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Macro Thoughts |
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Different worlds. (Reuters/Baz Ratner) @qzafrica Africa |
Residents of Kenya’s biggest slum Kibera started their week on a bleak
note: government cranes and bulldozers demolishing homes, schools, and
businesses in certain sections of the slum to make way for a new $20m
dual-carriageway in the capital Nairobi. Over 30,000 dwellers were
rendered homeless in the process on Monday (July 24), a move Amnesty
International Kenya said, “betrays the public trust and violates our
laws.”
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China's Xi says world must 'reject protectionism outright' @AP Africa |
The Chinese leader criticized the “escalation of protectionism and
unilateralism” that he said has directly affected the development of
emerging markets.
“We must unlock enormous potential for economic cooperation,” he said,
and fight back against protectionism by working through the United
Nations, the Group of 20 nations and elsewhere.
A day earlier at the summit, Xi said the world faces “a choice between
cooperation and confrontation” amid the trade dispute with the United
States in which he warned there would be no winner. U.S. President
Donald Trump, meanwhile, accused China of “vicious” tactics on trade.
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Amazon turns investor attention from sales growth to big profits International Trade |
Amazon reported a record second-quarter profit of $2.53 billion, or
$5.07 per share. Second-quarter sales of $52.9 billion came in
slightly below estimates of $53.4 billion. But investors remain
enthused because the Seattle-based company has generated net income of
$4.16 billion in the first half of this year, more than the previous
seven quarters combined, according to data compiled by Bloomberg. In
2014, Amazon lost $131 million.
Amazon’s stock has more than tripled in the past three years, making
Bezos the richest person on the planet. It’s the world’s second-most
valuable public company now behind Apple Inc., making it one of the
front-runners in the race to reach $1 trillion in market value.
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Vanilla villainy eats away at Madagascar's sweet reputation Commodities |
The crime wave started last year when the price of black non-split
Madagascar vanilla [VAN-MG-BNS], the benchmark for the giant Indian
Ocean island’s leading export, shot up to a record $635 per kilo from
just $100 two years earlier.
The surge in prices, sparked by growing luxury market demand for
natural - as opposed to synthetic - vanilla, has since eased slightly
to $530 but remains high enough for illicit vanilla hunters to take
the risk.
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The Big Read African politics Zimbabwe election: what the strongman left behind @Financialtimes Africa |
The overnight train from Harare, Zimbabwe’s capital, to Bulawayo, the
southern African nation’s second city, has not just seen better days.
It has seen better decades.
Its gutted fittings — filthy seats, broken windows, carriages in
pitched darkness — and decrepit rolling stock are a potent symbol of
the destitution left behind by Robert Mugabe, the post-independence
strongman toppled in a military coup last year. He was replaced as
president and leader of the ruling Zanu-PF party by an estranged
henchman, Emmerson Mnangagwa, who now proclaims one of the world’s
most isolated economies “open for business”.
Mr Mugabe, 94, spends his days between Singaporean hospitals and a
gilded-cage Harare mansion. But as Zimbabwe holds its first ever
election without him on the ballot on Monday, a critical vote for
convincing foreign investors to return, his legacy has yet to be
exorcised — including from the rails.
The Harare to Bulawayo service should be the economic backbone of
Zimbabwe as it straddles agricultural heartlands and the world’s
second biggest platinum reserves. Instead, says Wisdom Khawo, a
passenger wrapped in a thick coat and barely visible in the dark,
“it’s like travelling in hell”.
One of a forlorn few who still brave the service the 39-year-old
former truck driver turned fish seller endures it 10 times a month
back and forth. The $5 fare is all he can afford. The bus costs five
times the price, but is reduced to $20 if paying in US dollars instead
of surrogate money — officially worth the same but worth much less in
practice — used to meet a desperate shortage of the real thing.
Mr Khawo is a victim of an economy that has been brought to its knees.
The economy is $17bn in size but real output is still below 1998
levels, in a country without a currency since hyperinflation 10 years
ago. The next time he takes the train, it will be to cast a vote on
who will lead Zimbabwe’s difficult transition.
Mr Mnangagwa, a 75-year-old former security chief one of whose
vice-presidents was the coup mastermind, says his once Marxist-leaning
liberation movement will restore stable rule to attract international
investors and even encourage the return of white farmers who fled
after Zanu-PF seized their land in the 2000s.
His main rival is Nelson Chamisa, a charismatic 40-year-old lawyer and
pastor, who inherited the main opposition Movement for Democratic
Change after Morgan Tsvangirai, Mr Mugabe’s old foe, died earlier this
year.
He promises Zimbabwe will be a $100bn economy in a decade and touts
eye-catching policies at odds with grim reality — including a bullet
train to cover the 440km distance between Bulawayo and Harare in less
than an hour. State media outlets enjoy mocking it, but while the
concept is outlandish Mr Chamisa “understands very well how we are
suffering”, Mr Khawo says. “We need to refurbish our country.”
In a world where strongman politics is on the march, Zimbabwe shows
what strongmen leave behind. Under Mr Mugabe, Zanu-PF displayed a
fondness for rigging elections. This time, with an eye on its shaky
post-coup legitimacy, the party is protesting its commitment to
democracy almost too much.
State media says Mr Mnangagwa, who has invited international election
observers banished under his predecessor, “has made the democratic
space as expansive as the ocean”. His catchphrase, emblazoned on giant
billboards, states that “the voice of the people is the voice of God”.
The overt violence that turned elections in Mr Mugabe’s favour is
absent, and even in Zanu-PF’s heartlands Mr Chamisa has held rallies
without being harassed. Diplomats hope a biometric voter registration
system will stop blatant ballot-stuffing.
But God may still get a helping hand. When the election commission
unveiled the ballot paper design, Mr Mnangagwa appeared top despite
being 15th in the list, thanks to serendipitous separation of the 23
candidates into two columns.
Zanu-PF’s will to stay in power has shaped Zimbabwe deeply. Last year,
the country’s registrar-general denied that babies born in opposition
strongholds, such as Bulawayo, were being refused birth certificates
to prevent them registering to vote as adults years later. On Tuesday,
the UN human rights office warned of evidence of “voter intimidation .
. . including people being forced to attend political rallies”. Yet
this vote could be the closest for years.
A survey last week of 2,400 voters by Afrobarometer found 37 per cent
backed Mr Chamisa, against 40 per cent for the incumbent whose party
controls most media and access to state resources. A fifth were
undeclared. Parliamentary polls are also tight. Afrobarometer warns of
Zanu-PF’s “built-in electoral advantage” — its domination of rural
areas, where two-thirds of Zimbabweans live. But its findings imply
that a second round in the presidential race, in September, could take
place.
Tempers have risen along Zimbabwe’s economic and generational divides.
“Chamisa is a young ruler. That old man can get off,” says Tinashe
Chiringa, a jobless 29-year-old in Harare convinced that Mr Mnangagwa
can only win through rigging. “If Chamisa loses, we are ready for war,
fighting against Zanu-PF,” he warns.
There are other signs of instability, within both main parties. There
will be two MDCs on the ballot paper, due to infighting triggered by
Mr Chamisa’s rise. And Mr Mnangagwa narrowly escaped a June 23 bomb
attack at a campaign rally in Bulawayo. He blamed it on his “usual
enemies”, code for factions in his own party. He has a long-running
rivalry with Mr Mugabe’s wife, Grace. There is another element: the
generals who have already displayed their will to intervene in
politics.
Few believe that the coup plotters risked their lives last year to
rescue the ruling party only for it to lose in a democratic vote
months later. Nearly half of those polled by Afrobarometer believe the
security forces would annul a result they do not like.
“You don’t take power to give away power,” says Panashe Chigumadzi, a
Zimbabwean-born writer who fears the future may indeed bring a
“western-backed, military-backed order that we will find very
difficult to get out of”, resembling Paul Kagame’s Rwanda.
Yet Ms Chigumadzi sees a chance to reimagine Zimbabwe’s patriarchal
politics and history with the freedoms of expression and a sense of
possibility that have taken root since the coup.
“[For years] we haven’t been able to see beyond the shadow of Mugabe,”
she says, “now that he’s gone, people are free to imagine not just
what they’re against, but what they’re for.”
“The political balance is very delicate. But for now, I’m just
enjoying this moment.”
Zimbabwe’s first post-Mugabe vote has brought long-banished
international election observers back to the country. But they will
face a major test in spotting whether the ruling Zanu-PF party is
abandoning a history of vote-rigging, or just moving it out of sight.
Stephen Chan helped invent modern African election monitoring in the
1980 vote that first installed Mr Mugabe in what was then Southern
Rhodesia.
“What we did in 1980 is viewed as some kind of gospel,” says Mr Chan,
then a Commonwealth official, now a professor at the University of
London’s SOAS. “[But] we didn’t know what we were doing. We made it
up. We got very lucky.”
The rudiments of election observation — monitors fanning out to watch
polling stations across a country — have not changed much since. But
governments have.
Aware that international observers can provide a veneer of legitimacy,
regimes may invite several bodies to play them off against one
another. Monitors from the Commonwealth, African Union and EU are
among those operating in Zimbabwe. Ruling parties have also moved in
recent times from blatant ballot-stuffing to tampering with data
servers.
In their recent book How to Rig an Election Nic Cheeseman and Brian
Klaas warned that in light of the rise of digital manipulation,
monitoring “has not really moved with the times”, adding that “few
missions have the technical capacity they need”.
Africa is a frontline in that battle. Elections in Zambia in 2016 and
Kenya last year showed signs of data manipulation that may have swung
votes. Zimbabwe’s biometric voting is meant to prevent a repeat but
“if this election is going to be fixed, it will be fixed in the
algorithms,” Mr Chan says.
Yet even in the digital age, he says, observers need knowledge of the
local culture and a willingness to go deeper into rural areas to pick
up signs of subtle intimidation — called “shaking the matchbox” in
Zimbabwe.
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Ahead of Zimbabwe's elections Monday, @simonallison looks at whether a closer-than-expected presidential race will lead ZANU-PF to resort to violence and vote-rigging. Africa |
The oldest man in the world lives in Zimbabwe. His name is Phidas
Ndlovu, and he is 140 years old.
At least, that is according to Zimbabwe’s Biometric Voters’ Roll,
which was compiled ahead of the presidential and parliamentary
elections scheduled for July 30. The vote is a milestone in Zimbabwean
politics—the first held since the ouster of longtime President Robert
Mugabe in November last year, and the first time in the history of
independent Zimbabwe that Mugabe’s name will not appear on the ballot.
But as much as the country’s political landscape has changed in the
past eight months, much has remained the same, not least when it comes
to concerns over the credibility of the voting process. The last two
elections, in 2008 and 2013, were undermined by well-documented
irregularities. Opposition parties complained that their supporters
were prevented from registering to vote, and civil society
organizations documented hundreds of thousands of “ghost voters” on
the rolls. Journalists recorded widespread acts of intimidation and
violence against the opposition, committed by both government forces
and supporters of the ruling ZANU-PF party.
The new Biometric Voters’ Roll was supposed to solve many of these
problems. All voters are required to register with their photograph
and fingerprints, in an attempt to eliminate the possibility of voter
fraud. But a comprehensive analysis of the new roll, conducted by a
civil society group called Team Pachedu, claims that there are still
more than 250,000 entries that raise red flags. The 140-year-old
Phidas Ndlovu is one of them. Sihle Mpofu, apparently born in
1884—making her the oldest woman in the world—is another.
Given that there are just 5.6 million registered voters in Zimbabwe,
and that the polls next week are expected to be close, a quarter of a
million potential “ghost voters” could be statistically significant
and even swing the race
More than a third of respondents, 37 percent, told Afrobarometer that
they would vote for Chamisa’s coalition, the Movement for Democratic
Change Alliance, compared to 40 percent who indicated a preference for
Mnangagwa’s ZANU-PF. The voting intentions of 20 percent of
respondents could not be determined: They were either undecided,
didn’t plan to vote, or refused to answer the question.
If neither presidential frontrunner receives more than half of the
votes in the first round, a runoff election will be held. It was the
prospect of a runoff in 2008, between Mugabe and his nemesis, the late
Morgan Tsvangirai, that prompted post-election violence so extreme
that the opposition was forced to withdraw from the vote completely,
settling instead for a few Cabinet positions in a government of
national unity.
This time around, could the competitiveness of the opposition once
again prompt ZANU-PF to resort to violence and vote-rigging? “The
Afrobarometer survey significantly shifts the analysis on the
elections,” says Beardsworth. “The results will embolden the
opposition—and opposition voters—who will feel that victory is within
their grasp. This may also help to drive greater turnout amongst
apathetic voters and undecideds.”
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Zimbabwe stocks are surging ahead of election - that's a bad sign Africa |
Zimbabwean stocks are rising before Monday’s election. But in the
topsy-turvy world of the country’s equities market, that’s not
necessarily a sign of investor confidence.
The Harare exchange’s benchmark index has climbed 10 percent since the
election date was set on May 30. The gains suggest Zimbabweans are
continuing to use equities as a refuge to preserve their wealth,
concerned that there is a risk of inflation as the government prints
dollar-denominated bond notes to overcome a shortage of hard currency.
Among the best-performing stocks this year in Harare are Zimplow
Holdings Ltd. and Seed Co., gains that are in line with farming
sectors that Ndiritu identifies as standing to benefit if Zimbabwe can
navigate successful elections and proceed to economic reforms.
“The underlying demand is still quite strong -- we are starting to see
tobacco and a lot of agricultural production picking up and clearly
these are sectors that will benefit from that renewed sense of
optimism,” Ndiritu said.
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Ethiopia set on economic reforms, but won't be rushed: cenbank head @Reuters Africa |
Ethiopia has embarked on a root-and-branch overhaul of its economy,
though its currency will not be devalued any time soon and
liberalising the state-dominated banking sector will take years, the
recently appointed head of its central bank said.
In a candid interview at odds with the secretive traditions of the
National Bank of Ethiopia (NBE), the 47-year-old Yinager said the
country was making a clean break with the state-driven economic model
phased in following the end of military rule in 1991.
“We cannot move the way we were moving the past 15-16 years,” he told
Reuters on Wednesday, referring to a period of rapid growth driven by
huge state investments in infrastructure.
“We should look into new ways of managing the economy.”
Massive change has swept through the country of 100 million people
since Abiy took office in April and set about dismantling the status
quo.
While acknowledging a chronic shortage of dollars that is stifling
growth, Yinager ruled out any further devaluation in this financial
year, which runs until next July.
Yinager said establishing mobile banking was a priority, but
authorities would tread carefully for fear that local lenders, locked
in a 20th century banking time-warp, would be crushed by an influx of
international banks.
“It requires some sort of preparation to liberalise our banking
system, so we are working on that,” he said, adding this process would
take “some years”.
the currency crunch that Ethiopia has been battling has eased slightly
over the last two months with a sharp narrowing of the gap between the
official and black-market birr rates.
Yinager also said Addis was looking at ways to reduce its reliance on
loans from China, which he said was the source of 85 percent of
Ethiopia’s external debt.
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EABL reports FY 2018 Earnings EPS -26% here Kenyan Economy |
Par Value: 2/-
Closing Price: 230.00
Total Shares Issued: 790774356.00
Market Capitalization: 181,878,101,880
EPS: 7.19
PE: 31.988
FY Revenues of KES - 73.5bn
FY Profit Before Tax 11.7b versus 13.3b -12.00%
FY Profit After Tax 7.3b versus 8.5b -15.00%
FY EPS 7.19 versus 9.71 -26.00%
Final Dividend 5.50
Via Media Release
+5% revenue growth
performance significantly improved in t he second half with net sales +10%
EABL spirit sales increased 8% in the FY
Mainstream spirits portfolio +23%
Beer +4%
Innovation delivered good performance contributing 22% to EABL net
sales - Serengeti Lite in Tanzania, Tusker Cider in Kenya and Uganda
Waragi flavours
Gross margin improved by 4%
marketing spend +19%
Profit after Tax declined by 15% as a result of one-off tax provisions
''In the year we spent 13b on CAPEX a with 7.8b of that being spent on
Kisumu Brewery'' Andrew Cowan
Kenya +1% Uganda +4% Tanzania +41% - Andrew Cowan
Final Dividend of 5.50 a share.
Volume +7%
Net Sales +5%
Gross Profit +4.00%
Profit after tax -15.00%
Operating Cash Conversion +117%
Total Dividend KES 7.50/share
KENYA 73% of Total Revenues +1%
UGANDA 16% of Total revenues +4.00%
TANZANIA 11% of Total Revenues +41%
Total EABL 100% +5%
Kenya Earnings +1.00% 1. Bottled beer turnaround, sales growing +5% 2.
Scotch grew +4% 3. Mainstream spirits growing +22% 4. Senator decline
driven by uncertainty and plant shutdown in H1 5. Total spirits in +7%
growth constrained by uncontrolled imports
.@tuskerlite and @GuinnessIreland delivering +11% growth in Premium beer
Improved volume performance in H2 (+10% vs +4% in H1) across all categories
Stable regulatory and economic environment in H2 allowed us to deliver
highest net sales growth (+10%) for 6 years
Volume (mEU) 12.5 11.7 +7%
Gross sales 135.0 124.1 +9%
BROAD BASED GROWTH WEAKENED BY SENATOR KEG
+4% growth in underlying operating profit offset by one- off
provision provision for tax exposure
Net borrowings (27.5b) (24.4b)
EPS further deteriorated by higher non-controlling interest (SBL)
Priorities going forward
Opportunities for further growth
Commercialize the Kisumu brewery
Drive margin enhancement
Srengthen re-recruitment of bottled beer consumers
Win in premium leading with Scotch and vodka
Go bolder and faster with productivity initiatives
Sustain spirits growth momentum
Accelerate innovations - Serengeti Lite, Tusker Cider, Black &
White, Uganda Waragi flavours, etc.
DPS of KES 7.5 per share, unch - payout ratio >100%
Conclusions
Its a very strong Franchise. Clearly 2 elections a drought and a
credit crunch crimped Kenya +1.00%.
The Co. is signalling an H2 acceleration.
Tanzania a stand out.
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