Kazakhstan Chamber of Commerce in the USA

KazCham



Kazakhstan Daily News Roundup – January 25, 2011 0

Posted on January 25, 2011 by KazCham

HEADLINES:

KazMunaiGas to raise $500 million in 2011; crude production to remain stable
(SRI) – KazMunaiGas (KMG), Kazakhstan’s national oil and gas company, plans to raise about $500 million this year to restructure its debt and fund new and existing projects, the company’s chief executive Kairgeldy Kabyldin said.

Caspian Transportation System postponed until 2018 – KMG
(SRI) – The implementation of the Kazakhstan Caspian Transportation System (KCTS) will be postponed at least until 2018, KazMunaiGas head Kairgeldy Kabyldin said.

Samruk-Kazyna to raise $1 billion in 2011
(SRI) – Samruk-Kazyna, Kazakhstan’s state holding and investment company, plans to raise more than $1 billion on local and international markets this year to finance investment projects of its subsidiaries and affiliated companies.

ENERGY:

Caspian Sea oil find could be ‘biggest this year’ (Telegraph)

Kazakhstan increases oil refining by 13% in 2010 (SRI)

BTC and Tengizchevroil continuing talks – KMG head (TREND)

BUSINESS AND ECONOMY:

Kazakh bank loan portfolio seen flat in 2011 – central bank (Reuters)

National Bank of Kazakhstan: Exchange rates January 25, 2011 (Kazakhstan Today)

Indicators – January 24, 2011 (Reuters)

MINERAL RESOURCES:

Central Asia Resources appoints Christopher Campbell-Hicks to progess Kazakhstan projects (Proactive Investors)

Alhambra Resources: Granting of stock options (Marketwire)

POLITICS:

Foreign Minister to get warm Washington welcome despite democracy concerns? (EurasiaNet)

Kazakhstan ratifies agreement with IBRD on borrowing $17 million for reform (Itar-Tass)

SOURCE: http://silkroadintelligencer.com/2011/01/25/kazakhstan-daily-news-roundup-january-25-2011/

Kazakhstan Daily News Roundup – September 28, 2010 0

Posted on September 28, 2010 by KazCham

HEADLINES:

KMG Exploration Production buys two Kazakh oil firms for $65 million
(SRI) – KazMunaiGas Exploration & Production (KMG EP), the London-listed subsidiary of the Kazakh national oil and gas company, said on Monday it will buy two small Kazakh oil firms as it seeks to expand production synergies.

Kazakhstan to ban buckwheat exports
(SRI) – Kazakhstan plans to “temporarily” ban the export of oilseeds and buckwheat as domestic prices soared in September, the government said on Monday.

Samruk-Kazyna places $418-million bonds on KASE
(SRI) – Samruk-Kazyna, Kazakhstan’s state owned holding and investment company, placed 10-year domestic bonds worth KZT61.4 billion ($418 million) on the Kazakhstan Stock Exchange (KASE) on Monday, KASE reported.

ENERGY:

Max Petroleum reassures investors at AGM (Interactive Investor)

Environment agency of Kazakhstan to complete inspections of all oil companies by end of September (Interfax)

BUSINESS AND ECONOMY:

Tau Capital invests in Kazakh oil explorer (SRI)

Kazakhstan to export 7-8 million tons of grain (SRI)

Moody’s assigns (P)Baa3 to Kazakhstan Temir Zholy’s proposed notes (Cbonds.Info)

AREM suggests tightening control of monopolies as to their contractual obligations (Interfax)

National Bank of Kazakhstan: Exchange rates September 28, 2010 (Kazakhstan Today)

Indicators – September 28, 2010 (Reuters)

MINERAL RESOURCES:

ArcelorMittal Temirtau to launch $75 million environmental program (SRI)

POLITICS:

Financial Police brings charges against Kazakh Health Minister (Interfax)

REGIONAL:

Russia wants to supply all of China’s gas needs (AP)

Documentary shows dramatic shrinking of the Aral Sea (AFP)

SOURCE: http://silkroadintelligencer.com/2010/09/28/kazakhstan-daily-news-roundup-september-28-2010/

Kazakhstan Daily News Roundup – August 26, 2010 0

Posted on August 26, 2010 by KazCham

HEADLINES:

Karachaganak stake sale talks to conclude in weeks – Eni
(SRI) – Karachaganak Petroleum Operating (KPO), the Eni- and BG-led consortium of oil companies developing the Karachaganak field, is currently in talks with Kazakhstan to finalize the sale of a stake in the project, Eni CEO Paolo Scaroni said on Wednesday.

Samruk-Kazyna files claim against BTA over loans
(SRI) – Samruk-Kazyna, Kazakhstan’s state-owned holding and investment company, filed a claim in a Kazakh court against BTA Bank and “some of its creditors” over $300 million in transactions, BTA said on Wednesday.

U.S. judge rejects BTA Bank’s bid to stop lawsuit (SRI)

BUSINESS AND ECONOMY:

Samruk-Kazyna files claim against BTA over loans (SRI)

STX Group to build two icebreakers for Kazakh company (SRI)

Moody’s affirms Halyk Bank’s Ba2/D- ratings (Moody’s)

Former Ministry of Trade official named new head of Kazakhstan Investment Fund (SRI)

Living in fear in London: the exiled Kazakh banker accused of $2 billion fraud (Evening Standard)

Kazakhstan’s GDP to grow 5% in 2010 – Economic Development Ministry (Interfax)

Kazakhstan to supply feed grains to Tatarstan (Interfax)

Air Astana reports strong performance during first half 2010 (eTravel Blackboard)

SOCIETY:

Kazakh circus owner leaves lion in van overnight (SRI)

SOURCE: http://silkroadintelligencer.com/2010/08/26/kazakhstan-daily-news-roundup-august-26-2010/

Kazakhstan May Seek $2 Billion From China for ENRC, Kazakhmys 0

Posted on July 08, 2010 by KazCham

Bloomberg, by Nariman Gizitdinov

July 2 (Bloomberg) — Kazakhstan may seek $2 billion in Chinese loans to build smelters and help meet the country’s plan to double metal output by 2015, with money going to companies such as Kazakhmys Plc and Eurasian Natural Resources Corp.

The state-owned National Wellbeing Fund Samruk-Kazyna is “considering financing of new smelters of about $2 billion,” Chief Executive Officer Kairat Kelimbetov said by e-mail today. The money will be “either for Kazakhmys, Eurasian Natural Resources Corp. or other Kazakh companies,” he said.
Kazakhstan plans to double the production and export of metals in five years, President Nursultan Nazarbayev said in January. Kazakhmys and ENRC, the world’s largest producer of ferrochrome on a chrome-content basis, have already sought investment from China for new smelters and mines.

Samruk-Kazyna will also seek more than $1 billion from China to build a railroad from Zhetygen, near the financial capital Almaty, to Khorgos, a customs terminal on the Chinese border, Kelimbetov said. ENRC last year pulled out of the rail project to connect its plants to China after failing to get an agreement from the Kazakhstan government for the project.

SOURCE: Kazakhstan News Bulletin No 18, released by the Embassy of the Republic of Kazakhstan to the United States of America

Alliance loses $2 billion in 2009 0

Posted on May 19, 2010 by KazCham

(SRI) – Alliance Bank reported a net loss of KZT299 billion ($2.03 billion) in 2009, compared to a loss of KZT386 billion ($2.63 billion) a year earlier, according to the bank’s financial statements.

Its assets declined KZT748 billion ($5.09 billion) to KZT419 billion ($2.85 billion) in 2009. Alliance ended 2009 with a negative capital of KZT526 billion ($3.58 billion).

Alliance, which was the first Kazakh bank to default on its debt in 2008, completed its debt restructuring in March, reducing its total debt to $1.1 billion from $4.6 billion. As a result of the restructuring, state-owned holding and investment company Samruk-Kazyna now holds a 67-percent stake in Alliance, while its creditors control the remaining 33 percent. Samruk-Kazyna is reportedly seeking a buyer for its stake in Alliance.

Alliance plans to begin borrowing abroad next year when international capital markets open for Kazakh lenders, Alliance CEO Maksat Kabashev said in March.

BTA Bank, Temirbank, and Astana Finance, three other lenders which had declared default in 2008, are still in negotiations with creditors, seeking to restructure a total of approximately $15 billion.

SOURCE: http://silkroadintelligencer.com/2010/05/13/alliance-loses-2-billion-in-2009/

Kazakhstan May Restrict Corporate Withdrawals to Protect Banks, S&P Says 0

Posted on May 18, 2010 by KazCham

Kazakhstan is likely to restrict corporate withdrawals to keep banks liquid and allow them to recover as the country’s lenders try to restructure about $20 billion in debt, Standard & Poor’s said.

“During the crisis, the government controlled very actively the largest deposits in banks, including incentives for state companies not to withdraw their money,” Ekaterina Trofimova, a Paris-based S&P bank rating director, said in a May 15 interview in Almaty. The state directly or indirectly controls one-third to half of Kazakh bank deposits, she said.

Companies are now seeing that the crisis is passing, and “they want to get their money back,” Trofimova said. “But banks won’t be allowed to collapse in the interest of major companies, including state-owned ones, so the removal of deposits by companies will be careful and coordinated. Withdrawals won’t break the banking system, but they will limit its growth.”

Banks in the former Soviet republic face continued weak asset quality, unreliable funding conditions, and low capitalization for at least two more years, Standard & Poor’s said on April 19. Kazakhstan’s financial industry is still struggling to recover from the failure of BTA Bank, which defaulted in April last year two months after it was taken over by the state-owned National Wellbeing Fund Samruk-Kazyna.

Bank Defaults

Besides BTA, which was the country’s biggest lender before its collapse, Alliance Bank, AO Astana Finance and Temirbank, then controlled by BTA, have also defaulted, leaving about $20 billion in debt to be restructured.

Samruk-Kazyna controls stakes in state-owned energy company KazMunaiGaz National Co., uranium miner Kazatomprom, railway monopoly Kazakhstan Temir Zholy and phone operator Kazakhtelecom. The fund also owns stakes in Kazkommertsbank and Halyk Savings Bank, the two biggest lenders by assets, and controls BTA, Alliance and Temirbank.

New foreign borrowing by KazMunaiGaz and Kazatomprom “reduce the urgency of the problem of a possible reduction of large deposits in local banks,” Trofimova said.

KazMunaiGaz sold $1.5 billion of 10-year notes last month, while Kazatomprom sold $500 million of five-year notes last week, according to Bloomberg data.

Deposit Growth

“It’s disputable that Kazakh banks can base their development strategy on domestic resources, since people’s incomes and savings are relatively small and companies’ liquidity has been largely exhausted by the crisis,” Trofimova said. Kazakh bank deposits will increase 20-25 percent at best this year, and no more than 30 percent in 2011, she said.

KazMunaiGas Exploration Production, the London-traded unit of KazMunaiGaz, keeps most of its $4 billion in cash at accounts with Kazkommertsbank and Halyk, Alexander Gladyshev, the company’s head of investor relations, said by telephone from the capital Astana today. “The company has no problem in financing its current operations and capital expenditure, including payments of dividends,” he said, adding that KazMunaiGas as yet has no need to make “billions in withdrawals.”

Sholpan Mukasheva, a spokeswoman for Samruk-Kazyna, Galym Tumabayev, a spokesman for KazMunaiGaz National Co., and Sergei Nasyrov, a spokesman for Kazatomprom, all declined to comment.

Kazakhstan’s 39 banks held 7.298 trillion tenge ($49.8 billion) in deposits in the first quarter, down from 8.09 trillion tenge in the same period last year, according to the website of the Agency for Financial Supervision.

‘Free Liquidity’

“Kazakh banks have free liquidity of about $12 billion,” central bank Chairman Grigori Marchenko said on April 21. The country will increase reserve requirements for banks if they don’t “invest their excess liquidity in loans” in the first quarter, he said in January.

According to Trofimova, “Kazakh banks don’t have excess liquidity; liquidity is entirely adequate, taking into account its short-term character, the high concentration of deposits and remaining uncertainty in domestic and foreign markets.”

Kazakh banks’ combined loan portfolio dropped to 9.472 trillion tenge last quarter from 10.255 trillion tenge a year earlier, data from the Agency for Financial Supervision show. Banks’ total assets slumped 15 percent in the period to 11.946 trillion tenge, it said on April 23.

Nonperforming Loans

The combined loan portfolio may grow as much as 10 percent this year, and will rise even more in 2011, Trofimova said. Kazakh banks’ nonperforming loans, including those that have been restructured, account for almost 55 percent of total loans, she said, adding that gradual improvement will be seen in the fourth quarter. Nonperforming loans issued by banks excluding the four that defaulted are at just over 40 percent, she said.

Kazakh lenders raised provisions, cash set aside to cover loan losses, to a combined 3.5 trillion tenge, or 37 percent of their loan portfolios, in the first quarter from 1.56 trillion tenge a year earlier, according to the financial watchdog.

The defaulted lenders may recover more than a half of nonperforming loans, while the rest will get back more than two thirds, but only in the two to four year period, Trofimova said.

The economy of Kazakhstan, which holds 3.2 percent of world oil reserves according to BP Plc, grew an annual 7.1 percent in the first quarter, the country’s State Statistics Agency said on May 14.

Economic growth slowed to 1.2 percent last year from 3.2 percent in 2008. The economy grew 10 percent on average each year between 2000 and 2007 as energy and commodity prices rose.

To contact the reporter on this story: Nariman Gizitdinov in Almaty at ngizitdinov@bloomberg.net

SOURCE: http://preview.bloomberg.com/news/2010-05-17/kazakhstan-may-freeze-corporate-deposits-to-protect-bank-funds-s-p-says.html

SamrukKazyna buys into Temirbank 0

Posted on May 15, 2010 by KazCham

Almaty. May 14. Interfax-Kazakhstan – SamrukKazyna Kazakh State Fund of National Welfare has acquired a shareholding in Temirbank, the Kazakhstan Stock Exchange (KASE) reported.

Thus, according to the register of the bank shareholders as at 12 May, 2010, SamrukKazyna held 75.93% in the total outstanding shares, Kazakhstan’s BTA Bank had 13.32%.

Meanwhile, state fund’s share in the total outstanding common shares was 79.93% (75.933 million) and BTA Bank held 14.02% (13.318 million).

The total authorized common shares total 95 million, while preferred stock comes to 5 million.

The bank repurchased 96,620 of its preferred shares.

Temirbank and its parent company BTA Bank are now restructuring the debts.

In the first half of 2009 Temirbank was ranked 78th by assets among the CIS banks and 10th among the Kazakh banks according to the Interfax-1000: CIS Bank ranking prepared by the Interfax Center of Economic Analysis; BTA Bank was ranked 8th and 1st respectively.

SOURCE: http://www.interfax.kz/?lang=eng&int_id=10&news_id=3478

Alliance Bank completed debt restructuring 0

Posted on March 30, 2010 by KazCham

LONDON, Mar 30 – IA News-Kazakhstan. Alliance Bank has completed the restructuring of debt declared the press office of the bank.

“Alliance Bank is pleased to announce the completion of all planned activities on restructuring the debt of the bank”, was stated in Tuesday press release of the bank.

According to the press release, the National Welfare Fund “Samruk Kazyna” produced capital increase of JSC Alliance Bank for 129 billion tenge by purchasing newly issued common shares of the bank for $ 24 billion tenge and of conversion rights to the bonds of the bank’s preferred shares worth 105 billion tenge.

Under the restructuring plan, all financial obligations of the bank was restructured and canceled in exchange for money, new bonds and equities.

As a result of debt restructuring and capital increase, the bank’s additional capitalization is 547.9 billion tenge, where its regulatory net worth is 50 billion tenge, which corresponds to the prudential requirements.

The volume of debt as the result of the restructuring was reduced from approximately 4.5 billion (including accrued interest) up to 1,08 billion dollars, including: $ 850 million – the senior debt in eurobonds, 85 million – a real trade finance, 145 million – subordinated 20-year bonds.

As a result, 67% of the common shares of the bank are at FNB “SamrukKazyna”, 33% – from creditors, 67% of preferred shares at FNB “SamrukKazyna”, 33% – from creditors.

As noted in the announcement of the bank, 33% of its shares are distributed among more than 2 thousands of minority shareholders, none of which has no share of more than 3% of the shares.

Loan term lengthened to 7-20 years, with maintenance of principal will commence no earlier than 4 years.

SOURCE: http://www.zakon.kz/167578-aljans-bank-zajavljaet-o-zavershenii.html

New focus on small and medium-sized enterprises 0

Posted on March 18, 2010 by KazCham

SAMRUK, THE POWERFUL state holding company  which controls the ‘commanding heights’ of the  Kazakh economy, from pipelines and power lines  to railways, telecoms and oil companies, also  sponsors KazNex, an export promotion agency set  up specifically at President Nazarbayev’s request to  encourage small and medium-sized enterprises (SMEs) to raise quality and compete in export markets.

The government is keen to encourage small  companies to help diversify the economy and reduce  reliance on the extractive industries. SMEs currently  account for well under 20 per cent of GDP and  limited knowledge and penetration of export markets is one of their biggest weaknesses.

“Our vision is to become a driving force for  building support for exports. We already export  raw materials, and we want to develop exports  with higher value added,” says the KazNex agency’s  dynamic deputy chairwoman, Saule Akhmetova.  “We started with a study of best practice in other  countries, especially South Korea, Singapore,  Australia and Malaysia where growth was export led,” Akhmetova says.

“The problem in Kazakhstan is very low  awareness of the importance of exports on the  part of government, society and business. As more  international companies, including multinational  corporations such as Procter & Gamble, enter the  market, local businesses have to raise their game and focus on quality and marketing to compete effectively on both domestic and export markets,” she adds.

One company that addressed this issue was  Bekker & Co, a Kazakh-German joint venture in the  food processing sector. Bekker’s general director,  Ivan Kravchenko, says that from the moment  of independence in 1991 he realised that local businesses would not be able to compete with foreign imports. He went to the head of the German food  company, Bekker GmbH, who agreed to create a joints venture, which almost two decades later employs 770 people with an annual turnover of ?35 million.  Every 24 hours, Bekker produces nine tonnes  of sausages and 1.5 tonnes of bread and bakery  products, as well as traditional foods such as Russian pelmeni and Kazakh manti (dumplings) – always with h the emphasis on high-quality ingredients and  hand preparation.

“We employ lots of people for our relatively small  output. Most is prepared by hand, which we think is a major contributor to quality – we want our products  to be the same quality as home-cooked foods,”  says Kravchenko.

“Quality begins with raw materials in the food  industry. If you buy poor meat, no amount of effort  will improve it. Therefore we work with the best  suppliers. We buy our meat in Kazakhstan but other  products are imported,” he adds.

Almaty and the surrounding area is the main  market, but Kravchenko says the company wants to  export to the EU. “We have a large territory and a  relatively small population so we can feed ourselves  and have enough left over to sell abroad without  heavy use of chemical fertilisers. If we produce  ecologically clean products, we can sell them anywhere,” he says.

Ms Akhmetova of KazNex believes there is very  good potential for companies in the food processing,  textiles, chemicals, pharmaceuticals and paper  products sectors to boost exports but admits that  the crisis has slowed things down. “Companies  have limited access to funds, and some have even  suspended their activities temporarily,” she says.

One successful exporter is Textiline, which  produces a line of sportswear for Swiss clothing  manufacturer Assos at its state-of-the-art factory  in Talgar near Almaty. The company is one of a  new breed of Kazakh businesses where focus on  quality makes it possible to compete effectively with -international firms both at home and abroad.

Producing workwear for blue chip customers  such as TengizChevroil, KazMunaiGaz and KazZinc  accounts for around 65 per cent of its business, but Textiline also provides children’s clothes for the  domestic market and niche projects such as  making costumes and fabrics for the epic Kazakh  film, Nomad. According to sales and marketing director Inna  Apenko, investing in technology and staff training  was the only way Textiline could compete with low  cost exports from China – a perennial problem for  Kazakh businesses. High labour and operating costs  mean it costs five times more to produce a simple  t-shirt in Kazakhstan than in China or Turkey. “A  cheap labour force is a big competitive advantage for clothes manufacturers, but unfortunately, we don’t  have this. Unlike Vietnam or Indonesia, we also have  a shortage of specialists in this field so we had to set  up special courses,” Apenko explains.

“Our advantage over China is in technology  and intellectual property,” she adds. “When Assos  selected Textiline, the company said it needed to  be confident of quality production, and we could  guarantee this. We employ a team of specialists in  design, engineering and technology, whereas in  Chinese companies this work is typically carried out  in Europe.” Today, Textiline is the largest clothes  manufacturer in Kazakhstan, with six factories,  employing 1,200 people.

In recognition of the difficulties of raising  funds for investment, or even working capital,  the government has set up a new fund, called  Damu, which works with banks to finance smaller  companies. It has 117 billion tenge to lend at a preferential 12.5 per cent interest rate and a further  3 billion tenge specifically to help small companies  take part in state tenders or produce goods for export. The EBRD has also been an active provider of finance  to Kazakh banks for on-lending to SME customers,  and ATF Bank President Alexander Picker says that  the UniCredit-owned bank is using its international  experience to develop small business lending in  Kazakhstan, partly thanks to EBRD fundings

Bekker and Textiline have both had to adapt to  the economic slowdown, like most other Kazakh  companies. “Before the crisis, demand exceeded  supply, so we don’t plan to reduce output or cut  staff. But we have paid more attention to marketing  recently,” says Kravchenko.  Ms Apenko agrees on the importance of  enthusiatically promoting the company’s products.  “We plan to work actively towards exporting our  products,” she says. “But our major customers have  reduced orders by around 30 per cent, so we intend  to use this spare capacity to launch new consumer products for the domestic market.”

A study by KazNex found that funding was  actually not the main issue facing SMEs. “Our  research showed that the top problem was not  a lack of money but the need for better access  to information, better marketing skills and an understanding of international trade procedures. The most important thing is to change people’s mindset,” Akhmetova concludes.

Invest in Kazakhstan An official publication of the Government of the Republic of Kazakhstan, 2009. Page: 88-90.

The Samruk-Kazyna refinary projects 0

Posted on March 07, 2010 by KazCham

“Currently, «the Samruk-Kazyna» National Welfare Fund is reviewing 31 projects in various fields of Kazakhstan’s national economy. The total value of the projects exceeds 23 billion US dollars. Out of that amount approximately 11 billion US dollars account for petroleum refining and petrochemical industries, including refurbishment and upgrading projects for three oil refineries in Kazakhstan.

You probably know that a programme of these refineries’ enhancement has been developed in the framework of advanced hydrocarbon processing, which will improve the extent of future hydrocarbon conversion and improve the quality of the produced petrochemicals up to European standards and meet the country’s demands for high-octane gasoline and aircraft fuel.

Ongoing is the implementation of the development project to create the First Integrated Gas Chemical Facility that will produce baseline petrochemical products like polyethylene and polypropylene. We are also implementing a bitumen producing facility in Aktau at the plastic-making works. We are about to start operations to implement a project of aromatic compounds production at Atyrau Refinery. Some other production opportunities (including methanol facilities) are also being reviewed”.

From a welcome note of the managing director of Samruk Kazyna National Welfare Fund, B. Akchulakov

http://www.caspian-events.com/resources/Welcome+Letter_Samruk_Kazyna_en.pdf



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