SEPT. 22 2015 (The Conway Bulletin) — Russian mining company Polymetal offered Sumeru Gold $300m for its 50% stake in the Kyzyl gold project in Kazakhstan. Sumeru Gold is linked to Timur Kulibayev, a high profile Kazakh businessman and son- in-law of Kazakhstan’s President Nursultan Nazarbayev. The deal will mean Sumeru Gold also gives up its 7.4% share in Polymetal.
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(News report from Issue No. 249, published on Sept. 25 2015)
SEPT. 21 2015 (The Conway Bulletin) – The Kazakh authorities have launched an investigation into the drowning of four soldiers last week during an amphibious exercise on the Caspian Sea shore, media reported. Kazakhstan has pledged to improve and modernise its military. Like other armies in the former Soviet Union, allegations of corruption and bullying plague its armed forces.
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(News report from Issue No. 249, published on Sept. 25 2015)
SEPT. 18 2015 (The Conway Bulletin) — Have the Kazakh tenge and the Kyrgyz som reached rock bottom yet? This week, the tenge in Kazakhstan suffered another strong fall (-4.4%). The cost of $1 even rose above the psychological rate of 300 tenge on Sept. 16, only to settle back down to around 270 by the end of the week.
The Kyrgyz som also hit a historical high of 70/$1 on Wednesday.
And this despite repeated interventions from both Central Banks, which bought hundreds of millions of dollars in the currency market to support the tenge and som.
At the end of last week, the announcement that Dariga Nazarbayeva, the eldest daughter of Kazakh president Nursultan Nazarbayev, had been appointed as deputy PM sparked a late round of trade in the dollar market, weakening the tenge. Was this the market saying that they were worried about her promotion? Some analysts said that President Nazarbayev may be grooming her to take over the top job.
The som is struggling because the Russian economy isn’t recovering and the upcoming parliamentary elections in Kyrgyzstan are upset- ting the market.
In Georgia, the lari lost 2.4%, probably linked to general Emerging Markets weakness.
The Fed hasn’t ruled out the possibility of increasing rates by the end of the year. Such a decision would divert US dollars back to the US economy, away from Emerging Markets. The faltering economies in Central Asia and the South Caucasus need to prepare themselves for the worst.
Tightly-managed currencies in Azerbaijan, Tajikistan, Turkmenistan and Uzbekistan remained vir- tually unchanged this week. To maintain the exchange rates constant, central bankers in these countries had to heavily intervene in the currency markets.
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(News report from Issue No. 248, published on Sept. 18 2015)
SEPT. 11-18 2015 (The Conway Bulletin) — Canadian mining company Centerra Gold saw its stock price on the Toronto Stock Exchange jump over 16% to 7.34 Canadian dollars, after having slumped in the past three weeks, due to the signing of a new exploration licence in British Columbia. Centerra’s main asset, the Kumtor gold mine, is located in Kyrgyzstan. London listed KAZ Minerals, was down 6% to 152 pence due to low copper prices. Kazakhstan-focused Roxi Petroleum gained 4.4% this week, to 8.75 pence.
Kcell, one of Kazakhstan’s largest telecoms, lost 2% on Sept. 17 after its mother company TeliaSonera said it would leave Eurasian markets.
London-listed Bank of Georgia surged 3.9% this week to 1,907 pence. The GDR stock of Georgia’s TBC Bank lost 6.5% this week in London, down to $9.25 per share, though it had fallen to $9.11 on Sept. 14.
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(News report from Issue No. 248, published on Sept. 18 2015)
SEPT. 17 2015 (The Conway Bulletin) — If oil prices remain steady at roughly $50/barrel, Kazakhstan’s state oil and gas company, Kazmunaigas will post a profit of 75b tenge ($279m) in 2015, Sauat Mynbayev, the company chairman, told the Interfax news agency. In 2014, the company posted a profit of nearly 200b tenge ($743m at the current rate). Mr Mynbayev said the government’s decision to let the tenge float free against the dollar has helped contain losses.
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(News report from Issue No. 248, published on Sept. 18 2015)
SEPT. 15 2015 (The Conway Bulletin) – The Kazakh government said it would subsidise industrial companies that needed to increase salaries to match rising inflation and the falling value of the tenge. The Kazakh government has struggled to manage the economy during difficult economic times.
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(News report from Issue No. 248, published on Sept. 18 2015)
ALMATY, SEPT. 17 2015 (The Conway Bulletin) — Dogged by various corruption allegations against its businesses in Central Asia, Swedish-based TeliaSonera said it wanted to quit the Eurasian telecoms market to focus on European operations.
In the medium-term, TeliaSonera’s assets in the growing mobile telecoms markets of Central Asia and South Caucasus region could represent an attractive business for companies looking to enter the market. TeliaSonera owns stakes in telecoms companies in Azerbaijan, Georgia, Kazakhstan, Tajikistan and Uzbekistan. These are Azercell, Geo-cell, KcellP, Tcell and Ucell.
In most of these countries, TeliaSonera has been under the spotlight for its opaque corporate governance, an issue that its CEO, Johan Dennelind, referenced.
“Thanks to two years of hard work to improve the Eurasian operations, not least from a corporate governance and sustainability perspective, we now have better and more well-managed companies which we believe others can successfully develop further,” a TeliaSonera press release quoted him as saying.
TeliaSonera appointed Mr Dennelind as CEO in 2013 after a corruption probe into its operations in Uzbekistan forced the previous CEO and most of the directors to resign.
In the past two years, Swedish prosecutors have opened investigations into alleged bribes that the company paid to secure access to mobile networks and licences in Kazakhstan and Uzbekistan. More recently, in May 2015, a Swedish newspaper reported on another possible case of bribery in Azerbaijan.
In 2013, TeliaSonera sacked Tero Kivisaari, a senior executive, for paying $350m a few years earlier to a Gibraltar company linked to Gulnara Karimova, daughter of Uzbekistan’s President Islam Karimov, in exchange for a 3G licence. TeliaSonera owns 94% of Ucell, an Uzbekistan-based, mobile operator.
A 2013 deal that saw Kcell, in which TeliaSonera owns a 62% stake, pay Kazakh PM Karim Massimov $200m for network access has also come under scrutiny.
Analysts said that the pressure had been building on TeliaSonera and that they had been expecting TeliaSonera to cut its losses in its Eurasia division for some time.
Bakytzhan Khochshanov, an analyst at Halyk Finance, said that he thought a Russian or Turkish telecoms company might be interested in buying TeliaSonera’s stakes.
“Potential buyers are likely to be the largest ones, and among them either Megafon or MTS, as Vimpelcom already has an exposure to Kazakhstan’s market with its Beeline brand,” he said.
“Among the other potential bidders could also be Turkish operators, with Turkcell already having a stake in Kcell through Fintur Holding.”
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(News report from Issue No. 248, published on Sept. 18 2015)
SEPT. 15 2015 (The Conway Bulletin) — London-listed Nostrum Oil & Gas said in a statement that a proposed $37.5m takeover offer of Tethys Petroleum, a Central Asia-focused oil company, has not yet been accepted. Nostrum said some of Tethys’ Board expectations were unrealistic as “the underlying financial position of Tethys has continued to deteriorate.”
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Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 248, published on Sept. 18 2015)
SEPT. 15 2015 (The Conway Bulletin) — The Tengizchevroil consortium developing oil fields in west Kazakhstan awarded a “significant” contract to Scotland-based engineering company Xodus. Xodus tests the strength of rigs and other upstream oil structures using sound waves.
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(News report from Issue No. 248, published on Sept. 18 2015)
SEPT. 11 2015 (The Conway Bulletin) – Kazakh president Nursultan Nazarbayev used the 550th anniversary celebrations of the Kazakh khanate to espouse on one of his favourite topics — nation building. At the celebrations, he called on the country to be known as the Land of the Great Steppe.
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Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 248, published on Sept. 18 2015)