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Tuesday 01st of March 2016 |
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29-FEB-2016 Africa Markets Meta-Trends and Why Barclays' Exit is a Vote of No Confidence in Zuma @TheStarKenya Africa |
Many reasons have been given including the fact that the sale of Barclays Africa will add as much as 0.8 percentage points to Barclays’ core capital ratio, that the African unit’s return on equity of 9.3% last year was below the bank’s target rate of 11%, that Africa translates into Barclays carrying 100% of the ‘’reputational risk’’ without 100% control. For example, in South Africa the UK bank has a minority of board seats.
The real reason in my view is the Zuma ‘’Zupta’’ volatility. The Barclays Africa exit is a vote of no confidence in South Africa’s President Jacob Zuma and by extension in South Africa’s gateway position.
Two days before South Africa’s Finance minister Pravin Gordhan presented his budget last Wednesday, Zuma described Van Rooyen as the most qualified finance minister his administration has had. Unless the president is stopped, Barclays PLC’s move might well be the first in what becomes an Avalanche of Exits.
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It's Getting Harder for Currency Traders to Make Money, Market Veteran Says Africa |
A case in point is the yen: It dropped the most in more than a year on Jan. 29 after BOJ Governor Haruhiko Kuroda unexpectedly adopted negative rates. It has surged more than 6 percent since, set for its steepest monthly advance since 2008. Likewise, the euro has seen a weekly gain of 3 percent or more on three occasions since the start of 2015 and dropped as much five times. There were no comparable moves in the prior three years.
“We’re now starting to play a lot at the extremes of the ranges, and what I mean by that is that the market not only mean reverts, but goes back through to the other side of the price very quickly,” said Killen. “So really, you’ve got these whipsaws between ranges.”
The yen traded at 113.02 per dollar as of 8:21 a.m. in London on Monday after appreciating to 110.99 on Feb. 11, the strongest level since October 2014. Three-month implied volatility climbed to a 2 1/2-year high on the day the yen peaked as traders digested the nearly 10 percent move from Jan. 29’s low of 121.69.
A lot of the electronification of the market, which by and large is a good thing, has led to kill switches on a lot of that algorithmic-provided liquidity.”
Average daily turnover in the U.K. dropped 21 percent in October from a year earlier while volumes in North America slid 26 percent, according to central banks in the two regions. A JPMorgan Chase & Co. gauge of volatility climbed to its highest level in four years this month, more than doubling from the unprecedented lows reached in mid-2014.
At the same time, a decline in currency trading revenues and the rising cost of regulatory change has forced banks to turn to increased automation and cut staff. There were 2,300 people working in currency-market front-office jobs at the world’s biggest banks in 2014, a 23 percent drop from four years earlier, according to Coalition Development Ltd., an analytics firm.
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Julie Christie and Omar Sharif in Doctor Zhivago Africa |
“I want to live every moment totally and intensely. Even when I'm giving an interview or talking to people, that's all that I'm thinking about.”
“I didn't want to be a slave to any passion anymore. I gave up card playing altogether, even bridge and gambling - more or less. It took me a few years to get out of it.”
“When one sees what happens in the world between the religions, the different religions - killing each other and murdering each other, it's disgusting and as far as I am concerned it's ridiculous. So I thought I might be useful, I believe in God and I believe in religion, but believe religions should belong to you. The extraordinary thing is that the Jews believe that only the Jews can go to paradise, the Christians believe that only a Christian can go to paradise and the Muslims believe that only the Muslims can go to paradise. Now why should God, in his great justice, make somebody born that cannot go to paradise - it is absurd. Please forgive me I don't mean to say it's absurd, people made it absurd.”
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Why Trump and Sanders Were Inevitable Politico Law & Politics |
The only wonder, perhaps, is that it took Trump and Sanders this long to get here.
True, both men may fail in their respective insurgencies against the establishment. After his weekend thumping in South Carolina and facing long odds on Super Tuesday, Sanders could fade quickly as a candidate. Trump, meanwhile, still faces a sharp backlash from Republicans, some of whom are already saying publicly they can’t support him as their party’s nominee. But make no mistake: The message that Sanders and Trump are bringing to the stump isn’t going away soon, not until the two parties acknowledge the deep flaws in the economic paradigm that got us to this place of inequality, but which neither the Democratic nor the Republican leadership have questioned deeply.
Trump and Sanders are thus in many ways the yin and yang of America’s present discontent; both address, in different ways, the seething sense of unfairness, of inequality in Americans. Their supporters tend to be angry, somewhat less educated, more-industrial-age-than-information-age-skilled Americans—and in other cases, insecure young people just out of college, for whom unemployment until the age of 30 still averages 12 percent—who believe their political parties no longer represent them. Trump emphasizes shutting down job-stealing immigrants and getting “better” deals from the world; Sanders, imprisoning wealth-gobbling, spoiled Wall Streeters and getting “fairer” deals from the world. Both candidates plainly appeal to people who feel that no one is really standing up for them and what used to be known as their middle class; people who want more of the pie than they’ve been getting for a long time, and people who realize that their political parties are at best half-hearted about doing anything about that
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Glencore Profit Slumps 69% as Prices for Metals, Oil Slide Commodities |
Adjusted net income slid to $1.34 billion in 2015 from $4.29 billion a year earlier, the Baar, Switzerland-based company said in a statement Tuesday. That beat the $1.17 billion average of 15 analyst estimates compiled by Bloomberg.
Profits from the world’s biggest mining companies are evaporating as prices for copper, nickel, zinc and iron ore plunge because of gluts and slowing demand from China, the biggest customer. To weather the commodities collapse, Glencore is trying to save money and unveiled a plan last year to lower debt as much as 40 percent to $18 billion by scrapping its dividend, cutting costs and selling assets and new shares.
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Africa’s Richest Woman Draws Scrutiny Over Source of Wealth WSJ Subscriber Africa |
Africa’s wealthiest woman, the eldest child of Angola’s longtime ruler, is frank about the trouble facing her country’s oil-dependent economy.
“The economic situation today is difficult,” said Isabel dos Santos, whose Angolan investments include the nation’s top mobile operator and a supermarket chain battling sinking consumer demand. “With the lower oil prices, we are definitely feeling the pinch.”
The 42-year-old business magnate is feeling the pinch as well. The value of her two-continent empire has fallen along with global markets. Forbes magazine puts her net worth at $3.1 billion, down from $3.4 billion last year and $3.7 billion in 2014.
Yet she remains a controversial focus of deal making in Angola and Portugal, where she has invested hundreds of millions of dollars. In both countries, her portfolio of dominant banks, retailers and telecommunications companies makes her an object of media fascination and persistent speculation that her capital comes from her father’s access to state oil revenues.
Her €200 million ($218.5 million) deal to buy a majority stake in Portuguese power-equipment maker Efacec Power Solutions SGPS last fall prompted a group of European lawmakers to call for an investigation into whether she has channeled public oil revenues into personal investments. She is feuding with partners in an Angolan telecom venture over alleged unpaid dividends. And she is in conflict with Banco BPI SA, Portugal’s second-biggest traded lender, over the fate of its Angolan unit.
In a rare interview, Ms. dos Santos defended her investments and her country. She said she isn’t driven by money and drew a distinction between her businesses and the regime run by her father, President José Eduardo dos Santos.
“I’m not financed by any state money or any public funds,” she said. “I don’t do that.”
The gulf between her fortune and Angola’s pervasive poverty, which has widened during the 37 years of her father’s rule, has made Ms. dos Santos a magnet for criticism from opposition politicians in Angola and human-rights groups abroad.
Oil wealth has transformed Angola’s capital, Luanda, into one of the world’s most expensive cities. But the World Bank says two-thirds of the nation’s 24 million people live on less than $2 a day. Conditions have worsened with the plunge in oil prices. Africa’s second-biggest crude producer has shed thousands of jobs.
Ms. dos Santos’s investments have suffered as well. Angola’s currency, the kwanza, has lost half its value against the U.S. dollar in a year, eroding the value of the country’s businesses. In Portugal, her most important investment—an 18.6% stake in BPI—has shed a fifth of its value over the past year amid a weak market view and a failed takeover attempt by its largest shareholder.
Ms. dos Santos was born in the Soviet Union, where her father was studying engineering. She earned her degree in the same field at King’s College London and returned to Angola in the early 1990s during a lull in the country’s civil war.
She said she used her savings to open a “shack” called Miami Beach, now one of Luanda’s most expensive nightclubs. With a friend she launched a trucking company to keep the club and other businesses stocked with beer and soft drinks.
“I’m just tremendously independent,” Ms. dos Santos said. “I always had this wish to stand alone and not be in my parents’ shadow.”
When Angola’s government sought investors to build a mobile-phone network in the late 1990s, Ms. dos Santos said she used earnings from both businesses to bid about $1 million for the license. Today, Unitel SA, which Ms. dos Santos oversees as chairwoman, is valued at more than $5 billion.
“Her privileged position just allows her to get things done quickly and efficiently,” said Alexander Thomson-Payan, an American whose TGI Group competes with Unitel to sell mobile phones in Angola. “After all, she knows the boss.”
Unitel is embroiled in a dispute with a foreign business partner. The company is fighting Brazil’s Oi SA in court over what the Latin American telecom operator said are $600 million in unpaid dividends to Portugal Telecom SGPS, a Portuguese company Oi merged with in 2013. Portugal Telecom bought a quarter of Unitel in 2000.
Oi executives said they discovered during their merger with Portugal Telecom that Unitel hadn’t paid dividends to its shareholder for years. In May, Ms. dos Santos kicked an Oi executive out of a Unitel shareholders meeting in Luanda, according to a person present at the meeting. Ms. dos Santos said that didn’t happen.
Ms. dos Santos said Unitel had paid the dividends in Angola, but that Oi hadn’t repatriated them. Oi said it has yet to receive any dividends.
Ms. dos Santos’s hard-nosed business dealings are also creating controversy in Portugal, where her disagreements with BPI’s management over the fate of its Angolan unit risk putting the lender at odds with its supervisor, the European Central Bank.
Instead, Ms. dos Santos’s Unitel, which owns 49.9% of the Angolan unit, offered €140 million to increase its stake in the Angolan unit to a majority at what CaixaBI Investment Bank analyst Andre Rodrigues calculated then would be a low price. He valued the bank at between €1.8 billion and €2.6 billion when compared with peers, while Ms. dos Santos’s bid valued it at €1.4 billion. BPI turned down her bid in January.
Ms. dos Santos said she understands the ECB’s need to mitigate foreign risks and said her bid is a fair price.
Concerns about the source of her wealth burst into the open in October, when five members of the European Parliament asked the European Commission to investigate her purchase of a majority stake in Efacec, saying “legitimate doubts arise on whether the Angolan state might be indirectly financing ‘private’ major acquisitions of Ms. Isabel dos Santos, incurring in numerous illegalities under Angolan law.”
A European Commission official said it has raised the issue with Portuguese authorities, who are responsible for carrying out due diligence if they notice suspicious activities. The Portuguese Financial Intelligence unit didn’t answer requests for comment.
The parliamentarians seeking the investigation said in their letter to the European Commission that Ms. dos Santos is a “politically exposed person” under EU law—people who hold positions that could be abused—and pointed to circumstances of the deal that they found questionable.
The purchase was made by Winterfell Industries, a company set up in December 2014, registered on the Portuguese island of Madeira and controlled by Ms. dos Santos, the parliamentarians said.
Two months before the deal closed, the parliament members wrote, Mr. dos Santos issued a presidential order authorizing Angola’s state electricity company to purchase 40% of Winterfell from Ms. dos Santos for an undisclosed sum. Since the purchase, Efacec has become the supplier of three dams being built in Angola.
In the interview, Ms. dos Santos said that the state hadn’t yet concluded its purchase of the Winterfell stake and that Winterfell’s purchase of the equipment manufacturer had been paid out of her own pocket with backing from commercial banks.
She said she doesn’t get money from her father and hardly sees him.
“He is very busy, and I’m very busy,” she said.
KEY DATES IN THE LIFE OF ISABEL DOS SANTOS
April 20, 1973: Born in Baku, Azerbaijan, then part of the Soviet Union, where her father José Eduardo dos Santos studied engineering. Early 1990s: Graduates from King’s College London with a degree in engineering science and management. 1992: Mr. dos Santos reaches a truce with rebel leader Jonas Savimbi, clearing the way for many Angolans including Ms. dos Santos to return to Angola. 1995: Ms. dos Santos opens Miami Beach nightclub along the Angolan capital’s most exclusive surf. 1999: Ms. dos Santos wins a bid to start Angola’s private mobile operator, Unitel SA. December 2000: Portugal Telecom SGPS SA buys 25% of Unitel, of which Ms. dos Santos owns 25%. 2002: Marries Congolese businessman and art collector Sindika Dokolo. 2005: Buys into Portuguese energy conglomerate Galp Energia SA. Ms. dos Santos owns 45% of a vehicle controlled by Angola’s oil company Sonangol that owns 45% of Portuguese company Amorim Energia BV, which owns 38% of Galp. April 2005: Bank BIC Angola is created with Isabel dos Santos owning 25%. She has since raised her stake to 42.5%. January 2008: Bank BIC Portugal established, with Isabel dos Santos owning 25%. She has since raised the stake to 42.5%. September 2008: Banco BPI SA sells a 49.9% stake in its Angolan unit to Unitel. December 2008: Ms. dos Santos buys 9.69% of BPI from Banco Comercial Português SA. She now owns 18.6% of BPI. December 2009: Ms. dos Santos buys 10% of Portuguese telecom Zon Multimedia SGPS SA. She now owns, in a partnership with telecom Sonae SGPS SA, 50.01% of Nos SGPS SA, the product of a merger between Zon and another telecom. October 2015: Ms. dos Santos, through vehicle, buys 65% of Portugal’s Efacec Power Solutions SGPS SA. A 2014 European Union ruling placed Angola among countries whose debt is riskier than that of its own members. That resulted in a tighter central bank limit on BPI’s exposure to Angola—no more than 25% of the bank’s funds, a limit BPI exceeds by more than €3 billion. The central bank has given BPI until April to raise capital or shed its Angolan operations. BPI proposed spinning off the Angola unit as a free-standing company while keeping control, but Ms. dos Santos blocked the move in a shareholders vote on Feb. 5.
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Zimbabwe: Stranded in Stasis ICG Africa |
Zimbabwe is floundering, with little sign of meaningful reform and sustainable, broad-based recovery. Political uncertainty and economic insecurity have worsened; the Zimbabwe African National Union – Patriotic Front (ZANU-PF) government has consolidated power, as the opposition stumbles, but is consumed by struggles over who will succeed President Robert Mugabe. Upbeat economic projections by international institutions are predicated on government rhetoric about new policy commitments and belief in the country’s potential, but there are growing doubts that ZANU-PF can “walk the talk” of reform. Conditions are likely to deteriorate further due to insolvency, drought and growing food insecurity. Economic constraints have forced Harare to deal with international financial institutions (IFIs) and Western capitals, but to regain the trust of donors, private investors and ordinary citizens, the government must become more accountable, articulate a coherent vision and take actions that go beyond personal, factional and party aggrandisement.
Mugabe, though 92 and visibly waning, shows no sign of stepping down.
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In DNA, Clues to the Cheetah’s Speed and Hurdles Africa |
With their spotted coats and black “teardrop” facial markings, cheetahs are a favorite of tourists on photographic safaris. The animals race across the African savanna at speeds reaching 70 miles per hour because of their unique physiology: elongated legs, aerodynamic skull, enlarged adrenal glands and heart muscles, and claws that grip the earth like football cleats. Considered critically endangered, cheetahs number only about 10,000 today, with most living in southern and eastern Africa.
What the genomic analysis reveals is not encouraging: The cheetah has less than 5 percent of the genomic diversity of other wild cats, a level much lower than even inbred domestic dogs and cats and the lowest among the 30 mammals whose genomes have been sequenced. Genetic diversity in an animal is determined by variation in enzyme genes inherited by an animal’s two parents and is critical to its healthy reproduction and immunity to disease.
Scientists began to suspect that the cheetah was “genetically monotonous” several decades ago. Surgical skin grafts done experimentally among unrelated cheetahs were tolerated without the normal rate of tissue rejection, as if all the animals were identical twins. Cheetahs in captivity were difficult to breed and had unusually high mortality rates among the cubs. And the animals showed high vulnerability to outbreaks of disease.
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