Tag Archives: Kazakhstan

Kazakh elite are winners from bank merger

MARCH 3 2017 (The Conway Bulletin) — By merging Kazkommertsbank with Halyk Bank, the Kazakh elite have completed their drive to control the country’s banking sector.

It’s been a long campaign but, for the Kazakh elite, one worth fighting and winning. If previously, the country’s banking sector had been troublesome, creating billionaires such as Mukhtar Ablyazov and Nurlan Subkhanberdin who didn’t necessarily want to go along with President Nursultan Nazarbayev’s vision for Kazakhstan, now they have full control.

The process to subjugate the banking sector started with the government’s purchase of BTA Bank in 2008/9 when it was on the brink of collapse. Next came the not-so-subtle takeover of Kazkommertsbank in 2014/15 and then its absorption of BTA Bank, and its mountain of bad debt.

And now we have the denouement.

Kazkommertsbank has apparently agreed to merge with, or perhaps more accurately – be taken over by, Halyk Bank. The first and second biggest banks in the country will create a mega-bank that will dominate the sector.

Halyk Bank is owned by Dinara Kulibayeva, President Nursultan Nazarbayev’s daughter, and her husband, Timur Kulibayev. Since 2015, the 37-year-old Kenes Rakishev, one of the Kazakh elite’s favourite businessmen has been the majority owner of Kazkommertsbank. Last year he also became its chairman.

And, as if to underline the elite/insider nature of the deal, the Kazakh Central Bank has given the deal its blessing, saying that it will provide the necessary funds to see it through, including buying up the bad debt that Kazkommertzbank inherited when it took over BTA Bank. In other words, expect the new bank to be in excellent health and to be fully compliant to the whims of the Kazakh elite.

This cements the elite’s control of Kazakh business and banking. Opposition forces will never have as much leverage, good or bad, as when Ablyazov controlled BTA Bank and Subkhanberdin controlled Kazkommertsbank.

The business acumen of the Kazkommertsbank-Halyk merger may not be obvious, but the political reasons are crystal clear.

ENDS

(News report from Issue No. 319, published on March 3 2017)

New Syria talks to take place in Kazakhstan

Leave a Reply

MARCH 1 2017 (The Conway Bulletin) — The next round of talks aimed at ending a civil war in Syria are planned for Astana on March 14, media reported. This is the continuation of a series of talks this year in Astana involving Syrian rebels, forces loyal to Syrian president Bashir al-Assad, Russia, Turkey and Iran. For Kazakh President Nursultan Nazarbayev the talks have been useful in bolstering Kazakhstan’s international profile.

ENDS

(News report from Issue No. 319, published on March 3 2017)

Kazakh authorities clamping down on rights groups

Leave a Reply

FEB. 21 2017 (The Conway Bulletin) — The New York-based Human rights Watch said that the authorities in Kazakhstan have been harassing two local human rights groups by falsely alleging that their tax receipts were wrong. HRW said that International Legal Initiative Foundation and Liberty had both faced tax audits. The Kazakh authorities have not commented. Rights groups have previously accused Kazakhstan of using official channels to close down groups that it finds a nuisance.

ENDS

(News report from Issue No. 318, published on Feb.24 2017)

Kazakh journalist says was beaten

Leave a Reply

FEB. 21 2017 (The Conway Bulletin) — Supporters of jailed Kazakh journalist Zhanbolat Mamay said that he has been beaten in prison. Mr Mamay was arrested earlier this year for alleged financial crimes and for being linked to exiled opposition leader Mukhtar Ablyazov. He was the editor of Tribuna, one of the few genuinely independent newspaper left in Kazakhstan. Opposition groups have accused Kazakhstan of cracking down on the media.

ENDS

(News report from Issue No. 318, published on Feb.24 2017)

Currencies: Azerbaijani manat, Kazakh tenge

Leave a Reply

FEB. 24 2017 (The Conway Bulletin) — The Kazakh tenge added another 1% on to its value this week, bolstered by a rise in oil prices, and the Georgian lari added 2%, a rise that analysts attributed to a general improvement in global economic sentiment.

It was a different story, though, across the South Caucasus, where the Azerbaijani manat lost another 0.8% to fall to 1.7925/$1. This is frustrating for the Central Bank as the manat had looked good to break 1.7445/$1, the level it reached at the start of February – its strongest since November.

In any case, the manat has recovered since the end of January when it bottomed out at 1.95/$1.

But the Chairman of Board of Directors of Financial Markets Supervision Authority, Rufat Aslanli, told media that the manat couldn’t rely on oil prices to pull it out of its negative spiral. “Oil price has impact on sustainability of our economy, but not on the exchange rate of dollar,” he said.

ENDS

(News report from Issue No. 318, published on Feb.24 2017)

Kazakhstan plans new power plant

Leave a Reply

FEB. 24 2017 (The Conway Bulletin) — Kazakhstan will build a new hydropower plant with a 25MW capacity on the Turgusun river in the east of the country, media reported quoting the Kazakh Development Bank. The 11.3b tenge ($36.2m) power plant will, it is planned, produce 23% of the region’s electricity as well as generate new jobs. Kazakhstan is trying to boost power production to meet an increase in demand triggered by migration and a rise in living standards.

ENDS

(News report from Issue No. 318, published on Feb.24 2017)

Kazakhstan cuts interest rates as economy improves

Leave a Reply

ALMATY, FEB. 20 2017 (The Conway Bulletin) — Kazakhstan’s Central Bank cut its key interest rate by one percentage point to 11%, its lowest level since it introduced its this key rate in September 2015, and delivered one of its most upbeat assessments of the economy for years.

Central Bank chief Daniyer Akishev said that improved global economic outlook, a rise in oil prices and a slowdown in inflation had allowed him to cut the rate. At the beginning of last year, Kazakhstan’s interest rate had measured 17%.

Both the rate cut and the renewed confidence in the economy will be a relief to investors and to ordinary Kazakhs who have had to deal with an avalanche of grim economic data since oil prices collapsed in mid-2014.

“We took into account the positive impact of external factors. Sustainable world oil prices above $50 per barrel, improving global eco- nomic prospects and moderate inflationary background in our trading partners,” Mr Akishev told journalists.

“Among internal factors there has been a significant slowdown in inflation, which creates lower inflationary and devaluation expectations amongst people, as well as the ongoing de-dollarisation of bank deposits.”

Inflation had been a major worry after the tenge devalued by 50% in 2015. It had started to rise fast last year but has since slowed and the Kazakh Central Bank said that it would ease to between 6.5% and 7% this year from 8.5% last year (Feb. 22). The Central Bank also said that inflation in 2018 could drop as low as 5%.

The Kazakh economy is the biggest in Central Asia and is an important driver of regional economic growth.

ENDS

(News report from Issue No. 318, published on Feb.24 2017)

Kazakh authorities arrest another official

Leave a Reply

FEB. 23 2017 (The Conway Bulletin) — Kanat Sultanbekov was sacked as the deputy chairman of Kazakhstan Engineering and then promptly arrested for corruption, an apparent escalation of the crackdown on official corruption in Kazakhstan. Mr Sultanbekov is considered to be part of Kazakhstan’s elite. He has previously been the deputy mayor of both Almaty and Astana, two influential positions. Kazakhstan Engineering is the state-owned maker of military vehicles. Kazakh police have arrested dozens of high- ranking officials for corruption in the past few months, including the former finance minister Kuandyk Bishimbayev.

ENDS

(News report from Issue No. 318, published on Feb.24 2017)

Kazakhs are upbeat about economy

Leave a Reply

ALMATY, FEB. 20 2017 (The Conway Bulletin) — Kazakhs are significantly less well off now because of the collapse of the tenge and price rises, the ranking.kz website reported, although the general feeling on streets of Almaty is one of cautious optimism that the worst of an economic downturn is over.

Ranking.kz said that on average, people’s purchasing power had dropped by 4.5% in 2016, the sharpest drop in the last 16 years. In 2009, during the Global Financial Crisis, ranking.kz said that people’s purchasing power dropped by 3.1%.

On the streets of Almaty, though, people appeared less concerned by their apparent drop in purchasing power. A Conway Bulletin correspondent said that economic sentiment had turned with the tenge finally strengthening against the US dollar, oil prices staying around $55/barrel and inflation slowing.

Iraina, 22, was hurrying along a frozen sidestreet clutching a bag of groceries.

“Honestly, no. Of course it was a noticeable increase in groceries prices but I do not restrain myself,” she said. “I have a good salary, whereas prices increased only by 20 to 30 tenge.”

For Bakyt Kasenovich, 68, even though there had been an obvious economic dip, life now was far better than it was in 1990s or 2000s.

“I would not say that our level of life decreased so much. We, most likely, just got used to a rise in prices. I would not say that Kazakhstan faces this heavy crisis now,” he said. “Anyway we live better than before.”

A survey by ACT, an FSU-focused research company, showed that in October 2016 84% of Kazakhs were generally upbeat about their personal finances. They also expected to have an even better financial scenario by April 2017.

ENDS

(News report from Issue No. 318, published on Feb.24 2017)

Stock market: KAZ Minerals, Bank of Georgia

Leave a Reply

FEB. 24 2017 (The Conway Bulletin) — Bank of Georgia’s share price barely budged after it released full year results for 2016 that showed an increase in profit held back by a 10.5% devaluation in the Georgian lari throughout the year.

By Feb. 23, its shares were trading at 2,987p on the London Stock Exchange, its lowest level since the end of January. Analysts said that the poor performance of the lari was holding back the Bank of Georgia share price, confirming just how exposed the bank is to Georgia’s macro-economic performance.

Over at KAZ Minerals, the Kazakhstan-focused copper producer, it was a more positive, upbeat earnings session.

It said that its revenues had increased in 2016 by 15% to around $766m, because a clutch of new mines had now come on-stream. This appeared to impress the market and pushed up its shares by another 2.6% to 573p on the London Stock Exchange, near a four year high of 589p hit earlier in the month.

Analysts are split on the KAZ Minerals stock. JP Morgan and Credit Suisse kept their neutral rating on the stock while Citigroup reaffirmed its ‘buy’ rating.

ENDS

(News report from Issue No. 318, published on Feb.24 2017)