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Wednesday 18th of May 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
Saturday 28th May #Mindspeak will host the @cbkkenya Governor Patrick Njoroge @Njorogep |
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The Tiny Cayman Island Holding $265 Billion in Treasuries Africa |
The Cayman Islands, where more hedge funds are domiciled than anywhere else in the world, held $265 billion of Treasuries as of March, up 31 percent from a year earlier, according to data the U.S. Treasury Department released Monday. It was the first time that the U.S. released details of bond holdings among OPEC and Caribbean countries, and it came in response to a Freedom-of-Information Act request submitted by Bloomberg News.
About 60 percent of the world’s hedge-fund assets are domiciled in the Cayman Islands, according to a 2014 report by consulting firm Oliver Wyman & Co.
"A robust regulatory regime and no or low entity-level taxation allowed the Cayman Islands to build a long-lasting reputation as a global hedge funds hub," according to the report.
Home Thoughts
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Funds Swing to Bullish on Robusta Coffee Amid Dryness Concerns Commodities |
Speculators are bullish on robusta coffee for the first time in almost nine months as dry weather threatens crops in Vietnam and Indonesia, two of the largest producing countries.
Money managers were net-long 9,413 futures and options contracts as of May 10, according to a report published by ICE Futures Europe on Monday. A week earlier, they were net-short 1,144 contracts, after holding a bearish position since the week ended Aug. 25.
Futures have climbed almost 10 percent this year in London, and touched $1,686 a metric ton on Monday, the highest since August. Output in Vietnam, the top grower of the robusta variety used in instant coffee, may fall to a four-year low next season of 1.5 million tons, according to a Bloomberg survey of eight traders and analysts released last week. The harvest in Indonesia, the third-largest producer, may slide 10 percent to 570,000 tons, a separate survey showed.
"Concerns linger over robusta availability,” the International Coffee Organization said in an e-mailed newsletter. "Reports of drought in several robusta-growing regions have spurred speculation over potential shortages."
Emerging Markets
Frontier Markets
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Congolese point accusing fingers at Zuma and Dlamini-Zuma Mail and Guardian Africa |
President Jacob Zuma has come under fire from Congolese government critics, who accuse him of taking a hands-off approach to the Democratic Republic of the Congo’s unconstitutional attempts to delay elections.
The critics said this was because of his family’s business interests in the DRC.
African Union Commission chairperson Nkosazana Dlamini-Zuma is also included in the jibes after she appointed former Togolese prime minister Edem Kodjo to mediate in a national dialogue to resolve disputes about the elections. Critics say this process supported DRC President Joseph Kabila’s attempts to extend his two terms beyond November, when he is supposed to step down.
They say the Constitution dictates that there should be elections by November and there was nothing to negotiate. Kabila has argued that an update to the voters’ roll was necessary, a process that would take the country to well beyond the elections date.
The Kinshasa-based Le Potentiel newspaper this week slammed Dlamini-Zuma, saying she knew from the beginning that she had appointed Kodjo to a “mission impossible”. Kodjo is perceived to be biased towards Kabila, and so is Dlamini-Zuma.
“The accusation against the AU Commission chairperson is the fact that she works to favour the ruling party, to the detriment of the opposition,” the paper said.
It alleged that Dlamini-Zuma was “receiving instructions from Pretoria in exchange for benefits the DRC government give to the family of the South African President Jacob Zuma”.
In 2010 Zuma’s nephew, Khulubuse Zuma, fronted a R100-billion oil deal in the DRC, through a company that was registered in the British Virgin Islands in his name. The Panama Papers leak confirmed this and also revealed that the United States authorities were investigating the deal.
“We would like to tell him to quit the DRC, because he is using the Congo for his private business,” he said. “We want South Africa to deal legitimately with the Congo, state to state, not individuals taking advantage for their private interests.”
South Africa provided logistical support in the country’s 2011 elections, which included printing ballot papers. DRC opposition supporters marched to the ANC’s Luthuli House headquarters in Johannesburg that year because they said there were election irregularities.
The DRC’s current elections problems are expected to feature high on the agenda of the AU summit in Rwanda in July.
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Congo Scales Back Eurobond Plans as It Seeks World Bank Support Africa |
The Democratic Republic of Congo scaled back plans to sell $1 billion of Eurobonds and instead asked multilateral lenders for direct budgetary support after the collapse in commodity prices forced the government to cut spending.
The World Bank will provide $250 million to $500 million of assistance, in addition to $100 million from the AfDB, pending a review in June by the International Monetary Fund of the country’s macroeconomic framework, said Vincent Ngonga Nzinga, deputy chief of staff in the prime minister’s office.
Congo is Africa’s biggest copper producer and the world’s largest source of cobalt. It relies on the exports of the metals and other natural resources like oil and gold to generate most of its revenue. In the first four months of 2016, the government ran a deficit of 88 billion Congolese francs ($95 million) compared with a surplus of 181 billion francs a year earlier, as the collapse in commodity prices cut state receipts. In response, the cabinet on May 4 approved a 22 percent budget cut, but said it will still need support to plug the gap.
“We cannot maintain economic stability by only playing on the budget, by reducing expenditure, that is why the government has contacted the IMF and the World Bank,” Ngonga, who is also the prime minister’s principal economic adviser, said in the capital, Kinshasa.
Prime Minister Matata Ponyo Mapon announced last year that the government proposed to sell a debut Eurobond in 2016 to fund infrastructure investments. The government was deterred from those plans by the U.S. Federal Reserve’s decision in December to raise interest rates and the experience of other Africa countries that have issued Eurobonds in recent years, according to Ngonga.
“We should have launched the bond offer in April, but under current conditions we decided it would not be wise,” Vincent Ngonga Nzinga, deputy chief of staff at the prime minister’s office, said in an interview May 13. “We would have to expect an interest rate of between 12 and 14 percent.”
Discussions between Congo and the multilateral lenders began in Washington in April and will be concluded when an IMF delegation visits Kinshasa in June. For the funding to be released, the IMF must write a “comfort letter” to the World Bank that attests to the long-term viability of Congo’s macroeconomic framework, Ngonga said.
Budgetary support would also allow the central bank to rebuild dwindling foreign-exchange reserves, which fell to 1.19 billion on May 5 from $1.5 billion at the start of the year. Of those reserves, only $280 million is immediately available to the bank.
“This is why it is more urgent for us to access this budgetary support now,” Ngonga said, adding that the facility could be in place by September.
In the adjusted budget, which was discussed in parliament on Monday, there is still a provision for 256 billion Congolese francs ($276 million) from a bond issue. The government expects this money is more likely to come from the World Bank and the AfDB, according to Ngonga.
The IMF’s ability to approve multilateral budgetary support will also depend on an assessment of current standards of economic governance in the country. In 2012, the IMF canceled a $551-million loan program with Congo after the government failed to publish details of a copper-mining deal involving Gecamines and billionaire Israeli investor Dan Gentler.
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Angolan author jose' Eduardo Agualusa poses with his book A General Theory of Oblivion in London, May 15. Africa |
Agualusa's novel set during the Angolan Civil War has been nominated for the Man Booker International Prize.
What’s his book about?
A General Theory of Oblivion is set on the eve of Angolan independence in 1975. A Portuguese expatriate, Ludovica Fernandes Mano, takes the drastic step of sealing herself inside her apartment in the capital, Luanda, for fear of what is to come. Ludo gets through the next almost three decades by growing vegetables on her building’s terrace and spends her hours listening to the radio for news of the outside world while scribbling her thoughts into notebooks and eventually—once she has to burn her tomes for firewood—onto the walls of her apartment. She only re-emerges after almost 30 years of isolation following an encounter with a young burglar, and finds the Angolan capital changed beyond what she can imagine.
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.@CBKKenya staff receive threats over Imperial Bank audit @BD_Africa Africa |
“There are forces that wanted us to go the other way but we said ‘‘no thank you for your advice’’. My staff have received numerous threats to their lives,” the governor told the Senate Finance Committee chaired by Mandera Senator Billow Kerrow.
“We understand what we have been dealing with. We can assure you that we will do the audit without fear or favour despite the threats,” he said, adding that the Sh39 billion that was looted in the Imperial Bank heist is the new high water mark that makes Goldenberg scandal look like a kids’ game.
Initial reports also indicated that Imperial Bank had a huge bad loan book, fictitious deposits, unsecured insider lending and conflict of interest by shareholders and directors.
Dr Njoroge said Imperial Bank directors had failed to co-operate with the CBK on the reopening of the bank through their refusal to deposit Sh10 billion as the first step to reviving the lender.
“They said they wanted to pump in Sh10 billion, but six months down the line they have not deposited a shilling. Imperial Bank requires up to Sh34 billion to be revived,” Dr Njoroge said adding that the lender could have been reopened within a month of closure, but the directors have shown little interest in reopening the lender.
“We had plans to reopen the bank, but without shareholders support, we cannot go far. We have, however, not given up,” he said. Dr Njoroge agreed with the committee that the CBK bank supervision unit may have been complicit in the collapse of the three lenders.
“I agree that we may have been asleep. We needed to have barked much more loudly. We have been doing hard internal thinking on why the banks collapsed yet we had a supervision team,” he said.
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N.S.E Today |
The Nairobi All Share rebounded +0.43 points to close at 145.74. The Nairobi NSE20 Index bounced +11.45 points off a 10 week closing Low to close at 3878.42. Equity Turnover improved to clock 636.713m.
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N.S.E Equities - Commercial & Services |
Safaricom closed unchanged at 17.15 and closed out the session trading 17.25 +0.58%. Safaricom traded 1.536m shares. Investors have quite properly looked through the recent Noise.
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N.S.E Equities - Finance & Investment |
Kenya Commercial Bank was the most actively traded share at the Exchange and firmed +0.609% close and 41.25 and stretched as high as 41.75 +1.83% at the Finish. KCB traded 3.679m shares. KCB is well supported and the Rights Issue will be fully taken up. COOP Bank reported Q1 2016 Earnings before the Opening Bell, where Q1 PBT accelerated +14.144% off the back of a +16.70% increase in Loans and Advances to customers which clocked 213.72b. Net Interest Margins declined 30 basis points due to a faster rise in the Cost of funds. Loan loss provision were 3.113946b vs. 2.400400b +29.726%. COOP Bank eased -0.27% to close at 18.40 and traded 1.600m shares. Equity Bank rebounded +1.27% to close at 40.00 and on meaningful volume of 3.804m shares. Standard Chartered was up-ticked +1.522% to close at 200.00 and was trading at 205.00 +4.06% at the Finish. StanChart has plenty of scope to the Upside. At a recent event in Nairobi, The StanChart CEO specifically cited Kenya as an Outperformer in the Portfolio.
The Nairobi Securities Exchange issued a Notice where the following restrictions were introduced
1. An Individual or Private Co. shall not hold more than 5% of the equity share capital. 2. A Public Company shall not hold more than 10% of the equity share capital. 3. Trading Participants shall not cumulatively hold more than 40%.
I suspect the Authorities were concerned around a possible Stake build-Up and this essentially takes some ''take-over'' premium out of the price. The NSE firmed +0.89% to close at 28.25 and is +14.14% in 2016.
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N.S.E Equities - Industrial & Allied |
Bamburi Cement traded a block of 500.000 shares all at 190.00 and unchanged. Bamburi Cement is +8.571% in 2016 and is an Outperformer at the Exchange in 2016. Buyers have swelled and volumes in 2016.
BAT firmed +0.73% to close at 825.00 and traded 62,000 shares.
KenGen eased -0.75% to close at 6.60 and fractionally below the rights issue price.
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