Tag Archives: Kazakhstan

Italian Inalca and Kazakh Aktep sign deal

JAN. 17 2016 (The Conway Bulletin) — Italian beef processing company Inalca and Kazakh company Aktep signed a deal to create a joint venture and build new factories in the country. The new company will increase Aktep’s current production five-fold to 12,000 tonnes per year of meat products. Inalca Eurasia, Inalca’s daughter company, said it will invest €100m ($109m) in the project.

ENDS

(News report from Issue No. 264, published on Jan. 22 2016)

Editorial: Iran’s return

JAN. 22 2016 (The Conway Bulletin) – There is much excitement in our region over the emergence of Iran after over a decade of US-imposed sanctions.

New flight connections, new pipelines, new transmission lines and more is what a sanctions-free Iran could bring to the South Caucasus and Central Asia.

Iran has struck a deal with Air Astana to open the Almaty-Tehran air route. It has also revived talks with Turkmenistan about gas fields and pipelines around the Caspian.

Potentially, a new network to the east of the Caspian Sea could facilitate the European Union’s plans to import gas from the region. Azerbaijan may well be interested in such deals as well. In addition, Iran could become an important supplier of gas to both Armenia and Georgia.

On the flip side, Iran’s accession to the global oil market will undoubtedly drive the price of oil further down, it has huge oil reserves and production capacity, increasing the pressure on the budgets of oil-exporting economies in the region.

ENDS

Editorial from Issue No. 264, published on Jan. 22 2016)

Inflation doubles in Kazakhstan

JAN. 21 2016 (The Conway Bulletin) – Inflation in Kazakhstan in 2015 measured 13.6%, nearly double the rate of 2014, media reported quoting the state statistics agency. The final tally confirms that prices increased rapidly after a tenge devaluation in August. The tenge has lost around 55% of its value since Feb. 2014.

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(News report from Issue No. 264, published on Jan. 22 2016)

Business comment: Wealth fund critics come out

JAN. 22 2016 (The Conway Bulletin) — At the end of December, Berik Otemurat, a senior official at Kazakhstan’s Central Bank, picked up the phone and called several newspapers to speak out against the way the sovereign wealth fund was being managed.

He was promptly sacked after his quotes started populating articles. He had said that Kazakhstan’s sovereign wealth fund to be doomed.

Mr Otemurat’s argument was that the sovereign wealth fund was risk averse and that it was pilfering away its cash on low yield investments making low returns.

Low oil prices and the economic slump would combine, he said, to wipe away the fund’s reserves in 6 to 7 years.

Timur Kulibayev, President Nursultan Nazarbayev’s son-in-law and powerful businessman, spoke out against Kazakh money managers to but he’s not in any real danger of losing his job.

He has criticised for months the behaviour of the Central Bank and, effectively, said their management of the economic crisis has been poor.

Mr Kulibayev repeated his criticism last week. His bottom line was: “The government cannot continue spending its reserves to prop up the tenge or the reserves will be extinguished in three years.”

Of course, Mr Kulibayev, the second-richest man in Kazakhstan, is in a much stronger position than Mr Otemurat, so his words will not make him a pariah of the elite. This parallel goes to show that there are only few people who can speak out against Kazakhstan’s economic policy and face no consequences.

The managers of the sovereign wealth fund have said they will change their policy this year. Let’s see if they can stop the drain.

ENDS

(News report from Issue No. 264, published on Jan. 22 2016)

Kazakh leader’s nephew gets KNB post

JAN. 20 2016 (The Conway Bulletin) – Samat Abish Nazarbayev, the 37- year-old nephew of president Nursultan Nazarbayev, was appointed deputy head of the KNB, Kazakhstan’s intelligence service, the eurasinet.org website reported. Samat Abish Nazarbayev is the son of Bolat Nazarbayev, President Nazarbayev’s brother. By appointing him to a senior position in the KNB, Pres. Nazarbayev is strengthens his control over it.

ENDS

(News report from Issue No. 264, published on Jan. 22 2016)

Kazakhstan increases uranium output

JAN. 19 2016 (The Conway Bulletin) – Kazakhstan increased its uranium production by nearly 5% last year to 23.8m tonnes, media reported quoting the Kazakh nuclear agency Kazatomprom. Kazakhstan is the world’s largest producer of uranium. Kazakhstan has been increasing uranium production for a decade. Analysts have said that uranium exports may be a good future bet as countries look to boost nuclear power.

ENDS

(News report from Issue No. 264, published on Jan. 22 2016)

Stock market: Tethys, KAZ Minerals, Centerra

JAN. 21 2016 (The Conway Bulletin) — Tethys shares dropped to their lowest price since listing in 2011, falling 18% over the last week to 1.75p. Our graph shows its fall since the start of December.

Problems at its operations in Tajikistan may have dented investors’ confidence. China’s CNPC and France’s Total, its partners in the Bokhtar oil project, have said they want Tethys to exit the venture.

Last week, also, the Tajik government joined the fray and said it might expropriate 25% of the licensed area, as production hasn’t started yet.

Commodities prices were stable, after months of depreciation against the US dollar. But this has not helped all miners in the region. In fact, Centerra shares fell, due to the ongoing controversy with its Mongolian operations. On the upside, KAZ Minerals continued its upward trend, thanks to the continued depreciation of the Kazakh tenge. Its costs are in tenge. Its earnings in US dollars.

ENDS

(News report from Issue No. 264, published on Jan. 22 2016)

Central Asia and South Caucasus welcome Iran

JAN. 16/17 2016, ALMATY/Kazakhstan (The Conway Bulletin) – Countries in the South Caucasus and Central Asia applauded the end of western sanctions against Iran, a move they hope will turn their southern neighbour into a strong trade and diplomatic partner.

But, as well as adding a hopefully vibrant economy on their southern fringe, the reemergence of Iran also presents a major potential downside.

Low commodity and oil prices have been a major contributor to an economic downturn that has shaken the region. Adding Iran’s large oil reserve to the market will further pressure prices which are already hovering around 12-year-lows of $28/barrel, down from $115/barrel in the summer of 2014.

Most countries in the region issued a statement applauding Iran’s return to the international fold.

The Kazakh foreign ministry said: “It is a critically important step in creating a safer world.”

It also said that Iran had signed its first post-sanctions international agreement with Kazakhstan’s Air Astana to open an Almaty-Tehran flight in 2016.

In the South Caucasus, Armenia and Georgia are trying to negotiate gas supply deals with Iran, and Azerbaijan may be able to persuade Tehran to fill part of its TANAP gas pipeline running via Turkey to Europe.

Elham Hassanzadeh, Research Fellow at the Oxford Institute for Energy Studies, said Iran could become an important trade and diplomatic partner for Central Asia and the South Caucasus.

“It will certainly be an easier partner to trade with [than previously],” she told The Conway Bulletin in an interview.

“The cost of doing business with Iran will be significantly lower than that of during the sanctions era while less economic and political restrictions on a given country in the region could be translated into less antagonism and conflict and more collaboration and constructive dialogue.”

She said, though, that energy would be at the forefront of relations. “A good number of Azeri and Turkmen companies are planning to invest in Iran’s oil and gas sector,” Ms Hassanzadeh said.

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(News report from Issue No. 264, published on Jan. 22 2016)

Kazakhstan orders to pay $25m for ditching building plans

ALMATY, JAN. 18 2016 (The Conway Bulletin) — An arbitration court in Stockholm ordered a Kazakh state- owned company to pay €22.7m ($24.8m) to Estonian construction company Windoor for reneging on a building deal in Astana.

The case is important as more and more infrastructure projects in Kazakhstan grind to a halt with the deepening economic slump.

In the Stockholm case, Windoor, which specialises in glass-aluminium structures, filed a lawsuit against state-owned Diplomat Stroi Servis for €18m ($19.7) after it failed to pay for work it had carried out on a conference centre.

In 2012, Windoor and Baltiiski Dom, a Kazakh construction company, agreed a deal to build a 40,000 square metres diplomatic conference centre behind the Kazakh ministry of foreign affairs.

In an interview via email with The Conway Bulletin, Mailis Lintlom, the Windoor chairman, said: “By early 2014, it became clear that the construction of the project was behind schedule and that Windoor would not be able to start the [installation] work of the facade at the agreed time.” In February 2015, in line with the worsening economy in Kazakhstan, Windoor was told that the project had been “frozen”, triggering Windoor’s arbitration action.

At the end of December 2015, the Stockholm court said Diplomat Stroi Servis, owned by the Economic Department of Kazakhstan’s ministry of foreign affairs, will have to pay a €4.7m premium on Windoor’s court claim.

A Kazakh court will have to enforce the payment and Windoor is still waiting for a judicial confirmation of the award.

ENDS

(News report from Issue No. 264, published on Jan. 22 2016)

China lifts grain barriers for Kazakhstan

JAN. 15 2016 (The Conway Bulletin) – China has lifted administrative barriers that had restricted Kazakhstan’s grain exports to its neighbour, Kazakh first deputy PM Bakytzhan Sagintayev told media. He said that the lifting of the various barriers would make it far easier for Kazakhstan to sell grain to China. Grain has become, over the past decade, an important export commodity for Kazakhstan.

ENDS

(News report from Issue No. 264, published on Jan. 22 2016)