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Eurasian Business Briefing Investment & FDI

Brexit draws UK companies to Iran despite shadow of sanctions

Iranian power plant at ShazandWith the prospect of Brexit limiting their ability to operated within the EU, UK firms are cautiously turning to the attention the opportunities potentially on offer from Iran’s $600bn anticipated boom in trade and infrastructure investment over the next ten years.
With the Islamic Republic about to embarking on an ambitious investment drive after years of international isolation, the authorities in Tehran are expected to be looking overseas for the finance it requires for a number of key projects, including the expansion of its 10,223km long state-owned rail network; the construction of 7 new international airports; the upgrade of 54 existing ones; and the acquisition of a new fleet of aircraft. The state carrier Iran Air has already placed orders with Airbus for 114 new aircraft and it is estimated that another 600 new airplanes will be needed over the next decade.
Iran also hopes to secure large investments into its unexplored and under-developed natural gas sector.
“Is there an opportunity here for UK business? Of course there is,” said Amanda Clack, head of Infrastructure and consultancy EY told The Telegraph this week. “Deliverability is key and contracts could be won by British companies on the basis of professionalism. These skills are underpinned by high standards and regulation which means the companies are more likely to offer a robust approach to the work.”
However, according to the The British Iranian Chamber of Commerce (BICC), the main obstacle towards a significant increase in British Iranian trade lies in the absence of banking facilities caused by the fear among European banks of American primary sanctions against Iran which were retained even after the Iran nuclear deal in late 2015.
“Until the American election there were indications that some UK banks were willing to handle direct transactions with Iran under certain conditions. Since then attitudes of the banks seem to have become more cautious and restrictive,” a spokesman said.



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BJP looks to trigger FDI surge into retail sector after election victory

Modi wins Uttar Pradesh March 2017Indian retail: BJP’s resounding victory in this month’s Uttar Pradesh assembly elections is expected to trigger a speedy relaxation in the rules governing inward investment into India’s fiercely protected multi-brand retail sector, the Times of India reported on Monday.
According to its sources, (more…)

indiatimes Read More»

China puts faith in development zones to attract investors

Tianjin Economic-Technological Development Area (TEDA)China is to carry on promoting its development zones as a means of attracting foreign investment and promoting international cooperation, the State Council announced yesterday, as it seeks to counter the effects of President Donald Trump’s attempts to boost domestic production and employment by discouraging US companies from locating their plants and factories abroad.
International companies running their operations within the zones will be allowed (more…)

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Chinese real estate investment hits record high – with more to come

Strategic Hotels ChicagoChinese investment in overseas commercial and residential property investment hit a record high of US $33bn in 2016, a year-on-year increase of nearly 53% percent year-on-year, according to the latest data compiled by Jones Lang LaSalle (JLL), with the highlights of last year’s activity being (more…)

theinvestor Read More»

China corners fintech investment as Beijing ups funding towards $200bn

Eric Jing CEO Ant Financial Services Group (Alibaba)Fintech investment: As much as half of all today’s investment in financial technology ends up in China, a senior Alibaba executive told delegates at the World Economic Forum in Davos last week, days before the Chinese government announced that it was to pump a further $14.6bn into an investment fund designed to provide financial assistance to technology companies as it seeks to create a digital economy. This latest intervention (more…)

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Beijing looks to stem Chinese capital flight and encourage FDI

Chinese Commerce Minister Gao HuchengChinese capital flight: The Chinese government is getting ready to curb its private sector’s appetite for overseas mergers and acquisitions and to encourage inward investment by sharply reducing restrictions on foreign investment access in 2017 to make it easier for overseas firms to spend their cash in the People’s Republic, according to a blog posted on the Ministry of Commerce’s website earlier this month. The government would “promote the healthy and orderly development of outbound investment and cooperation in 2017, ” Commerce Minister Gao Hucheng is quoted as saying. (more…)

theguardian Read More»

Air Astana, Kazatomprom and KazMunayGaz to kick off Kazakh privatisation programme

airastanaKazakh privatisation programme: A significant proportion of the Kazakh government’s stakes in KazMunayGas, Air Astana and Kazakhtelecom operator are to be sold off over the next 18 months after a government commission gave its approval to plans drawn up last year by the Samruk Kazyna Sovereign Wealth Fund to privatise a total of 153 companies through a series initial public offerings (IPOs), the fund’s CEO Umirzak Shukeyev announced earlier this week. (more…)

The Astana Times Read More»

Hundreds of SMEs to be included in Russian privatisation programme

Russian Textile CompanyRussian privatisation: Hundreds of Russian SMEs could be put up for sale alongside some of the country’s larger blue-chip companies next year, Deputy Finance Minister Alexei Moiseev said yesterday, as he flagged Moscow’s intention to make a “significant push” to speed up its privatisation programme. (more…)

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Hinkley Point the model as France and China pledge to set up investment fund

Hinkley Point CHinkley Point: France and China are to set up a fund for joint investment in overseas projects, France’s foreign minister Jean-Marc Ayrault told reporters at a joint briefing with his Chinese counterpart Wang Yi in Beijing yesterday, and confirmed that the two countries intended to use (more…)

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Russian privatisation plans expanded to include VTB bank, Alrosa and Russian Railways

VTB Office towerRussian privatisation: The government in Moscow has drawn up plans to sell stakes in the VTB bank (35%), the Alrosa diamond mining concern (8%) and Russian Railways (25%) over the course of the next three years, (more…)

Rosbalt Read More»

Chinese set to pump $11bn into new Lake Baikal tourist complex

Lake BaikalLake Baikal tourist complex: A group of Chinese investors have clubbed together and commissioned a study into the commercial and technical feasibility of creating an $11bn leisure and tourist complex on the shores of Lake Baikal (more…)

Siberian Times Read More»

German Minister blocks Aixtron takeover and looks to curb Chinese spending spree

german-economy-minister-sigmar-gabrielAixtron: With China’s appetite for buying up European companies showing no sign of abating and its year-on-year investment in Europe jumping by 62% to a record €20bn last year, the German Economy Minister Sigmar Gabriel this week ramped up pressure (more…)

Bloomberg Read More»

Moscow and Ankara bury their differences to set up $1bn Russian Turkish investment fund

Russian Economy MIinsiter Ulyukaev and Turkey's EM Zeybeci Istanbul 09/10/16Russian Turkish investment fund: With Russian President Putin due to meet with his Turkish counterpart Recep Erodgan at the World Energy Congress in Istanbul today,  Moscow and Ankara took another significant step towards (more…)
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Renault joins Western rush into Iranian car market

Renault DusterRenault has become the latest Western car manufacturer to return to the Iranian car market this week after it signed a deal with Tehran to produce at least 150,000 Duster and Symbol cars a year from a plant in the country’s capital, starting from 2018. The French company will (more…)

isna Read More»

South Korea agrees to build $350m terminal for Tashkent airport

Tashkent airport: The South Korean government yesterday agreed to invest $250m in the construction of a new terminal (more…)

Times of Central Asia Read More»

CITIC gets ready to pump $10bn into Iranian mining sector

Iranian MinersIranian mining sector: China’s CITIC Group Corporation is getting ready to invest $10bn in Iran’s mining and minerals sectors through the Iranian Mines and Mining Industries Development and Renovation Organization (IMIDRO), it emerged this week, with the Chinese investment company (more…)

TREND Read More»

Aeroflot privatisation put off until 2020 – but Bashneft sale still on the cards

Aeroflot adAeroflot privatization: Russia’s flagship national airline will not be privatized before 2020 at the earliest, the Economic Development Ministry’s director of Corporate Governance Oksana Tarasenko said yesterday, but (more…)

The Moscow Times Read More»

Chinese investors lead surge as Kazakh FDI on course to hit $10bn for 2016

Chinese pm and Kazakh presidentKazakh FDI: With some $24bn of Chinese project investment in the pipeline over the coming years. the Astana is expecting FDI into Kazakhstan to hit $10bn this year, according to Kaznex Invest Chairman Borisbiy Zhangurazov, almost (more…)

The Astana Times Read More»

Alrosa launches Eurasian Diamond Centre in Vladivostok as Eastern Economic Forum gets under way

Eastern Economic Forum VladivostokAlrosa, Russia’s largest diamond mining operation, launched the Eurasian Diamond Centre in Vladivostok yesterday to coincide with the opening of the second Eastern Economic Forum tomorrow, when representatives from more than 200 (more…)

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Bashneft privatisation postponed as Rosneft sale moves up agenda

Bashneft refineryBashneft privatisation: The Russian government is considering putting its 19.5% stake in the Rosneft oil giant up for sale, it emerged yesterday, after Prime Minister Dmitry Medvedev announced that the Kremlin was indefinitely postponing the privatisation of Bashneft, its smaller competitor.
The sale of Bashneft had been planned for this autumn and had been meant to help plug gaps in Russia’s budget caused by an oil price slump and Western sanctions imposed over the country’s actions in Ukraine; but the privatisation has become mired with controversy after Rosneft defied the authorities by asking to be included in the bidding process, despite a ruling from the government that, as a state-run enterprise, it was ineligible to take part.
Rosneft’s management has been claiming that a legal loophole gave it the right to participate and two sources familiar with the situation are quoted in the Financial Times as suggesting that there was now “too much noise” around the deal, prompting Medvedev’s spokeswoman Natalia Timakov to announce that the sale – which was expected to raise well over $4bn – was to be postponed for an unspecified period of time. Medvedev may also have been disappointed by the likely return on the sale. “The stake valuation was too high at current oil prices,” said Andrey Polischuk, an analyst at Raiffeisen Bank in Moscow. “Perhaps only Rosneft was ready to pay that much, but it doesn’t suit everyone as a bidder and probably this issue has yet to be discussed by the government.”
Head of Republic of Bashkortostan Rustem KhamitovThe sale had also been opposed by Rustim Khamitov, Head of the Republic of Bashkortostan, where many of Bashneft’s oil fields are located. 
While it is unclear if Moscow’s decision to look at selling Rosneft instead has been prompted by its disagreement with the company’s defiance over the Bashneft privatisation process, it has not come out of the blue; earlier this year, Russian Finance Minister Anton Siluanov told CNBC that it was hoping to divest its 19.5% stake in the second half of the year and would be expecting to raise just under $10bn.

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