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Thursday 01st of September 2016
 
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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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POINT OMEGA. By Don DeLillo
Africa


“The true life is not reducible to words spoken or written, not by
anyone, ever.” ― Don DeLillo, Point Omega

read more





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.

read more




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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Currency Markets at a Glance WSJ
Law & Politics


Euro 1.1144
Dollar Index 96.06
Japan Yen 103.32
Swiss Franc 0.9837
Pound 1.3145
Aussie 0.7541
India Rupee 66.955
South Korea Won 1121.51
Brazil Real 3.2275
Egypt Pound 8.8776
South Africa Rand 14.6676

Dollar Index 3 Month Chart INO 96.053 [Target 100.00 By Year End]

http://quotes.ino.com/charting/index.html?s=NYBOT_DX&v=d3&t=c&a=50&w=1

Dollar Yen 1 month Chart INO 103.60 [Could back up as much as 105.00]

http://quotes.ino.com/charting/index.html?s=FOREX_USDJPY&t=c&a=2&w=15&v=d1

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Brazil's worst recession in 100 years shows no sign of abating - 6 straight quarters of economic contraction Jamie McGeever
Emerging Markets


Rousseff Is Ousted, and Investing in Brazil Is Going to Get a Lot
Trickier via @markets

https://twitter.com/BloombergEM/status/771049431672168448

India's economy slowed more than estimated, adding pressure to the
new central bank governor  @Business

https://twitter.com/business/status/770962754597449729?s=03

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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.”

read more


SA Futuregrowth has halted lending to six state-owned firms, including power utility Eskom and logistics firm Transnet, it said on Wednesday citing political uncertainty.
Africa


Futuregrowth, which manages client assets of around 170 billion rand
($12 billion), said it was concerned by "a power struggle" in
government, triggering a drop in the rand currency.

read more


South Africa All Share Bloomberg +4.02% 2016
Africa


Dollar versus Rand 6 Month Chart INO 14.6676

http://quotes.ino.com/charting/index.html?s=FOREX_USDZAR&v=d6&t=c&a=50&w=1

Egypt EGX30 Bloomberg +16.44% 2016

http://www.bloomberg.com/quote/CASE:IND

Nigeria slides into recession for the first time in more than 20
years as GDP shrinks 2.06% in Q2. Jamie McGeever

https://twitter.com/ReutersJamie/status/770963911256449024

read more


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.

read more



Volume of cash moving through mobile money transfer platforms grew by a fifth in the first six months of this year, powered by increased uptake of cellphone-based gaming
Kenyan Economy


A total Sh1.59 trillion moved through the mobile platforms in the
first six months of the year, according to Central Bank of Kenya (CBK)
data, signalling that consumers in East Africa’s largest economy are
on course to surpassing 2015’s full-year record of Sh2.81 trillion.

This means an average of Sh220.4 billion is moving on mobile money
platforms every month compared to Sh186.4 billion per month in in a
similar period last year.

Telecoms operators said transactions to bookmakers have added impetus
to mobile money’s steady rise since it was first launched in Kenya
nine years ago.

The betting industry has emerged as a major player in the mobile money
industry alongside retail payments, peer-to-peer transfers, and
diaspora remittances, according to telecoms operators.

read more



Nairobi All Share Bloomberg -7.39% 2016 [snapped a losing streak which had seen the All Share -8.98% since Thursday am last week]
Kenyan Economy


134.94 +1.62 +1.22%

Nairobi ^NSE20 Bloomberg -21.33% 2016 [snapped a losing Streak which
had seen NSE20 -9.99% since Thursday am last week]

http://j.mp/ajuMHJ

3,178.83 +62.01 +1.99%

Every Listed Share can be interrogated here

http://www.rich.co.ke/rcdata/nsestocks.php

read more



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

read more


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

read more




 
 
by Aly Khan Satchu (www.rich.co.ke)
 
 
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September 2016
 
 
 
 
 
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