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Thursday 01st of September 2016 |
Morning Africa |
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Macro Thoughts |
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#ThisisNairobi Good Afternoon from Nairobi Africa |
“What matters is the shape-making impulse.” —Seamus Heaney Paris Review
“The less there was to see, the harder he looked, the more he saw.” ― Don DeLillo, Point Omega
“We're a crowd, a swarm. We think in groups, travel in armies. Armies carry the gene for self-destruction. One bomb is never enough. The blur of technology, this is where the oracles plot their wars. Because now comes the introversion. Father Teilhard knew this, the omega point. A leap out of our biology. Ask yourself this question. Do we have to be human forever? Consciousness is exhausted. Back now to inorganic matter. This is what we want. We want to be stones in a field.” ― Don DeLillo, Point Omega
“If you reveal everything, bare every feeling, ask for understanding, you lose something crucial to your sense of yourself. You need to know things that others don't know. It's what no one knows about you that allows you to know yourself.” ― Don DeLillo, Point Omega
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Bongo won 49.80 percent of Saturday's vote, against 48.23 percent for Ping, a narrow margin of only 5,594 votes of a total 627,805 registered voters. @AJENews Law & Politics |
Any appeal by Ping would be likely to focus on disputed results in one of the country's nine provinces - the Haut-Ogooue, where Bongo won 95.5 percent of the vote. Results from the province showed a turnout of more than 99 percent, compared with a nationwide turnout of 59.46 percent.
"It's going to be difficult to get people to accept these results," one member of the electoral commission told AFP, asking not to be named because of the sensitivity of the subject.
"We've never seen results like these, even during the father's time," he added.
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10 NOV 14 :: Ouagadougou's Signal to Sub-Sahara Africa The Star Law & Politics |
The tipping point for this accelerated sequence of events was President Compaoré stacking parliament in order to extend the presidential term limit. There are plenty of African presidents who are seeking to pull off the same magic trick and events in Ouagadougou have surely put them on notice.
Martin Aglo, a law student from Benin, told Reuters: “After the Arab Spring, this is the Black Spring”.
During the Arab Spring [now in the bleak mid-Winter], nearly all commentators spoke of how this North African wildfire could not leap the Sahara and head to sub-Saharan Africa. The reasons were that the State [incumbents] had a monopoly on the tools of violence and would bring overwhelming force and violence to bear.
We need to ask ourselves; how many people can incumbent shoot stone cold dead in such a situation – 100, 1,000, 10,000? This is another point: there is a threshold beyond which the incumbent can’t go. Where that threshold lies will be discovered in the throes of the event.
Therefore, the preeminent point to note is that protests in Burkina Faso achieved escape velocity. Overthrowing incumbents is all about acceleration, momentum and speed best characterised by the Ger- man word ‘Blitzkrieg’.
Out of a population of 17 million people in Burkina Faso, over 60 per cent are aged between 17 and 24 years, according to the World Bank, and this is another point to note. The country’s youth flexed their muscles. What’s clear is that a very young, very informed and very connected African youth demographic [many characterise this as a ‘demographic dividend’] – which for Beautiful Blaise turned into a demographic terminator – is set to alter the existing equilibrium between the rulers and the subjects, and a re-balancing has begun.
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Africa is missing out on the biggest emerging-market bond party in history. Africa |
As countries from Saudi Arabia to Papua New Guinea prepare to hit the market with tens of billions of dollars in Eurobond sales before the Federal Reserve increases interest rates, issuance from sub-Saharan Africa has all but dried up, with Ghana canceling a deal, Kenya, Nigeria and Ivory Coast delaying theirs and little in the pipeline. Only two nations -- South Africa and Mozambique -- have sold dollar securities this year, the latter in a restructuring of existing debt. African sales of $2 billion in 2016 are the lowest since 2008, when the financial crisis froze the market.
While Africa’s borrowing rates have dropped since February as investors hunt for higher-yielding assets, they are still more than 200 basis points above the emerging-market average. That’s made governments nervous about taking on debt in foreign currencies, according to FirstRand Ltd.’s Rand Merchant Bank unit.
The dearth of activity contrasts with a frenzy elsewhere. Deals of $9 billion from Qatar and $16.5 billion from Argentina helped propel Eurobond issuance among emerging-market sovereigns to a record $90 billion in the first half of the year. JPMorgan Chase & Co. projects an all-time high of $125.5 billion of transactions in 2016. To read more about booming emerging-market bond sales
African governments sold a record of $8 billion of international bonds in 2014. Last year, issuers from Angola to Zambia tapped the market, bringing the total to $6.75 billion.
Ghana, West Africa’s biggest economy after Nigeria, scrapped a sale of as much as $1 billion this month. It balked at the rates demanded by investors to compensate for a weakening currency, rising debt burden and a large fiscal deficit caused by weaker prices for gold and oil. While yields on the country’s $1 billion notes due in August 2023 have dropped from a record 16 percent on Jan. 20, at 9.34 percent they’re more than 500 basis points above the emerging market average of 4.24 percent, according to Bloomberg indexes.
Ivory Coast has also ruled out a Eurobond this year as the depreciation of the euro, to which the the Francophone country pegs its currency, makes dollar bonds less attractive, Finance Minister Adama Kone, said in an interview last week.
Nigeria’s plans to issue at least $1 billion in 2016 have been held up by investor concerns that the economy is on the brink of a recession because of a rout in oil prices and a slump in production. While Nigeria has asked banks to place bids by Sept. 19 if they want to manage the Eurobond sale, it may hold off and instead try to entice foreign investors to buy local bonds, according to RMB’s Ramkhelawan-Bhana.
Other countries are shut out of the market altogether after their yields soared. At 17.13 percent, those on Mozambique’s $727 million of securities due in 2023 are the highest in the world after Venezuela’s. Investors have fled after the southern African nation, already struggling with plunging exports, revealed $1.4 billion of state-guaranteed loans that it had previously kept secret.
Falling prices for raw materials have placed “significant stress” on several African economies, said Marco Santamaria, a money manager in New York at AllianceBernstein LP, which oversees almost $500 billion of assets. “Clearly, that’s made investors more cautious, which is reflected in the high yields for some of the countries. For governments thinking of raising funds, the Eurobond market probably isn’t the most obvious place.”
For those that need the money, time may be running out. The IMF said Kenya, for one, needs to act swiftly to avoid increased borrowing costs that are likely to follow if capital is drawn out of emerging markets by a rise in U.S. interest rates.
“There should be more issuance from September,” said Ray Zucaro, chief investment officer of hedge fund RVX Asset Management in Miami, whose only African assets are Nigerian Eurobonds. “But you’ve had volatile energy prices, which impacts the likes of Nigeria and Ghana. We’re not bullish on metals prices, which puts Zambia in a tricky space. All these things stirring together have damped investor appetite for sub-Saharan Africa.”
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Nigeria in recession as low oil prices shrink economy Reuters Africa |
Nigeria, Africa's biggest economy, officially slid into recession for the first time in more than 20 years as the statistics office announced a further contraction in the second quarter of the year.
The Nigerian Bureau of Statistics (NBS) said on Wednesday that gross domestic product (GDP) contracted by 2.06 percent after shrinking 0.36 in the first quarter.
It said the non-oil sector declined due to a weaker currency, while lower prices dragged the oil sector down.
Crude sales account for around 70 percent of government revenues.
Compounding the impact of low oil prices, attacks by militants on oil and gas facilities in the southern Niger Delta hub since the start of the year has cut crude production by about 700,000 barrels per day (bpd) to 1.56 million bpd.
On Wednesday, the statistics office said annual inflation reached 17.1 percent in July from 16.5 percent in June - a more than 10-year high - and food inflation rose to 15.8 percent from 15.3.
Nigeria's sovereign dollar bonds fell across the curve to their lowest value in more than two weeks after the NBS released its data.
"With a wider current account deficit it remains important for Nigeria to maintain a credible policy response, in order to attract much-needed stabilizing inflows," she added.
The NBS figures showed Nigeria attracted just $647.1 million of capital in the second quarter, a 76 percent fall year-on-year and 9 percent down from the first quarter.
Nigeria's economy was last in recession, for less than a year, in 1991, NBS data shows. It also experienced a prolonged recession from 1982 until 1984.
President Muhammadu Buhari was in power for some of that period as a military ruler after seizing power in a December 1983 coup and remained head of state until the military pushed him out in August 1985.
The naira remained at the record low of 418 per dollar hit on Tuesday on the black market, as dollar shortages curb activity on the official interbank market where the currency was offered as rates as weak as 365.25 this month before gaining ground after central bank interventions.
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Atlas African Industries Ltd reports H1 16 Loss details here Africa |
Par Value: Closing Price: 1.10 Total Shares Issued: 1,497,370,885 Market Capitalization: EPS: -2.53 PE: -0.435
Revenue 0.063m vs 3.147m -97.998% Cost of sales [0.034m] vs. [1.924m] -98.233% Gross profit 0.029m vs. 1.223m -97.629% Operating expenses [2.036m] vs. [13.291m] -84.681% Share option charge [0.067m] vs [2.720m] -97.537% Operating loss [2.074m] vs. [14.700m] -85.891% Loss before taxation [2.074m] vs. [14.700m] -85.891% Loss from the year from continuing operations [2.075m] vs. [14.785m] -85.966% Loss from the year from discontinued operations – vs. [19.400m] Loss for the year [2.075m] vs. [34.185m] -93.930% EPS from continuing operations [0.17] vs. [3.58] -95.251% EPS from continuing and discontinue operations [0.17] vs. [8.21] -97.929% Total assets 7.274m vs. 4.479m +62.402% Total equity 6.459m vs. 3.576m +80.621% Cash and cash equivalents at the end of the period 1.709m vs. 1.450m +17.862% Number of shares at the end of the period : 1,497,370,885
Company Commentary
CHAIRMAN’S STATEMENT
This has been a frustrating period for the Company and its shareholders.
During the period, we initially made great strides forward to deliver on our strategy to take advantage of opportunities in the consumer industrial sector: we changed the name of the Company to Atlas African Industries Limited, shifted our operational focus and raised US$5 million from new and existing shareholders to strengthen the balance sheet; through our Ethiopian subsidiary TEAP Glass PLC (‘TEAP’) we secured a 100 year land lease for our planned new state-of-the-art glass bottle manufacturing facility (the first 45 years of lease payments have been paid in advance) on a 5.5 acre site located in Chancho, in close proximity to established infrastructure and just 30 kilometres from intended mine sites for the majority of materials needed to produce high quality bottles; we appointed MH Engineering Plc, a leading Ethiopian firm, to conduct a full feasibility study, including architectural, engineering, structural, sanitary, electrical and mechanical design and quantity surveying services; we commenced ground clearing and geotechnical drilling on-site ahead of constructing ancillary buildings, and placed deposits on long lead items. The tangible potential of our Ethiopian project (the ‘Chancho Project’) was further underpinned by the signing of a memorandum of understanding with leading Ethiopian brewer Raya Brewery Share Company (‘Raya’), with a view – subject to confirmation of quality – to entering into an offtake agreement to regularly supply international standard, high quality glass bottles to Raya in substitution of the imported bottles it currently uses.
Preliminary economic studies had highlighted the strong potential of the Chancho Project based on a yearly production capacity of 105 million 330ml bottles, with full production targeted for early 2019. The Ethiopian Government has designated manufacturing as a top industrial priority with an emphasis on replacement of imports; the high-quality glass bottle market is currently dominated by expensive imports, so we identified our project as having huge benefit to all stakeholders, both the investors and Ethiopia. Success of the Chancho Project has the potential to generate significant revenue in tax to the Ethiopian Government as well as generate employment of 195 people in the area. Furthermore, we perceived significant ancillary benefits would be seen within associated businesses and supply chains.
Despite these considerable efforts and the factors which suggested that the Chancho Project would generate positive impacts for the Company, its shareholders, the local community around Chancho and the Ethiopian Government through tax revenues, our progress has been undermined and derailed by the actions of the Ethiopian Revenue and Customs Authority (‘ERCA’). As shareholders will be aware from our announcement of 11 May 2016 we have been subjected to a complete injustice, through the summary removal of approximately US$2.4 million from TEAP’s bank account with the Development Bank of Ethiopia by ERCA. ERCA’s actions stem from a tax claim made against Ardan Risk & Support Services (‘Ardan’) which categorically relate to periods prior to Atlas’ involvement with Ardan. Atlas has received legal advice that neither it nor TEAP has any liability for any such taxes under Ethiopian law.
The Board continues in its fight to retrieve the expropriated funds and is pursing all legal, diplomatic and political channels in order to seek redress, including direct appeals to the Government of Ethiopia and the Ethiopian Investment Commission and through the UK Foreign Office and the British Business Secretary; our major shareholders have been actively lobbying the Canadian and US Governments.
The Company believes that the unilateral removal of these funds was unlawful. I want to again reiterate and assure shareholders that the Board is examining all available options as it seeks to have the Company’s funds returned. Concurrently, the Board has been actively considering alternative options available to maximise shareholder value and on 1 August 2016 announced that the Company has acquired an interest in BonanzaWin, a Nigerian based gaming company offering a range of online and real-play gaming experiences including sports betting, casino slot games, and lotto.
This investment is in line with the Company’s active development strategy to identify and support prospective growth opportunities across Africa. Atlas’ total investment into Equatorial Partners Limited (‘EPL’, which holds a 60% stake in Saerimner Ltd (‘Saerimner’) a Nigerian registered company operating under the trading name “BonanzaWin”) at this stage is US$0.3 million, in consideration for which it has acquired a 10% equity stake in EPL. BonanzaWin has established a portfolio of gaming businesses currently focussed on the Nigerian market; the company has a secure online gaming platform, which powers a wide range of games including sports betting, live casino and slot games, has three gaming shops where customers can play and place bets, and is a regulated provider of the Nigerian lottery, for which BonanzaWin sells tickets through a number of local sales agents. BonanzaWin is licenced and regulated by the Lagos State Lottery Board and Atlas believes the company represents a compelling investment opportunity to access Nigeria’s growing gaming and entertainment sectors. For the 12- month period ended 31 December 2015 EPL and Saerimner reported a loss of US$0.3 million.
Financial Review
For the period under review the Company is reporting turnover of US$63k and comprehensive losses of US$2.1million. At 30 June 2016 the Company had cash and cash equivalents of US$1.7 million.
Outlook
While all the building blocks are in place to develop a valuable project for both shareholders and the people of Ethiopia, the actions taken by ERCA have caused the Company to suspend activities in connection with the Chancho Project. The Chancho Project has intrinsic value and we have received approaches from international brewing companies who see investment into it as a potential entry point into Ethiopia. Despite the disappointments relating to recent events in Ethiopia, the recent investment in BonanzaWin provides us with exposure to Nigeria’s large consumer market, specifically the fast-growing gaming and entertainment market. With rising incomes and increasing consumer demand, the African continent continues to develop and unlock new market opportunities and we look forward to keeping shareholders updated with developments across our portfolio. Finally, I would like to thank the executive team, who have been upstanding in their commitment to the Company in the face of severe hardships, and also our shareholders whose support is invaluable as we focus on remedying the current difficult situation. Ian H. Mann Non-Executive Chairman 30 August 2016
Conclusions
Still searching for a Path
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Express Kenya reports H1 16 EPS loss [0.88cents] Earnings here Kenyan Economy |
Par Value: 5/- Closing Price: 3.55 Total Shares Issued: 35403790.00 Market Capitalization: 125,683,455 EPS: -2.18 PE: -1.628
Express Kenya Limited is a Kenya-based company engaged in the provision of clearing and forwarding services for air and sea, as well as warehousing and logistics services.
H1 Revenue 34.661m vs. 60.000m -42.232% H1 Direct costs [21.975m] vs. [33.747m] -34.883% H1 Gross profit 12.686m vs. 26.253m -51.678% H1 Other operating income 3.528m vs. 5.856m -39.754% H1 Administrative expenses [17.999m] vs. [21.893m] -17.787% H1 Other operating expenses [20.363m] vs. [24.817m] -17.947% H1 Operating [Loss][22.148m] vs. [14.601m] -51.688% [Loss] before tax [31.106m] vs. [23.267m] -33.691% [Loss] for the period [31.106m] vs. [23.267m] -33.691% EPS [0.88] vs. [0.66] -33.333% No interim dividend Cash and cash equivalents at the end of the period [48.435m] vs. [40.331m] Total assets 421.948m vs. 444.437m -5.060%
Conclusions
Market Cap is $1.25m
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