Tag Archives: Markets

Markets: Shares in region push up

FEB. 11 2021 (The Bulletin) — Shares in companies in the South Caucasus and Central Asia region tracked commodity prices, pushing up to new highs. Commodity prices have remained strong throughout the pandemic, supporting mining companies. With the exception of Bank of Georgia, Georgia Capital, TBC Bank and Kaspi, the stocks tracked in the region are all miners.

The share price of KAZ Minerals, the London-listed copper producer, pushed up to near 810p, a 2-1/2 year high, already oustripping an offer of 780p per share that a Kazakhstan-funded group of private investors have offered shareholders. And their offer was an increase on the 640p that they had originally offered shareholders in November. In March last year, KAZ Minerals’ shares had hit a low of 300p. The only stock that didn’t push up in value was Anglo Asian. Analysts said that this was because of its surge already this year.

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— This story was first published in issue 471 of the Central Asia & South Caucasus Bulletin

— Copyright the Central Asia & South Caucasus Bulletin 2021

Markets — Armenian dram recovers post-war losses

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JAN. 22 2021 (The Bulletin) — Currencies in the region traded broadly flat over the past week, reflecting a slow domestic week while most attention was focused on the swearing-in of Joe Biden as the United States’ 46th president.

Specifically, the Armenian dram rose by 1.2%, reversing some of the steep loses it has suffered since a war broke out with Azerbaijan over the disputed region of Nagorno-Karabakh. Across the Caspian Sea, The Kazakh som inched up and the Uzbek soum moved down slightly.

Most Central Banks have been selling US dollar reserves to keep their currencies propped. up. In two press releases on Jan. 19 and Jan. 21, the Azerbaijani Central Bank said that it sold $66.4m and $67.4m. Azerbaijan maintains one of the tightest US dollar currency pegs in the region. In 2015, it devalued the manat twice, leaving psychological scars and weakening the reputation of the government. Commentators said that the authorities wanted to avoid a repeat of this.

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— This story was first published in issue 469 of the Central Asia & South Caucasus Bulletin

— Copyright the Central Asia & South Caucasus Bulletin 2021

Markets — Georgian banks wobble on coronavirus impact assessment

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JAN. 22 2021 (The Bulletin) — Anglo Asian Mining’s share price continues to surge with better-than-expected results and news of new finds. The company, which is part owned by the Azerbaijani government is also one of the winners of a war between Armenia and Azerbaijan over the disputed region of Nagorno-Karabakh as it has been promised new gold mine concessions.

Far less buoyant are banking stocks in Georgia with both Bank of Georgia and TBC Bank trading down. This follows a downgrade by the Fitch ratings agency of the Georgian banking sector because of the impact of the coronavirus.

Another stock that has traded down recently is Kaspi, the Kazakh company that owns Kaspi bank. Analysts said that another 5% fall in its share price was a reflection of concern over the durability of the company’s app, on which much of its share price is built. It has been hit by a handful of glitches.

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— This story was first published in issue 469 of the Central Asia & South Caucasus Bulletin

— Copyright the Central Asia & South Caucasus Bulletin 2021

Markets: Armenian dram continues to fall

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JAN. 8 2021 (The Bulletin) — The Armenian dram continued to lose value over the Christmas period, trading down another 2.8% at 522/$1. The economic and political fallout from losing a war against Azerbaijan over the disputed region of Nagorno-Karabakh dragged the currency to loses in 2020. It finished the year down 9%.

Azerbaijan, by contrast, has pegged its value to the US dollar and although it has come under pressure, the Azerbaijani Central Bank denied that it had any plans to devalue it. It has remained at a constant level against the US dollar.

In Tbilisi, the Georgian Central Bank said that it was continuing its policy of propping up its lari currency to protect it from being dragged down by a surge in coronavirus cases.

Across the Caspian Sea, the Kazakh tenge rose by 1.2% over Christmas and as stability returned to Kyrgyzstan after a coup in October 2020, its currency rose by 2%.

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— This story was first published in issue 467 of the Central Asia & South Caucasus Bulletin

— Copyright the Central Asia & South Caucasus Bulletin 2021

Markets: Stocks rebound on boyant market

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JAN. 8 2021 (The Bulletin) — Stocks in companies in Central Asia and the South Caucasus that are listed on Western exchanges finished 2020 strongly. Stock markets have shrugged off intensified lockdowns and instead banked on a return to normality by Easter.

The biggest riser over the Christmas period was this year’s major listing from the region, Kaspi, which moved up 20%.

Georgian banks also performed strongly, with both TBC Bank and Bank of Georgia rising more than 8%. They are still down by a third, though, from the start of 2020, reflecting the economic impact of the coronavirus pandemic wrought.

Metals and mining stocks saw generally sluggish growth over the festive period but, relative to other stocks, they had a decent 2020. Central Asia Metals, the Kazakhstan-focused copper producer, is now trading at 225p, up from 215p at the start of 2020.

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— This story was first published in issue 467 of the Central Asia & South Caucasus Bulletin

— Copyright the Central Asia & South Caucasus Bulletin 2021

Markets: Stocks drop across the region

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JULY 31 (The Bulletin) — With the exception of the region’s two main listed gold miners, Centerra Gold and Anglo Asian Mining, and also TBC Bank, which analysts said gained ground because it had been oversold in the past few weeks, stocks in the Central Asia and South Caucasus region fell.

They generally tracked stock markets around the world which dipped with business confidence. Confidence has been hit by the prospect of a second wave of coronavirus infections and deaths.

The biggest fallers were Bank of Georgia, down 8.6%, and Georgia Healthcare, down 7.1%, but even KAZ Minerals, the Kazakhstan-focused copper producer, which presented a decent set of Q2 figures traded down.

Gold miners rose because, with investors getting increasingly nervous, gold price also rose.

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— This story was published in issue 455 of the Central Asia & South Caucasus Bulletin, on July 31 2020.

— Copyright the Central Asia & South Caucasus Bulletin 2020

Markets: Kazakh tenge drops value

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JULY 31 (The Bulletin) — The Kazakh tenge was the main mover over the past week, dropping nearly 2% in value against the US dollar to trade at 421.8/$1, its lowest value since the start of May.

Analysts blamed the sharp drop in the value of the tenge on Kazakhstan’s worsening economic outlook, an outlook dimmed by the spread of the coronavirus. The Kazakh government has continually delayed the relaxation of coronavirus lockdown rules and a recession that analysts had anticipated, with GDP contracting by 5%, now looks like wishful thinking. Kazakhstan also reduced its key interest rate in June, stripping the tenge of some of its support.

Before the coronavirus infected economies, the tenge had been valued at around 380/$1. It fell to an all-time low of 456/$1.

Elsewhere, governments maintained the value of their currencies by selling their US dollar reserves.

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— This story was published in issue 455 of the Central Asia & South Caucasus Bulletin, on July 31 2020.

— Copyright the Central Asia & South Caucasus Bulletin 2020

Markets – Azerbaijan cuts its key interest rate, keeps manat steady

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JUNE 23 (The Bulletin) — The Azerbaijani Central Bank cut its key interest rate to 7% from 7.25% but, as expected, this failed to shift the value of its manat currency. The Azerbaijani manat, like the Turkmen manat, are fixed rigidly against a set US dollar exchange rate.

The Tajik somoni and the Uzbek soum are also pegged against a US dollar rate, but less rigidly. The Uzbek Central Bank allows its currency to lose ground slowly, and in a controlled manner, against the US dollar. The Tajik Central Bank is less controlled but generally likes to keep its exchange rate level.

As for the other currencies, they are all manipulated by their central banks to a greater or lesser extent and with a greater or lesser degree of openness. The Georgian Central Bank does post updates on its currency sales to prop up the lari.

The biggest mover over the past week was the Kazakh tenge which, other than a brief foray three weeks ago, moved below 400/$1 for the first time since the start of March.

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— This story was first published in issue 451 of the Central Asia & South Caucasus Bulletin on June 23 2020

— Copyright the Central Asia & South Caucasus Bulletin 2020

MARKETS: Stocks rise after coronavirus hit

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APRIL 5 (The Bulletin) — Stocks across the world, including in the Central Asia and South Caucasus region, rebounded from the depths they reached last week as the infection rates of the coronavirus started to flatten out.

Every major traded stock in the region, other than Georgia’s TBC Bank, moved upwards, most by double figures, although Bank of Georgia, TBC’s rival, only posted a 0.7% rise.

The biggest risers were the gold and copper producers, helped up by strong commodity and US dollar prices. Centerra Gold, which is listed on the Toronto Stock Exchange, saw its share prices increase by 17.4% to C$8.71. It started the year at C$10.41.

The chart below, of Centerra’s share price, shows market volatility since February. The impact of the coronavirus has moved prices wildly.

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— This story was first published in issue 441 of the Central Asia & South Caucasus Bulletin

— Copyright the Central Asia & South Caucasus Bulletin 2020

MARKETS: Central Banks sell US dollar reserves to defend currencies

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APRIL 5 (The Bulletin) — Central Banks across the region continued to spend millions of dollars propping up their ailing currencies against the dual onslaught of the impact of the spread of the coronavirus and a drop in oil prices.

Both the Kazakh tenge and the Georgian lari recovered ground that they had previously lost, moving up slightly. This was backed up by a recovery in oil prices and partly by the slowing of the spread of Covid-19. It is still a major concern, of course, and it has knocked economies across the world, but a near-global lockdown has slowed its spread.

The Kyrgyz som, though, continued to fall heavily. Currency speculators have said that Kyrgyzstan is particularly vulnerable to a global recession. It fell more than 16% to 85/$1, its lowest ever level after the Central Bank essentially accepted that it couldn’t defend its previous value of around 70/$1.

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— This story was first published in issue 441 of the Central Asia & South Caucasus Bulletin