Page 14 - FSUOGM Week 02 2022

FSUOGM FSUOGM

Almaty closed. 1 uranium supplier, “it’d be like if the Saudis
Kazakhstan upheaval clear impact on local stocks that were hit in had issues in oil,” Jonathan Hinze, president
“From the market perspective, we note the
of UxC LLC, a leading nuclear fuel market
impacts country’s banks, London on January 5, led by internet company research and analysis firm, was quoted as
Kaspi.kz, down c30% yesterday and another
saying by Bloomberg, adding: “Even if there
bonds, equities and uranium 12% on January 6,” Slava Smolyaninov, head isn’t a shortage right now, the potential for this
of strategy at BSC GM said in a note.
to create a shortage is what people now are
and oil industries Kazakh demonstrations, which came out of trading on.”
Equity investors were caught out by the
In southwestern Mangistau province,
All of Kazakhstan’s financial organisations nowhere and hit in the middle of Eastern where much of the country’s rich oil reserves
including its banks and stock market Europe’s extended Christmas and Orthodox are extracted, Chevron confirmed to Sky
remained suspended on January 6 amid New Year holidays that run to January 14. News on January 5 that it was working to end
the country’s social unrest, according to the The leaderless revolution rapidly expanded a stoppage at its Tengizchevroil venture.
press secretary of the National Bank of the and morphed from protests against a specific On January 6, TheEdgeMarkets reported
Republic, Olzhas Ramazanova. issue—rising vehicle fuel prices—to a Reach Energy as announcing that its unit in
“The Agency of the Republic of Kazakhstan more general anti-government movement Kazakhstan might be affected by the country’s
for the Regulation and Development of the becoming a political protest. state of emergency declaration. In a filing to
Financial Market and the National Bank of “Apparently, the situation with street Bursa Malaysia, Reach Energy noted that the
Kazakhstan, taking into account the conduct violence in Almaty, the financial center of government of Kazakhstan had declared a
of counterterrorist operations ... and taking the country, is out of control with military two-week emergency regime in Almaty and
into account temporary disruptions in the confrontation and numerous casualties,” Mangistau province, where Emir-Oil LLP, the
Internet ... report the temporary suspension Smolyaninov said. “Authorities ordered an company’s sub-subsidiary is located.
of the activities of all financial organisations,” anti-terrorist operation in Almaty in the Emir-Oil LLP holds the entire subsoil use
Khabar 24 TV channel quoted him as saying. evening of January 6 and called for military rights in an 850.3-square-kilometre onshore
Ramazanova also said that the measure support from Russia, Belarus and other hydrocarbon exploration and production
was aimed at protecting the life and health of member states of the Collective Security contracted area in Mangistau province.
employees and clients of financial institutions, Treaty Organization [CSTO].”
although there are reports of inhabitants of The instability and call for a Russia-led
the capital Nur-Sultan and largest Kazakh city CSTO military intervention on the eve of Pinchuk’s Geo Alliance buys
and commercial capital Almaty—scene of the key talks with the US and Nato over a new
biggest deadly clashes between protesters and European security deal has been seen by out Arawak’s 50% stake.
law enforcement and troops during the week’s investors as weakening Russian President
unrest—going hungry due to the closure of Vladimir Putin’s hand going into the talks, Geo Alliance Group Limited, owned by Victor
ATMs [Watch video below]. With the internet which makes a quick resolution of tensions Pinchuk, has completed a deal to purchase
down, shops cannot process digital payments less likely. And that hurt Russian equity prices a 50% stake in Geo-Alliance Oil-Gas Public
and are demanding cash, unavailable due to as well. Limited, which combines Ukrainian oil and
the offline ATMs. The Russian market reacted negatively gas assets with Arawak Energy Ukraine BV, a
Also closed amid the crisis in Kazakhstan’s even though Brent was back trading above subsidiary of the Vitol Group. “As a result of
were the country’s three main airports, with $80, causing the leading dollar-denominated the agreement, Geo Alliance Group Limited
all flights cancelled on January 6. With a state Russia Trading System (RTS) index to fall and its shareholders became 100% owners
of emergency in place, entry to the country to further to 1,540, or 20%, from its 1920 of Geo-Alliance Oil-Gas Public Limited,”
foreigners has been temporarily suspended, peak level seen at the end of October, said announced Geo Alliance.
RIA reported. Earlier in Nur-Sultan, and in Smolyaninov.
Alma-Ata, telephone communications were Kazakhstan’s reputation for stability under
disconnected and the internet was closed Nursultan Nazarbayev, an autocrat who Russia has reduced gas
down by the operator Kazakhtelecom. ruled for nearly three decades until 2019 but
Kazakhstan’s sovereign bonds were hit appears to have left the country amid the transits through Ukraine
as the crisis rapidly escalated and Russian turmoil, helped attract hundreds of billions of
paratroopers were dispatched to assist the ex- dollars of foreign investment into its oil and since January
Soviet state’s regime. metals industries, such as uranium extraction.
January 6 saw Kazakhstan’s 2045 dollar Kazatomprom , the world’s biggest Since the beginning of this year, Russia has
bond, which had its worst day since the peak uranium producer, said on January 6 it reduced gas transits through Ukraine to
of the COVID-19 panic in March 2020 on was operating normally with no impact on 52.5mn cubic metres per day with reserved
January 5, slide further, falling as much as 1 production or exports. “Uranium mining is daily volumes of 109.6 cubic metres.
cent and nearing 20-month lows. going according to plan there have been no According to general director of GTS Serhiy
With a solid macroeconomic position stoppages. The company is fulfulling its export Makogon, we expect the decline in transits
Kazakhstan’s debt has been seen as relatively contracts,” a Kazatomprom spokesperson was will continue, as nominations at the beginning
stable. The nation’s debt lost 2.9% last year, quoted as saying by Reuters. of the gas day will be about 50.5 mcm per
according to a Bloomberg index tracking Uranium prices have, however, soared day. According to him, this will be the lowest
sovereign dollar bonds from emerging in recent days amid the unrest Kazakhstan, transit level since the end of January 2020.
markets, so obligations have already lost more which produces more than 40% of the At the same time, the Russian gas monopoly
value in the first days of January than in all of radioactive metal used in nuclear fuel. Gazprom has not given any information about
last year. Uranium surged almost 8% to $45.25 a the reduction in gas transits.
The protests this week hit Kazakhstan pound on Wednesday from $42 Tuesday,
companies listed in London, mostly raw according to UxC data.
material producers, with the local exchange in Given Kazakhstan’s role as the world’s No.

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