Tag Archives: Kazakhstan

Kazakh CBank introduces new rules

FEB. 29 2016 (The Conway Bulletin) – Kazakhstan’s Central Bank imposed new rules for exchanging tenge into US dollars in an effort to bolster its tenge currency, which has lost around half its value in the past 12 months. From now, Kazakhs will have to present photo ID if they want to exchange more than 1m tenge ($2,860) into any foreign currency. This is half the previous level.

ENDS

(News report from Issue No. 270, published on March 4 2016)

FDI drops in Kazakhstan

MARCH 2 2016 (The Conway Bulletin) – Foreign direct investment (FDI) in Kazakhstan’s oil and gas sector dropped by 72% to $1.9b last year compared to 2014, data from the Central Bank showed. The data shows just how heavily Kazakhstan’s oil and gas sector has been hit by the economic downturn. Proportionally, FDI to Kazakhstan’s oil and gas sector was harder hit than any other part of its economy.

ENDS

(News report from Issue No. 270, published on March 4 2016)

Kazakh KMG EP revenues collapse by 37% in 2015

ALMATY, FEB. 26 2016, (The Conway Bulletin) — KMG EP posted a 37% fall in revenues in 2015 to 530b tenge ($2.4m), its lowest since 2009, because of depressed oil prices.

KMG EP is the exploration and production branch of Kazakhstan’s state-owned energy company Kazmunaigas. The collapse in KMG EP’s revenues mirrors the rest of Kazakhstan’s oil and gas sector.

But, although it posted a drop in revenue, KMG EP also boasted a 400% rise in net profit to $1.1b.

This was linked to the depreciation of the Kazakh tenge. KMG EP’s income is mainly in US dollars and its costs are in tenge.

Lower taxes and the write-down of its Ozenmunaigas field in western Kazakhstan also helped KMG EP’s profit. Ozenmunaigas had become a drain on the company, pulling in investment and extra salaries after rioting by workers in 2011.

But it was the depreciation of the tenge that drove most of KMG EP’s profit. KMG EP “recognised a foreign exchange gain of 449b tenge ($2b), as over 93% of cash and financial assets were denominated in foreign currencies at the time of the currency devaluation,” the company said in its annual report.

This boost, though, essentially disguised what would have been a loss in 2015, as analysts pointed out.

“The FX gain is a one off profit and will not affect the future operating profit of the company,” Gulmariya Zhapakova, analyst at Halyk Finance, said in a report.

KMG EP’s yearly report also said that salary inflation would hit it in 2016. It is under pressure from workers and their unions to raise salaries after the tenge lost half its value over the past year.

Production in 2015 was flat. KMG EP and its subsidiaries extracted 12.4m tonnes of oil.

ENDS

(News report from Issue No. 270, published on March 4 2016)

Egypt’s Sisi visits Kazakhstan

FEB. 26 2016 (The Conway Bulletin) – Egypt’s President Abdel Fattah al- Sisi flew to Astana for talks with Kazakh President Nursultan Nazarbayev, a rare visit to Kazakhstan from a Middle Eastern leader. A few days before Mr Sisi’s visit, Kazakhstan restored air links to Egypt. It cut them at the end of last year after an alleged bomb planted by Islamic radicals blew up a Russian Plane. There was no news of any agreements signed at the meeting.

ENDS

(News report from Issue No. 270, published on March 4 2016)

Turkcell submits bid for TeliaSonera’s Eurasian holdings

ALMATY, FEB. 26 2016, (The Conway Bulletin) — Turkcell, Turkey’s largest telecoms operator, said it had submitted a formal offer for TeliaSonera’s share in Fintur, a holding company that owns several stakes in telecoms operators across Central Asia and the South Caucasus.

TeliaSonera owns a 58.55% stake in Fintur. Turkcell owns the rest of the Netherlands-based company. Fintur, in turn, owns stakes in Azerbaijan Azercell, Georgia’s Geocell, Kazakhstan’s Kcell, Uzbekistan Ucell and Tajikistan’s Tcell.

If the sale goes through, the deal will reduce TeliaSonera’s exposure to the region. TeliaSonera will not, though, be able to walk away completely as the Swedish-Finnish company owns, directly and indirectly, 38% of Turkcell.

Other major Turkcell shareholders include Alfa Group and Cukurova Holding.

Many TeliaSonera shareholders had wanted the company to quit the region entirely after being accused of bribing senior officials in Uzbekistan for 3G licences nine years ago. The corruption investigation is ongoing.

In its statement, Turkcell also said it had submitted another offer for TeliaSonera’s directly owned 24% share in Kcell. If the two companies agree on the sale, Turkcell will own 75% in Kcell.

ENDS

(News report from Issue No. 270, published on March 4 2016)

Kazakhstan’s senate agrees new budget

MARCH 3 2016 (The Conway Bulletin) – Kazakhstan’s senate passed a new budget for 2016 that reported an increase in state spending, a plan designed to kick-start the economy. The government’s actual income from taxes will drop in 2016, it is forecasting, by around 8% but a lump of cash earmarked for various projects in 2017 will instead be injected into the system this year.

ENDS

(News report from Issue No. 270, published on March 4 2016)

Satybaldy invests in Kazakh IT and finance

FEB. 29 2016 (The Conway Bulletin) – Kairat Satybaldy’s new investment company Alatau Capital Invest, Baring Vostok Capital and Kaspi Bank signed a deal to co-invest in projects in Kazakhstan’s IT and finance sectors. Mr Satybaldy, President Nursultan Nazarbayev’s nephew, was the secretary of the ruling party Nur Otan until November 2015, when he became a shareholder in Kaspi Bank. Baring Vostok Capital is also a shareholder in Kaspi Bank.

ENDS

(News report from Issue No. 270, published on March 4 2016)

Stock market: KAZ Minerals

MARCH 4 2016 (The Conway Bulletin) — London-based miner KAZ Minerals has continued to rally after publishing its annual report at the end of February.

Since Feb. 1, its share price has gained 61% in the London Stock Exchange.

In the past week, equity researchers have increased their target price and their rating for KAZ Minerals, formerly known as Kazakhmys.

Copper prices have gone up in the past weeks and this has allowed the company to be more bullish in its forecast.

One sign of warning, however, comes from the strengthening tenge. The stability of the Kazakh currency at around 350/$1 over the past weeks confirms appears to suggest that it has founds an equilibrium.

This means that last year’s foreign currency gains for KAZ Minerals were a one-off boon and the company will have to rely solely on increased production if it wants to keep its growth rate.

ENDS

(News report from Issue No. 270, published on March 4 2016)

Editorial: Kyrgyz, Kazakh inflation

MARCH 4 2016 (The Conway Bulletin) – Inflation is the next enemy for South Caucasus and Central Asian countries hit by the regional economic downturn.

A fall in commodity prices at the end of 2014 pushed down revenues in the extractive sectors and sent the Russian rouble into a downward spiral. This then hit the value of local currencies, hurting people’s confidence in their Central Banks and their pockets.

Then came a fall in vital workers’ remittances from Russia, down by up to 45%.

Now, inflation appears to be on the rise, as Kyrgyzstan’s Central Bank chief Tolkunbek Abdygulov has warned.

In Kazakhstan, inflation is already at 15.1% year-on-year to the end of February 2016. It has been warning about a surge in prices and salaries since it effectively devalued its currency in Aug. 2015.

A couple of days after the devaluation, the Kazakh Central Bank said it was now making inflation-busting its top target. There is a lot of work to do.

ENDS

(Editorial from Issue No. 270, published on March 4 2016)

Kazakh foreign travel dries up

MARCH 1 2016 (The Conway Bulletin) – The proportion of Kazakhs travelling abroad for holidays or for work has fallen by 70% to 80% because of the devaluation in the tenge, media reported quoting the Kazakhstan Tourist Association chairman Rashid Shaikenov. The tenge has lost around 50% of its value in the past year, forcing people to ditch foreign holidays.

ENDS

(News report from Issue No. 270, published on March 4 2016)