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Tuesday 05th of April 2016 |
Morning Africa |
Register and its all Free. 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 Macro Thoughts Home Thoughts |
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Who is who on the list? Notable Africans in the leaked 'Panama Papers' Mail and Guardian Law & Politics |
Clive Khulubuse Zuma, nephew of South African president Clive Khulubuse Zuma is a nephew of South Africa’s president Jacob Zuma. A mining magnate, Khulubuse Zuma reportedly has a lavish lifestyle. In June 2015, a South African court found Zuma liable as chairman in the collapse of a gold mining company that led to more than 5,000 job losses. Inside the Mossack Fonseca data: Offshore firm was accused of questionable oil field deals. Zuma was authorised to represent Caprikat Limited, one of two offshore companies that controversially acquired oil fields in the Democratic Republic of Congo. In late summer 2010, as published reports raised questions about the acquisition, British Virgin Islands authorities ordered Mossack Fonseca to provide background information on Zuma, which the law firm had not previously obtained. That same year, Mossack Fonseca decided to end its relationship with the companies. Zuma and representatives of the companies have rejected allegations of wrongdoing and claimed the oil deals are “quite attractive” to the DRC government. Jaynet Désirée Kabila Kyungu, DR Congo member of parliament Jaynet Désirée Kabila Kyungu is the twin sister of Joseph Kabila, the president of the Democratic Republic of the Congo. Famed for secrecy and meticulousness, she was elected to parliament in November 2011 and took office in February 2012. Kabila is the president of the Laurent Desire Kabila Foundation, named after her father, and owner of Digital Congo, a television, Internet and radio conglomerate. In 2015, Jeune Afrique reported that Kabila had become “the most influential person in the president’s entourage.” Inside the Mossack Fonseca data: Offshore company has holding in Congo’s wireless communications business. Keratsu Holding Limited was incorporated in Niue on June 19, 2001, a few months after Kabila’s brother became president of the Democratic Republic of the Congo. Jaynet Désirée Kabila Kyungu appeared as co-director with Congolese businessman Kalume Nyembwe Feruzi. The DRC company Keratsu Holding Ltd has owned stakes in one of the DRC’s major mobile phone operators.
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List of people named in the Panama Papers Law & Politics |
Angola José Maria Botelho de Vasconcelos, Minister of Petroleum[1] Botswana Ian Kirby, President of the Botswana Court of Appeal and former Attorney General[1] Democratic Republic of the Congo Jaynet Kabila, Member of the National Assembly[5] Republic of the Congo Bruno Itoua, Minister of Scientific Research and Technical Innovation and former Chairman of the SNPC[1] Kenya Kalpana Rawal, Deputy Chief Justice of the Supreme Court[1] Nigeria James Ibori, former Governor of Delta State[1] Rwanda Emmanuel Ndahiro, brigadier general and former chief of the intelligence agency[8] Zambia Attan Shansonga, former Ambassador to the United States[15] Ghana John Addo Kufuor, son of former President John Kufuor[1] Guinea Mamadie Touré, widow of former President Lansana Conté[1] Ivory Coast Jean-Claude N’Da Ametchi, associate of former President Laurent Gbagbo[1] Senegal Mamadou Pouye, friend of Karim Wade, himself the son of former President Abdoulaye Wade[16] South Africa Clive Khulubuse Zuma, nephew of President Jacob Zuma[17] United Nations Kojo Annan, son of former Secretary-General Kofi Annan[1]
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Congolese troops deployed on the streets of Brazzaville BBC Africa |
Troops have been deployed on the streets of Brazzaville, the capital of the Republic of Congo. Witnesses told the BBC this comes after a military barracks was attacked. An anonymous official told the AP news agency that police are fighting members of a militia called the Ninjas. The Ninjas were a main anti-government force in the 1998-99 civil war. Conclusions The Street is infinitely more muscular than it was.
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The Africa Integration Index is here, and it has some unlikely winners and surprises Africa |
a relationship of necessity—nearly 90% of Ethiopian imports come through Djibouti’s port, serviced by at least 1,500 trucks daily. And as Ethiopia’s state-dominated economy continues to boom, this number is projected to grow to 8,000 in just five years.
In November, the first train started operations, relying on diesel as the power lines come up, and it could be life-saving. It is actually an old track that fell into a state of disuse, but the work on it now means it has at least seven times more capacity, capable of carrying 3,500 tonnes of goods.
The inaugural Africa Regional Integration Index is focused on the eight major blocs that prop up the AU, and which are known as Regional Economic Communities (RECs).
The index is compiled by the AU, the African Development Bank (AfDB), and UN Economic Commission for Africa (UNECA).
The biggest surprise of the day was the identification of the Intergovernmental Authority on Development (IGAD) as the best performer in regional infrastructure, one of five categories the index measures and the most visible face of continental integration.
IGAD is at times overshadowed by other blocs, but got a new lease of life when it was picked to lead efforts to resolve South Sudan’s often-intractable conflict.
Its eight members include both Ethiopia and Djibouti, the port city which perhaps fittingly houses its headquarters.
“When regional infrastructure works better, business costs fall as transport corridors speed goods across boundaries and more customers access services as mobile phone roaming expands,” the authors say.
“When visa or work permit restrictions are cut, gains in time and resources open up, which supports more competitive businesses and economies,” the index noted, while allowing for skills gaps to be plugs and talent to move more easily.
A third category also had experts at the report’s launch purring—that of “productive integration”. A measure of value addition, or the intermediate goods or services that a business uses towards the finished article, it has been a source of angst on the continent, as data shows resource exports still dominate.
The five-member East African Community (EAC) was the highest scoring in value addition, but perhaps interesting was the placing of Benin above Nigeria in their shared ECOWAS bloc, explained by its proximity to the regional giant, to which it re-exports manufactured products.
Kenya ranked highest in three of the four blocs it is a member of—EAC, IGAD and Comesa, the Common Market for Eastern and Southern Africa.
Other categories index were trade integration, on which the EAC was the top performer, and financial integration, which all blocs are lagging on, it being in the nascent stages.
Another surprise was that the biggest economies are not the best integrated—Algeria, DR Congo, Egypt, Ethiopia, Nigeria and Tanzania all have room for “more progress”, the index, developed jointly with the AfDB and the UN’s Economic Commission for Africa, notes.
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Tuna and Gunships: How $850 Million in Bonds Went Bad in Mozambique WSJ Subscriber Africa |
Mozambique is becoming a case study on the perils of rushing into markets at the edge of the world’s financial system.
Global investors who in 2013 thought they were lending a state-owned company $850 million to buy a tuna fishing fleet learned within months that the funds had been diverted to buy ships for the navy. Two years later, they were told Mozambique intended to restructure the bonds, because the fishing company’s revenue wasn’t holding up.
Now, they are learning that Credit Suisse Group AG, which led the bond sale with a Russian bank, had made another sizable loan to Mozambique around the same time of the original bond sale.
The end result is that Mozambique is deeper in debt, paying higher interest on the new restructured bonds and weathering a downgrade of its credit rating to “selective default.” Investors are left with bonds that are likely worth less than they thought before learning about the other loans. And there still isn’t much to show in the way of tuna.
Buyers of the tuna bonds officially endorsed the restructuring Friday, with about 85% voting to accept the deal. The restructuring replaced debt that had originally yielded 8.5% with new government bonds yielding 14.4%. Standard & Poor’s Ratings Services cut its credit rating of Mozambican debt to selective default status Friday, calling the exchange “distressed.”
The episode presents another mess for Credit Suisse CEO Tidjane Thiam as he attempts to reduce the bank’s reliance on investment banking in risky markets. The bank managed the restructuring, which helped tie off the problem of the rapid failure of the original bonds it helped sell.
But investors want to know why they weren’t told about the other loans until after they had cast their votes for the restructuring. The loans made by Credit Suisse and other lenders—at least $787 million worth—could diminish the value of the new bonds.
“Why wasn’t it disclosed?” said Marcus Boeckmann, an emerging-market debt-fund manager at Candriam Investors Group in London, who participated in the bond exchange without knowing of the incremental loans. “That would clearly be a negative.”
While Credit Suisse didn’t inform bondholders of the existence of the loan until many had agreed to the restructuring late in March, it had included the debt in the calculation of Mozambique’s consolidated public debt that it provided to investors during the exchange, a person familiar with the offering said.
Between the bonds and loans, Credit Suisse and other banks helped Mozambique borrow at least $1.47 billion in 2013 alone, representing a 25% increase on the roughly $6 billion national debt reported at the end of 2012. The debt has become all the more onerous over the past year as Mozambique’s currency depreciated 29%. The government obtained a $289 million rescue loan from the International Monetary Fund in October to bolster its finances.
Investors chasing higher yields and the commodities boom rushed into Africa in recent years. When Mozambique, a country with rich offshore natural-gas deposits, proposed in 2013 to sell $850 million in government-guaranteed bonds for a new state-owned tuna fishing company, Credit Suisse and Russian bank VTB Group easily sold the debt to buyers that included big money managers like AllianceBernstein LP, Aberdeen Asset Management PLC and Franklin Templeton Investments.
The bonds were sold by a company called Empresa Mocambicana de Atum, or Ematum, over several months in 2013 ending in September. A preliminary offering document for the bonds gave a short description of how the proceeds would be used—for “the fishery activity of tuna and other fish resources”—and included no financial projections, according to a copy of the document reviewed by The Wall Street Journal. Fund managers said they invested in the deal without much knowledge of how the fishing company would operate because they trusted in the government guarantee backing the bonds.
Later in September, however, the contractor to build the tuna boats announced it also would be building expensive military speedboats. In public budgetary documents, the government said it had decided to split the funds into commercial and noncommercial uses.
The news shocked investors. “We had a lot of questions from clients who had corporate governance concerns,” said Kevin Daly, a portfolio manager on the emerging-market fixed-income team at Aberdeen Asset Management. “There was a lot of stigma attached to this bond.”
Attempts to reach Mozambique’s finance ministry and Ematum were unsuccessful. Investors who spoke with the finance minister said they were told the country always thought the proceeds could be used for equipment to protect the tuna fleet.
Meanwhile, Ematum was pulling in at most 5% of the tuna it had expected, according to bond investor Marco Ruijer, who reviewed the company’s financial statements. In June 2015, the government announced plans to restructure the debt.
Mr. Ruijer manages $5 billion in emerging-market debt at NN Investment Partners. He traveled to Mozambique in September to meet with the finance minister to get more information on the restructuring. At the last minute, the meeting was canceled.
“It was a big mess,” he said.
By February the bond’s price had fallen to 74 cents on the dollar, reflecting fears that Mozambique would miss a principal payment due March 11. The government made the payment, then offered to swap holders of the remaining bonds into more traditional government bonds. Investors would have to hold the bonds for years longer than the original debt, but would get much higher interest.
What the investors didn’t know is that in 2013, Credit Suisse and VTB had lent $622 million to another state-owned company called Proindicus SA to fund the purchases of navy ships and radar installations to protect against piracy, a person familiar with the loans said. The following year, the bank approached investors about expanding the loan to as much as $900 million, the person said.
Credit Suisse didn’t tell the tuna bondholders about the loans until March 24, a day after the bulk of them had approved the restructuring in an early vote, people familiar with the matter said. The disclosure was triggered by a downgrade from S&P on March 15 that tripped a clause making the loans immediately repayable, one of the people said.
Unless they are also restructured, the Proindicus loans are scheduled to be fully repaid by 2021, two years before the new bonds fall due, according to a person familiar with the matter. In the event Mozambique defaults on its debts, the existence of the additional loans could reduce recoveries for bondholders, investors said.
Conclusions
Quite a Story.
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France approves Sh28bn for Kenya's infrastructure Kenyan Economy |
A bulk of the money Sh13.8 billion (120 million euros) will be used to finance the Last Mile Connectivity Programme.
Of this, 90 million euros is being given to the country as a Concessional Loan, with the remaining 30 million euros as a grant.
The French government is also providing Sh15.1 billion (15 million euros) for phase two of the Roads 2000 Programme, Sh60 billion (60 million euros) as a non-sovereign loan for the Meru Wind Farm, and 19 million euros for the Ruiru II Dam that will see an increased water supply in the cosmopolitan Nairobi area.
The bilateral talks also saw Treasury CS Rotich secure 33 million euros for the East Africa Development Bank.
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N.S.E Today |
The Nairobi NSE20 rallied +8.14 points to close at a Fresh 3 month High of 4016.64 The Nairobi All Share shaved off 0.15 points to close at 146.73. Equity Volume picked up speed to clock 896.023m more than twice the volume of the previous session.
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N.S.E Equities - Commercial & Services |
Safaricom closed unchanged at 16.80 and on heavy duty volume action of 18.096m shares worth 304.001m. Safaricom is +3.067% in 2016 and will rally from here and into the release of the FY Earnings in about 6 weeks time.
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N.S.E Equities - Finance & Investment |
Standard Chartered rallied +3.25% to score a Fresh 2016 Closing High of 254.00. StanChart has ramped +37.29% higher in 2016 and is a Bull Outlier at the Securities Exchange in 2016. Kenya Commercial Bank closed unchanged at 41.75 but closed out the session trading 42.25 +1.2%. KCB traded 2.984m shares and Buyers continue to outpace Sellers by a meaningful margin signalling further upside Traction. Equity Group firmed +0.62% to close at 40.50 and stretched as high as 41.00 +1.86% at the closing Bell. Equity traded 6.997m shares worth 284.73m.
National Bank slumped by the daily allowable maximum to close -9.87% at a 2003 Low of 10.95. National Bank is -30.476% Year To Date.
BRITAM EA surged +9.28% today to close at 12.95 a 3 month High. BRITAM EA has bagged a +19.35% 2 session Gain and this Run higher was triggered by the news that the Mauritian Government had struck a deal with existing shareholders re the Dawood Rawaat stake. This clearing of an overhang of supply has been view as positive for the stock. BRITAM EA traded 467,700 shares.
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N.S.E Equities - Industrial & Allied |
Bamburi Cement firmed +1.04% to close at 194.00 and traded 366,200 shares. Bamburi Cement is +10.85% Year To Date and this move was verified by the release of muscular FY Earnings.
Transcentury fell back -4.59% to close at a 2016 Low of 5.20. Transcentury is -36.96% in 2016 and this is an All Time Low. Its difficult to see an outcome where Ordinary Shareholders are not completely extinguished. EA Cables [which is majority owned by Trancentury] rebounded +7.87% off a 2016 closing Low to close at 6.85. EA Cables remains -35.37% in 2016.
BAT Kenya was low-ticked -9.19% to close at 771.00 on just 700 shares. BAT is a Buy at this Level tomorrow morning.
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