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| 10 March 2004 | ||||||||||||||||||||
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Politics and Macroeconomics |
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New GSM Frequency Tender Could Hurt Competition In Mobile Market |
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The
Kazakhstani government's recent announcement that it will auction off
the rights for the GSM-1800 cellular standard with a 10MHz range to a
single company has aroused concerns that the sale of such a large
frequency range will stifle competition in the growing mobile
communications market. According
to Adil Uvaliev, deputy director of the non-profit Center for the
Development of Information-Communication Technologies, "the
purchase of the 10 MHz GSM-1800 standard as a single lot by one company
– when current mobile operators own only 5 MHz ranges – could lead
to the inability of current operators to compete." Uvaliev
added the government's announcement of the tender just one month prior
to its due date "suggests that the competition was announced only
as a formality, and that the winner has been pre-determined." Birzhan
Kaneshev, chairman of the state Agency for Informatization and
Communication, disagreed with Uvaliev's assessment. "Monopolization
[in the mobile market] is impossible, as the GSM-900 technology works on
a 5 MHz range, while GSM-1800 is a different standard using a wider
range to get higher quality results and different parameters; that is
why its technologies are based on a range of 10 MHz," Kaneshev
said. Kazakhstan
currently has two major cellular providers using the GSM-900 standard:
GSM Kazakhstan (a joint venture between Kazakhtelecom and Turkey's
Turkcell which operates the K'Cell and Aktiv networks) and Kar-Tel
(which operates the K-Mobile and Excess trademarks. (Interfax)
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Gold
And Currency Reserves Up 1.4% In February |
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Kazakhstan's
gold and currency reserves, including the National Fund, totaled USD
9.232 Billion at the end of February, up 1.4% from the end of January,
according to the National Bank press release. The
National Bank's own gold and currency reserves were up 2% in February to
total USD 5.545 Billion. The National Fund, which re-invests revenues
from oil and gas production in Kazakhstan, rose by USD 21 Million, from
UDS 3.666 Billion to 3.687 Billion during the past month. The
National Bank's currency reserves rose 2.55% in February to total USD
4.859 Billion, while net gold reserves were down 2.08% to USD 687
Million. (Interfax)
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Inflation
In Kazakhstan Slows To O.5% |
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The
pace of growth of consumer prices in Kazakhstan in February 2004 slowed
to 0.5%, from 0.7% in January. The
republic is on pace to somewhat exceed 2003 inflation, when the consumer
price index rose by 6.8%, though the Kazakhstani government has forecast
average annual inflation in 2004 to be just 5.4%. (Kazakhstani
Statistics Agency)
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Money
Supply Falls In Kazakhstan |
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The
amount of money in circulation in Kazakhstan at the end of January 2004
stood at KZT 231.2 Billion, down 3.2% from the previous month. "The
fall was primarily due to seasonal factors," National Bank Chairman
Anvar Saydenov told reporters this week. The
total money supply in Kazakhstan was practically unchanged in January,
Saydenov pointed out, standing at KZT 969.8 Billion at month's end.
Likewise, the external assets of Kazakhstan's banking system grew by
8.6% in January, but this movement was compensated by a fall in internal
assets of 7.2%, he noted. Deposits
in Kazakhstani banks grew by 1% in January to total KZT 738.7 Billion. The
decline of the amount of money in circulation, coupled with the rise in
deposits in banks, meant that the share of bank deposits in Kazakhstan's
total money supply rose from 75.4% to 76.2% over the course of the
month. (Interfax)
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Equities |
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The KASE-Shares index decreased by 8.81% to 166.20 by the end of period on March 3 2004. KASE-Shares index and weekly volume of trades. |
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Note:
KASE-Shares index is based on ask prices for equities in A Listing In the period between February 26 and March 3 2004, the volume of equity trades at the KASE decreased to USD 2,025,604 from USD 3,017,786 in the previous period. The shares traded during the period were common shares of Bank CenterCredit (CCBN), Kazakhmys (KZMS), Rahat (RAHT) and Temirbank (TEBN). (Irbis) |
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Company News |
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Oil & Gas |
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In
a press release issued by the international oil company Royal
Dutch/Shell, the Managing Director and head of the exploration and
operation sector Walter van de Waiver asserted, "Kashagan is a
major project, which will bring profit to its shareholders in the coming
decades." On
Wednesday, the Kazakhstani national energy company KazMunayGas and the
international consortium Agip KCO approved the budget plan for project
realization. By 2010, Agip KCO plans to produce up to 450,000 barrels of
oil per day at Kashagan, or 21 million tonnes annually. The consortium
further plans to increase oil production in 2013 up to 900,000 bpd or 42
million tonnes a year, and plans to reach its maximum level of
production- 56 million tonnes by 2016. Total
development costs for the deposit are estimated at approximately USD 29
Billion. W. Waiver noted that Shell's decision to continue with Kashagan
development marks the third deposit in the CIS region that is central to
the company's regional development plans, in addition to the development
of the Sakhalin-2 deposit in Russia and the Salym deposit. W. Waiver
noted, "On the whole, we hope that the Caspian and the Commonwealth
of Independent States will become one of the most important centers for
Shell's investment activity. We already have verifiable results in our
attempts to realize this strategy." In
addition to Kashagan and pursuant to the PSA, the consortium's contract
territory includes three more oil deposits: Kalamkas, Aktoty, Kayran.
All 4 of these structures consist of 11 offshore blocks, occupying an
area of 6,000 square kilometers.
(Interfax) *** Kazakhstan's
state-owned oil company KazMunayGas and Anglo-Dutch oil major Royal
Dutch/Shell plan to jointly bid in the second round of a tender for the
rights to a 63% stake in leading Czech petrochemical company Unipetrol
AS. According
to Kazakhstani Minister of Energy Vladimir Shkolnik, executives from KMG
and Shell are already studying financial information on Unipetrol. Shell,
Polish refining company PKN Orlen and oil and gas company MOL Rt were
all included on a short list of finalists after a first round of bidding
for the Unipetrol stake. The value of the Czech government's 63% stake
is estimated at around EURO 500 Million. KMG
was not included on the short list for participation in the second round
of bidding, which was announced on January 22, 2004, though it had been
considered one of the favourites to acquire the Unipetrol stake. (Kazakhstan
Today) *** Shareholders
in two subsidiaries of state oil and gas giant KazMunayGas -
EmbaMunayGas and UzenMunayGas - formally approved KMG's plans to merge
the two companies at a general meeting of shareholders. The
shareholders' meetings were conducted concurrently late last week in
Atyrau and Zhanaozen (Mangystau oblast), where the two subsidiaries are
based. "A
transfer act and agreement on the merger of JSC EmbaMunayGas and
UzenMunayGas were approved; the persons authorized to sign these
documents were designated and a decision to annul the sale of shares of
each of these entities in accordance with the law was passed,"
KMG's press service announced on March 1. At
the EmbaMunayGas meeting shareholders owning a combined 86.6% stake in
the company were in attendance, while at the UzenMunayGas meeting the
shareholders in attendance own a 90.4% stake in that company. The
decision to approve the merger was "unanimous", KMG said. KazMunayGas
announced plans to merge the two production subsidiaries in the fall of
2003 as a means of cutting costs and improving the efficiency of its
production operations. The merged company will have the second largest
oil reserves base in Kazakhstan with 275 million tonnes and will see its
capitalization increase by more than 3 times that of EmbaMunayGas alone
(or 1.5 times that of UzenMunayGas). In
2004 KMG believes that the merged company will take home more than KZT
6.5 Billion in net profits. (Interfax) *** The
proposed western Kazakhstan-western China pipeline will likely be
extended on the China side to the Dushanzi Refinery in Xinjiang
Province, Kazakhstani state oil company KazMunayGas President Uzakbay
Karabalin announced this week. The
planned pipeline, which is being built in stages will eventually run
along the route Atyrau-Kenkiyak-Atasu-Alashankou-Dushanzi, Karabalin
explained. The
Atyrau-Kenkiyak portion of the pipeline was built by Chinese oil giant
CNPC and put into service last year. At present, KazMunayGas is
considering the feasibility study for the Atasu-Alashankou section, to
which the Dushanzi section has also been added. "In
December of last year we concluded work on a document entitled
"Foundation for Investment". This is now being examined by our
company," Karabalin said. "According
to the document, in 2004-04 the Atasu-Alashankou-Dushanzi pipeline will
be build," he added. "Pay
attention: while before we said that the terminus of the pipeline would
be at Alashankou (on the Kazakhstan-China border), now KazMunayGas and
CNPC have decided that the section Alashankou-Dushanzi, in Chinese
territory, should be included in the project," Karabalin
emphasized. Dushanzi,
which lies about 400 kilometers from the Kazakhstan-China border, is
home to an oil processing plant with the capacity to hand 6 million
tonnes of crude per year. Karabalin
said that an agreement on the construction of the Atasu-Dushanzi line is
likely to be signed in May 2004, with construction set to begin in July
or August. The pipeline section - the second of three, with only the
crucial middle section missing - would be finished in early 2006, he
added. All
told, the western Kazakhstani-western China is expected to be over 3,000
kilometers long and to cost around USD 3 Billion to build.
(Interfax)
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Banking and Finance |
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Major
Kazakhstani commercial bank Kazkommertsbank (KKB) on February 26 announced
the launch of a new on-line procurement site. The site is a joint venture
with US-based e-commerce giant Commerce One. "The
new project will help simplify the process of purchasing goods and
services - and make it more accessible and transparent - both for the
government and private companies in the republic," KKB Managing
Director Ermek Shamuratov explained at a press conference. Shamuratov
asserted that use of the on-line system will help reduce government
bureaucracy in its procurement offices and help those offices work more
efficiently. A particular advantage of on-line procurement is that the
buyer can analyse competitive proposals from various suppliers in real
time and compare the qualitative specifications of goods, Shamuratov said. The
use of an electronic purchasing system can reduce the buying expenses of
private companies by 15%; from the sales side, the savings is even greater
by 22%, Shamuratov stated. Initially
the KKB site will only deal with the Kazakhstani market, but in the future
the bank hopes to expand the service to cover an international market of
goods and services. (Interfax) *** Kazakhstan's
TuranAlem Bank, the third largest bank in the republic, and the
Export-Import (Exim) Bank of India signed an agreement for a USD 10
Million credit line to the Kazakhstani bank in Almaty on February 27. According
to TuranAlem Deputy Chairman Saduakas Mameshtegi, the credit line provides
funds to allocate loans for up to five years under rates of LIBOR
+0.15-0.25% interest. According
to S. Mameshtegi, the loan funds will be used to support medium- and
long-term projects involving the import of goods and equipment from India.
The loan is expected to help bolster ties between TuranAlem and Indian
banks as well as help entrepreneurs from the two countries expand their
businesses. (KazInform)
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Power |
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The
creation of a long-planned Kazakhstani-Russian energy sector joint
venture on the basis of the Ekibastuz GRES-2 power plant in Kazakhstan
is in its final stages, Kazakhstani Prime Minister Daniyal Akhmetov
disclosed on the sidelines of the Eurasian Economic Community summit in
Almaty last week. According
to Akhmetov, "there remain a few technical details" to be
worked out between the two parties, but at this point "there are no
doubts that the JV will be created." Acting
Russian Prime Minister Viktor Khristenko affirmed Russia's commitment to
"finalize these long, difficult and complicated decisions." He
also confirmed that the creation of the energy sector
JV was "nearing the finish line." "If
we all have enough energy, then it's probably a question of
months," Khristenko said. Kazakhstan
and Russia announced their intention to create a joint venture on the
basis of the Ekibastuz plant back in 2002, but negotiations have dragged
on since then. According to agreements, Kazakhstan will sell a 50% stake
in the Ekibastuz facility to Russian energy giant for USD 250 Million.
The money will actually be used to offset Kazakhstani debts for
electricity supply from Russia. The
Ekibastuz GRES-2 went into service in 1990. It has the capacity to
produce 850 MW of power and employs 1,440 people. At present the power
station produces about 12% of the electricity generated in Kazakhstan. (Kazakhstan
Today)
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Metals and Mining |
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National
atomic and uranium company KazAtomProm's new uranium refining plant in
Taukent (South Kazakhstan) turned out its first batch of products,
according to KazAtomProm press release. KazAtomProm
launched the plant in Taukent in November 2003. The facility produces
uranium protoxide-oxide. According
to KazAtomProm President Mukhtar Jakishev, the company spent USD 4
Million on the construction of the plant. The enterprise is will process
1,500-1,700 tonnes of uranium annually. The quality of the production
"will conform to quality expectations in the CIS and in foreign
countries," Jakishev said. KazAtomProm
built the Taukent plant to complement its existing uranium refining
operations at the Ulba Metallurgy plant. The South Kazakhstan facility
will process roughly half of the uranium produced at KazAtomProm mines
in southern regions of the republic, while the Ulba plant will refine
the remainder. The
new facility was built using state-of-the-art, nearly pollution-free
technologies, Jakishev said. The investment made in the plant will begin
paying a return in just four years, he added. (Interfax) *** Major
Kazakhstani steel producer Ispat-Karmet, a unit of international steel
giant LNM Group, in early March began construction of a pipe plant in
Aktau. The
plant will mainly supply to the domestic oil and gas sector, but
production could also be shipped from the Aktau Seaport to clients in
Russia, Azerbaijan, Turkmenistan and Iran, Ispat-Karmet Financial
Manager V. Vaideshwaran told reporters last week. The
project will initially cost some USD 65 Million to build and will have a
capacity to produce up to 60,000 tonnes of pipe per year. During
a meeting with Kazakhstani President Nursultan Nazarbaev in February,
LNM Group owner Lakshmi Mittal said his company would invest upwards of
USD 450 Million in Kazakhstan by 2008. At
the main steel plant near Temirtau (Karaganda oblast), Ispat-Karmet is
in the process of installing a USD 285 Million system for the
uninterrupted, round-the-clock production of steel. The plant hopes to
launch the first of two of these machines by the end of 2004. (news.kkb.kz)
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Transport and Telecommunications |
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The
state Anti-Monopoly Agency this week conducted public hearings on a
possible rise in telecommunications tariffs for services offered by JSC
Transtelecom. Transtelecom
submitted a bid to raise telecommunications tariffs beginning April 1 in
January 2004. Speaking
at the hearings, Transtelecom President Askar Nasenov said that the
existing tariffs approved by the agency are unprofitable on certain
services. Transtelecom's average tariffs are nearly 50% lower than those
of national telecommunications company Kazakhtelecom, Nasenov noted. A
tariff increase would allow the company to modernize its technical
capacities, which in the long run would improve services for its clients
and the telecommunications industry as a whole. Most of the equipment
used by Transtelecom is "morally and physically outdated,"
Nasenov declared. A
tariff increase would also enable Transtelecom to raise pay for its
employees up to industry standards. Currently salaries at Transtelecom
are 50-70% below the industry average, Nasenov said. "We
lose specialists because of [the wage discrepancies]. We train them,
give them experience, and then [other companies] buy them away from
us," Nasenov explained. (Interfax)
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Money Markets |
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KZT/USD market rate dynamics during the week |
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Currency Rates as of 1 March 2004 |
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Note: Some of the information quoted in this issue has been provided for us by Golden Eagle Partners. For more information on those articles, please contact: jmann1@AOL.com or newswire@ges.kz |
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For
more information and other publications please contact Yelena Kovalenko
at +7 (3272) 596 708
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