Fitch may revise ratings of some banks in Azerbaijan
Fitch Ratings, an international rating agency, has announced possible revision of the ratings of the International Bank of Azerbaijan (IBA) and AtaBank OJSC.
The ratings have been placed on Rating Watch Evolving (RWE). The RWE reflects heightened probability that the rating may be upgraded, downgraded or affirmed.
The rating actions are driven by the publication of the Exposure Draft of Fitch’s revised Bank Rating Criteria.
As outlined in the Exposure Draft, Fitch plans to introduce + and - modifiers at the 'CCC'/'ccc' level for Long-Term Issuer Default Ratings (IDRs), long-term international debt and deposit ratings of both banks.
Presently, Atabank OJSC Foreign-Currency Long-Term IDR is at 'CCC', and IBA OJSC Viability Rating - at 'ccc'.
Fitch will resolve the Rating Watch following the publication of the final criteria in line with the Exposure Draft.
Previously, Fitch Ratings upgraded IBA’s Long-Term Issuer-Default Rating to 'B-' from 'RD' (Restricted Default).
The upgrades of the bank's ratings followed successful completion of IBA's debt restructuring on September 1, 2017.
Azerbaijan may channel excessive labor force to export-oriented employment
Azerbaijan may channel excessive labor force to export-oriented employment, Salim Muslumov, the country’s minister of labor and social protection of population, told reporters in Baku.
He said that presently, there is a situation in Azerbaijan when the supply of labor force exceeds the demand for it.
“We are facing questions regarding how to ensure employment of the labor force, whether we should create new jobs or channel excessive labor force to export-oriented employment, and whether in this case this force will be competitive in the world market,” Muslumov said.
The minister said that the studies held by a special working group of the ministry showed that in the next 10 years, as in the previous ones, the process of creating new workplaces with medium income should continue in Azerbaijan.
“With the improvement of Azerbaijan’s economic situation, the population growth has increased in recent years, and as a result, the number of able-bodied population greatly exceeds the number of jobs planned to be opened as part of the implementation of strategic road maps,” the minister noted.
At the same time, Muslumov added that the problem with excess of labor force cannot be solved only by opening new jobs.
“Excess of labor force may be employed through implementation of a number of programs – organizing freelance activity, shift work, creating self-employment programs,” the minister said.
Mammadyarov: Co-op in trilateral format to be expanded
Foreign ministers of Azerbaijan, Iran and Turkey, Elmar Mammadyarov, Mohammad Javad Zarif and Mevlut Cavusoglu have agreed to continue holding meetings in the trilateral format, expand cooperation and use the potential in energy, transport, tourism and other spheres, said the Azerbaijani foreign minister.
Mammadyarov made the remarks at a press conference dedicated to the results of the fifth trilateral meeting of Azerbaijani, Turkish and Iranian foreign ministers held in Baku Dec. 20.
The Azerbaijani official noted that the ministers also discussed the Palestine-Israel conflict.
“As you know, a document will be adopted tomorrow on this issue at the UN General Assembly. We will vote in favor of that document,” added Mammadyarov. “Azerbaijan’s position on Al-Quds was voiced by President Ilham Aliyev at a summit in Istanbul. That's where we stand on this.”
Touching upon the energy cooperation, the Azerbaijani minister said that the TANAP pipeline will be put into operation in 2018.
The energy cooperation between Azerbaijan and Iran is growing day by day, he said.
Moreover, electricity exchange is being expanded among the three countries, added Mammadyarov.
“At our next meeting in Istanbul, we will invite people from both the private sector and the economic sector and discuss ways to further expand cooperation,” noted the official.
Azerbaijani banks to render investment services
Azerbaijani banks will render investment services, Ruslan Babayev, head of the Division of Supervision at Financial Markets Infrastructure at Azerbaijan’s Financial Market Supervisory Authority said.
He was speaking in Baku at the event titled “Capital markets in 2018.”
He said that the final decision on this issue will be adopted before the end of the first half of 2018.
“A package of proposals which envisage amendments to Azerbaijan’s legislation has already been prepared on this issue,” he noted. “The changes will reflect the issues of licensing and the types of services provided, as in the world practice banks cannot provide all types of investment services.”
Presently, 31 banks, including two state-owned ones, operate in Azerbaijan.
Listing in Azerbaijan should become more attractive - Baku Stock Exchange
Listing in Azerbaijan should become more attractive, said Vugar Namazov, Chair of Baku Stock Exchange (BSE), at the “Capital Markets in 2018” event held in Baku.
He said that it is stocks but not other tools that are a heart of today's market.
'IPO (initial public offering) should be ensured to expand the market. This is needed to make listing more attractive,” Namazov said.
According to him, today BSE offers great conditions for accepting companies for listing.
'In 2016 we updated the technical platform and created a trade system based on the system of Korean stock exchange. This system is among the top technologies in the world. We updated our legal framework. Now we have to revive business by using the platforms,” Namazov said.
Head of BSE pointed three directions that mainstreamed the current markets - control, competition, and technology.
“If we fail today to build our capital markets, improve control and technology, we will lose competition, and our companies may turn to foreign stock exchanges, and we will lose clients,” he said.
According to Namazov, the current listing process in BSE is split into three levels - major market, standard market, and alternative market.
This approach attracts more companies to being listed, both major companies meeting top standards and small and middle businesses just emerging, he said.
'The future goal will be to have maximum possible number of companies listed. This year we have drawn two companies - Unibank and Metak to listing. Unibank is getting ready to issue bonds and stocks', Namazov said.
Investment bank to appear in Azerbaijan
Azerbaijan will have its own investment bank, the director of AzFinance investment company Abid Mammadov said at the event “Capital Markets in 2018”.
His pointed out that the creation of an investment bank is one of the main goals of AzFinance.
"We plan to establish the country's first investment bank in 2018, or at the latest, in 2019,” Mammadov said.“The more we work with the market, the more often we see the demand in it. Investment bank will play a big role in this development. "
He added that people are gradually moving away from traditional financial instruments and are looking for new directions for investment.
"Until 2014, people considered two key tools for investment, namely, bank deposits and real estate investments. Today, people don’t want to use standard investments. The reason is that today the real estate market is no longer experiencing the boom that was observed a few years ago, and the interest on deposits is not so attractive," Mammadov said.
"Companies that are looking for alternative means of financing also show interest. Therefore, the need for an investment bank is growing," Mammadov said.
The investment bank is a financial institution that organizes capital raising in the world financial markets for governments and large companies, as well as provides consulting services for the purchase and sale of business, brokerage services.
It is the leading intermediary in the trading of stocks and bonds, derivatives, currencies and commodities, as well as issuing analytical reports on all markets on which it operates.
Fitch Ratings expects economic growth to strengthen in Azerbaijan in 2018
Fitch Ratings expects economic growth to strengthen in Azerbaijan in 2018, according to Fitch 2018 Outlook: CIS and Georgian Banks.
“We expect economic growth in 2018 will strengthen in Russia, Ukraine, Kazakhstan, Belarus and Azerbaijan. Growth will slow but remain healthy in Georgia, Armenia and Uzbekistan,” Fitch said.
“In Azerbaijan the authorities took important steps in 2017 in connection with the completion of large bad loan buy-outs from International Bank of Azerbaijan,” Fitch said. “But many other lenders still need to increase provisioning for their large portfolios of restructured and foreign-currency loans.”
Bank sector outlooks for the CIS and Georgia in 2018 are mostly stable, helped by a more supportive economic backdrop and steps to reduce asset quality pressure stemming from recessions and currency devaluations in recent years, Fitch Ratings says.