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Wednesday 04th of March 2015 |
Morning Africa |
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Macro Thoughts
Home Thoughts
Once upon a time I would leave my Home just before 7 to get to the Office around 7.15 or 7.20. Then I started leaving at 6.30 in order to arrive at 7 and now I leave at 5.50 to get at my desk at a quarter past 6 because if I left any later its a Crap-shoot with a low of 45 minutes and High of > 2 hours. |
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Is the Mysterious Light on This Dwarf Planet a Sign of Life? via @business Africa |
Researchers, some of whom have worked on the $473 million Dawn mission for more than a decade, say they’re surprised by the strange brightness from Ceres’s otherwise highly cratered, "dark surface of fairly primitive composition," according to Carol Raymond, deputy principal investigator of the Dawn mission. It is probably unique in the solar system.
“The mystery will be solved,” she says, “but it is one that really got us on the edge of our seats.”
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The Peaks of Mount Kenya seen from the Slopes of @Fairmontmtkenya @Fairmonthotels [and a mysterious Green Light] Africa |
“And as I sat there brooding on the old, unknown world, I thought of Gatsby’s wonder when he first picked out the green light at the end of Daisy’s dock. He had come a long way to this blue lawn, and his dream must have seemed so close that he could hardly fail to grasp it. He did not know that it was already behind him, somewhere back in that vast obscurity beyond the city, where the dark fields of the republic rolled on under the night.
Gatsby believed in the green light, the orgastic future that year by year recedes before us. It eluded us then, but that's no matter—to-morrow we will run faster, stretch out our arms farther. . . . And one fine morning——
So we beat on, boats against the current, borne back ceaselessly into the past.” ― F. Scott Fitzgerald, The Great Gatsby
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The Prime Minister received twenty-three standing ovations for his portrayal of Iran as a villainous country now “gobbling up” four other Middle Eastern countries—Iraq, Syria, Lebanon, and Yemen. New Yorker Law & Politics |
“How many more countries will Iran devour when sanctions are lifted?” he asked. “We must all stand together to stop Iran’s march of conquest, subjugation, and terror.”
As Netanyahu addressed Congress, Secretary of State John Kerry was meeting with his Iranian counterpart—their eighth round of talks in this year alone—four thousand miles away, in the Swiss resort city of Montreux, to try to nail down a framework for an agreement within the next three weeks. “We’re working away. Productively,” Kerry told reporters. In Washington, the White House noted that President Obama was not watching Netanyahu’s speech—he was participating in a video conference with his British, French, German, and Italian counterparts on the Ukraine crisis. He read a transcript of Netanyahu’s remarks later.
The schism between the White House and an Israeli government has not been so deep since the dispute between the Reagan Administration and Prime Minister Menachem Begin, in the nineteen-eighties, over the sale of American AWAC intelligence aircraft to Saudi Arabia, the former U.S. Ambassador to Israel Martin Indyk told me. “It’s tragic and sad,” he said. Tensions are even reminiscent of President Eisenhower’s confrontation with Israel during the 1956 invasion of Egypt during the Suez crisis.
The chemistry between Netanyahu and Obama has never been good. It’s not a matter of personalities. It’s a clash of realities—the two men see the world differently.
“But when asked to finally decide,” he said, “a clear majority breaks in favor of a deal.”
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Brent held above $60 a barrel on Wednesday supported by a hike in Saudi crude prices and strikes on oil facilities in Libya. Commodities |
In a move widely seen as a vote of confidence by Saudi Arabia in demand recovery, the OPEC kingpin raised the official selling prices (OSPs) for its oil deliveries to Asia and the United States on Tuesday.
"This is a sign that prices have bottomed out because it means Saudi is confident in raising prices without being afraid of losing market share," said Tony Nunan, a risk manager at Mitsubishi Corp in Tokyo.
In the past seven weeks, Brent crude LCOc1 rose from a six-year low to hold above $60 a barrel despite continued concerns about global oversupply.
The April Brent contract was down 30 cents at $60.72 by 0302 GMT, after rising 2.5 percent on Tuesday, while U.S. crude futures CLc1 edged up 9 cents to $50.61 a barrel.
Air strikes on oil terminals and an airport in Libya on Tuesday helped to underpin prices.
Still, talks between major powers and Iran over its nuclear program capped oil price gains. Any sign of a lasting agreement between Tehran and six world powers could result in a flood of Iranian crude returning to the market.
"We still have the big question mark over Iran. This month is the crunch time for P5+1 talks," Nunan said.
Investors are also looking to weekly U.S. government inventories data due later on Wednesday for more price support, after an industry report showed a smaller-than-expected build in U.S. commercial crude stocks last week. [API/S]
U.S. crude stocks rose 2.9 million barrels last week, data from the American Petroleum Institute showed on Tuesday, versus analysts' expectations for an increase of 4.2 million barrels. [EIA/S]
State-owned Saudi Arabian Oil Co. said Tuesday it will sell cargoes of Arab Light in April at 90 cents a barrel below Asia’s regional benchmark. That narrows the discount by $1.40 from March, the biggest price increase since January 2012, according to data compiled by Bloomberg. The company also raised prices it offers to refiners in the U.S.
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AFRICA HOW TO NAVIGATE THE RETAIL DISTRIBUTION LABYRINTH FEBRUARY, 2015 NIELSEN Africa |
Today, there are an estimated 350 million middle-class consumers on the continent. Many companies have already mobilized to capture this emerging demand, but nearly as many have had to recalibrate their growth expectations, discovering that delivering strong growth in Africa’s markets is not as easy as merely being present with an otherwise solid brand, awaiting demographic tailwinds.
Beyond the well-known infrastructure constraints, one of the more overwhelming challenges is the complexity of the retail environment. Modern trade is growing, but it is still small and underdeveloped outside South Africa. This leaves companies to figure out how to reach consumers in the hundreds of thousands of smaller, traditional and informal outlets that account for the majority of CPG sales. Currently, Nielsen tracks retail sales in 14 sub-Saharan countries where traditional grocery stores account for about 50% of consumer goods spend – there are over 550,000 of these outlets in the countries monitored! But the most common shopping channel of all is the simple table top: a stand set up on the side of the road or in a local market to capture passing trade. Eighty percent of consumers shop from these table tops, of which there are no less than 200,000 in Nigeria alone.
For example, Nielsen analyzed a range of new products in Nigeria, Africa’s largest consumer-goods market. In the course of six months, the highest- selling new product measured in Nielsen’s Retail Index reached 65% of the retail universe of 745,000 outlets, while the next nine best-selling products were available in just 30% of these outlets. In what developed market would bestsellers 2-10 reach only 30% of possible outlets in six months? Consider the enormous launch potential if these products had only reached more outlets and consumers. This report aims to demonstrate how CPG companies can overcome distribution challenges by getting much closer to a multitude of small retailers upon whom success will in large measure depend.
In Madagascar, a Nielsen survey showed consumers went shopping 70 times a month on average, while in Kenya the average was 38. Some Madagascar shoppers visited the same outlet two or three times a day.
Second, CPG companies will need to identify the best channels and retailers for a given product category. In Lagos, we found laundry detergents in distribution in no less than 100,000 outlets, an impossibly large number to reach. But further analysis showed that 80% of the sales value came from just 35,000 of those outlets, and a full 50% from a more manageable 10,000.
Simply knowing which stores have refrigeration can transform the sales efforts of a purveyor of cold drinks. And all this data can be delivered on a mobile phone or tablet.
Modern trade is at an early stage of development. 80% of consumers shop in traditional outlets. • Brand familiarity and recommendations from others are strong purchase drivers. • Retail channel shopping preferences and the types of products purchased vary significantly from country to country. • A small proportion of retail outlets can account for a disproportionate portion of sales.
The African Development Bank estimates there are 55 million “wealthy” people in Africa, that is, consumers whose per capita daily expenditure is above U.S. $20. In population terms, that represents a market the size of Italy or Spain. But these consumers account for just 5% of the population. Reach today’s growing middle class of around 350 million people, and the opportunities become significant indeed.
Many companies have already mobilized to capture this emerging demand. But it is also the case that many have had to recalibrate their expectations about how fast they can grow their businesses, struggling to translate the opportunity into results.
AN INITIAL PROBLEM WAS A LACK OF UNDERSTANDING OF HOW CONSUMERS DIFFER IN THIS VAST CONTINENT.
But a second, perhaps more challenging one has since emerged: an insufficiently detailed understanding of what is a highly-fragmented retail system. Without such an understanding, it is hard to function effectively within the system.
In young consumer markets, it is the retailer rather than the brand that is initially trusted by consumers. Getting close to the retailer is therefore a key component of an effective distribution strategy.
FIRST MANUFACTURERS WILL NEED TO UNDERSTAND WHO SHOPS WHERE AND FOR WHAT, THEN THEY MUST IDENTIFY THE BEST RETAIL OUTLETS FOR A GIVEN PRODUCT, AND THEN THEY CAN TURN TO HELPING RETAILERS BUILD DEMAND.
All three will depend upon a level of local market knowledge that only analysis can deliver, combined with an intensive, customized approach to working with retailers.
In most countries in Africa, the percentage of CPG sales made through modern trade outlets is exceptionally small. Even in Kenya, regarded as one of Africa’s most developed retail markets, traditional trade still accounts for 70% of sales (Exhibit 3). It is true that large African and international retailers such as Shoprite, Woolworths, and Carrefour are making investments in modern trade formats. But traditional outlets will continue to be a significant channel for reaching consumers for some considerable time to come.
Conclusions
A very interesting report.
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@RDCongoBenelux Sep 10 Pr #Kabila posing "High Commander Medal of #National #Hero Order #Lumumba" over LT.Gen. #Bahuma coffin #Congo #DRC Africa |
Fitch warned that South Africa could lose its investment grade status. http://af.reuters.com/article/investingNews/idAFKBN0LZ1SK20150303
"Our rating for South Africa is BBB with a negative outlook, so we are signalling that a downgrade is more likely than not," he said.
South Africa All Share Bloomberg +6.87% 2015 [244 points below a record high reached 24th Feb] http://www.bloomberg.com/quote/JALSH:IND
Dollar versus Rand 6 Month Chart INO 11.7451 http://quotes.ino.com/charting/index.html?s=FOREX_USDZAR&v=d6&t=c&a=50&w=1
Egypt Pound versus The Dollar 3 Month Chart INO 7.6306 http://quotes.ino.com/charting/index.html?s=FOREX_USDEGP&v=d3&t=c&a=50&w=1
Egypt EGX30 Bloomberg +6.18% 2015 http://www.bloomberg.com/quote/CASE:IND
Nigeria expects to lower its forecast for 2015 economic growth NGGDPQ=ECI again, after cutting its forecast to 5.54 percent in January, after oil prices fell and the currency weakened further last month, the country's statistics bureau said. http://www.reuters.com/article/2015/03/03/us-nigeria-economy-idUSKBN0LZ26I20150303
Yemi Kale told the Reuters Africa Investment Summit on Tuesday he did not expect a reduction of more than 1 percent in the 5.54 percent forecast. Final figures will be released by half-year, he said.
Nigeria lowered its forecast for economic growth in January from 2014's 6.22 percent after the government cut spending because the price of oil had slumped.
"Because of the changes in the macro-variables ... we are not sticking with those forecasts any longer. The exchange rate, crude oil forecast have changed," Kale, the head of the National Bureau of Statistics, told Reuters by telephone.
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“When we were young, the government would always say, ‘You are the future of tomorrow.’ Now we just try to make our own strides, because if you wait for them, you’ll starve.” Africa |
“For years they have left us . . .” Gloria was saying about Nigeria’s leaders, and just then there was a click, and then quiet. The buzzing stopped.
“Oh,” said Victor, looking up, surprised. “They have brought the light.”
A ceiling fan began whirring. The television blinked on. A newscaster began talking about the election, and an army operation against Boko Haram in the northeast, all of which seemed to exist on another planet. A few minutes later, the power blinked off again, and the buzzing resumed.
Festac, which used to be called Little London, is now decaying, and residents are bracing for election-related violence. (Andrew Esiebo/For The Washington Post)
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Nigeria All Share Bloomberg -11.70% 2015 [+3,106 points since 13th Feb] Africa |
A burnt pickup truck is seen in front of a building that Boko Haram insurgents used as their base before being driven out by the Chadian military in Dikwa March 2, 2015. http://www.reuters.com/article/2015/03/03/us-nigeria-violence-chad-idUSKBN0LZ2NS20150303
A black and white Boko Haram flag still flutters on top of a deserted villa in the Nigerian town of Dikwa, overlooking a courtyard filled with dirty mattresses and charred vehicles.
Inside the villa's pink and white walls, blood trickled into corridors and a pile of insurgents' bodies lay in a heap in a wardrobe.
The scene was the result of a dawn attack by troops from neighboring Chad, who are driving deep into Nigerian territory in an offensive aimed at helping end a six-year insurgency that has killed thousands and now sucking in neighboring armies.
"They resisted ferociously. This huge villa was their command center," a Chadian soldier who fought in the battle told a Reuters reporter visiting the town after fighting subsided.
Oil-rich Nigeria's main cities are facing acute gasoline shortages as importers feel the pinch of a plummeting local currency, tighter credit lines and unpaid government subsidies, oil traders and local industry sources said. http://af.reuters.com/article/investingNews/idAFKBN0LZ15420150303
As queues of double-parked cars stretch outside filling stations in the capital Abuja, empty tanks elsewhere are forcing consumers onto the black market just weeks before presidential elections on March 28 in Africa's biggest economy.
"I have spent 12 hours here," taxi driver Bartholomew Odey Akpa told Reuters on Monday. "I work at the airport as a car hire ... and there is no fuel for me to go."
Nigeria exports around two million barrels per day of crude but a neglected refining system means it is almost wholly reliant on imports for the 40 million litres per day of gasoline it consumes.
Ghana Stock Exchange Composite Index Bloomberg -3.68% 2015 http://www.bloomberg.com/quote/GGSECI:IND
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@Ukenyatta directs State firms to place all their adverts on digital outlets Kenyan Economy |
“We are spending hundreds of millions of shillings in advertising through the media. Let the ministries and other public bodies advertise through the digital platform we just launched and save that money for use in other things,” said Mr Kenyatta.
“Those targeting government jobs and contracts can get that information on the new portal,” he added.
The move, if fully effected, could significantly weigh down the incomes of local media houses, which rely heavily on government advertisements for revenues.
This would worsen the situation for the three leading media houses — Nation Media Group, Standard Group and Royal Media Services — which have incurred losses after the Communications Authority of Kenya switched off their television stations three weeks ago.
However, director of public communications and head of government advertising at the Ministry of Information Communication Technology Dennis Chebitwey said media houses should not expect significant impact on their revenues since the government would also spend on their existing online platforms.
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Nairobi Security Exchange on a red hot winning streak The Star Kenyan Economy |
The Nairobi Securities Exchange has been on a Kerry Packer type winning streak. Kerry Packer was an Australian tycoon who founded World Series Cricket which was a break away professional cricket competition staged between 1977 and 1979. World Series Cricket started the innovation process which re-invented cricket.
Kerry Packer was a famous and lucky gambler and apparently walked into Vegas one evening and there is a noisy Texas Oil-Man around whom all the attractive girls are buzzing like bees and he calls over the waiter and asks;
''How much is that man worth''
The waiter responds '' $60m.''
Packer walks over and introduces himself and takes out a coin and says '' “I’ll toss you for $60m''
Packer was, more remarkably, once reported to have won 20 hands of baccarat in a row at Las Vegas.
Finally, Kudos to the Cabinet Secretary National Treasury Henry Rotich for stepping up on the Capital Gains Tax.
Kenya Shilling versus The Dollar Live ForexPros http://j.mp/5jDOot
Nairobi All Share Bloomberg +6.2% in 2015 http://www.BLOOMBERG.COM/quote/NSEASI:IND
Nairobi ^NSE20 Bloomberg +7.1% in 2015 http://j.mp/ajuMHJ
Every Listed Share can be interrogated here http://www.rich.co.ke/rcdata/nsestocks.php
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N.S.E Today |
This was a Banner Session with Equity Turnover clocking 1.992b which is the highest volume session of the Year. The Securities Exchange has been seeing some profit taking after a powerful 8 week Surge. The All Share ticked 0.27 points lower to close at 172.80. The All Share is +6.083% and has corrected 2.653% off an All Time reached on the 25th of February. EABL which has retreated 15.71% since 19th February has pressured the All Share. The Nairobi NSE20 eased 13.37 points to close at 5461.08. The NSE20 ticked 13.37 points easier to close at 5461.08. The NSE20 is +6.872% and is outperforming the All Share for the first time in a more than 37 month bull market and this speaks to a Rally that has broadened out. The NSE20 is just below a 7 year high reached Monday. there were 14 Winners and 22 Losers today. Safaricom traded 16.00 at the Finish Line which is above its all time closing High.
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N.S.E Equities - Commercial & Services |
Safaricom traded 3rd at the Securities Exchange and firmed 0.32% to close at 15.45 but was trading at session Highs of 16.00 +3.9% at the Finish Line. Safaricom traded heavy volume action of 22.042m shares worth 341.289m. There were 2 Buyers for every seller signalling Safaricom which is +9.96% in 2015 is all set to reset all time closing Highs of 15.85 [set on 25th February last week] as early as tomorrow. Closing the Session at 16.00 and above the record closing High is a very loud signal in the Noise.
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N.S.E Equities - Finance & Investment |
Kenya Commercial Bank closed unchanged at 59.00 and traded 2.009m shares worth 119.447m. There were Buyers for 3x the volume traded during the session at the Closing Bell. Someone is quite properly mopping up shares here. I think the unchanged dividend has led to some loose shares becoming available but this supply will be extinguished soon ahead of a move to 66.00. The Full Year Results spoke for themselves. Kenya Commercial Bank is +3.508% Year to date.
Equity Bank closed unchanged at 53.00 and traded 1.866m shares worth 99.022m.
NIC Bank reported FY 2014 Earnings where pretax profit rose 24 percent last year to 6.23 billion shillings [$68.4m]. NIC Bank's loan book grew by more than a fifth to 102.04 billion shillings, while total assets were up by 20 percent at 145.78 billion shillings. NIC Bank closed unchanged at 63.00 and is +9.56% in 2015. There have been persistent rumours that NIC Bank and CBA have been looking at a possible merger.
National Bank reported FY 2014 Earnings where the net profit declined to Sh870.7 million compared to Sh1.1 billion in 2013. The Profit suppression was characterised by the CEO Munir Ahmed
"We have supplemented that with the voluntary retirement for 190 staff where we paid 1.1 billion shillings."
"We are changing the wheels of a moving car," Ahmed said to Reuters
National Bank also proposed a Bonus Issue and a Rights Issue [13b shilling cash call] and this news rallied the price +4.04% to close at 25.75 on 255,100 shares traded. National Bank is +4.0404% in 2015.
Centum bounced +1.68% to close at 60.50 and was trading at 61.00 +2.52% at the closing Bell. Centum traded a super normal 8.896m shares [1.336% of the Company's shares and a material Piece of the Centum Action] worth 538.357m. Centum bagged some big gains recently on the sale of its stake in UAP Insurance. Centum is -0.81% Year to date.
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N.S.E Equities - Industrial & Allied |
EABL saw elevated volume action and eased back 1.01% to close at 295.00 and traded its highest volume session in 2015 with 2.463m shares worth 729.011m changing hands. EABL announced that they are seeking to raise 11 billion shillings ($120.48 million) through a medium-term note Program. EABL has retreated 15.71% since closing at a 2015 high of 350.00 on 19th February when it close +13.63% for the Year. EABL is now -4.22% and this price correction has overshot massively. The First Half results were muscular and neither the Keroche expansion News or the MTN Program justify the depth of this correction.
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