Kazakhstan Chamber of Commerce in the USA

KazCham



Kazakhstan Daily News Roundup – August 10, 2010 0

Posted on August 10, 2010 by KazCham

HEADLINES:

Max Petroleum shares soar on new oil find
(SRI) – Max Petroleum, a Kazakhstan-focused oil junior, said it had struck oil oil at a greater depth, potentially extending its existing Zhana Makat oil field in western Kazakhstan.

Unicredit not expecting further writedowns of ATF Bank
(SRI) -UniCredit does not plan to further write down the value ATF Bank, after it marked down the value of its Kazakh subsidiary by more than half a billion euros in less than a year, the head of its Austrian arm said last week.

Eurasian Bank reports $9.5 million net loss in H1
(SRI) – Eurasian Bank reported last week a net loss of KZT1.4 billion ($9.5 million) in the first half of 2010, compared to a net profit of KZT158.9 million ($1.58 million) in the same period last year.

ENERGY:

Kazatomprom’s uranium output continues to rise in H1 2010
(SRI) – Kazatomprom, Kazakhstan’s national uranium company, said it produced 8,452 tonnes of uranium in the first six months of 2010, a 42% increase compared to the same period in 2009.

Uranium One shares jump on narrower loss, forecast (Reuters)

BUSINESS AND ECONOMY:

Central bank reports current account surplus of $5.7 billion in H1 (SRI)

Moody’s changes outlook on Kazkommertsbank’s financial strength rating to stable from negative (Moody’s)

Kazakhstan imposes no restrictions on grain exports (Itar-Tass)

Russia to become Kazakhstan’s main grain export destination – Agricultural Ministry (Interfax)

Share of Kazakhstan-produced goods in procurement by state authorities exceeded 55% in H1 (Interfax)

National Bank of Kazakhstan: Exchange rates August 10, 2010 (Kazinform)

METALS AND MINING:

Bitter row knocks sheen off Kazakh gold company (EurasiaNet)

ArcelorMittal Temirtau to make own billet (Steel Business Briefing)

Kazatomprom and Toshiba to establish rare metals production JV by year-end (Interfax)

SOURCE: http://silkroadintelligencer.com/2010/08/10/kazakhstan-daily-news-roundup-august-10-2010/

Kazakhstan Daily News Roundup – July 30, 2010 0

Posted on July 30, 2010 by KazCham

HEADLINES:

Karachaganak should not pay export duty – BG Group CFO
(SRI) – BG Group believes that Karachaganak Petroleum Operating (KPO) should not be liable for Kazakhstan’s planned export duty, the company’s CFO, Ashley Almanza, told reporters on a conference call on Wednesday.

Kazakhmys H1 output beats forecast on strong demand
(SRI) – Kazakh miner Kazakhmys said its first-half output of finished metal from its own concentrate fell 3.4% but the company beat its guidance and reiterated its full-year target as demand stayed strong.

ENERGY:

Ekibastuz GRES-1 income $70 million in H1 2010 (SRI)

Tengizchevroil’s direct payments to Kazakhstan increased by 77% in H1 (Interfax)

BUSINESS AND ECONOMY:

CenterCredit probe by financial police shows no violations (SRI)

Bank lending slightly down in H1 – central bank (SRI)

Moody’s downgrades ATF Bank to Ba2 (SRI)

Steppe Cement H1 revenues up 20% in H1 2010 (SRI)

GSM Kazakhstan installs 4G base station in Astana (TeleGeography)

National Bank of Kazakhstan: Exchange rates July 30, 2010 (Kazinform)

METALS AND MINING:

Financial police suspects Polyus Gold directors of fraud in KazakhGold deal (Interfax)

POLITICS:

The U.S., Kazakhstan and stresses of empire (The Globalist)

Nuclear Center prepares documents for Semipalatinsk nuclear test site land reclamation (Interfax)

SOCIETY:

Disco fever fails to grip Almaty (EurasiaNet)

REGIONAL:

Uzbeks flee Kyrgyzstan for Russia (Global Post)

Food crisis next challenge for Kyrgyzstan? (EurasiaNet)

U.S. aims to expand its presence in Uzbekistan (CACI Analyst)

SOURCE: http://silkroadintelligencer.com/2010/07/30/kazakhstan-daily-news-roundup-july-30-2010/

The BTA saga 0

Posted on March 26, 2010 by KazCham

ONCE UPON A time, all six of Kazakhstan’s biggest  banks were Kazakh-owned and accounted for 86 per cent of banking assets. They stayed home-owned,  unlike most banks in central Europe, because they  borrowed to fund their headlong growth by raising  cheap equity in London and/or by borrowing lots  of money, very cheaply, from foreign banks –  $45 billion, to be precise.

By the time the fairy story ended, in August  2007, two of the ‘big six’ banks, ATF Bank and  BankCenterCredit (BCC), had already been sold, at very high multiples at the top of the market,  to Italy’s UniCredit and South Korea’s Kookmin Bank respectively. Several others, including  Kazkommertsbank (KKB), had also linked up with  foreign minority partners.

They were the lucky ones. Once Kazakh banks  became victims of the US sub-prime crisis, deep- pocketed foreign shareholders suddenly became  highly desirable and are now being actively sought by -»Alliance Bank, and above all, BTA Bank.

BTA was effectively nationalised in mid-February  when the government, in the shape of the Samruk/ Kazyna holding company, shovelled nearly $5 billion  into the banking system and took a controlling  75.1 per cent stake in BTA in return for $1.7 billion of  fresh equity.

In a conference call with BTAs investors and  creditors on 28 April, Anvar Saidenov, the former  Central Bank president who now runs BTA, explained  that Samruk had acquired the controlling stake “via a mandatory additional share issue… as a result of BTA  being in breach of liquidity and capital requirement.”BTAs ousted former president, Mukhtar Ablyazov,  didn’t see it that way. He complained that the bank  had been the victim of an egregious act of corporate  raiding, before fleeing the country ahead of the  bailiffs. He is now required to respond to accusations  of money-laundering and illegally transferring  funds to front companies. From a safe distance,  Ablyazov has started legal proceedings in an attempt  to get billions of dollars in compensation for the  bank’s former owners, although he is not formally a  shareholder in the bank himself, according to Central Bank chief, Grigori Marchenko.

Ablyazov, long viewed with suspicion by the  establishment, is a boyish-looking, hyper-active  entrepreneur, and former energy minister. He helped  finance and lead the opposition Democratic Choice  movement earlier in the decade before being jailed  for allegedly misappropriating funds. After a year in  jail he was given a presidential pardon and released,  promising to give up politics and throw his energies  into business.

By the time the global financial crisis broke two  years ago, Ablyazov and chairman Roman Solodchenko had built BTA into the country’s biggest bank. In the  process they borrowed more than $15 billion – mostly  in foreign currency – and re-lent much of the money  into property and other projects in Kazakhstan and  throughout the former Soviet Union.

While commodity prices remained high, for the  first year of the crisis, BTA, along with other heavily  indebted banks, was able to repay maturing debt and  interest by recalling maturing loans and rolling over  loans at higher rates. But when commodity prices  nose-dived in the second half of 2008, in the global  meltdown that followed the collapse of Lehman  Brothers, corporate balance sheets contracted, cash  evaporated and depositors looked for a safer home. Tenge devaluation in early February added further to  the foreign debt burden of all banks, but especially  BTA as the most indebted.

When Samruk/Kazyna took possession of their  new asset, Anvar Saidenov, the former Central Bank  president, moved in to take charge and a small army  of finance police moved in to the bank to go through  the books and computer files with a fine toothcomb.

The cultural change is dramatic – from free- wheeling, growth-orientated, entrepreneurial  whiz-bang the bank is now just ticking over in  the safe hands of a former central banker and  financial bureaucrats. Little wonder, under the circumstances, that the main priorities of the new  management are to restructure the bank’s debt as  soon as possible and find a new owner to rebuild the h bank. UBS and Goldman Sachs have been called in as financial advisers.

Their task became more difficult after the  new management was forced to default on BTAs  foreign loans in April. Morgan Stanley and another  international banks called in loans totalling $550  million, triggering what would have been an  avalanche of early repayment demands, which the  state made quite clear it was not prepared to deplete  its reserves to satisfy.

The US investment bank justified the move as  a response to changes in ownership covenants  following Samruk’s defenestration of the old regime  and downgrades by the international rating agencies.  Standard and Poors moved BTA debt to “default”  status and Fitch downgraded BTAs long-term issuer  default rating to “restricted default” as the new state  owners are continuing to pay interest on outstanding debt and repaying smaller loans, below $10 million,  as they come due.

BTA is not alone in its default. In May, Alliance  Bank requested a three-month moratorium on  debt repayments after writing down $1.1 billion  of assets linked to US Treasuries. BTA, Halyk, KKB  and other banks, meanwhile, have raised new bond  issues domestically where possible to shore up their  capital base and allow them to buy up some of their distressed bonds at a discount.

With BTA formerly scheduled to pay back  $3 billion this year out of $9 billion of foreign loans  still outstanding, the new owners have taken a  tougher line with creditors, pointing out that those  granting foreign loans and credits to Kazakh and  other emerging market banks in the boom years  were all professionals who should have been aware  of the risks.

At the annual Fitch rating conference in April,  Elena Bakhmutova, chairperson of the Kazakh Agency for Regulation and Supervision of Financial Markets  and Financial Organisations (KFSE), said: “We will use all feasible suggestions – redemption of discounts,  substitution of new debt securities and so on.” But,  she underlined “under no circumstances will state  guarantees be used.” It is on this basis that BTAs  new owners are negotiating debt-restructuring terms h with creditors to clear the ground for substantive  negotiations with potential new owners.

The leading suitor is Russia’s giant Sberbank, the  former Soviet savings bank. Ownership of BTA would  give Moscow a powerful new role in the Kazakh  economy. Russia, however, is also suffering from the  global economic crisis and Sberbank is having its own  problems with mounting bad debts. However, the  Russian state is preparing a substantial recapitalisation of Sberbank, both to strengthen it domestically and  provide it with the financial firepower to take over BTA if terms can be agreed. Whether any other suitors  emerge depends largely on the evolution of the  banking crisis elsewhere in the world.

Looking ahead, the chance to buy what was  Kazakhstan’s biggest bank, with subsidiaries  throughout Central Asia, is probably an unrepeatable opportunity. But deep pockets and strong nerves are  called for, and both are currently in short supply.

Invest in Kazakhstan An official publication of the Government of the Republic of Kazakhstan, 2009. Page: 82-83.



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