ANALYSIS: Kazakhstan stands on verge of a retail revolution

A block away from President Nursultan Nazarbeyev’s summer residence, signs outside a small row of shops discreetly display the names of the world’s most exclusive brands – Cartier, Tiffany & Co, Van Cleef & Arpels. Uniformed doormen wait for the occasional customer, a nouveau Kazakh in a huge, gleaming SUV.

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News Roundup - June 25, 2008

energy:

Russian-Kazakh Caspian discovery claimed
(Oil and Gas Journal) - The first well on the Tsentralnaya structure in the Caspian Sea off Russia is a possibly giant oil and gas-condensate discovery, the OOO TsentrKaspneftegas joint venture announced earlier this month.

business and economy:

KazInvestBank outlook revised to negative
Standard & Poor’s Ratings Services affirmed the ‘B’ long-term and ‘B’ short-term counterparty credit ratings of the bank but lowered its Kazakhstan national scale rating to kzBB from kzBB+.

Eurasian Bank to increase capital by 50 percent
Eurasian Bank, Kazakhstan’s tenth largest bank, announced plans to boost its charter capital by 50 percent through an additional issue of shares worth 4 billion tenge.

Kazakhstan stock market to work in full in next 2-3 years: Kazakh PM
(Interfax) - “In next 2 – 3 years Kazakhstan stock market will start to work in full”, Prime Minister Karim Massimov has said at the Kazakh-American forum on public-private partnership initiative on Tuesday.

Kazakh-American forum on state-private sector partnership started in Astana
(Kazinform) - Representative of the US Department for Commerce pointed out that “the forum will become something like a catalyst for strengthening commercial and trade ties”. “Integration of the private sector to world economy depends on state bodies’ work,” he noted.

KazSat-1 predicament may continue till October – deputy Prime Minister
(Interfax) - A technical predicament with Kazakhstan’s first telecommunication satellite may last till October, deputy Prime Minister Umirzak Shukeev said.

Russia’s Renaissance Capital launches Central Asian stocks index
(Dow Jones - Easy Bourse) - Russian investment bank Renaissance Capital said Tuesday it has launched a new index for Central Asian stocks to draw investors’ interest to the economies of the former Soviet nations in the region.

Sales turnover between Kazakhstan and China may hit $15 bl within two years, Tazhin (Interfax)

Kazakhstan: harvesting campaign has started (AgriMarket.info)

Ministry of Labor of Kazakhstan plans to develop strategy of pension payments increase (Kazakhstan Today)

National Bank of Kazakhstan: Exchange rates June 25, 2008 (Kazinform)

Indicators - June 25, 2008
(Reuters) - Kazakhstan’s economic indicators based on data provided by the State Statistics Agency, government institutions, the central bank and exchanges.

politics:

Kazakh opposition says govt backsliding on reform
(Reuters) - Kazakhstan’s opposition accused the government on Tuesday of backtracking on pledges to bring more democracy ahead of the ex-Soviet nation’s chairmanship of Europe’s top democracy watchdog in 2010.

China ranks fourth among trade partners of Kazakhstan
(Kazinform) - Foreign Affairs Minister of China Yang Jiechi, who was nominated to this post last April, pays his first official visit to Kazakhstan.
The official visit of the Chinese FM is called to be a milestone in promotion of the Sino-Kazakh strategic partnership, Kazinform refers to the MFA’s press service.

Government to announce list of professional occupations requiring Kazakh language skills (Interfax)

Ambassadors of Kazakhstan to Korea and Iraq appointed (Kazakhstan Today)

society:

At the heart of Eurasia
(Nine O’Clock) - On July 6, 2008, Astana – the capital of the Republic of Kazakhstan – is celebrating its 10th birthday, a holiday of national importance. For Kazakhstan, the ten years that have passed since the relocation of the capital have become years of dynamic development and revival.

The northern Aral Sea returns to life in Kazakhstan
(AFP) - Fisherman Khaldan Kolzhanov’s eyes fill with emotion at the sound of the seagulls and the sight of the small waves lapping at the beach. Here in this corner of southwest Kazakhstan, thanks to the Kokaral dam, vast expanses of sand and salt have finally disappeared.

Key facts about the disappearing Aral Sea (Reuters)

regional news:

Iran likely Nabucco supplier
(UPI) - Iran may supply natural gas from its South Pars field to the proposed Nabucco pipeline over U.S. objections, a corporate official said Monday.

Kazakhstan Regional News Roundup - June 25, 2008

Iran likely Nabucco supplier
(UPI) - Iran may supply natural gas from its South Pars field to the proposed Nabucco pipeline over U.S. objections, a corporate official said Monday.

Kazakhstan Society Roundup - June 25, 2008

At the heart of Eurasia
(Nine O’Clock) - On July 6, 2008, Astana – the capital of the Republic of Kazakhstan – is celebrating its 10th birthday, a holiday of national importance. For Kazakhstan, the ten years that have passed since the relocation of the capital have become years of dynamic development and revival.

The northern Aral Sea returns to life in Kazakhstan
(AFP) - Fisherman Khaldan Kolzhanov’s eyes fill with emotion at the sound of the seagulls and the sight of the small waves lapping at the beach. Here in this corner of southwest Kazakhstan, thanks to the Kokaral dam, vast expanses of sand and salt have finally disappeared.

Key facts about the disappearing Aral Sea (Reuters)

Kazakhstan Politics Roundup - June 25, 2008

Kazakh opposition says govt backsliding on reform
(Reuters) - Kazakhstan’s opposition accused the government on Tuesday of backtracking on pledges to bring more democracy ahead of the ex-Soviet nation’s chairmanship of Europe’s top democracy watchdog in 2010.

China ranks fourth among trade partners of Kazakhstan
(Kazinform) - Foreign Affairs Minister of China Yang Jiechi, who was nominated to this post last April, pays his first official visit to Kazakhstan.
The official visit of the Chinese FM is called to be a milestone in promotion of the Sino-Kazakh strategic partnership, Kazinform refers to the MFA’s press service.

Government to announce list of professional occupations requiring Kazakh language skills (Interfax)

Ambassadors of Kazakhstan to Korea and Iraq appointed (Kazakhstan Today)

Kazakhstan Business and Economy Roundup - June 25, 2008

KazInvestBank outlook revised to negative
Standard & Poor’s Ratings Services affirmed the ‘B’ long-term and ‘B’ short-term counterparty credit ratings of the bank but lowered its Kazakhstan national scale rating to kzBB from kzBB+.

Eurasian Bank to increase capital by 50 percent
Eurasian Bank, Kazakhstan’s tenth largest bank, announced plans to boost its charter capital by 50 percent through an additional issue of shares worth 4 billion tenge.

Kazakhstan stock market to work in full in next 2-3 years: Kazakh PM
(Interfax) - “In next 2 – 3 years Kazakhstan stock market will start to work in full”, Prime Minister Karim Massimov has said at the Kazakh-American forum on public-private partnership initiative on Tuesday.

Kazakh-American forum on state-private sector partnership started in Astana
(Kazinform) - Representative of the US Department for Commerce pointed out that “the forum will become something like a catalyst for strengthening commercial and trade ties”. “Integration of the private sector to world economy depends on state bodies’ work,” he noted.

KazSat-1 predicament may continue till October – deputy Prime Minister
(Interfax) - A technical predicament with Kazakhstan’s first telecommunication satellite may last till October, deputy Prime Minister Umirzak Shukeev said.

Russia’s Renaissance Capital launches Central Asian stocks index
(Dow Jones - Easy Bourse) - Russian investment bank Renaissance Capital said Tuesday it has launched a new index for Central Asian stocks to draw investors’ interest to the economies of the former Soviet nations in the region.

Sales turnover between Kazakhstan and China may hit $15 bl within two years, Tazhin (Interfax)

Kazakhstan: harvesting campaign has started (AgriMarket.info)

Ministry of Labor of Kazakhstan plans to develop strategy of pension payments increase (Kazakhstan Today)

National Bank of Kazakhstan: Exchange rates June 25, 2008 (Kazinform)

Indicators - June 25, 2008
(Reuters) - Kazakhstan’s economic indicators based on data provided by the State Statistics Agency, government institutions, the central bank and exchanges.

Kazakhstan Energy Roundup - June 25, 2008

Russian-Kazakh Caspian discovery claimed
(Oil and Gas Journal) - The first well on the Tsentralnaya structure in the Caspian Sea off Russia is a possibly giant oil and gas-condensate discovery, the OOO TsentrKaspneftegas joint venture announced earlier this month.

KazInvestBank outlook revised to negative

(Silk Road Intelligencer) - Standard & Poor’s Ratings Services revised its outlook for KazInvestBank (KIB) to negative from stable, Interfax reported on June 24.

Standard & Poor’s Ratings Services affirmed the ‘B’ long-term and ‘B’ short-term counterparty credit ratings of the bank but lowered its Kazakhstan national scale rating to kzBB from kzBB+.

“The outlook revision and the Kazakhstan national scale downgrade reflect the increased pressure on the bank’s asset quality, in particular, its exposure to the troubled construction sector,” said Standard & Poor’s credit analyst Annette Ess in a press release.

The changed outlook and domestic rating revision also reflect the challenges of Kazakh banks to maintain asset quality and liquidity in wake of the recent credit crunch. KIB’s rapid growth, high lending concentrations, and small domestic franchise have accentuated these difficulties.

Its position as a niche player with strong focus on profitability, transparent and supportive shareholders, good management team and adequate risk management only partially mitigates these concerns.

“Although KIB benefits from business connections, capital support, and solid relationships with its shareholders (among them, a group of wealthy Kazakh businessmen, the European Bank for Reconstruction and Development, and Citi Venture Capital International), we give no rating uplift for support from the bank’s owners because we are uncertain about their ability and willingness to provide support if needed,” S&P said.

Furthermore, the agency did not factor in option of a state-organized bail-out because it doesn’t regard KIB as a systemically important bank to the Kazakh economy. The bank is the 16th largest bank in Kazakhstan in terms of assets with a market share is less than 1 percent.

Eurasian Bank to increase capital by 50 percent

(Silk Road Intelligencer) - Eurasian Bank, Kazakhstan’s tenth largest bank, announced plans to boost its charter capital by 50 percent through an additional issue of shares worth 4 billion tenge. Its charter capital at the end of March 2008 was approximately 8 billion tenge.

The bank’s board decided to issue 26,315 additional shares at 152,390 tenge per share, the bank said in a press release on Monday.

The raised capital will be used to implement its strategy to expand the bank’s branch network, retail banking operations and services to small and medium businesses.