State-owned Indian Railways is to host a meeting of the heads of its fellow South Asian railway companies next week to discuss the possibility of pushing forward the development a transcontinental rail freight service that would run through Iran and Turkey. If the 6,000 km project were to be realised, (more…)businesstoday Read 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%.
In an attempt to improve real-time global economic forecasting, the World Trade Organization (WTO) last week launched its World Trade Outlook Indicator (WTOI), WTO said on Friday. Designed to give an early signal of the current and short-term direction of world trade and its near future, the WTOI should be able (more…)ITAR-TASS Read More»
Half of the $42bn that Azerbaijan’s mammoth offshore Shah Deniz 2 (SD2) gas field is expected to cost has now been spent and over 72% of its development complete, the head of the investment department at Azerbaijan’s state oil company SOCAR Vagif Aliev told a press conference this week. Gas extraction from SD2 is on track (more…)naturalgaseurope Read More»
Russian European oilfields will start running out in the 2040s giving it no more than 25-30 years to replace it with oil production from the Arctic a leading expert warned this week.
By then, Russia will see a steady decline in oil production from its European fields, the Research Manager of the Institute of Geology, Oil and Gas of Russia’s Academy of Sciences Alexey Kontorovich told delegates at the Technoprom forum on technological development in Novosibirsk, and while Western Siberia would maintain production longer, it would not be enough to meet the country’s economic needs. Its Arctic fields were therefore going to be essential for Russia to ensure its sustainable economic development.
Breakthrough Starshot: Russian billionaire internet investor Yury Milner has joined forces with the world-famous physicist Stephen Hawking and Facebook founder Mark Zukerberg to launch a revolutionary $100m project to construct a robot research spacecraft capable of covering a distance of 4.37 light years – the distance between Earth and our closest star system (more…)rbth Read More»
Central Asian stagnation: The economies of Europe and Central Asia continue to face difficult headwinds in an increasingly complex and uncertain global economic environment, with short-term prospects differing substantially across countries, according to a new report from the World Bank that was published yesterday.
Following a contraction (more…)
Standard & Poor’s this week confirmed Russia’s long-term foreign currency rating at BBB- and its sovereign credit rating at BB+. The agency also kept the country’s short-term foreign currency rating at B and rouble’s at A-3, and is also forecasting the GDP will decline by 1.4% this year and grow by an annual average of 0.5%between 2016 and 2019.ITAR-TASS Read More»