Tag Archives: Kazakhstan

Lender targets Kazakhstan

JULY 6 2017 (The Bulletin) — TWINO, the peer-to-peer loans company, said that it was going to start lending to Kazakh clients, a PR boost for Kazakhstan which has been trying to deflect from negative headlines about the rise of non- performing loans in its banking sector. TWINO, based in London, said that it was the first European peer-to-peer loans provider to lend to Kazakhstan. It already lends to Latvia. Poland, the Czech Republic, Russia, Georgia, Denmark, Mexico and Spain.

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(News report from Issue No. 336, published on July 16 2017)

Comment: Kazakhstan’s two- pronged foreign policy

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JULY 16 2017 (The Bulletin) — For Kazakhstan, July 2 marked both the Day of Diplomatic Service and also the 25th anniversary of the establishment of the country’s diplomatic corps. In 1992 Kazakh President Nursultan Nazarbayev signed a decree setting up the service and another that enshrined a ‘multi-vector’ foreign policy.

Since then, Kazakhstan has built up diplomatic relations with 182 countries, including 57 embassies and 27 consulates abroad. It also hosts 69 embassies, 19 consulates and 27 international organisations representations.

Kazakhstan’s foreign policy can be roughly broken down into two.

Firstly, Astana has been quite successful in setting up multi-vector diplomacy, roughly defined as seeking to keep “friendly and mutually- beneficial relations with all states” while also pushing the country towards playing an “important role in world affairs”.

This is a pragmatic approach to international affairs, evidenced by the balancing between Russia and China, strong ties with the EU and the US, as well as with non-traditional partners such as South Korea, Singapore, Malaysia and Japan.

On the other hand, and somewhat less successfully, Kazakhstan has been actively engaging the international community for the past few years in order to boost its image as a modern and mature diplomatic player in world affairs. In January, Kazakhstan took a non-permanent seat at the UN Security Council for two years. Nuclear non-proliferation, the fight against terrorism, and Sino- Russian relations were erected as key priorities.

Kazakhstan also confirmed its intention to play an active role in the peace talks in Syria after hosting five rounds of negotiations since early 2017, although no breakthroughs have been reached yet. Furthermore, Astana is increasingly seeking international prestige and acknowledgment, as evidenced by Astana’s 2017 Expo and its bid to host the 2022 Winter Olympic Games.

Kazakhstan is actively seeking to boost its regional leadership and increasingly move away from its image of a post-Soviet country and that of a “Stan”. In 2014 it was even proposed to change the name of the country to “Kazakh Eli”, which means country of the Kazakhs in Kazakh. This idea has been abandoned, for now.

By Mathieu Boulegue, analyst specialising in the former Soviet Union for AESMA Group

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(News report from Issue No. 336, published on July 16 2017)

Comment: Turkey’s coup and its impact

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ISTANBUL, JULY 16 2017 (The Bulletin) — Finally we’ve made it to this finest of cities. It’s taken us a week since leaving Edinburgh to get here – via Yorkshire, Hampshire, Lord’s cricket ground, Warsaw, Prague (the airport only) and lovely, louche Odessa.

But at turns brooding and majestic; playful and frustrating, Istanbul is a place that commands love and loyalty. My wife and I are heading east on book research duty, hers not mine, and there was no reason to linger. Still, I insisted. It’s good for the temper, if not the waistline, to spend days here eating, drinking and strolling.

Coincidentally we are in Istanbul for the first anniversary of a failed coup attempt against Turkish President Recep Erdogan. A rebel army unit captured the bridge over the Bosphorus and tried to arrest Erdogan. They failed and the ramifications have been great.

Erdogan blamed the exiled cleric Fethullah Gulen for organising the coup and police have arrested at least 50,000 people for being ‘Gulenists’. This purge hasn’t been confined to Turkey. Pressure has been applied to Turkey’s allies in Central Asia and the South Caucasus too. Azerbaijan and Turkmenistan have been happy to comply, others less so, although Georgia has started to acquiesce.

With a resurgent Russia and a powerful China, Turkey’s influence in the region has waned since the 1990s but the coup anniversary is a reminder that events in Istanbul reverberate across the Anatolian plateau, over the Caspian Sea and on to the Tien Shan mountains.

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(News report from Issue No. 336, published on July 16 2017)

Uranium bank to open in August, says Kazakh President

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JULY 3 2017 (The Bulletin) — Kazakh president Nursultan Nazarbayev said that a low-enriched Uranium bank will open in eastern Kazakhstan on Aug. 29. The project is being administered by the International Atomic Energy Agency (IAEA) and is being promoted by Kazakh officials and Mr Nazarbayev as yet another contribution by Kazakhstan to world peace. On the day the uranium bank opens, Mr Nazarbayev intends to give out his first international award for nuclear disarmament. He already has his own peace award.

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(News report from Issue No. 336, published on July 16 2017)

Currencies: Kazakhstan’s tenge

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JULY 16 2017 (The Bulletin) — The Kazakh tenge has now fallen to its lowest level since January, giving up most gains it had made this year.

By July 14 it was trading at $327.91/$1, down 2.3% since July 3. At its year peak on May 25, the tenge had traded at 310.65/$1. This means that it has fallen by 5.5% in around seven weeks.

A fluctuating oil price is likely to have had little impact on the value of the tenge. It has been hovering between $50 and $45 per barrel for some time. Instead, commentators have pointed to weak Kazakh fundamentals which suggest that the economy is still in poor shape.

Most worryingly amongst this economic data is the bad debt ratio that banks have built up. It just seems to be getting bigger and the government is preparing a bailout.

ENDS

(News report from Issue No. 336, published on July 16 2017)

Kazakhstan props up banks

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JULY 11 2017 (The Bulletin) — Kazakhstan is prepared to give up to 500b tenge ($1.52b) to its banks to help them weather an economic downturn that has piled their loan portfolios with bad debt, deputy central bank chief Oleg Smolyakov was quoted as saying. Kazakhstan’s bank have been listing worryingly after a collapse in oil prices in mid-2014 forced a sharp economic decline and the tenge to lose half its value.

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(News report from Issue No. 336, published on July 16 2017)

Oil shipments from Georgia drop

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JULY 4 2017 (The Bulletin) — Oil shipments from the Georgian Black Sea port of Batumi have fallen 29.2% this year, an official from Kazakhstan’s state-run Kazmunaigas told local media. He didn’t give a reason for the drop although Kazakh oil producers have previously said that they have switched exports to the Caspian Pipeline Consortium which threads around the north coast of the Caspian Sea to the Russian port of Novorossiysk. Batumi is a major oil exit point for crude oil heading to Europe. A heavy reduction in its use will hit Georgian revenues. Georgian officials have not commented.

ENDS

(News report from Issue No. 336, published on July 16 2017)

Kazakh authorities slap $27.4m tax fine against Kcell

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ALMATY, JULY 5 2017 (The Bulletin) — Kcell, the biggest Kazakh mobile operator, said that Kazakhstan’s tax authorities have handed it a 9b tenge fine ($27.4m) for unpaid taxes.

In response Kcell, majority owned by Swedish -Finnish operator Telia, said it would dispute the fine, setting up a potentially explosive court fight between a Western corporate and the Kazakh government.

“Following the audit (of our accounts for 2012-15), the tax authority has made a total claim of 9b tenge, of which 5.8b tenge is for unpaid taxes and 3.2b tenge represents fines and penalties for late payment. Kcell intends to dispute this claim through the available mechanisms, which includes court litigation,” Kcell said in a statement.

For both parties a lengthy court battle is poor timing. After a corruption scandal in Uzbekistan centred on paying the daughter of former Uzbek leader Islam Karimov for market access, Telia said it wants to exit the former Soviet Union. As well as its stake in Kcell, it plans to sell out of Uzbekistan Ucell, Azerbaijan’s Azercell, Moldova’s Moldcell and Georgia’s Geocell.

Kazakhstan wants to woo finance companies into setting up in Astana, where it is building an investment centre. Headlines highlighting rows will damage this drive.

ENDS

(News report from Issue No. 336, published on July 16 2017)

Stock market: KAZ Minerals, Georgia Healthcare

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JULY 16 2017 (The Bulletin) — In a rocky fortnight for stocks in Central Asia and the South Caucasus, only KAZ Minerals and Georgia Healthcare bucked the trend and returned growth. Both have had stellar years and are hitting all-time highs.

For KAZ Minerals, the Kazakhstan-focused copper producer formerly called Kazakhmys, production costs at its sites in north Kazakhstan have been lower than previously expected giving it greater margins. Copper prices have been fairly stable, trading in the $250 – $270 per lb corridor this year after a jump at the end of 2016.

For Georgia Healthcare, analysts have simply underestimated the profitability of the product that it was offering. This profitability may have been a motivating factor for London-listed BGEO Group, which owns a 57% stake in Georgia Healthcare, to tell investors that it was going to split into two companies. BGEO Group plans to hold the Georgia Healthcare stake, along with other assets, but it will spin off Bank of Georgia into its own London-listed company.

On the downside Nostrum was the biggest faller, shedding more than 15% of its price. It is now trading at below 430p for the first time since the end of March.

On Toronto’s stock exchange, Centerra Gold was down 6.3% to C$6.63, its lowest since the March.

ENDS

(News report from Issue No. 336, published on July 16 2017)

Kazakh-US deal extends military cooperation

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JULY 5 2017 (The Bulletin) — After a meeting in Washington DC, officials from Kazakhstan and the US signed a deal to extend military cooperation between the two countries until 2022. No details of the cooperation were released although Kazakh and US armies do hold joint exercises. Over the last few years, Kazakhstan has been improving its military deals with Russia.

ENDS

(News report from Issue No. 336, published on July 16 2017)