Tag Archives: Kazakhstan

Trump boosts copper, companies in Central Asia benefit

NOV. 25 2016 (The Conway Bulletin) — Copper prices have gained around 12% to a 16-month high of $2.67/lb, since the election of Donald Trump as US president-elect, showing the power of his words.

Trump’s plan to invest $1 trillion in overhauling ageing infrastructure across the United States gave a boost to the global market price of copper, a key element for large construction projects.

Companies in Central Asia that focus on copper production, chiefly Central Asia Metals and KAZ Minerals in Kazakhstan, also benefited from the Trump effect on copper prices.

Both companies saw their share prices soar in the London Stock Exchange by around 20 – 25% in the past two weeks, a sign that the commodity slump could timidly start to reverse.

Central Asia Metals seized the opportunity to acquire a new deposit in Kazakhstan this week, which showed just how bullish the market has become.

Zak Mir, an analyst for the Proactive Investor website, said that Central Asia Metals’ stock price, which is already at its historical high, is on track to reach 240p/share within the next few months. This would be almost double this year’s low of 124p/share.

It’s been a roller coaster year for commodity companies in the region and this doesn’t look like changing.

Despite the uncertainty, the metals market might well reverse their downward trend before oil prices start growing again, marking an important split between the two sectors.

The Central Asian and South Caucasus region has been badly hit by the fall in commodity prices in the last two years. Any sign of recovery is good news.

ENDS

(News report from Issue No. 306, published on Nov. 25 2016)

Kazakhstan-based Nostrum revenues drop

NOV. 23 2016 (The Conway Bulletin) — Kazakhstan-focused Nostrum Oil and Gas posted a 35% fall in revenues for the first nine months of 2016, compared to the same period last year, a slight recovery compared to H1 results. Nostrum said it had successfully cut costs to counter sustained low oil prices. Production averaged 38,900 barrels/day in the reported period, down 12% from 2015. The company said it expects production to average 40,000 barrels/day by year-end.

ENDS

(News report from Issue No. 306, published on Nov. 25 2016)

Kazakhstan imposes restrictions on labour unions

NOV. 23 2016 (The Conway Bulletin) — New York-based NGO Human Rights Watch accused Kazakhstan of deliberately creating mountains of red tape to thwart and frustrate labour unions. In a report entitled: “Kazakhstan: Workers’ Rights Violated, Restricted”, HRW said that the Kazakh elite grew nervous of labour unions after a strike in 2011 ended with police shooting dead several protesters. HRW said that the government had imposed a registration system on labour unions as a way of monitoring their activities.

ENDS

(News report from Issue No. 306, published on Nov. 25 2016)

Kazakh President says ‘no’ to dynasty

ALMATY, NOV. 23 2016 (The Conway Bulletin) — In an interview with Bloomberg News, Kazakh President Nursultan Nazarbayev appeared to cautiously rule out a straight handover of power to a family member.

The 76-year-old leader also said that he would be prepared to govern for another five year term from 2020 if he felt well enough and had strong enough public support.

Speculation has been mounting for years over Mr Nazarbayev’s succession plans. Many analysts have suggested that Mr Nazarbayev’s eldest daughter, Dariga who is now a senator, may be being lined up to take over from him.

“I’m not envisaging succession for my children, I don’t think that’s a question for us,” he said. “Our transfer of power is spelled out by the constitution.”

This nuanced reply appears to suggest that Mr Nazarbayev’s successor will have to win power through an election, as the constitution states. Western vote monitors, though, have never judged an election in Kazakhstan to be either free or fair.

And, on the victory of Donald Trump in the US presidential election this month, Mr Nazarbayev said he was confident the incoming US President would mend US-Russia relations, a positive step forward for global international relations.

“The best democratisation, say of Russia and all countries, is to have the West in friendly relations with all of us,” he said.

Kazakhstan is dealing with a sharp economic downturn triggered by a collapse in oil prices and a recession in Russia. Mr Nazarbayev also said in the interview that he was looking to strengthen the banking system.

ENDS

(News report from Issue No. 306, published on Nov. 25 2016)

Kazakhs cut out imported luxury goods to beat tough economic times

ALMATY/TARAZ, Kazakhstan, NOV. 21 2016 (The Conway Bulletin) — A stubborn, painful economic downturn has wiped 4% off the average Kazakhs’ purchasing power, the ranking.kz website reported, forcing people to cut out luxury items — especially those imported from abroad.

Aiganym Dosmail, who works in an advertising agency in Almaty, said that she had cut out on buying luxury items that had been imported and ballooned in price since the devaluation of the tenge last year.

“I optimise my spending. Previously, I bought a lot of unnecessary stuff and now I buy only those goods that last long and are good quality. It is of course sad that previously marsh- mallows cost 300 tenge and now they cost 800 tenge,” she told the Bulletin.

The tenge lost half its value last year after the government reluctantly cut its peg to the US dollar. Low oil prices and a recession in Russia had pressured the Kazakh economy, and others across the region, into currency devaluations and budget cuts.

Worst hit are importers of luxury goods. Most Kazakhs now can’t afford to buy the foreign goods that they could afford even a year earlier.

Unlike Ms Dosmail, Aigerim Zhanuzak’s hairdressing salon in Taraz in the south of the country has been far less affected. She said that most of her clients are self-styled middle class Kazakhs and that she hasn’t had to put up her costs because she doesn’t have may import costs.

“My salon is targeting middle income and higher class people which means the crisis doesn’t impact people when it comes to personal comfort. People always want to eat and lto ook good,” she said. “If we talk about the financial crisis in our town then it has hit the lower-income population. Goods have become more expensive, public transport as well, but salaries have not increased, unfortunately.”

ENDS

(News report from Issue No. 306, published on Nov. 25 2016)

Kazakhstan oil field goes commercial

NOV. 21 2016 (The Conway Bulletin) — Kazakhstan’s troublesome Caspian Sea oil field Kashagan has finally started producing oil on a commercial basis, Kazakh oil and gas minister Kanat Bozumbayev said in a speech to parliament. The project has been heavily delayed and has run several billion dollars over budget but the news still marks an important bench mark for Kazakhstan which is counting on Kashagan revenues boosting it into the top tier of global oil producers.

ENDS

(News report from Issue No. 306, published on Nov. 25 2016)

Kazakh President discusses his succession

NOV. 25 2016 (The Conway Bulletin) — >> In his interview with Bloomberg, Nazarbayev says that he won’t hand power to his children. What do you think he means by this?

>> If you read the interview closely, it is not as clear as that. He says in the interview that he “doesn’t envisage succession for his children” and that it is “not a question for us”. Instead he says that it is up to the Kazakh people to decide through the constitution. This, of course, means through an election. I think that Nazarbayev has deliberately left this ambiguous. He is certainly not ruling out encouraging one of his two daughters, or their children, to take over form him but he is saving that whoever does will have to win a presidential election to earn legitimacy.

>> So you don’t think it is as clear cut as the Bloomberg headline writers make out. They were definitive and gave the story the headline: ‘Kazakh President Nazarbayev Says Power Won’t Be Family Business’.

>> That’s right. I think that he is leaving his options open, fully open. Of course, he can’t sit there in a Bloomberg interview and say that he favours handing over power to Dariga which, as we have said, is a likely scenario. Instead he has to say that the constitution has to be respected and the people have to decide. This can easily be manipulated to give Nazarbayev the result he wants. He just needs his Nur Otan party to select his chosen candidate and then for an election to pass this off successfully. Don’t forget that Western observers have never judged an election in Kazakhstan to be free fair. This generally means that the Kazakh elite can host can election but still generate the results that they need.

>> Right. So, when the time is right, Nur Otan picks Nazarbayev’s favoured candidate. An election is called which this candidate wins. This means that the constitution has been respected and the people have made their choice. Is that right?

>> That process would certainly fit with the process that Nazarbayev described in his Bloomberg interview. We don’t know who he favours but his interview with Bloomberg, in our view, certainly did not reduce Dariga’s chances of becoming his successor.

>> What else was important to pick up on in the interview?

>> I actually think that it’s important that Nazarbayev said he’d be happy to stay on as president past 2020. This had been the date we’d been expecting him to stand aside, he will be 80-years-old in 2020, but he’s now signalled that he is no rush to sort out the succession issue in Kazakhstan and that he’d be prepared to wait until 2025 or, dare we say it, beyond that to sort out this troublesome issue. I thought that Nazarbayev looked spritely in the interview. For a man of 76, he is clearly in good nick.

>> And, what about his comments on Trump? Surely they were important too?

>> Yes and no. I wouldn’t have expected anything else. He has to welcome Trump as the next US President. All the leaders of the Former Soviet Union do. Hillary Clinton would have meant more of the same, which essentially was poor Russia-US relations souring the whole ex-Soviet space. With Trump it’s a clean slate. Nobody is sure what he is going to do.

ENDS

(News report from Issue No. 306, published on Nov. 25 2016)

Kazakhstan-based financial institutions sign agreement

NOV. 21 2016 (The Conway Bulletin) — Kazakhstan-based financial institution Almex Holding and Dutch company Staay Food Group signed an agreement to create a joint venture to develop agribusiness in Kazakhstan. They want to create a distribution network with local farmers. At a later stage, Staay Food said it plans to build greenhouses to boost exports of fresh fruits and vegetables. Almex group controls Halyk Bank, Kazakhstan’s second- largest bank, and is owned by President Nursultan Nazarbayev’s daughter Dinara and her husband, Timur Kulibayev.

ENDS

(News report from Issue No. 306, published on Nov. 25 2016)

Kazakhstan-based Central Asia Metals expands

NOV. 22 2016 (The Conway Bulletin) — London-listed copper producer Central Asia Metals said it bought an 80% interest in a copper exploration property in northern Kazakhstan. The company said that it paid local company GRK-Aksu around $1m for the stake and has pledged to invest another $1m in the deposit in 2017.

ENDS

(News report from Issue No. 306, published on Nov. 25 2016)

Kazakh mayor to bring London cabs

NOV. 23 2016 (The Conway Bulletin) — Gabidulla Abdrakhimov, mayor of Shymkent in southern Kazakhstan, flew to London to meet British business representatives and to float the idea of bringing the iconic London cabs to his city. Gipsy cabs are commonplace in Kazakhstan, although taxi companies and ride-hailing apps have gained an increasing share of the market in recent years. In 2012, Magnesium Bronze’s London cabs became the only official taxi brand in Baku, Azerbaijan.

ENDS

(News report from Issue No. 306, published on Nov. 25 2016)