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Friday 11th of March 2016
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Morning Africa |
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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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