NOV. 23 2015 (The Conway Bulletin) – In a move designed to help oil exporters, the Kazakh government said it would cut export duty on a tonne of oil to $40 from $60. Some exporters in Kazakhstan have simply stopped production until either oil prices improved or taxes were cut.
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(News report from Issue No. 258, published on Nov. 27 2015)
NOV. 25 2015 (The Conway Bulletin) — In its financial results for the first nine months of the year, Kazakhstan- focused Nostrum Oil & Gas said revenues were down 40% to $374.8m. Low oil prices and back taxes dented Nostrum’s financial position. Nostrum is investing around $500m in the GTU3 gas treatment facility, which will increase production to 100,000 barrels of oil equivalent per day (boepd) by 2017 from around 40,000boepd.
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(News report from Issue No. 258, published on Nov. 27 2015)
NOV. 20 2015 (The Conway Bulletin) – Kazakhstan’s pipeline monopoly Kaztransgas launched the $3.5b Beineu- Bozoi-Shymkent gas pipeline, five months early. The pipeline is important because it pumps gas from fields in the north-west to urban centres in the south.
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(News report from Issue No. 258, published on Nov. 27 2015)
NOV. 23 2015 (The Conway Bulletin) – Incompetent local administrations have delayed the Kazakh government’s centrepiece $9b Nurly Zhol infrastructure investment policy, Yerbolat Dossayev, Kazakhstan’s minister of economy, said. Nurly Zhol, which means bright path, was announced last year and was supposed to transform the Kazakh economy. It has failed to have an impact.
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(News report from Issue No. 258, published on Nov. 27 2015)
NOV. 20 2015 (The Conway Bulletin) – The IMF applauded Kazakhstan’s plans to sell off chunks of up to 50% in 43 high profile state-owned companies.
In a report, the IMF also said that ditching the tenge’s peg to the US dollar in August will push up inflation in the short term.
“The decision to float the exchange rate in August, followed by the introduction of a new policy interest rate (base rate) as the new monetary policy anchor in September, set in motion the process of modernizing the monetary policy framework,” the IMF said in its report.
Under pressure from depressed oil prices and a fall in the value of the rouble, the Kazakh Central Bank dropped its peg to the US dollar in August. The tenge plunged in value.
Strapped for cash, the Kazakh government said earlier this month that it wanted to sell off chunks of its biggest companies to private investors. The plan received a qualified endorsement from the IMF.
“We welcome these initiatives and the authorities’ objective of implementing the privatisation program competitively and in a way that ensures genuine private ownership and control,” it said.
The issue for investors is which stock market the government lists the shares on.
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(News report from Issue No. 258, published on Nov. 27 2015)
NOV. 23 2015 (The Conway Bulletin) – Kazakhstan’s energy minister Vladimir Shkolnik said 40,000 people working in the country’s oil and gas sector could lose their jobs next year if energy prices continued to stay low. He said the depressed price of oil had decimated the oil and gas sector.
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(News report from Issue No. 258, published on Nov. 27 2015)
NOV. 24 2015 (The Conway Bulletin) — The share of foreign currency-denominated deposits in Kazakhstan increased from 55.5% in January 2015 to 65.9% at the end of October, according to Central Bank chief Daniyar Akishev.
The devaluation of the tenge vis-à- vis the US dollar motivated people to keep their savings in US dollars to preserve the value.
One ofMr Akishev’s main tasks is to restore confidence in the tenge, after the currency lost 40% of its value over the summer. The 65.9% mark will beMr Akishev’s starting point, the ratio when he took office after his predecessor Kairat Kelimbetov was sacked on Nov. 2. New regulations restricting mortgage loans in foreign currencies might help reduce dollarisation, but a new wave of non-performing loans will soon hit the banking sector. A painful reminder of the 2008/9 financial crisis.
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(News report from Issue No. 258, published on Nov. 27 2015)
NOV. 23 2015 (The Conway Bulletin) – Kazakh president Nursultan Nazarbayev signed into law changes to the country’s employment code that make it easier for companies to sack workers. The new law also makes industrial action harder to take. Businesses have said that the law is a necessary modernising step. Trade unions have said it is designed to undermine them.
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(News report from Issue No. 258, published on Nov. 27 2015)
NOV. 20 2015 (The Conway Bulletin) — Russian lender VTB Bank said it had injected $40m into its Kazakh subsidiary to increase its total capitalisation by 44% to around 24b tenge ($78m). The move is more evidence of a worsening economic outlook. In the first three-quarters of the year, VTB Bank recorded losses of 791m tenge ($2.6m), compared to a 850m tenge profit in the same period last year ($4.6m at the time).
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(News report from Issue No. 258, published on Nov. 27 2015)
NOV. 23 2015 (The Conway Bulletin) — Copper producer Central Asia Metals said it received government approval for the expansion of its Kounrad project in central Kazakhstan. The company said construction works will start in March 2016 and the expansion will cost $19.5m. Central Asia Metals also said it is set to meet its production target of 12,000 tonnes in 2015, which would represent a 7.7% increase compared to 2014.
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(News report from Issue No. 258, published on Nov. 27 2015)