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GLG News by this Author

Istanbul equities soar as real economy stagnates

April 15, 2009

Analysis of:Turkish stocks and bonds rally on IMF hopes | www.forbes.com

Terms of the IMF's next program terms for Turkey are not agreed and the Istanbul stock market has unrealistic expectations, up over one-third in five months. Export industries (especially automobiles, textiles and machinery) have been hardest hit but the banking sector is holding its own. Low consumer confidence further decelerates economic growth, which will be negative in 2009. Government hopes for return to positive growth  in 2010-11 may prove illusory. Political uncertainty adds to the mix, as the ruling party AKP's vote dropped from 47% in 2007 to 39% in the municipal elections held at the end of March, increasing the likelihood of factionalism and decreasing the authority of prime minister Erdogan within the party. The Istanbul Stock Exchange National 100 Index, the equity market's main benchmark, could still rise a bit further but it faces rough going following its recent recovery. At present it is driven more by psychological factors than by real economic performance.

Moscow and Ashgabat fail to agree over the Caspian Coastal Pipeline

April 15, 2009

Analysis of:Russia, Turkmenistan put off gas agreement | www.upi.com

The leaders of Russia and Turkmenistan have been unable to agree on terms for the (re)construction of a Soviet-era gas pipeline in western Turkmenistan. While subsequent negotiations are not excluded, Ashgabat has declared its intent to allow companies other than Gazprom, including Western companies, to bid for the work. In the context of recent developments, a pattern begins to form that may signify the breaking of what is left of Russia’s hold on Central Asian gas transport, to which its relationship with Turkmenistan has been central in the post-Soviet era.

Turkmen gas almost in reach (RWE, OMV, energy)

January 21, 2009

Analysis of:Russia and Ukraine to Sign Contracts Today to End Gas Dispute | www.bloomberg.com

The conflict between Russia and Ukraine over gas payments and transit in which the EU has found itself embroiled leads many to wonder what other possibilities exist for piping gas to Europe. One such possibility is to find a way to pipe gas directly from Turkmenistan (where the gas originates) to Europe, avoiding both Russia and Ukraine. Regardless of who is at fault between Russia and Ukraine, the present diplomatic chill in their relations, which has translated into a thermal chill in Europe, shows how timely and important it is to translate those discussions into facts on the ground.

Russian equity flight accelerates

September 22, 2008

Analysis of:Russian index shows biggest decline since 1998 | www.iht.com

This commentary, first distributed on September 11, analyzes the fall of the Moscow RTS and MICEX main equity indices that began from their all-time highs four months ago. It retains its relevance irrespective of oscillations over the past ten days, which in fact conform to the analysis, pointing to both domestic and international reasons for the decline even before the margin calls, forced liquidations, and the banking system's dysfunction over a mid-size brokerage house's default that forced the decision to close the exchanges for two and a half days. The one-day recovery following the markets' re-opening does nothing to invalidate the longer-term conclusions drawn.

Five reasons why Tehran has itself to blame

July 14, 2008

Analysis of:Total says Iran investment too politically risky | uk.news.yahoo.com

Economic, political and bureaucratic obstacles to rational and reliable decision-making within Iran are ignored, even as U.S. pressure is invoked to explain to exit of Western energy companies from Iran. I enumerate five reasons why energy investment in Iran would be ill-advised under present conditions in any case, all having to do with political obstructionism and economic irrationality that are endemic to the Iranian state apparatus, irrespective of international conditions.

Turkmenistan Beginning to Leave Russian Energy Orbit

July 11, 2008

Analysis of:Gazprom and Turkmenistan in talks on natural gas | www.iht.com

Gazprom is slowly losing its bid to keep Turkmenistan exclusively in the Russian orbit. Interconnection between Turkmenistan's and Azerbaijan's rigs in the Caspian Sea will lead to settlement of a bilateral territorial dispute, finally permitting agreement to construct a trans-Caspian gas pipeline circumventing Russia. Moreover, construction has now actually begun on the ground, on a pipeline to take natural gas from Turkmenistan through Uzbekistan and Kazakhstan to China. "Long-term" agreements with Russia were only framework documents, and the follow-on negotiations necessary to continue after the initial period have not been successful, as Turkmenistan plays for time and finds other export markets.

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