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Friday 11th of March 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 |
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#KFWealthReport Conclusions Africa |
Macro Thoughts
Home Thoughts
“Longing on a large scale is what makes history.” ― Don DeLillo, Underworld
“The pattern match begins with a search for a substring of a given string that has a specified structure in the string manipulation language” ― Don DeLillo, End Zone
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London's Oldest Fish Restaurant Is Loved by Bankers and Gangsters Africa |
Starters range from a £7 lobster bisque ($10) to £20.75 dressed crab, as well as potted shrimps, prawn cocktail and smoked eel. The 14 mains, costing from £15 to £45, feature Dover sole, Cornish brill and other seafood specialties. The menu advises: "All Fish can be Fried, Grilled or Poached, please ask a member of staff for the best way to order."
Conclusions
This was one of my favourite restaurants and I worked just around the Corner.
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The Obama Doctrine The Atlantic Law & Politics |
Obama believes that the Manichaeanism, and eloquently rendered bellicosity, commonly associated with Churchill were justified by Hitler’s rise, and were at times defensible in the struggle against the Soviet Union. But he also thinks rhetoric should be weaponized sparingly, if at all, in today’s more ambiguous and complicated international arena.
But as Assad clung to power, Obama’s resistance to direct intervention only grew. After several months of deliberation, he authorized the CIA to train and fund Syrian rebels, but he also shared the outlook of his former defense secretary, Robert Gates, who had routinely asked in meetings, “Shouldn’t we finish up the two wars we have before we look for another?”
Obama, unlike liberal interventionists, is an admirer of the foreign-policy realism of President George H. W. Bush and, in particular, of Bush’s national-security adviser, Brent Scowcroft (“I love that guy,” Obama once told me). Bush and Scowcroft removed Saddam Hussein’s army from Kuwait in 1991, and they deftly managed the disintegration of the Soviet Union; Scowcroft also, on Bush’s behalf, toasted the leaders of China shortly after the slaughter in Tiananmen Square. As Obama was writing his campaign manifesto, The Audacity of Hope, in 2006, Susan Rice, then an informal adviser, felt it necessary to remind him to include at least one line of praise for the foreign policy of President Bill Clinton, to partially balance the praise he showered on Bush and Scowcroft.
Within the White House, Obama would argue that “dropping bombs on someone to prove that you’re willing to drop bombs on someone is just about the worst reason to use force.”
Obama was also unsettled by a surprise visit early in the week from James Clapper, his director of national intelligence, who interrupted the President’s Daily Brief, the threat report Obama receives each morning from Clapper’s analysts, to make clear that the intelligence on Syria’s use of sarin gas, while robust, was not a “slam dunk.” He chose the term carefully. Clapper, the chief of an intelligence community traumatized by its failures in the run-up to the Iraq War, was not going to overpromise, in the manner of the onetime CIA director George Tenet, who famously guaranteed George W. Bush a “slam dunk” in Iraq.
While the Pentagon and the White House’s national-security apparatuses were still moving toward war (John Kerry told me he was expecting a strike the day after his speech), the president had come to believe that he was walking into a trap—one laid both by allies and by adversaries, and by conventional expectations of what an American president is supposed to do.
This was the moment the president believes he finally broke with what he calls, derisively, the “Washington playbook.”
“Where am I controversial? When it comes to the use of military power,” he said. “That is the source of the controversy. There’s a playbook in Washington that presidents are supposed to follow. It’s a playbook that comes out of the foreign-policy establishment. And the playbook prescribes responses to different events, and these responses tend to be militarized responses. Where America is directly threatened, the playbook works. But the playbook can also be a trap that can lead to bad decisions. In the midst of an international challenge like Syria, you get judged harshly if you don’t follow the playbook, even if there are good reasons why it does not apply.”
What country does he consider the greatest challenge to America in the coming decades? “In terms of traditional great-state relations, I do believe that the relationship between the United States and China is going to be the most critical,” he said. “If we get that right and China continues on a peaceful rise, then we have a partner that is growing in capability and sharing with us the burdens and responsibilities of maintaining an international order. If China fails; if it is not able to maintain a trajectory that satisfies its population and has to resort to nationalism as an organizing principle; if it feels so overwhelmed that it never takes on the responsibilities of a country its size in maintaining the international order; if it views the world only in terms of regional spheres of influence—then not only do we see the potential for conflict with China, but we will find ourselves having more difficulty dealing with these other challenges that are going to come.”
Conclusions
A cerebral Fellow. Re His syria red-line. Just about everyone appreciates he was smart to side step Erdogan's Trip-wire.
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Draghi Expands ECB Stimulus With More QE and Lower Rates World Currencies |
Mario Draghi unleashed his most audacious stimulus package yet, unexpectedly testing the lower bounds of all the European Central Bank’s interest rates, expanding its monthly bond purchases by a third and signaling it may pay lenders to borrow its cash.
The 25-member Governing Council, meeting in Frankfurt on Thursday, cut the rate on cash parked overnight by banks by 10 basis points to minus 0.4 percent and lowered its benchmark rate to zero. Bond purchases were increased to 80 billion euros ($87 billion) a month from 60 billion euros, and corporate bonds will now be eligible. A new series of long-term loans to banks will begin in June.
The ECB president told a press conference in Frankfurt that: Interest rates will remain at present or lower levels for an extended period of time The outlook for growth has been revised down, reflecting weakening global prospects 2016 GDP revised down to 1.4% from 1.7% 2017 GDP revised down to 1.7% from 1.9%, GDP to be 1.8% in 2018 Inflation forecast for 2016 slashed to 0.1% from 1% Inflation to be 1.3% in 2017, will average 1.6% in 2018 The central bank stopped short of introducing a tiered deposit rate, which had been the subject of speculation before the meeting.
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‘Angola is no longer a colonial fiction,’ Ricardo Soares de Oliveira writes in Magnificent and Beggar Land Africa |
‘Angola is no longer a colonial fiction,’ Ricardo Soares de Oliveira writes in Magnificent and Beggar Land, even though it was a ruined, inchoate slab of territory during the last years of Portuguese rule and then for decades after independence.
But party and state have remained inextricably bound together; and both perform the will of the president, José Eduardo dos Santos, who assumed office in an age of strongmen, between Margaret Thatcher’s first election victory in 1979 and Robert Mugabe’s in 1980. Thirty-six years later Dos Santos is still in power. Under his supervision, Angola is not just a development star, but a model of elite self-enrichment and wealth disparity. There are now said to be seven thousand millionaires while four million people in the capital survive on $2 a day. Poverty is even more pronounced in rural areas. About eight million Angolans, or 37 per cent of the population, are living on the edge.
The key to social injustice in Angola is a repressive government, ostentatiously decked out in fossil fuel receipts. Western oil companies remained in the country throughout the years of conflict, and beyond. But a dispute 15 years ago with Western lenders over where the government’s oil receipts were going left the door open to the Chinese, and in 2004 trade figures with China began to show a decisive upturn. Today China is Angola’s major trading partner, rolling out a national infrastructure (including railways and quick-build housing) in return for fuel. The ‘Angola model’, Soares de Oliveira explains, is simply a ‘resources for infrastructure deal … oil cargoes in exchange for Chinese credit lines to help finance reconstruction’. It looks enviable, not just to Western investors who feel the IMF’s fastidiousness gave China an unfair advantage, but to African countries without the same resources. An oil-endowed country on the Atlantic coast that survived the ravages of slavery, settler colonialism, armed liberation, socialism and Cold War military intervention is now forging ahead as a triumphant capitalist economy, enriching powerful Angolans and enhancing the country’s continental prestige. The president’s daughter, Isabel dos Santos, is worth around $3 billion and said by Forbes to be ‘Africa’s richest woman’.
Today’s poor Angolans – probably half the country – are scarcely more prosperous than their grandparents were, but the rich are decidedly richer. Angola’s future may look brighter once its old elites have been buried with honour and good riddance.
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South Africa All Share Bloomberg +1.66% 2016 Africa |
South Africa Off to Bad Start as Factory, Mining Output Slumps http://www.bloomberg.com/news/articles/2016-03-10/south-africa-off-to-bad-start-as-factory-mining-output-slumps
South Africa’s economy, which narrowly avoided a recession last year, is off to a bad start in 2016 as manufacturing and mining output, which together make up about a fifth of gross domestic product, contracted in January.
Factory output shrank 2.5 percent from a year before, the biggest decline since July 2014, when a four-week strike in the vehicle and car-parts industry halted production. Mining production fell for a fifth consecutive month by 4.5 percent, the statistics office said on Thursday.
The data reflects a “combination of weak global demand dynamics, particularly from China, and the ongoing structural growth constraints that we have domestically,” Jeffrey Schultz, an economist at BNP Paribas Securities, said by phone from Johannesburg on Thursday. “Effectively, the manufacturing sector is operating at recessionary levels.”
Dollar versus Rand 6 Month Chart INO 15.3126 http://quotes.ino.com/charting/index.html?s=FOREX_USDZAR&v=d6&t=c&a=50&w=1
Egypt EGX30 Bloomberg -6.31% 2016 [+3.00% yesterday] http://www.bloomberg.com/quote/CASE:IND
6,563.65 +191.01 +3.00%
The currency traded at 9.684 per dollar, from 9.763 on Tuesday, according to the average quote from three unregulated dealers in Cairo surveyed by Bloomberg. The official rate is 7.830 per dollar. The pound traded at 9.817 per dollar on Sunday, the lowest since Bloomberg began a weekly black-market survey in April 2013.
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Nigerian policymaker advised central bank to devalue naira: MPC minutes Africa |
Adedoyin Salami, an academic, said the naira was 10-percent over-valued and voted to move the exchange rate band to plus or minus five percent from 220, minutes from the 12-member MPC January meeting showed.
Nigeria faces its worst economic crisis for decades as the falling price of oil has slashed revenues, prompting the central bank to peg the currency and introduce curbs to conserve foreign exchange reserves which have fallen to a more than 11-year low.
The naira trades some 40 percent below the official rate on the black market versus the dollar. Africa's biggest economy grew by 2.8 percent last year, its slowest for decades.[nL5N16G4TQ]
Salami said his proposal gained no support at the meeting and that the central bank was focused on exchange rate stability at the expense of inflation.
"The absence of an exchange rate management policy has diminished Nigeria's attractiveness as a destination for international capital flows," he said.
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Mozambique's Tuna Bonds Surge Most in 15 Months on Debt Exchange Africa |
Bonds of Mozambique’s state-owned tuna-fishing company gained the most in 15 months after the nation proposed a debt-exchange for almost $700 million of securities as a commodities slump led to a cash crunch in the southeast African country.
Yields on the $773.5 million of sinkable securities fell 2.35 percentage points to 16.77 percent by 8:50 a.m. in London after dropping 173 basis points on Wednesday. That brought the price to 80.1 cents to the dollar, from 75 cents on Friday, according to data compiled by Bloomberg.
The maximum price of the new fixed-rate notes to exchange the securities of Empresa Mocambicana de Atum SA will be 80 cents on the dollar, the government said in a statement Wednesday. The new government bonds will mature in 2023. Other details about the terms of the debt exchange, including the prices and interest rate, will be announced on March 17. The debt outstanding is estimated to be $697 million after a scheduled interest-rate payment on March 11, the government said.
“The government so far is trying a friendly debt exchange,” said Lutz Roehmeyer, director of fund management at Landesbank Berlin Investment GmbH, who oversees about $1.1 billion in emerging-market debt, including the so-called tuna bonds. “So they can expect some goodwill from bondholders. If successful, the government has cash-flow savings.”
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Newly Rich Africans Are Young, Hip Millennials Willing to Spend Africa |
The profile of a rich African is shifting from older white-haired males to younger, hip millennials who have found new ways to make and keep money in a changing global scene.
There will be 3,933 ultra-wealthy individuals on the continent by 2025, from 2,650 last year, according to the Knight Frank Wealth Report 2016. In Kenya, for example, ultra high net worth individuals have increased 122 percent since 2005, rising 2 percent in 2015 alone, despite a struggling economy. Some of them are 20 to 30 year-olds.
“The ultra-high net worth individual is younger in emerging markets, like China and Africa, than in developed markets,” Andrew Shirley, editor of the report, told reporters in the Kenyan capital, Nairobi.
The entry of the younger and better educated people into the exclusive club in Africa is also bringing fresh and non-traditional ways in which the wealthy grow and spend their money. More ultra-rich Africans are buying jets to avoid spending inordinate amounts of time in airport terminals waiting for the next connection to their destination on a continent with poor transport links, according to Shirley.
“The route from Lagos to London is the eighth-fastest growing private-jet route in the world,” Shirley said. “If you go to the Wilson airport in Nairobi, it’s full of private jets.”
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.@Barclays Would Consider Full Africa Unit Sale Staley Says Africa |
91-Day T-Bill down 25bps to 8.807%, 182-Day T-Bill down 37bps to 10.890% and 364-Day T-Bill down 59bps to 12.247%
The Central Bank of Kenya (CBK) offered KES 4.0bn for the 91-Day T-Bill and KES 6.0bn each for the 182-Day and 364-Day T-Bills. It received bids worth KES 12.5bn, KES 12.1bn and KES 21.2bn, implying a performance rate of 311.9%, 201.9% and 353.0% for the 91-Day, 182-Day and 364-Day T-Bills respectively. It accepted bids worth KES 9.2bn for the 91-Day T-Bill at an average yield of 8.807% (-25bps w/w). For the 182-Day T-Bill, it accepted bids worth KES 7.6bn at an average yield of 10.890% (-37bps w/w) and for the 364-Day T-Bill, it accepted bids worth KES 12.5bn at an average yield of 12.247% (-59bps w/w). (Source: CBK, Kestrel Research)
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Bamburi Cement reports FY PAT 2015 +50.448% Earnings here Kenyan Economy |
Par Value: 5/- Closing Price: 193.00 Total Shares Issued: 362959275.00 Market Capitalization: 70,051,140,075 EPS: 14.49 PE: 13.3195
The largest cement manufacturing company in the region.
FY Turnover 39.200b vs. 36.029b +8.801% FY Cost of sales [26.670b] vs. [26.683b] -0.047% FY Gross profit 12.530b vs. 9.346b +34.068% FY Operating expenses [5.251b] vs. [4.071b] +28.986% FY Operating profit 7.279b vs. 5.275b +37.991% FY Profit before tax 8.458b vs. 5.801b +45.802% FY Profit for the year 5.872b vs. 3.903b +50.448% EPS 14.49 vs. 9.80 +47.857% Total assets 34.337b vs. 34.082b +0.748% Net increase in cash and cash equivalents 0.854b vs. [1.212b] +170.462% Dividend per share 13.00 vs. 12.00 +8.33%
Company Commentary
market conditions were more favourable compared to 2014 with stable macro conditions for most of the year Group Turnover increased +9.00% …driven by increased demand in the key domestic markets in Kenya and Uganda growth in the inland Africa exports out of Uganda earlier in the year Operating Profit increased by +38% to 7.3b Investment Income and foreign exchange gains increased PBT +46% cash generated from operations increased to 8.3b from 7.6b Group is optimistic about GDP growth in 2016 Interim Dividend 6/= + Final of 7/=
Conclusions
Muscular bulked up FY Earnings and looks like it can be maintained at this New Trajectory in 2016
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CIC Insurance reports FY EPS 2015 +2.381% Earnings here Kenyan Economy |
Par Value: Closing Price: 6.00 Total Shares Issued: 2615538528.00 Market Capitalization: 15,693,231,168 EPS: 0.43 PE: 13.953
CIC is the leading provider of micro insurance and other financial services
CIC Insurance Group Limited FY 2015 through 31st December 2015 vs. 31st December 2014 FY Investment properties 5.420742b vs. 4.596000b +17.945% FY Government securities 3.213601b vs. 2.503013b +28.389% FY Equity investments 1.075779b vs. 0.377619b +184.885% FY Deposits with financial institutions 4.842340b vs. 7.476940b -33.910% FY Total assets 24.813856b vs. 23.690387b +4.742% FY Gross written premiums 11.439541b vs. 13.721376b -16. 630% FY Gross earned premiums 12.638444b vs. 13.363942b -5.429% FY Less reinsurance ceded [1.909518b] vs. [1.053618b] +81.234% FY Net earned premiums 10.728926b vs. 12.310324b -12.846% FY Total income 13.826552b vs. 14.519875b -4.775% FY Claims and policyholders’ benefits expense [7.283698b] vs. [8.641875b] -15.716% FY Commissions expense [1.379772b] vs. [1.138843b] +21.156% FY Operating and other expenses [3.823833b] vs. [3.356525b] +13.922% FY Profit for the year 1.136604b vs. 1.088440b +4.425% FY Forex loss on translation [282.179m] vs. – EPS 0.43 vs. 0.42 +2.381% Dividend 0.105 versus 0.10 Cash & cash equivalents at 31st December 4.806290b vs. 2.442026b +96.816%
Company Commentary
Gross earned premium decreased by 5% Total Assets +5.00% The Twin devaluation of both equities quoted on the NSE and bonds marked to market also had an impact on previously expected investment income Our gross earned premium dropped by 5% largely due to a deliberate strategy to streamline our medical business as well as our group life business which saw a number of large loss making accounts exit our portfolio
Conclusions
Fully priced
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N.S.E Today |
The Nairobi All Share firmed 0.44 points to close at 144.97. The All Share had its best week in 36 months the previous week and consolidated that move this week. The Nairobi NSE20 firmed +9.00 points to close at 3958.82. The NSE20 retreated -0.57% this week. Equity Turnover clocked 591.845m. Risk Appetite has returned some of late across the World,with higher Beta FX now at 2016 Highs. Oil has rebounded meaningfully and US Oil is at 2016 Highs as well. I am of the view that Frontier Investors will up-shift Kenya this Year and down-shift Lagos and Johannesburg and this will underpin the Equity Markets in Nairobi.
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N.S.E Equities - Commercial & Services |
Safaricom firmed +0.30% to close at 16.30 and was trading at 16.40 +0.92% at the Finish Line. Safaricom traded 10.029m shares. Safaricom is unchanged in 2016 and is 4.29% below its 2016 closing High of 17.00 reached Friday last week and Monday this week. Buyers outpace Sellers and the price is underwritten at this level.
Kenya Airways probed +2.27% better to close at 4.5 and traded 1.971m shares. Mckinsey have evidently put forward a Radical Surgery Program.
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N.S.E Equities - Finance & Investment |
CIC Insurance reported FY 2015 Earnings where the FY Profit after Tax increased +4.425%. CIC Insurance said that ''The Twin devaluation of both equities quoted on the NSE and bonds marked to market also had an impact on previously expected investment income.'' Cic added in the commentary that ''Our gross earned premium dropped by 5% largely due to a deliberate strategy to streamline our medical business as well as our group life business which saw a number of large loss making accounts exit our portfolio.'' CIC Insurance closed unchanged at 6.00 and is -3.22% Year to date. ''CIC Group will venture into real estate with a Sh2.8 billion commercial and residential development on its 200 acre parcel in Kiambu county'' as per a report carried on Business Daily.
Predictably the Big Banks have started to outperform as the Earnings Season enters Full Swing and Tier 1 Banks outperform expectations [which were frankly set too low, anyway].
Equity Group eased -0.6% to close at 41.75 and traded 3.202m shares. Equity released FY 2015 Earnings this week where FY Profit after tax increased +1.024% to 17.327000b. Equity's Dr. James Mwangi spoke of 2016 being a year of consolidation and one where Equity would seek to sweat their regional subsidiaries further.
Standard Chartered had Buyers for 677% more shares than were available for Sale during the trading session and rallied +4.545% to close at 207.00 and traded just 1,700 shares. The Standard Chartered share structure is such that it has the smallest Free Float of the Big Cap Banks and therefore a squeeze can develop if the Full Year Results outperform expectations, which I expect.
Diamond Trust Bank rallied +3.77% to close at a Fresh 2016 High of 220.00 and traded 7,200 shares. DTB released FY 2015 Earnings this week where FY Profit after tax increased +15.615% to 6.599806b. DTB is +17.64% Year to date.
COOP Bank which will report FY Earnings next Thursday rallied +2.56% to close at a 2016 High of 20.00. COOP Bank is +11.11% Year To Date.
Barclays Bank firmed +0.85% to close at 11.80 and traded 585,400 shares. Barclays Bank is under performing the market and is -13.23% in 2016. The CEO of Barclays PLC Jes Staley was interviewed by Bloomberg today where he said ''Barclays Would Consider Full Africa Unit Sale'' Barclays PLC has been talking up the Sale and said earlier in the week that there is no shortage of Suitors for Barclays Africa. |
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N.S.E Equities - Industrial & Allied |
Bamburi Cement reported some sparkling FY 2015 Earnings where, FY Turnover expanded +8.801%, FY Profit before Tax surged +45.802% and the dividend pay out was increased +8.33%. Bamburi struck a positive tone in their accompanying commentary and spoke to '' increased demand in the key domestic markets in Kenya and Uganda'' and growth in the inland Africa exports out of Uganda earlier in the year'' These were muscular bulked up FY Earnings and the Company is signalling that this new elevation can be maintained in 2016. Bamburi Cement has been a Bull Outlier in 2016 at the Bourse and firmed 0.51% to close at 194.00. Bamburi is +10.85% in 2016 and Investors evidently had heard the Earnings Signal.
EABL closed unchanged at 282.00 and was the most actively traded share at the Securities Exchange this Friday with 662,900 shares changing hands. EABL is outperforming the Broader market and is +3.29% in 2016 and has further headroom.
KenGen ticked +0.645% firmer to close at 7.80 and traded 1.187m shares.
Trans-Century eased -1.73% to close at 5.65 and is -31.51% in 2016 ahead of its Bond D-DAY later in March.
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