Tag Archives: Kazakhstan

Kazakh oil revenues fall

JUNE 15 2016 (The Conway Bulletin) – Kazakh officials said production of oil and gas makes up around 17% of the country’s GDP, a proportion eight percentage points lower than in 2015. The fall in oil prices has impacted both feasibility and profitability at Kazakhstan’s oil and gas fields. This is an important measure of the impact of the drop in oil price on Kazakhstan’s economy.

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(News report from Issue No. 285, published on June 17 2016)

Stock market: Tethys, Nostrum

JUNE 17 2016 (The Conway Bulletin) – Central Asia and South Caucasus-linked stocks fell this week, driven down by lower oil prices. As shown in the table, Tethys and Nostrum shares dropped significantly over the past week after a rather stable month.

Roxi, on the other hand, moved against the tide, gaining 15.3% in one week.

On June 14, the company’s non-executive director Edmund Limerick purchased 500,000 shares at 9.8p/share, for a total of £49,000. Mr Limerick and his wife now own 1.15m shares, or 0.12% of the company, up from 0.07% before the purchase.

The deal pushed up the share price, giving it a boost after weeks of downward pressure.

Kuat Oraziman, CEO, and Kairat Satylganov,CFO and director, own Roxi, which operates in Western Kazakhstan, not far from the massive Tengiz oilfield.

ENDS

(News report from Issue No. 285, published on June 17 2016)

Business comment: Gold in Central Asia

JUNE 17 2016 (The Conway Bulletin) – Gold prices climbing up towards $1,300/ounce, but not everyone in the mining sector in Central Asia is happy.

In Kazakhstan, Russian miner Polymetal received a much-needed lifeline from Sberbank to push forward with its Kyzyl project in north-eastern Kazakhstan. The gold sector in Kazakhstan is enjoying a positive season, as production numbers in the country are up 3.7% to 13 tonnes of fine gold in the first five months of the year, compared to Jan.-May 2015.

The steady growth is paired with increased investment, as Polymetal is focusing its growth outside Russia on Kazakhstan and Armenia.

But this year has not brought only good news in Kazakhstan. In March, Alhambra Resources said it was seeking damages against Kazakhstan’s government, via the World Bank’s International Centre for Settlement of Investment Disputes, for the bankruptcy of its Kazakh subsidiary.

Recovering commodity prices, however, can do little to improve the mood in Kyrgyzstan, where Centerra Gold and the government are increasingly entangled in what could become a decisive legal battle.

Centerra sought the resolution of the continuous fines and corruption probes at the Stockholm court of arbitration.

The Kyrgyz government responded with more fines and charged a former director of Kyrgyzaltyn — which owns a stake in Centerra — of taking bribes from the Canadian miner.

These charges, fuelled by allegations from a former Centerra director, would make the Canadian company guilty of paying bribes, serving an order to the government, which is trying hard to show Centerra under a bad light.

ENDS

(News report from Issue No. 285, published on June 17 2016)

Kazakh airline to prepare an IPO

JUNE 16 2016 (The Conway Bulletin) – Peter Foster, CEO of Kazakhstan’s flagship airline Air Astana, said the company will seek financial advisors this autumn to prepare an IPO in 2018. Mr Foster said that the company will list in Kazakhstan and in other more liquid markets, such as London or Singapore. Britain’s BAE Systems owns 49% of Air Astana, Kazakhstan’s sovereign wealth fund Samruk-Kazyna owns 51%.

ENDS

(News report from Issue No. 285, published on June 17 2016)

WWF suspends Kazakh athletes

JUNE 15 2016 (The Conway Bulletin) – The World Weightlifting Federation said four Kazakh athletes, Svetlana Podobedova, Maya Maneza, Zulfiya Chinshanlo and Ilya Ilyin, took performance-enhancing drugs at the 2012 London Olympic Games. All four athletes will now be suspended from global competition, including the Rio Olympics this summer. Mr Ilyin, twice Olympic gold medallist, said he was shocked by the news and denied having taken drugs. The ban will be a major blow to Kazakhstan’s medal hopes.

ENDS

(News report from Issue No. 285, published on June 17 2016)

Kazakhstan links Aktobe attacks to Syrian imam

ALMATY, JUNE 14 2016 (The Conway Bulletin) — Kazakhstan’s interior minister, Kalmukhanbet Kassymov, said attacks earlier this month in Aktobe by two dozen armed men had been ordered from Syria, the strongest suggestion yet that the government linked the violence to the extremist group ISIS.

His comments appeared to clear up an inconsistency in the Kazakh authorities’ explanation on the motives behind the attacks.

After the initial attack on June 5 on two shops and a police outpost in Aktobe, the authorities had alluded to a link with ISIS but a few days later President Nursultan Nazarbayev then suggested they had been part of an attempted colour revolution sponsored by the West. Coloured revolution means, in the FSU, a pro-Western, foreign-funded movement.

Now, though, the government line appears settled.

Mr Kassymov said that up to 45 men had gathered in an apartment before the first attack.

“When they all gathered in an apartment, they listened to an address from a so-called imam, apparently from Syria, who said that they needed to carry out a sacred jihad,” Russian media quoted him as saying. “The investigation will prove this.”

He also said that the last few gunmen who had escaped the shoot- out on June 5 had now been captured or killed. He said that, in total, 18 gunmen had been killed and nine arrested.

Three security officers and four civilians were also killed in the attacks, in the most serious in Kazakhstan’s 25 years of independence.

ENDS

(News report from Issue No. 285, published on June 17 2016)

Editorial: Kazakhstan’s financial stimulus

JUNE 17 2016 (The Conway Bulletin) – It’s been a tough year for Kazakh President Nursultan Nazarbayev, perhaps one of the toughest. The economy has flat-lined, worrying investors and locals, who have seen jobs disappear and the value of their tenge savings fall.

Unprecedented anti-government protests swept across Kazakhstan in April and May and in June gunmen alleged to have had links to radical Islamists in Syria attacked targets in Aktobe, killing several people.

Mr Nazarbayev has already staged a parliamentary election, a favourite tactic of his to shore up support. This worked only momentarily. Now he has had to spend big. He’s chucked $712m at the economy in a Keynesian attempt to breathe life into it and create jobs and wealth.

Will it work? It’s unclear. He’s picked small and medium-sized companies and house building to target. These are good targets. Mr Nazarbayev is looking to help out ordinary Kazakhs directly. And it’s the same message with the house-building.

Of course, though, there are serious pitfalls. The plan could be badly implemented, money wasted or stolen.

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(Editorial from Issue No. 285, published on June 17 2016)

Uber starts operating in Kazakh capital, challenging gypsy cab system

ALMATY, JUNE 10 2016 (The Conway Bulletin) — Uber started operations in Astana, posing a major challenge to Kazakhstan’s taxi industry which, like much of the rest of the former Soviet Union, has been based on an informal gypsy cab system for generations.

But the San Francisco-based ride-hailing app said in a statement that the service would only be offered with electronic payments, potentially creating an obstacle in the stubbornly cash-oriented economy.

Traditionally, taxi rides in Kazakhstan are a matter of flagging any private car down and then haggling a price. Cash is the only way of paying.

Astana residents, backed this up. They said that fixed prices and cashless payments will act as a brake on Uber’s popularity.

“The inability to negotiate the price will surely make rides more expensive,” said Alberto, an expat working for an European consultancy in Astana.

“The city government is trying to eliminate gipsy cabs ahead of the EXPO next year, but the cashless-only payment option will deter local travellers from using Uber.”

Electronic payments make up around 15% of total commercial transactions in Kazakhstan, according to the Central Bank, compared to a global average of 25% and a European average of around 50%.

In Uber’s experience, the payment system could change, though.

Months after Uber rolled out its service in Baku in April 2015, the company listened to its customers’ demands and introduced a cash option for paying their rides.

Uber said it chose Astana for its growth opportunities. “Astana is a dream-city, a city of the future and big opportunities,” it said.

Uber is not the first taxi app to tap into the Kazakh market. A long-haul Russian service, called InDriver, launched in Kazakhstan,Uzbekistan and Kyrgyzstan. Users said InDriver’s clunky technology made it hard to use.

ENDS

(News report from Issue No. 285, published on June 17 2016)

Kazakh President orders $712m economic stimulus

ALMATY, JUNE 15 2016 (The Conway Bulletin) — With economic activity in Kazakhstan faltering, President Nursultan Nazarbayev ordered his government to spend 240b tenge (around $712m) on supporting small and medium-sized companies as well as building thousands of new houses.

Mr Nazarbayev is under increasing pressure to shore up his support by boosting the economy against a 50% fall in the value of the tenge, rising unemployment and inflation. In April and May anti-government protests swept across the country in the most widespread anti-government challenge to Mr Nazarbayev’s 25-year rule.

The Presidential press service said the cash would come from the Republican budget, a phrase that Kazakh civil servants use to refer to Kazakhstan’s sovereign wealth fund.

ENDS

(News report from Issue No. 285, published on June 17 2016)

Kazakhstan’s Kashagan to start production in October

JUNE 14 2016 (The Conway Bulletin) – Kazakhstan’s PM Karim Massimov said that Kashagan, the country’s largest oilfield will start production in October 2016. Mr Massimov challenged the consortium members – which include Exxon, Kazmunaigas, Total, Eni, Shell and Inpex – to meet the government’s production plans and resume production at the Caspian Sea field, which had briefly started pumping oil in 2013, before damaged pipes forced its closure.

ENDS

(News report from Issue No. 285, published on June 17 2016)