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Monday 25th of January 2016 |
Morning Africa |
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If you are tracking the NSE Do it via RICHLIVE and use Mozilla Firefox as your Browser. 0930-1500 KENYA TIME Normal Board - The Whole shebang Prompt Board Next day settlement Expert Board All you need re an Individual stock.
The Latest Daily PodCast can be found here on the Front Page of the site http://www.rich.co.ke
It was a pleasure hosting Albert Mugo and his @KenGenKenya Team at Mindspeak on Friday.
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Pedestrians are seen in front of the US Capitol in Washington, DC, as snow continues to fall, Jan. 22, 2016. Africa |
This party – the "Bomb Party" of the novel's alternative title – fills the longest chapter of the book. The party is held outside sometime around New Year's Day, and the guests are kept warm via enormous bonfires around Dr. Fischer's lawn. The meal is exquisite. Following dinner, Dr. Fischer explains the rules for that night's experiment. He has hidden six crackers in a bran tub. Inside five of them are cheques for two million francs apiece, with the name left blank. Inside the sixth is a small bomb. The guests are expected to draw crackers and open them one by one.
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Oil prices soared 10 percent on Friday, one of the biggest daily rallies ever Reuters Commodities |
Oil prices soared 10 percent on Friday, one of the biggest daily rallies ever, as bearish traders who had taken out record short positions scrambled to close them, betting the market's long rout may finally be over.
U.S. crude CLc1 climbed 9 percent and Brent LCOc1 bounced 10 percent on Friday.
U.S. crude was last up 0.9 percent at $32.49 a barrel. The contracts had descended to as low as $26.19 last week, their lowest since May 2003. Brent crude rose 1.3 percent to $32.59 a barrel after dropping on Wednesday to $27.10, lowest since November 2003
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Volatility in the cocoa-futures market is soaring Commodities |
A measure of 60-day price volatility on Thursday climbed to a 13-month high. Cocoa has dropped 16 percent from a four-year high of $3,429 a metric ton on Dec. 7 on indications that pricey beans curbed demand. On Wednesday, aggregate trading volumes for both futures and options rose to records.
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FDI flows into Africa fell 31.4% year-on-year last year to $38bn, with Central and Southern Africa registering the largest declines. Africa |
FOREIGN direct investment (FDI) into SA fell 74% to $1.5bn last year, a far steeper decline than experienced by the rest of the continent, according to the Global Investment Trends Monitor published by the United Nations Conference on Trade and Development (Unctad).
FDI flows into Africa fell 31.4% year-on-year last year to $38bn, with Central and Southern Africa registering the largest declines.
On a global basis, Unctad projects a decline in global FDI this year, but commentators think that despite SA’s weak profile, the country still offers attractive investment opportunities in the medium to longer term.
Standard Bank chief economist Goolam Ballim said SA would continue to benefit from the African growth story and would continue to be a magnet for capital in the longer term.
"One has to acknowledge that we are in a world where global growth is generally slowing or anaemic and the price of capital is becoming more expensive, led by the US Federal Reserve’s tightening. This environment will suppress generalised investment flows, especially to more risky or novel markets, and some would regard Africa within that lens.
"With a slighter longer-term viewpoint, the demographics and generalised income biases still favour emerging markets, including many African economies.
"And SA, as Africa’s most established economy, will continue to serve as a partial launch pad for interests into the rest of the continent. Also, SA in its own right still offers opportunities in its emerging classes that are moving up the income and consumption curves," Mr Ballim said.
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Don’t underestimate the power of Africa’s informal sector in a global economy QUARTZ Africa |
The informal economy in Africa is big business. The International Labour Organisation (ILO) estimates that its average size as a percentage of gross domestic product in sub-Saharan Africa is 41%. This ranges from under 30% in South Africa to 60% in Nigeria, Tanzania and Zimbabwe.
It is also a huge employer. It represents about three-quarters of non-agricultural employment, and about 72% of total employment in sub-Saharan Africa. About 93% of new jobs created in Africa during that 1990s were in the informal economy.
The International Labor Office defines the informal economy as:
All economic activities by workers or economic units that are—in law or practice—not covered or sufficiently covered by formal arrangements.
Today the informal economy appears to be as important as ever to Africa and its future development.
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Rezidor Plans to Build 35 Hotels Across Africa in Four Years Africa |
The company officially starts operating the Radisson Blu Hotel in the Kenyan capital, Nairobi, on Friday. The hotel was developed by a Kenyan investor and three Scandinavian funds at a cost of 9 billion shillings ($88 million), Neumann said in an interview in the city. The other properties will be built by 2020, he said.
“We see Africa as the continent of opportunity,” Neumann said. “We have been focusing on Africa for some time and we are now recognized for having the largest amount of hotel rooms under development” in sub-Saharan Africa.
Carlson Rezidor will open a second hotel in Kenya under the Park Inn brand in the Nairobi suburb of Westlands at the end of this year and a third one under the Radisson Blu Residences brand next door to the official residence of Kenya’s president in 2017, Neumann said.
“This is a country which has an enormous future,” he said. “It has unparalleled natural beauty and Nairobi is an international great city. Kenya Airways is a recognized international airline, which is very important for the African continent and we together need to do everything possible to promote this city and this country.”
Other properties under development include a Radisson Blu and a Park Inn Hotel in the Rwandan capital, Kigali, with a combined total of 460 rooms that are expected to open by May. In the Ethiopian capital, Addis Ababa, a second Radisson Blu Hotel will be built, while the company is also constructing properties in Uganda and South Sudan.
“Today we already have 31 hotels on the African continent in operation, the other 35 are coming on so that is a real force,” Neumann said. “We want to make Radisson Blu the leading brand in Africa in the upscale market.”
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25-JAN-2016 Who is the Puppeteer? @TheStarKenya Kenyan Economy |
A puppeteer is a person who manipulates an inanimate object, such as a puppet, in real time to create the illusion of life. The puppeteer may be visible to or hidden from the audience. A puppeteer can operate a puppet indirectly using strings, rods, wires, electronics or directly by his or her own hands placed inside the puppet or holding it externally. You have to admit that there has been a concerted effort to undermine the bona fides of the government’s Eurobond issues. When I was in London, I used to enjoy going to the Royal Festival hall and listening to the orchestra play. And over the last few weeks it is as if I was at the festival hall. Ah look! That’s the violin, then you might open the Nation and say to yourself that’s the percussion and oh, look over there the string instruments and on and on it has gone. A seriously good orchestra of course plays their individual musical instruments well and makes sweet music together. The ‘Eurobond Orchestra’ made some good points but its now become an awful racket, a cacophony even [a harsh, discordant mixture of sounds]. The orchestra made sweet music whilst the audience was the domestic echo-chamber but then once the puppeteer took it outside the confines of the Kenyan hot-bed things have begun to unravel.
To impugn the Federal Reserve, JP Morgan and Qatar National Bank [the second largest bank in Africa and the Middle East in terms of assets and therefore on the roster by right] and to sweep them up in a $1b heist exhibits a fundamental ignorance of how capital flows around the world and is a self-harm type of accusation to make. Just think about this why would these institutions put their neck on the line for a transaction that probably represents 0.00001 per cent of their revenues? It would be an insane risk-reward trade especially in the new normal where banks and institutions are so nervous around ‘’risk-taking’’ and every transaction has a compliance officer all over it like a bad rash. Big global institutions are not interested in getting caught on the wrong side of the new 21st century compliance policeman. The fact that Barclays PLC is searching for an exit out of Barclays Africa informs us of this and why this game is not worth the candle. President Jacob Zuma behaved like a fugitive at Davos last week [skipping all his panel discussions] and this orchestra of ours with its behind the scenes conductor [puppeteer] would be behaving no differently if they took this cacophony outside our borders.
Let’s now turn to the economy and inspect what’s happening because a lot is and if you blink you are going to miss a positive story. According to Charles Robertson [author of the Fastest Billion] and chief economist Renaissance Capital.
‘’A big improvement in both the budget and the current account..... the authorities are squeezing those deficits hard, really hard...We esti- mate that the budget deficit was 11 per cent of GDP in the 12 months through March 2015 but was aggressively cut to eight per cent through September 2015...a three point improvement is impressive in any country to achieve it in six months is remarkable. The current account deficit is on track to meet 7.6 per cent of GDP annual target’’
This is big and I have already written about it and its continuing to trend better and informs us why the shilling has been so “teflon’’. As an investor you have to seek the signal in the cacophony and the shilling is emitting a very powerful signal.
Razia Khan of Standard Chartered Bank swung through Nairobi last week; “we are still relatively optimistic and looking at the con- tinuation of the growth uptrend in Kenya which we think we will be within reach of six per cent from 2016,” said Khan. Take a look around Africa and you will note that there are winners and losers and that Kenya is very definitely with the winners. I expect South Africa and Nigeria to be close to zero per cent GDP in 2016.
Another point to note is that we have gotten lucky with the weather. I once joked that to be a good economist in Kenya, you need to be a good meteorologist. The way I see it we have been really lucky. There is plenty of collateral damage from the El Niño weather pattern but we have gotten lucky. The agri-economy is doing just fine.
Africa Confidential in its latest edi- tion wrote: “Secondly, the commodity price crash cannot all be blamed on China and it is not blighting all Africa’s exports. For example, export earnings from cocoa, coffee and tea look set to hold up in both the increasingly lu- crative specialist markets and in the traditional bulk purchase markets.’’
The dream of oil is now over the horizon but there is a lot of positive momentum out there and its not getting drowned out by the cacophony but is beginning to rise above it.
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World's Biggest Tea Auction Seen as a `House of Collusion' Kenyan Economy |
“I think automating your system will go a long way to dispel some of the perceptions that this is a house of collusion,” Kenyatta said. “People believe that you just come here to showcase, but the real deals are done at night.”
Kenya is the world’s largest exporter of black tea, the country’s biggest generator of foreign-currency earnings. The Mombasa auction handled 358.6 million kilograms (791 million pounds) of the leaves in 2015, compared with 390.2 million kilograms a year earlier, according to data compiled by Tea Brokers East Africa Ltd., a Mombasa-based trader of the crop. The sale competes with the Colombo auction in Sri Lanka, which traded 315.5 million kilograms of tea last year, compared with 333.5 million kilograms in 2014, according to data e-mailed by the Sri Lanka Tea Board.
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N.S.E Today |
The Stock Market snapped its losing Streak. The Nairobi All Share rebounded 0.48% off a 13 month low to close at 137.13 The Nairobi NSE20 Index bounced 5.06 points off a 43 month low to close at 3752.45 Equity Turnover picked up speed and clocked 1.497b.
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N.S.E Equities - Agricultural |
Sasini Tea and Coffee firmed +3.66% to close at 21.25 and was trading at 22.00 +7.32% at the closing Bell.
Africa Confidential in its latest Edition said ''“Secondly, the commodity price crash ….is not blighting all Africa’s exports. For example, export earnings from cocoa, coffee and tea look set to hold up in both the increasingly lucrative specialist markets and in the traditional bulk purchase markets.’’
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N.S.E Equities - Commercial & Services |
Safaricom rallied +0.99% to close at 15.25 and was trading at close to session highs at 15.35 +1.66% at the Finish Line. Safaricom has room to rebound meaningfully and is oversold. Safaricom traded 4.81m shares.
Kenya Airways up-ticked +1.08% to close at 4.70 and traded 352,400 shares.
Standard Group surged +8.03% to close at 30.25.
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N.S.E Equities - Finance & Investment |
Kenya Commercial Bank closed unchanged at 38.50 on heavy duty volume action of 24.365m shares worth 943.612m. Kenya Commercial Bank's price was leaning higher and the weighted average was 38.73 and KCB closed out the session trading at 39.00 +1.3%. Kenya Commercial Bank trades on a Trailing P/E Ratio of 6.838 which is inexpensive.
Kenya Commercial Bank share price data here http://www.rich.co.ke/rcdata/company.php?i=MjE%3D
Par Value: 1/- Closing Price: 38.50 Total Shares Issued: 2984227692.00 Market Capitalization: 114,892,766,142 EPS: 5.63 PE: 6.838
Diamond Trust Bank rallied +3.24% to close at 191.00 and sprinted as high as 199.00 +7.57% at the Finish line. Todays thrust higher was on unusually strong volume with 783,600 shares worth 149.67m changing hands. Equity Bank edged 1.298% easier to close at 38.00 and closed the session trading at 37.50 -2.6%. Equity traded 4.284m shares. CFC Bank firmed +1.25% to close at 81.00 and traded 550,500 shares. There has been good volume action in the counter this year. Barclays Bank traded soft and closed -2.53% at 11.55 and traded 410,100 shares. There was a very big Supply showing on the board and Barclays PLC chatter around down-sizing Africa has not been helpful.
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N.S.E Equities - Industrial & Allied |
EABL rallied +1.56% to close at 259.00 and traded 251,300 shares ahead of an imminent earnings Release. I expect an Earnings Release that comfortably outpaces consensus estimates.
ARM Cement Limited issued a Cautionary announcement pre-market opening
''further to the Cautionary Announcement made on 23rd December 2015 on the subject of a proposed equity investment of USD 125 million by an international institutional investor (“the Investor”), the process for the proposed investment remains ongoing. Pursuant to a term sheet signed on 30 December 2015, the Investor proposes to make an equity investment of up to USD 125 million by subscribing for convertible preference shares in the Company. This long term structured instrument is likely to be of seven years tenor and, on conversion to ordinary shares in the Company, is not expected to reach the threshold which would require a mandatory take-over bid, based on the Company’s current issued share capital.
The Investor is in the process of conducting its due diligence on the Company. The detailed terms of the investment shall be contained in definitive agreements to be entered into between the Company and The Investor.
The finalisation of the proposed investment is subject to several conditions, including, but not limited to, completion of satisfactory due diligence and definitive agreements and regulatory and shareholder approvals.''
ARM eased 2.85% to close at 34.00 and traded 68,900 shares.
@Armcement1 25-JAN-2016 Cautionary Announcement http://www.rich.co.ke/media/docs/ARM%20Cement%20Ltd.-%20Cautionary%20Announcement.pdf
KenGen firmed +0.92% to close at 5.50 and traded 1.254m shares. The share price is in disequilibrium and this is evidenced by the PE Ratio which is close to 1.0000.
Flame Tree Group (NSE: FTGH) ''has today signed an agreement to acquire, a leading colour cosmetic brand in Kenya, subject to approval from the Competition Authority. The acquisition will position Flame Tree Group as a key player in the niche colour cosmetic prestige segment. Suzie Wokabi the founder of SuzieBeauty will also join Flame Tree Group as the Creative Director for the prestigious cosmetic segment'' FTG Holdings surged +7.85% to close at 7.55 and traded 19,300 shares.
FlameTree Group Holdings 25-JAN-2016 Cautionary Announcement http://www.rich.co.ke/media/docs/FTGH%20Ltd.-%20Cautionary%20Announcement.pdf
Sameer Africa rallied +8.33% to close at 3.90. There were 20 Buyers for every Seller which explains todays price move.
Transcentury slumped -9.19% to close at 7.90.
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