Foreign investors are being lured back into Russia by businesses seeking to tap the public equity and bond markets, the Financial Times reports today, after almost three years when they have shied away over concerns of the impact of sanctions as well as worries over the economy.
As their board considers the possibility of a share placement on one of Asia’s major stock exchanges – most likely Hong Kong – executives from Russian energy giant Gazprom flew into Singapore and Hong Kong this week for the first time since 2015 in a bid to drum up interest; but even after last year’s commodities rally and a revival in Russian stocks, Asian money managers have yet to be persuaded that Gazprom is worth adding to their portfolio.
News that Gazprom (more…)
The ongoing consolidation of Kazakhstan’s banking sector could be about to undergo a major step change after it emerged that two of the country’s largest financial institutions, Halyk Bank and Qazkon were in merger talks. If successful, the new bank would command 38% of the country’s total bank assets (around $30bn) and have a combined loan base of approximately $20bn.
A rationalisation of the sector has been under way since 2015 when, with almost all of Kazakhstan’s banks still coming to grips with the fallout from the financial crisis of 2008/9 which left them grappling with weak balance sheets and a large number of non-performing loans (NPLs), the sector began coming under added pressure from the slowdown in the Chinese and Russian economies and plunging oil prices. Real GDP growth dropped from 4.3% to 1% and in August 2015 the authorities in Astana decided to float the tenge, causing its value to drop by 30% overnight,.
The devaluation impacted on all the country’s banks with Qazkom’s woes compounded by its acquisition of the nationalised BTA Bank (whose NPL rate stood as high as 89%) earlier in the same year.
Following government intervention, principally through the launch of a $2.8bn fund to help its banks tackle the problem of their ever-present NPLs, the National Bank of Kazakhstan (NBK) last year introduced new rules forcing them to raise their equity-deposit ratio and to increase the maximum permissible tenge deposit rate from 10% to 14%. Having also signed up to the Basel III regulatory framework accord (the global voluntary regulatory framework that calls for participating countries to strengthen their banks’ capital requirements by increasing liquidity and decreasing leverage) it then demanded that they raise their minimum equity levels to $300m – a 1000% increase – by 2021.
With only a handful of banks (including Halyk and Qazkom) currently meeting those requirements, the NBK’s policy was bound to trigger a wave of mergers and acquisitions. In the same year that Kazkommertzbank bought BTA, Forte Bank executed a reverse merger the Alliance and Temir banks, while the Eurasian Bank took over BankPozitiv.
Following news of the possible merger shares in Halyk Bank fell by 11.4% percent and those Qazkom increased by 6%.
Russian oligarchs: Rising share prices and a resurgence in the value of the rouble brought on partly by the prospect of a Trump administration have added approximately $29bn to the fortunes of some of Russia’s richest men, making President Putin’s inner circle among the chief beneficiaries of last November’s presidential election, according to figures compiled and released by Forbes this week.
Among the biggest winners (more…)
Three years into her purge of the country’s banking sector which to date has seen 276 financial institutions driven out of business and a further 28 put through the regulator’s financial rehabilitation programme, the Central Bank of Russia’s Elvira Nabiullina has been named Europe’s best central banker for 2016 by the UK magazine The Banker. (more…)
Islamic banking: Moves by the Reserve Bank of India (RBI) to offer its banks an “Islamic window” through which they would be able to introduce a limited number of Sharia-compliant or interest-free banking services could lead to “trillions of dollars” of Gulf money being invested in the sub-continent, the Indian Centre for Islamic Finance (ICIF) said yesterday. (more…)ndtv Read More»
The World Federation of Exchanges (WFE) has written to he chairman of of the Tehran Stock Exchange (TSE) approving the Iranian exchange’s membership of the 63-strong international trade association of publicly regulated stock, futures, and options exchanges, TSE chairman Hassan Qalibaf Asl confirmed this month. The move will ease Iranian capital’s entry into the global network of the stock exchanges and investors access to their data and information, he said.
TSE membership (more…)
CAREC motorway: The Asian Development Bank (ADB) yesterday agreed to lend Pakistan $100m to complete the remaining 64km section of the M4 motorway linking the towns of Shorkot and Khanewal in the province of Punjab, giving it the distinction of being the first project to be co-financed by the ADB and the newly established Asian Infrastructure Investment Bank (AIIB).
Pakistan’s Secretary for Economic Affairs Tariq Bajwa and ADB Country Director for Pakistan Werner E. Liepach signed the loan agreement during a ceremony which was also attended by Finance Minister Senator Ishaq Dar and ADB Vice President Wencai Zhang.
“Pakistan must grasp the opportunities presented by its strategic location. Investments in transport and connectivity under the framework of Central Asia Regional Economic Cooperation (CAREC) programmes, as well as other regional cooperation initiatives,” ADB Vice President Wencai Zhang at the signing.
The project marks ADB’s first co-financing agreement with the AIIB which is expected to approve the $100m at a board meeting later this month. The United Kingdom’s Department for International Development (DFID) has also committed a $34m grant for the project. ADB will administer both the AIIB loan and the DFID grant. The project is part of the 1,800 km CAREC transport corridor linking the port city of Karachi in the south, to country’s inland urban centres and onward to Afghanistan and the Central Asia countries.
Iran wants to set up a financial centre on Qeshm Island in the Strait of Hormuz to act as a gateway for banks and other institutions looking to gain a foothold in the country, according to Farhad Taghizadeh-Hesary, a senior adviser to the island’s development agency. A number of Chinese and (more…)Bloomberg Read More»
AIIB membership: The 57-strong Asian Infrastructure Investment Bank (AIIB) will have almost 100 member countries and regions by the end of the year, its president Jin Liqun told editors at the Asia News Network’s annual board meeting in Beijing this week. “Up to 30 countries (more…)