Finance In Brief

National Bank of Kazakhstan to lower refinancing rate down to 16%

/IRBIS, March 28/

REUTERS informs, with the reference to the representative of the bank, that from March 21 the National Bank of Kazakhstan reduced refinancing rate down to 16% from 18%, which has been effective since November 10, 1999.

The source said stabilization of the situation on financial markets has allowed to reduce refinancing rate down to 16% from 18%.

He added that this move has been made to stimulate financing of the real sector by commercial banks and to "forestall speculative anticipations on the market".

It is said the National Bank has also reduced REPO rate down to 19% from 23%, "overnight" rate down to 21% from 27%.

The National Bank of Kazakhstan for March 29 - 31: 1USD/KZT = 141.80, 1DEM/KZT = 71.49, 1RUR/KZT = 4.98, 1EUR/KZT = 139.82

/IRBIS, March 28/

For March 29 - 31, 2000 the National Bank of Kazakhstan has established the following exchange rates for accounting, customs and tax purposes: for 1 USD 141.80 (+0.20) tenge; for 1 DEM 71.49 (-0.61) tenge; for 1 RUR 4.98 (+0.07) tenge; for 1 EURO 139.82 (-1.20) tenge.

Total of 33 currencies are in the list.


Investment attractiveness of financial instruments at KASE from March 23 through 29

/IRBIS, March 30, 00/ � Following is the table that allows to compare investment attractiveness of the financial instruments, which were regularly traded or quoted at Kazakhstan stock exchange (KASE) from March 23 through 29. In parentheses � figures of previous period. Instruments are given in descending order based on their attractiveness.

Financial instrument  Currency  Yield, % APR  Volume of deals, mln KZT  Volume of deals, mln USD
KOMBb  USD  13.21 (12.99)  0 ( 0)  0 ( 0)
KKGBb  USD  12.36 (12.66)  0 (13.4 ) 0 (94.4)
BTAS  USD  12.21 (12.73)  22.4 ( 0)  158.1 ( 0)
Euronotes-3  USD  10.94 (10.95)  759.7 (593.4)  5,356.9 (4,191.4)
�V�����  USD  10.67 (11.09)  522.1 (11.2)  3,681.3 (79.1)
Euronotes-2  USD  9.83 (9.90)  308.8 (409.1)  2,177.6 (2,889.6)
MEKAVM, MGU  USD  *9.12 (9.05)  334.5 (359.6)  2,358.8 (2,540.0)
������, notes  KZT  *16.76 (15.20)  724.3 (357.5)  5,107.5 (2,525.2)
KZT (SS repo)  KZT  *9.54 (19.56)  1,395.3 (1,606.0)  26,888.3 (11,343.8)

Notes: Yield of BTAS was calculated for 5 days by ask quotations; yield of KKGBb � bid quotations (by deals); KOMBb � as average for bid quotations.

Tenge devaluation rate is estimated in the week by a trend of 12.22% APR.

The yields, shown here, do not incorporate overhead expenses that are inevitable when conducting operations and fixing profits (commission and tax collections, membership fees etc). Marked by a star are the instruments with less than a year circulation term. Weighted average effective yields are given for them.

Forthcoming repayment of SS for KZT2.5 bln caused the growth in Exchange's demand for USD

/IRBIS, March 30/

Today the next morning trades in U.S. dollars, Deutsche marks and euros were held at Kazakhstan stock exchange (KASE) with TOD payment terms. 18 banks participated in the trades.

Today the trades in U.S. dollars opened at KZT142.00 per unit. Total of 121 deals were made. Weighted average dollar exchange rate equaled to KZT141.97 (+0.12) per unit. Volume of the session � $9.785 mln (+$7.205 mln). Exchange rate fluctuation during the trade �0.04%. The trades were closed at KZT141.95/97 per dollar.

The dollar market has changed again. Today formerly inactive banks became completely different. Strong and organized demand was created on the floor by 16 participants. Four of them were handling more than 1 mln U.S. dollars. It is quite possible, that some banks were working towards "the repayment" of SS, since KZT2.5 bln should flow into their corespondent accounts today.

Despite sharply grown demand, volume of dollars supplied to the trade floor did not let USD to firm during the trades. Resulting growth in the Exchange price of the dollar was mainly caused by a strong opening of the market. And during the session the exchange rate of the American currency was falling gradually and steadily under surmounting supply of USD from mainly one participant.

Once again, the results of the trade proved that the banks of the second tier use each chance to stretch their currency positions. As soon as free funds get into their correspondent accounts they are invested into USD.

One hour after closing of the morning session on interbank market of Kazakhstan dollar was quoted at KZT141.93/97 per unit. Two hours later � KZT141.95/98. In the day session of KASE with TOD payment terms at 12:30PM the dollar was at KZT141.93/96.

Deutsche mark, morning session, TOD: no deals. Closing quotations � KZT69.00/70.00 for mark.

Euro, morning session, TOD: no deals. Closing quotations � KZT135.00/136.89 for euro.

Actual yield in tenge of MEKAVM-6, #15 � 11.74% APR

/IRBIS, March 30, 00/ � On March 30 the Ministry of Finance of Kazakhstan should repay 15th issue of MEKAVM-6 (KZ46L3003A05) for USD5,263.2 th. which will equal to KZT746.3 mln at repayment exchange rate.

Weighted average yield of these bonds is settled at the auction at 9.05% APR in currency terms. Actual yield in tenge, calculated at exchange rate, equaled 11.74% APR.

Previous issue of MEKAVM-6 (#8, KZ46L0212996) was repaid on Dec.2,99. Actual yield in terms of tenge equaled 22.24% APR.

Issues of MEKAVM-6 #9-14 were cancelled by the emitter due to unacceptable terms of the dealers and their clients.

At additional session of KASE dollar was actively traded within KZT141.83 - 141.94 interval

/IRBIS, March 30, 00/ � At Kazakhstan stock exchange (KASE) additional (day) trades in U.S. dollars, Deutsche marks and euros with TOD terms were held. 11 banks participated in the trades.

In U.S. dollars 16 deals were made during the trade for a total of $2.550 mln within KZT141.83 - 141.94 per dollar interval. At closing of the session (3:30PM) dollar quotations were at KZT141.83/88 per unit. Trades closed at KZT141.83. During the trades exchange rate of the dollar was steadily falling.

The session was different from the others with regard to the record high activity of the participants. Both the number of the deals, and the number of the banks that took part in additional trades were not this high.

At 3:30PM in trades in dollars on TOM and SPOT terms no deals were made. Dollar quotations for these types of payment terms were absent.

At 3:30PM on interbank currency market indicative dollar quotations were at KZT141.84/90 per dollar in REUTERS information system.

Tengiz people




Tengiz people are both Kazakhstani and foreign; innovative and conservative; responsible and yet irresponsible (although the latter are fast being routed). On the whole they are normal people with their own hopes, goals and problems. All of them are proud of what they are doing.


The TCO is in reliable (Kazakhstani?) hands�

At present 70% of TCO personnel are from Kazakhstan. According to the plan, their number is to rise to 80%. �But our objective is to exceed these figures, as no detailed positions are stipulated. Hence, we have undertaken a wide-ranging educational program for our personnel's professional growth,� said Tom Winterton, the TCO General Director.

These words are not the words of an idle man. Dynamic training courses for leading positions meant that in the last year their number doubled in comparison with 1998 (diagram 1).

This is very important issue. Kazakhstan's media is still busy discussing the fact that TCO brought in foreign specialists, which is a worrying problem. But various conversations with TCO staff, and concrete facts (which are the main consideration) have finally clarified the matter.

�The future of the TCO is in reliable hands,� Steve A. McLennan, General Manager of Finance Department said in estimating the Kazakhstanis' potential.

�As for me I have never met such talented or clever people anywhere. In the last year alone we reduced the number of foreigners by 20%,� he continued.

Mr. McLennan provides a significant example. The company had sent a girl Raigul to the Chevron headquarters in San-Ramon (the U.S.A.) for a probation period. Raigul learnt the subject so perfectly, that she was soon able to perform functions that not all Americans could do. And it was western accounting that she was learning. Due to her talent she was asked to stay at Chevron.

I have met Raigul. She is an ordinary Kazakhstani girl, having graduated from the Karagandy Cooperative Institute. She began to work at Chevron as an ordinary accountant. Now, in three years, she is the head of one of the subdivisions of the Finance Department. Previously this post was occupied by a foreign specialist.

Another bright example is Zara Kaldybaeva, who worked in the TCO Personnel Department. She began to work as a secretary. Some time ago she was invited to work in Angola on one of Chevron's Overseas projects.


US management and the Kazakhstan mentality

Today western management is characterized by the precise order being applied at the TCO. We have already written about this order in the last issue (THE GLOBE, 28.03.2000).

However, different people have different views. �The official declaration of new rules on interrelation in a working team leads to a negative view of the American style, in particular of the company's policy,� so claimed one critical article.

What about incompatibilities between US management and Kazakhstan mentality?

�I have never experienced or even heard of such problems,� said the above-mentioned Raigul.

�Western management is more democratic. Problems are settled together, there is no sole manager, but accurate division of responsibility,� Gabit Kurkimov, a manager of the general accountant department, Finance Department claimed.

�The system today is quite normal, especially for younger people. There are no problems in adapting to western management. Just the opposite, I appreciate the accurate order and strict responsibility. For example, prohibition from drinking. There are some who consider this a bad thing, but I approve. This is not only in the western managerial system. Look at the Ministry of Extraordinary Situations. There drinknig is always prohibited. We may have the odd drink occasionally. Yet all of us, even if we do not work, would be included in the liquidation brigade, if there was ever any accident, and that is why we should be sober even our in spare time.� The words are not of a manager, but of a worker from the plant.

But the picture would be incomplete if we did not mention the opinions of TCO foreign specialists.

�We came here with certain stereotypes and preconceptions. For example, that people here are behind in comparison with the West. Later when we saw what the Kazakhstan population had achieved in 10 years, we felt nothing but respect. A high level of education and a great hard-working capacity amongst compatriots is impressive. Conditions at Tengiz are hard, unfavorable, and yet Kazakhstanis work professionally, efficiently and safely. Their desire to further their learning is astonishing. People constantly come to me asking for further education. The people are very clever and they catch on to western management ideas fast. They are extremely interested in new knowledge,� Chris Bowen, Tengiz oil production super-commissary shares with his impressions.

But despite all of the opinions surrounding US management and Kazakhstan psychology, it is real facts that really matter.


Active, very active

Anyone who goes there can see how active the people at Tengiz are. There are two public organizations in TCO. They are Ana Tili and the Association of Businesswomen. Ana Tili was founded by ordinary Tengiz workers. Instead of resting after work, they created a union and began to undertake educational activities throughout the oblast. With the worsening economic situation came lower the educational levels in the schools where their children studied. However, what is striking is that these workers did not wait for somebody's help, but created the organization themselves and began to invite teachers from other parts. As a result, their work was soon a profitable business. But the money is not the point - given the high average salary at TCO. It is the active and positive outlook on life that is the key. They neither wait nor rely on help from the government, but rather they settle their problems themselves.

The general atmosphere in the company promotes this feeling. People at Tengiz are proud of their work, but not only of their company. They believe in their business, and in the fact that it is doing good things for the entire country, as well as enabling them to support their families. This belief, and the fact that TCO invests in people and in individuals are the most important of all.

Unmatched in KazakhstanI

Unmatched in KazakhstanI was in Tengiz, so I can tell from own experience. I can compare it toother companies based in Almaty, where there is no such attitude of themanagement focused on employee needs. TCO implements a program of issuing no-interest housing loans to itsemployees for a 30-year repay term. Starting 1995, already 1400 employeesreceived over $6 million worth of housing loans. Training has been a very special priority at TCO. Under Universityassistance Program and various other initiatives the company committeditself to offering assistance to employees and their children in gettingaccess to quality training in Kazakh Universities. This year TCO invested$280,000 in these programs. In the middle of the steppes, exposed to pretty hard climatic conditionsthere is a comfortable rotational village with excellent accommodations andoffices. They even enjoy a wonderful swimming pool. To complete the picture I will quote one of TCO employees - a plantoperator, who said the following: �I took the pictures of TCO village, theswimming pool and my room home to show them to my friends working with otheroil companies outside Tengiz. They were really amazed, as they don't haveanything remotely resembling our living conditions in Tengiz. Sharing a roomin a hostel with 19 company mates - that is all the comfort they got.�I am trying the guy further, asking whether it is true that �during theSoviet times it took 2 to 3 years for the oilmen working in Tengiz to saveenough money to buy a new car. They say, now it is impossible because TCO ispaying meager salaries.�The man is visibly perplexed by the allegation. �I myself worked here atthat time, so I can tell the difference. I truly appreciate what the companydoes for us, for what we got here and the standard of living I can afford.To cut it short, I can say that my family is doing OK, nothing to worryabout.�Since 1993, the average monthly pay at TCO has risen 2.6 times, amounting to$664 in 1999. It seems, I can hardly find another company in Kazakhstanpaying this money to its employees. So, this is my first report from Tengiz. I tried to show the place from theinside. Here is what it looks like: a strict order, the general air ofcompetition and observance of stringent rules, wages unmatched in Kazakhstanand top professionalism of employees. Tengiz also has its problems and meetsits challenges: the wrong perceptions, the transportation issue,environmental issues... Yet, these are the topics of our further storiesabout this place.

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