On Monday, the Kazakh government announced its intention to sell 10-year and 30-year bonds in US dollars to international investors after more than 14 years of absence from allowing public investment in government debt. Intended to avoid an expensive and potentially politically divisive battle over debt restructuring (such as the one in Argentina in 2001 and more recently last month), the combined orders from investors topped $11 billion. The last time a Central Asian country offered debt was in April 2000, when Kazakhstan sold $350 million worth of debt that matured in 2007.
Orders were exceptionally high due to continually low interest rates throughout the rest of the global bond market and Kazakhstan’s posting of a 4.05% yield for the 10-year coupon and at 5.1% yield for the 30-year one, giving bond investors hungry for larger gains something to contemplate. Kazakhstan’s current problems probably stem from the need to raise a large amount of capital relatively quickly.
The enormous size of the order book demonstrates that international investors are unafraid of the risk of developing economies like those in Central Asia given that they appear to be worthwhile expenditures. The securities are likely to be rated Baa 2 by Moody’s and BBB+ by Standard & Poor’s credit rating agency to reflect the rating that Kazakh sovereign debt currently has.
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- Three political parties have submitted documentation to participate in Uzbekistan’s parliamentary election to join the Oliy Majlis. The three are Uzbekistan’s Social Democratic Party, or Adolat, the Democratic Party of Uzbekistan ‘Milly Tiklanish” and the Mvoment of Entrepreneurs and Businessmen. They were all submitted to the Central Election Commission participate in the election that has been officially scheduled for December 21, 2014. Nomination of candidates for MP will begin on October 17.
- Hundreds of websites have been blocked in Tajikistan, including popular ones such as Facebook and Youtube, as of October 5. Asmodduin Atoev, chairman of Tajikistan’s Association of Internet Service Providers, said that many websites including popular Russian social networks, remain inaccessible. State Communication Services deputy chief Rafqjon Shokirov, said that “reports about alleged blocking of websites, including Facebook, do not correspond to reality.”
- Iran is planning to import 2 million tons of wheat from Kazakhstan over the next 2-3 years, presumably as part of one of the many barter deals that Iran has been striking to avoid triggering the biting sanctions imposed upon its economy by Western powers. On October 1, during a meeting of the state agricultural company of Kazakhstan, KazAgro and chairman of Government Trading Corporation of Iran (GTC), the deal was struck.
- The Russian ruble fell to another record low yesterday, leading to questions about whether authorities will continue to let its value slide without creating massive inflation. The Russian Central Bank’s reference basket of euros and dollars jumped more than 44/55 against the ruble yesterday, following months of pressure and international sanctions against Russia in the wake of the Ukrainian civil war. New statistics on employment in the US bolstered the dollar simultaneously as the ruble fell.
- Once again, the ceasefire between Azerbaijan and Armenia was broken over the weekend in the troubled Nagorno-Karabakh region, though by whom it seems hard to say. Both sides blame the other in their official statements, which trickled down into their respective news media outlets. By all accounts, no soldiers or civilians were hurt in the skirmish. The ceasefire has been in place since 1994, after the end of a large conflict between the two countries that started in 1988.
- Russia has announced the beginning of anti-terror military drills in Tajikistan. The Kremlin specified that nearly 1,000 Russian members of the Russian military base inside of Tajikistan will begin drills I include reconnaissance, artillery maneuvers and more than 300 “units of military hardware.” The base is the largest such base located outside of Russia, housing more than six thousand soldiers on the outskirts of Tajik cities of Dushanbe, Kurgan-Tyube and Kulyab.
- The Kyrgyz government has approved a set of new tariffs on natural gas for households and small businesses. The tariff for the general population will be set at 12.93 soms (less than one US cent) per cubic meter of gas utilized. For customers in the industrial, budgetary and commercial spaces, the fee will be 3.4 soms per cubic meter, an even lower sum. The tariffs had long been rumored to be released, though due to delays in their transmission on part of Gazprom Kyrgyzstan, they have now just been released.
- Iran has freed the wife of Jason Rezaian, the Washington Post’s Tehran bureau chief, after more than two months in Iranian jail. The couple was detained during a July raid on their home, and was arrested with other foreign journalists at the same time. Charges have not been filed, and Mr. Rezaian remains in custody, though the release of his wife Yeganeh Salehi is viewed cautiously as a positive step.