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Kyrgyzstan & Uzbekistan News

This Section is contributed by Kazkommerts Securities

August 17, 1998

Latest Kazakhstan Weekly News

• Last week, the National Bank of Kyrgyzstan decreased the Som/Dollar rate to 19.51 from 19.49 (Reuters).

• The IMF has approved a new 3-year loan worth SDR 64.5m (US $86m) to support the Kyrgyz government's economic programme for 1988-2000. The first tranche of SDR 21.5m (US $29m) will be extended in two equal portions to be disbursed once every six months. The first portion will be given immediately. (Delovaya Nedelya).

• According to a report by the Kyrgyz National Securities Market Commission, there were 1,221 joint-stock companies in the country as of July 1, 1998. Of the total volume of issues by these companies, industrial enterprises account for 35.5%, transport and communication companies—10.96%, trade and catering companies—18.59%, and financial institutions —2.7%. The report says that foreign portfolio investors have invested 1,044m Soms (US $53.6m) in Kyrgyz corporate securities. There are 86 licensed players on the Kyrgyz securities market. They include 18 registrars, 16 investment funds, 35 brokers and dealers, 12 investment consultants, 3 management companies, a stock exchange, and a central depository. Three foreign companies have obtained licenses on the Kyrgyz stock market: Global Securities, Gora Association, and the Minaret Group. (Reuters)

• Reuters reported that the Austrian company Raiffeisen Inc. will be a financial adviser in the privatisation of Kyrgyztelecom along with the joint Kyrgyz-British bank Maksat. The company won a tender that was announced in May and finalised last week. Besides Raiffeisen, seven foreign companies took part in the tender. The financial advisers are supposed to determine the exact size and price of a block of shares to be sold to a strategic investor. The Government Privatisation Programme suggests a sale of 35-40% of Kyrgyztelecom shares.

• The American Golden Gate company and the Netherlands' Ahhnaur Group will invest US $3.5bn in upgrading and developing the infrastructure of the city of Bishkek, the capital of Kyrgyzstan. *

• The Kyrgyz government has ordered that the Ministry of Finance allocate 5 million Soms (US $256,542) to the Kyrgyz coal producers Dzhergalan Mine, Kok-Yangar, and Kyzyl-Kiya Komur. *

• Kyrgyzstan has published a law whereby the government's debt to the Kyrgyz National Bank could be converted into securities. The total debt between 1992-1997 was 4 billion Soms (about US $205m). *

• The Asian Bank has delayed a second US $20m tranche to Kyrgyzstan as its requirements with respect to leading Kyrgyz companies in the telecommunications, energy, and railway sectors, (Kyrgyztelecom, Kyrgyzenergo, Kyrgyzmunaizat, and Kyrgyz Aba Zholdory) were not met. The charters of the above companies do not comply with Kyrgyz law on joint-stock companies since their chairmen were not elected through general shareholders' meetings but instead were appointed by the Kyrgyz President.*

• The National Bank of Uzbekistan decreased the Sum/Dollar rate to 101.65 from 101.02 (Reuters).

• Uzbekistan's natural gas output rose from January-July 1998 to 32.24 billion m³ from 29.393 billion m³ in the same period last year, Reuters reported with reference to the Uzbekistan State Statistics Committee. The committee also reported an increase in the output of oil, gas condensate, gasoline, diesel and fuel oil, and jet fuel.

• Coca-Cola has opened its fifth bottling plant in Uzbekistan. The cost of the new plant was US $55m and it has a capacity of 350 million litres per year. According to the Uzbekistani Deputy Prime Minister, Mirabror Usmanov, Coca-Cola's investment in Uzbekistan will reach US $140m this year. Coca-Cola's facilities in Uzbekistan are operated by Coca-Cola Bottlers Uzbekistan Ltd, a joint venture between Coca-Cola Export Corporation, the private company ROZ Trading, and a state-owned company Uzpishcheprom. (Reuters)

• According to the Chairman of the Central Bank of Uzbekistan, Faizulla Mulazhanov, Uzbekistan is prepared to sign Article VIII of the IMF agreement that stipulates a full convertibility of the national currency not later than the year 2000. (Reuters).