Tag Archives: Kazakhstan

Kazakhstan says interest is high for privatisations

ALMATY, APRIL 5 2017 (The Conway Bulletin) — A senior official at Samruk Kazyna, Kazakhstan’s sovereign wealth fund, said that the up-and-coming privatisations of Air Astana, the national airline, and Kazatomprom, the state nuclear company, were attracting a lot of attention from Western investors.

In an interview with Reuters in London, Berik Beisengaliyev, managing director for assets optimisation of Samruk Kazyna, also said that the Kazakh government had sold off 120 small and medium sized companies. Samruk Kazyna is Kazakhstan’s $67b sovereign wealth fund.

“We saw a very positive mood in the market,” he was quoted as saying. Kazakhstan has been promising the so-called People’s IPO that would see chunks of the country’s biggest companies listed on both the Kazakh Stock Exchange and an international exchange. It has continually delayed the IPOs, mainly because market conditions have moved against sales.

Still, Mr Beisengaliyev said that the sale of the smaller companies would be complete by the end of 2018 allowing the government to sell off what have been considered its top tier assets.

As well as Air Astana, which is 49% owned by BAE Systems, and Kazatomprom, the world’s biggest uranium producer, the more high profile companies slated to be sold off, or at least be partially privatised, include Kazpost, oil and gas company Kazmunaigas and railway operator Temir Zholy.

A third tier of companies are being considered for sale to strategic investors, single high-profile companies instead of the multiple smaller investors attracted through an IPO, Mr Beisengaliyev said. These companies include domestic airline Qazqom, Kazakhtelecom and mining company Teu-Ken Sumruk.

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(News report from Issue No. 324, published on April 13 2017)

MPs receive pay rise, angering ordinary Kazakhs

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APRIL 11 2017 (The Conway Bulletin) — MPs in Kazakhstan have received a pay rise of 50%, media reported. According to the Eurasianet website, the pay rise has angered many ordinary Kazakhs who are struggling through a sharp economic downturn. MPs have responded that the pay rise was organised four year ago and that they were the last group of government officials to receive a pay rise. The pay rise, active since March 1, means that MPs in Kazakhstan now earn $2,000 to $2,200 every month.

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(News report from Issue No. 324, published on April 13 2017)

Kazakh car-maker to produce Chevrolet Niva

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APRIL 10 2017 (The Conway Bulletin) — SaryArkaAvtoProm, a Kazakh car- maker based in Kostani in the north of the country, started production of the Chevrolet Niva car, the GM-AvtoVAZ company said in a press release. The announcement is a major boost for Kazakhstan’s fledgling car-making industry. It has been hard hit by a sharp economic downturn that has knocked consumer confidence. The SaryArkaAvtoProm is one of three car-making factories in Kazakhstan. GM-AvtoVAZ is a joint-venture set up by the US’ GM and Russia’s AvtoVAZ. It will sell the Chevrolet Niva produced by SaryArkaAvtoProm in southern Russia.

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(News report from Issue No. 324, published on April 13 2017)

‘Silk Road’ train links UK and China via Kazakhstan

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APRIL 10 2017 (The Conway Bulletin) — A train carrying whisky, baby food and vitamins left a depot in southern England at the start of an 18-day journey through Central Asia to China.

This modern-day ‘Silk Road’ odyssey is part of China’s push to promote freight transport by rail between East Asia and Europe.

At its heart, the 11,000km route relies upon a stable Central Asia with modern infrastructure and it shows just how important the region has become as a transport hub. The ‘Silk Road’ train will travel through Europe into Russia and then dip down into Kazakhstan before crossing into western China and terminating in Yiwu on the eastern coast Xubin Feng, the head of Yiwu Timex Investment Company, underlined the importance of the train.

“Restoring the ancient Silk Road as a means by which China, North Europe and now the UK can exchange goods is an important and exciting initiative,” he said.

The project is part of China’s drive to promote its so-called ‘One Belt, One Road’ programme. Three months ago, the first freight train arrived from China to Britain and several other European capitals have already been linked up to China by rail.

And this ‘One Belt, One Road’ policy is important for Central Asia, and in particular Kazakhstan, as it plays a vital, and potentially lucrative, stagepost role.

Kazakhstan has started to leverage its position as a link between Europe and East Asia and, as well as promoting its rail infrastructure, it has also promoted itself as a refuelling pitstop for airlines crossing to Asia.

Also, this year, the first train from Kazakhstan headed through China to Vietnam, opening up another route.

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(News report from Issue No. 324, published on April 13 2017)

GE buys into Kazakh train engine maker

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ALMATY, APRIL 12 2017 (The Conway Bulletin) — GE Transportation, a division of US engineering giant GE, bought a 50% stake in Kazakh train maker Lokomotiv Kurastyru Zauyty for an undisclosed amount.

The deal could be one of the biggest investments by a Western company in a Kazakh engineering company outside the extractive industries this year.

In a press release Jamie Miller, the GE Transportation CEO, as saying: “Kazakhstan has a strategic plan for its railroad to support economic growth and increased regional trade, and today’s announcement underscores GE’s commitment to working with KTZ to ensure that Kazakhstan’s rail infrastructure remains modern and reliable.”

For Kazakhstan the deal will likely be a relief, although the amount that GE Transportation paid for its 50% stake has not been released. It has been trying to attract more Western investment into industries outside the oil, gas and mining sectors. Its railway sector is one area in which it has been investing heavily.

Lokomotiv Kurastyru Zauyty was set up in 2009 by Kazakh railway company Temir Zholy and Russia’s Transmashholding. It is Central Asia and the South Caucasus’ biggest manufacturer of locomotive trains and exports across the region.

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(News report from Issue No. 324, published on April 13 2017)

Kazakhstan to strip IS fighters citizenship

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APRIL 11 2017 (The Conway Bulletin) — Kazakhstan’s President Nursultan Nazarbayev said that people convicted of fighting for IS would be stripped of their Kazakh citizenship. The Kazinform news agency also quoted Mr Nazarbayev as saying that between 500 and 600 Kazakhs had headed off to join IS over the past few years.

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(News report from Issue No. 324, published on April 13 2017)

New airport terminal and train station to open in Kazakhstan

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APRIL 10 2017 (The Conway Bulletin) — Kazakhstan’s investment minister Zhenis Kasymbek said that a new airport terminal and a new railway station will open in mid-May, less than a month before Astana opens its EXPO-2017 exhibition. Media quoted Mr Kasymbek as saying that after it has been complete, Astana airport will be able to process 7.5m passengers every year. The EXPO-2017 exhibition is being touted as the biggest international festival held by Kazakhstan since independence from the Soviet Union in 1991. President Nursultan Nazarbayev has said that he wants to use it to showcase modern day Kazakhstan.

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(News report from Issue No. 324, published on April 13 2017)f

Nazarbayev wants Kazakh language to adopt Latin

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APRIL 12 2017 (The Conway Bulletin) — Kazakh President Nursultan Nazarbayev ordered officials to start preparing to switch Kazakh to the Latin alphabet by 2025. Mr Nazarbayev has long wanted to make the switch in what he sees as a part of a modernisation drive. Kazakh and Russian are both official languages in Kazakhstan, although Kazakh is becoming increasingly widespread. The switch to the Latin alphabet will bring Kazakhstan in line with its Central Asian neighbours, other than Kyrgyzstan, who all use it.

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(News report from Issue No. 324, published on April 13 2017)

People lose faith in Kazakhstan’s healthcare after two deaths

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ALMATY, APRIL 7 2017 (The Conway Bulletin) — Two deaths in hospitals in Almaty this year have unnerved the normally phlegmatic residents of Kazakhstan’s most populous city.

Investigations have been launched into the death of 26-year- old Aleksey Gubenko who died in March at a private hospital while being treated for sinusitis and Yerzhan Kulbayev who died in a state-run hospital in January after having his kidney removed, apparently illegally to pay off a loan.

Trust in Kazakhstan’s healthcare system is waning, whether it is private or state. An opinion poll in January by the demos.kz website showed that 65% of people rated the healthcare at three out of five or lower and 61% of the respondents said that the healthcare staff were not competent.

For 24-year-old Leila, an accountant, news of the two deaths in hospital did not come as a surprise.

“I do not have any illusions regarding Kazakhstan’s healthcare system, so I am not surprised with these cases,” she said. “Obviously, I do not trust our doctors and state hospitals have big queues of people waiting too.”

Sergey, a taxi driver, said that it was better not to be sick in Kazakhstan and to avoid doctors.

“We are all mortal, you never know what will happen to you in half an hour,” he said.

“It is just better not to be sick and be less engaged with the healthcare system.”

Poor morale among staff and underfunding have characterised Kazakhstan’s healthcare system. In 2015, Almas Kurmanov, the then head of budget at the ministry of health told media that the healthcare budget needed to be doubled or tripled. He said that Kazakhstan was spending $254/person on health compared to an average in the OECD of $2,400/person.

Earlier this year too, five senior executives, including the CEO, at the state-run medicine distribution company SK-Pharmacy were sacked and arrested for bribe-taking.

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(News report from Issue No. 324, published on April 13 2017)

Markets: Central Asia Metals

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APRIL 13 2017 (The Conway Bulletin) — Central Asia Metals, which is focused on Kazakhstan, posted turnover up 3% at $69.3m for 2016, helping to push up its share price to a five-week high of 242p by April 10.

This has since come off slightly but Central Asia Metals is still threatening to push past an all-time high of 246p set in mid-February. That’s certainly what analysts think. Most of them reiterated a ‘buy’ rating with Peel Hunt targeting 255p and FinnCap targeting 264p.

One of the main attractions for shareholders is the strong dividend that Central Asia Metals pays out. The Motley Fool, a stock analysis blog, explained.

“Shareholders will reap the benefit of this strong performance.

As much as 31% of last year’s revenue will be returned to shareholders by way of a total dividend of 15.5p. This gives a yield of 6.7% at the current share price of 229p,” the Motley Fool wrote before the share price started rising.

“This isn’t a one-off performance. The company’s dividend policy is to return at least 20% of revenue from Kounrad to shareholders each year.”

Kounrad is Central Asia Metal’s low-cost copper producing site in Balkhash, central Kazakhstan.

To underline the Motley Fool’s point, take a look at previous dividends. In 2015 and 2014, Central Asia Metals paid out 12.5p, in 2013 9p and in 2012 10.7p.

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(News report from Issue No. 324, published on April 13 2017)f