Kazakhstan Chamber of Commerce in the USA

KazCham



Kazakhstan Daily News Roundup – May 26, 2011 0

Posted on May 26, 2011 by KazCham

Kazakhstan Daily News Roundup – August 24, 2010 0

Posted on August 24, 2010 by KazCham

HEADLINES:

Kazakhstan first in, first out
(bne) – Predictions that Kazakhstan would be first in, first out of the crisis have proved to be not far from the truth. The rise in commodity prices over the last year has boosted the natural resources sector, which has in turn dragged the rest of the economy, including the banking sector, along with it.

PetroKazakhstan and Lukoil end ownership dispute over Kazakh oil field
(SRI) – Russian Lukoil signed an agreement with PetroKazakhstan, a Kazakh-Chinese joint venture, that will pay the Russian oil company about $438 million in damages to bring an end to a prolonged ownership dispute over the Kazakh Turgai Petroleum oil venture.

Kazakhstan ready to increase grain exports to drought-stricken Russia
(SRI) – Kazakhstan is ready to supply up to 2 million tonnes of grain to Russia this season, about 25% of its total exports, as Russia may face shortage caused by prolonged heat wave and draught, Reuters reported last week.

ENERGY:

KMG EP first-half income falls 22% on forex (SRI)

KazMunaiGas said to plan joint exploration venture with BG in North Sea (Bloomberg)

Tax police to complete KPO tax probe in two weeks (Interfax)

Tethys Petroleum: Kazakhstan Kul-Bas exploration period extended (Marketwire)

BUSINESS AND ECONOMY:

Kazakhstan pushes Islamic finance post-crisis (Reuters)

BTA issues shares as part of restructuring (SRI)

ATF reports losses in January – July (SRI)

Financial police probing alleged misappropriation of KZT58.7 million at Almaty Airport (Interfax)

Kazakhstan to build new crop-duster aircraft (RIA Novosti)

National Bank of Kazakhstan: Exchange rates August 24, 2010 (Kazakhstan Today)

METALS AND MINING:

ENRC buys into disputed Congo project (Financial Times)

Alhambra, John Komarnicki and Hillcrest Investments announce conversion of secured debentures into shares (Marketwire)

Alhambra closes $4.6-million first tranche of $6.0-million equity financing (Marketwire)

POLITICS:

Ablyazov asylum case could lead to rift with Kazakhstan (Telegraph)

REGIONAL:

Tajik borders tightened after deadly jailbreak (AFP)

Southern Kyrgyz mayor challenges government authority (AP)

Azerbaijan Supreme Court rejects bloggers’ appeal – lawyer (AFP)

SOURCE: http://silkroadintelligencer.com/2010/08/24/kazakhstan-daily-news-roundup-august-24-2010/

Foreign banks 0

Posted on March 22, 2010 by KazCham

WITH THE BENEFIT of hindsight, the timing of the  first major foray by foreign banks into the domestic  banking market could hardly have been worse. But  from a long-term perspective, the decision of Italy’s  UniCredit and South Korea’s Kookmin Bank to  pay $2.3 billion and $1 billion respectively for ATF  and BankCentreCredit (BCC) just before the global  financial crisis erupted in the summer of 2007 could h well turn out to be prescient once Kazakhstan and Central Asia return to the path of rapid growth.

For UniCredit, the move into Central Asia’s richest h and most dynamic economy was an extension of its  previous foray into Central Europe as the acquisitive  Italian bank looked to diversify beyond slow-growing western European markets. For Kookmin, expansion  into resource-rich Kazakhstan reflected both  expectations of faster growth than Korea itself and  a chance to position itself for an expected influx of  South Korean investment in energy and commodity projects – including nuclear. In May 2009, Kookmin’s  chairman was a prominent member of a South Korean business delegation which earmarked projects worth $5 billion for investment by Korean companies  and banks.

“We strongly believe that a strategic partnership  will bring us competitive advantages and make it  easier to deal with any financial wobbles,” says Timur  Ishmuratov, managing director of BCC’s international  department. “Kookmin, like our bank, has a focus  on the retail and SME [small- and medium-sized  enterprises] market. It offers some very good products,  based on sophisticated IT infrastructure, which could  potentially be very good for our clients, too.”

Kazakh banks grew by focusing on corporate  finance and the construction sector. In both cases,  personal contacts were often key to business. While  local banks were active in the corporate market, their  understanding and penetration of the retail market,  especially mortgage lending, was low. Just as they  were developing expertise in these areas, retail and  mortgage lending became the first casualties of the  sub-prime crisis.

Some foreign banks spotted the opportunity to  expand, while local banks pulled back to focus on  repaying debts. HSBC, for example, one of several  foreign banks working in Kazakhastan for more  than a decade, recently decided to open several  new branches and make an additional $100 million  available for mortgage finances

Before the entry of UniCredit and Kookmin into  mainstream banking, most foreign banks, including Citibank and ABN-Ambro, concentrated on servicing the Kazakh subsidiaries of international companies  and expats and facilitating foreign borrowing for  Kazakh banks and companies. ABN was acquired  by Royal Bank of Scotland and its former Kazakh  subsidiary is now looking for a new owner following the virtual nationalisation of RBS itself in the UK  banking meltdown.

Before the global crisis brought banking back  to Earth, dozens of foreign banks were seeking to  get a foothold in the market by buying a Kazakh  bank. But prices were sky high and several potential  foreign buyers, such as Austria’s Raiffeisen, which  first sought to buy BTA several years ago, were unable to find suitable acquisition targets at an acceptable  price. “We observed the market but the prices did  not reflect the environment and potential risks, so  we decided to start from scratch,” a bank spokesman  said. The alternative plan to start a greenfleld bank is  currently on hold.

Now may be a good time for potential buyers  to look again, however. While the government is  focused on finding a new foreign owner for BTA, new  regulations setting a tenge 5 billion ($3.5 million)  minimum capital requirement for Kazakh banks  come into force in July, putting pressure on smaller  banks to consolidate or put themselves up for sale.  International Bank of Alma ty, with a capital of just  tenge 1.5 billion, was recently taken over, for example,  and is now being re-branded as Home Credit.

Ironically, just as Kazakh banks have become open  to takeover and more attractively priced, most foreign banks have drastically scaled back their expansion  plans. “Without the international crisis I would say  that we could expect more investment in Kazakhstan, h because prices are now optimal,” says Alexander  Picker, the Austrian president of ATF Bank. “But,  while any bank not looking to expand in Central and  Eastern Europe used to get a bad mark from analysts,  now it’s the opposite. I don’t know how many banks  will be brave enough to see the potential and act. It  depends very much on the bravery and anti-cyclical  ideas of boardrooms – many of which are in survival  mode at present.”

Several investment banks, including JP Morgan,  which has an important advisory role with Kazakhmys h and other big corporates, and Deutsche Bank, have  recently set up representative offices in Almaty,  to show the flag and be ready for more ambitious  moves, when the time is right. There is currently high  demand for advisory services – with UBS and Goldman h Sachs, for example, recently taken on as advisers to the government on settling the future of BTA.

Russian banks are also stepping up their presence. Sberbank, currently eyeing up BTA, leads the pack  while VTB, Russia’s former foreign trade bank, has  pared down its expansion plans for the CIS generally to concentrate on what it sees as the most attractive  markets – Kazakhstan and Azerbaijani

On the investment banking side, Russia’s Troika  followed Renaissance Capital into Kazakhstan  last year through the acquisition of local asset  management house Almex, and there is also  interest from further afield. Israel’s Bank Hapoalim,  for example, completed its acquisition of Demir Kazakhstan Bank (since re-branded Bank Pozitiv) in  November 2007, and Bank of Tokyo Mitsubishi is due -to set up a representative office in early 2009, with  the initial aim of serving Japanese companies.

Invest in Kazakhstan An official publication of the Government of the Republic of Kazakhstan, 2009. Page: 84-86.



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