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Tuesday 04th of September 2018 |
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Macro Thoughts |
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Ruins of Kilwa Kisiwani and Ruins of Songo Mnara UNESCO H/T @rhaplord Africa |
The remains of two great East African ports admired by early European explorers are situated on two small islands near the coast. From the 13th to the 16th century, the merchants of Kilwa dealt in gold, silver, pearls, perfumes, Arabian crockery, Persian earthenware and Chinese porcelain; much of the trade in the Indian Ocean thus passed through their hands. Located on two islands close to each other just off the Tanzanian coast about 300km south of Dar es Salaam are the remains of two port cites, Kilwa Kisiwani and Songo Mnara. The larger, Kilwa Kisiwani, was occupied from the 9th to the 19th century and reached its peak of prosperity in the13th and 14th centuries. In 1331-1332, the great traveler, Ibn Battouta made a stop here and described Kilwa as one of the most beautiful cities of the world. Kilwa Kisiwani and Songo Mnara were Swahili trading cities and their prosperity was based on control of Indian Ocean trade with Arabia, India and China, particularly between the 13th and 16th centuries, when gold and ivory from the hinterland was traded for silver, carnelians, perfumes, Persian faience and Chinese porcelain. Kilwa Kisiwani minted its own currency in the 11th to 14th centuries. In the 16th century, the Portuguese established a fort on Kilwa Kisiwani and the decline of the two islands began.
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The Magic of Saida by MG Vassanji is situated in Kilwa in part Africa |
We return to East Africa in The Magic of Saida, as Canadian medical doctor, Kamal Punja journeys back to Tanzania in search of his first love, the woman Saida. As Kamal walks around his hometown of Kilwa he recalls his childhood and relives the events that he witnessed. As he travels around the countryside he remembers the lost history of the region: the local wars between the tribal groups, the arrival of the Sultans, the slavery of his grandmother, the European wars fought by colonial rivals, the displacements of thousands of people in East Africa and his own forced departure for Canada when Asians were expelled. Kamal's life is set against the historical events of the struggle for independence of former African colonies and so his story can be read in this post-colonial context.
Kamal's life is intertwined with the lost history of East Africa. Vassanji is not only writing Kamal's story but also recreating the history of colonial intervention by Germany and Great Britain. We are reminded of this turbulent history in every chapter of the novel: Chapter one begins with these words,
Kilwa was all history, Kamal said. The past haunted from the ruins and graves; it was there in the references to the Germans who had ruled there once, and the slaves who were sold there, he heard it in his mother's tales and he heard it recited - majestically - by the old poet, Saida's grandfather. (9)
This old poet, Mzee Omari Tamin, is an important figure throughout the novel and the history of Kilwa and the whole region. The novel begins with Mzee Omari writing his major work, The Composition of the Coming of the Modern Age, which is in fact his history of colonialism in the region from the point of view of the local Africans.
Kamal's search for Saida is connected to his uncovering the fragments of his family's past and the history of Kilwa. Every chapter has a clue to these missing people, and their stories.
There were actually three Kilwas: the Island, called Kisiwani, the ancient stone city now in ruins; Kamal’s Kilwa, which saw its heyday in the nineteenth century trade in ivory and slaves; and Masoko, the markets…scattered about the main road to the harbour. (16)
In The Magic of Saida Vassanji reminds us that a thriving slave trade existed in East Africa for many centuries and long before the arrival of Europeans. The Swahili-Arab slave traders moved slaves from Nkhotakota on Lake Malawi to Kilwa. The Prazeros were a slave trading tribe along the Zambezi River. In several places in the novel Kamal mentions slavery as a part of the history of Kilwa since this is vital for the lost story which he is trying to recover. In one scene the young boy Kamal tells his mother about finding human bones on a hidden beach. She explains to him:
"The sea holds many secrets, you understand? Kilwa is a old town. Slaves were brought here, from the south. Many died. Others?-sent off to Zanzibar, Bagamoyo, Arabia, India. Know this. Those are the bones of our ancestors." So she told him. Know this. Eyes fixed into him. But before she said "India." she had drawn a long breath. There were African slaves in India? Slaves everywhere? (49)
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Another emerging-market meltdown? Don't rule it out via @bopinion Emerging Markets |
Emerging-market stresses have been building since at least 2013. Investors may have forgotten the effect of the “taper tantrum” on the so-called Fragile Five – Brazil, India, Indonesia, Turkey and South Africa – a term coined by Morgan Stanley to describe their vulnerability to capital outflows. Monetary accommodation, lower current-account deficits and growth disguised the underlying challenges, attracting more capital to those markets. The textbook recipe for an emerging-market crisis requires a large dose of debt and an associated domestic credit bubble, including misallocation of capital into uneconomic trophy projects or financial speculation. Then add: a weak banking sector, budget deficits, current-account gaps, substantial short-term foreign-currency debt and inadequate forex reserves. Season with narrowly based industrial structures, reliance on commodity exports, institutional weaknesses, corruption and poor political and economic leadership. Based on these criteria, the number of emerging markets at risk extends well beyond Turkey and Argentina. Like Tolstoy’s families, each nation has different sources of unhappiness.
Total emerging-market borrowing increased from $21 trillion (or 145 percent of GDP) in 2007 to $63 trillion (210 percent of GDP) in 2017. Borrowings by non-financial corporations and households have jumped. Since 2007, the foreign-currency debt – in dollars, euros and yen – of these countries doubled to around $9 trillion. China, India, Indonesia, Malaysia, South Africa, Mexico, Chile, Brazil and some Eastern European countries have foreign-currency debt between 20 percent and 50 percent of GDP. In all, EM borrowers need to repay or refinance around $1.5 trillion in debt in 2019 and again in 2020. Many are not earning enough to meet these commitments. Turkey and Argentina have twin deficits (combined budget and current-account gaps as a percentage of GDP) of 8.7 percent and 10.4 percent, respectively, that require financing. Pakistan has a twin deficit well above 10 percent. Brazil, India, Indonesia, South Africa and Ukraine are at or above 5 percent on that basis. In India, if state governments are included the number approaches double figures. Those gauges are rising in China, Malaysia, Mexico, Colombia, Chile and Poland.
Then look at reserve coverage – foreign-exchange holdings divided by 12-month funding needs for the current account, short-term debt maturities and amortization of long-term debt – which measures the capacity to meet immediate foreign-currency obligations. Turkey and Argentina score 0.4 and 0.6 respectively, meaning they can’t cover their needs without new borrowings. Pakistan, Ecuador, Poland, Indonesia, Malaysia and South Africa have reserve coverage of less than 1. Chile, Hungary, Colombia, Mexico and India have coverage of less than 2. Brazil and China come in at 2.5 and 3.1 times, respectively.
China and India face well-documented difficulties in their financial systems. The true level of Chinese non-performing loans may be several times the official 1.75 percent. India’s NPL ratio is around 10 percent of all loans.
Events in Turkey and Argentina show how these weaknesses become exposed. Global liquidity tightening, led by the U.S. Federal Reserve increasing rates and unwinding its bond purchases, reduces capital inflows and increases the cost of borrowing. Trade tensions, sanctions, the breakdown of the global institutional structure and rising geopolitical risks exacerbate those Weaknesses in the real economy and the financial system feed each other in a vicious cycle. Capital withdrawals undermine currencies, driving down prices of assets such as bonds, stocks and property. The reduced availability of finance and higher funding costs add to pressure on over-extended borrowers, triggering banking problems that feed back into the economy. Credit rating and investment downgrades extend the cycle.
Turkey and Argentina may be special cases. But given the fundamental problems, other emerging markets are likely to come under pressure. As Herbert Stein's 1976 law states: “If something cannot go on forever, it will stop.”
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[The End of] Halcyon Days @TheStarKenya Emerging Markets |
Wikipedia has an article on: halcyon days and it reads thus,
From Latin Alcyone, daughter of Aeolus and wife of Ceyx. When her husband died in a shipwreck, Alcyone threw herself into the sea whereupon the gods transformed them both into halcyon birds (kingfishers). When Alcyone made her nest on the beach, waves threatened to destroy it. Aeolus restrained his winds and kept them calm during seven days in each year, so she could lay her eggs. These became known as the “halcyon days,” when storms do not occur. Today, the term is used to denote a past period that is being remembered for being happy and/or successfuL
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12-SEP-2016 :: Mirrors on the ceiling, The pink champagne on ice Emerging Markets |
If volatility spikes, positions are going to be reduced en masse. Or to put it another way and to borrow the lyrics from the Eagles Hotel California:
Mirrors on the ceiling, The pink champagne on ice And she said “We are all just prisoners here, of our own device” Last thing I remember, I was Running for the door I had to find the passage back To the place I was before “Relax,” said the night man, “We are programmed to receive. You can check-out any time you like, But you can never leave! “ What is clear is that we are at the fag-end of this party.
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China's Xi offers $60bn in financial support to Africa @AJENews @AJELive #FOCAC2018 Africa |
Speaking at the opening of a major summit with African leaders in Beijing on Monday, Xi said the figure included $15bn in grants, interest-free loans and concessional loans, a credit line of $20bn, $10bn for "development financing" and $5bn to buy imports from the continent.
Chinese companies will be encouraged to invest no less than $10bn in African countries in the next three years, he added.
Government debt from China's interest-free loans due by the end of 2018 will be written off for indebted poor African countries, as well as for developing nations in the continent's interior and small island nations, Xi said.
"China-Africa cooperation must give Chinese and African people tangible benefits and successes that can be seen, that can be felt," he said.
Al Jazeera's Adrian Brown, reporting from Beijing, said economists and some international financial institutions worry that Chinese loans are burying some countries under massive debt.
"It's hard to think of any country in Africa that has not been touched by China," he said, adding that China rejects the claim of "debt-trap diplomacy".
Beijing loaned around $125bn to the continent from 2000 to 2016, according to data from the China-Africa Research Initiative at Washington's Johns Hopkins University School of Advanced International Studies.
Every African country is represented at the business forum apart from eSwatini, self-ruled Taiwan's last African ally that has so far rejected China's overtures to ditch Taipei and recognise Beijing.
African leaders in attendance include South Africa's Cyril Ramaphosa, Egypt's Abdel Fattah el-Sisi, Zambia's Edgar Lungu and Gabon's Ali Bongo.
Ramaphosa defended China's involvement on the continent, saying FOCAC "refutes the view that a new colonialism is taking hold in Africa as our detractors would have us believe".
Before FOCAC, Rwandan President and current chair of the African Union Paul Kagame had also dismissed the concerns, telling the official Xinhua news agency talk of "debt traps" were attempts to discourage African-Chinese interactions.
However, Aly-Khan Satchu, an economic analyst based in Kenya's capital, Nairobi, told Al Jazeera the concerns over "debt-trap diplomacy" were "real".
"There are worries that this infrastructure has been inflated in price, and that it is highly unlikely to make a return on investments that is necessary for these countries to get in order to pay back the debt," he said.
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China's Xi says funds for Africa not for 'vanity projects' Reuters #FOCAC2018 Africa |
Chinese funds are not for “vanity projects” in Africa but are to build infrastructure that can remove development bottlenecks, Chinese President Xi Jinping said on Monday, telling Chinese firms they also had to respect local people and the environment.
Xi said at a business forum before the start of a triennial China Africa summit their friendship was time-honoured and that China’s investment in Africa came with no political strings attached.
“China does not interfere in Africa’s internal affairs and does not impose its own will on Africa. What we value is the sharing of development experience and the support we can offer to Africa’s national rejuvenation and prosperity,” Xi said.
“China’s cooperation with Africa is clearly targeted at the major bottlenecks to development. Resources for our cooperation are not to be spent on any vanity projects but in places where they count the most,” he said.
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#FOCAC2018 @UKenyatta Africa |
The money will be channelled to projects aligned to the Chinese Government’s Belt and Road Initiative covering telecommunication, construction of roads, bridges and sea ports, energy, and human capacity development #FOCAC2018
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03-SEP-2018 :: Inflexion points are difficult to discern but this is one right here. Africa |
I refer you to Uganda. Bobi and Barbi Wine have now arrived in the US. But what caught my attention was a Video of Revelers at a Tarrus Riley concert who while chanting ‘People Power’ threw bottles at @BebeCoolUG while he was on stage performing and later ended his performance. Inflexion points are difficult to discern but this is one right here.
A Debt crisis and a political inflexion point where those who fought for Independence hand over to the ''Born Free'' Generation is in fact a ''double whammy''
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ZAMBIA Bonds, bills and ever bigger debts @Africa_Conf Africa |
The government has all but expelled an IMF official, as the debt continues to spiral and the role of Chinese projects in it raises more concern Having allocated US$500 million to external debt service this year, the government's liquidity crisis drags on as relations with donors and international financial institutions plummet.Lusaka asked the International Monetary Fund to withdraw its resident representative Alfredo Baldini on the grounds that he was supposedly 'spreading negative talk' among the donors, a source in Lusaka said. The rift is a blow to any chance – practically non-existent though it already was – of a deal.
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Local Risks Worsen South Africa's Pain Amid Emerging-Market Rout Africa |
The premium investors demand to hold South African debt rather than U.S. Treasuries, known as the sovereign spread, has climbed 63 basis points since the beginning of August to 336, the highest level since November 2016, according to JPMorgan Chase & Co. indexes. The emerging-market premium increased 43 basis points in the same period. A cocktail of negative economic news, political risks and falling commodity prices accelerated a slide in South Africa’s rand and bonds sparked by crises in Turkey and Argentina and escalating trade tensions between the U.S. and China. President Cyril Ramaphosa’s announcement on Aug. 1 that the ruling party backed an amendment to the constitution to seize land without compensation has weighed on the currency, along with worries over rules governing mining. “Emerging-market vulnerabilities have not eased; in fact, they have intensified, which could imply that the rand is likely to remain on the back foot over the near-term,” Walter de Wet and Reezwana Sumad, analysts at Nedbank Group Ltd. in Johannesburg, said in a report. The currency could weaken above 15 per dollar if a land-reform Constitutional amendment has the effect of undermining property rights, they said. “Foreign investor sentiment remains a key risk.” The rand weakened 1.1 percent to 14.8452 per dollar by 11:56 a.m. in Johannesburg. Yields on South Africa’s $2 billion of 2028 Eurobonds climbed two basis points to 5.9 percent, bringing the increase since the beginning of August to 43 basis points.
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Ghana considering $50 bln century bond, president @NAkufoAddo says @ReutersAfrica Africa |
President Nana Akufo-Addo said during a meeting with Xi in Beijing on Sunday: “The Ministry of Finance and economists in Ghana are looking at floating a $50 billion century bond. This will provide us with the resources to finance our infrastructural and industrial development.”
The announcement drew scepticism in financial markets, with analysts expressing doubts over Ghana’s capacity to undertake such a transaction.
“While the estimate of Ghana’s likely infrastructure investment need over the next century may well total more than $50 billion, Ghana’s ability to raise anything like $50 billion in a single issue is doubtful, given the country’s current financing capacity,” said Standard-Chartered Bank chief economist Razia Khan.
Conclusions
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(EABL) has raised its stake in Serengeti Breweries to 72.5 per cent after converting a Sh15.3 billion loan to the Tanzanian subsidiary into equity. @BD_Africa Kenyan Economy |
The Nairobi Securities Exchange-listed firm, whose ownership previously stood at 51 per cent, made the transaction to ease the subsidiary’s debt burden. Serengeti’s minority shareholders, who were diluted in the deal, could restore their original 49 per cent stake in the future by ceding half of their dividend entitlement going forward. “On July 1, 2017, the company entered into an agreement with the non-controlling shareholders of its subsidiary, Serengeti Breweries Limited (SBL), to convert all its outstanding loans receivable to the subsidiary into equity shares, without proportionate capital contribution by the non-controlling shareholders,” EABL says in its latest annual report. “The transaction resulted in an increase in the effective control of the subsidiary from 51 per cent to 72.5 per cent.”
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EABL share price data and FY 18 Earnings here Kenyan Economy |
Par Value: 2/- Closing Price: 199.00 Total Shares Issued: 790774356.00 Market Capitalization: 157,364,096,844 EPS: 7.19 PE: 27.677
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
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LongHorn Kenya reports FY 2018 EPS +36.375% Earnings here Kenyan Economy |
Par Value: Closing Price: 4.50 Total Shares Issued: 369940476.00 Market Capitalization: 1,664,732,142 EPS: 0.49 PE: 9.184
Longhorn Publishers PLC FY 2018 results through 30th June 2018 vs. 30th June 2017 FY Revenue 1.696318b vs. 1.451774b +16.844% FY Cost of sales [781.140m] vs. [702.173m] +11.246% FY Gross profit 915.178m vs. 749.601m +22.089% FY Distribution costs [134.591m] vs. [169.445m] -20.570% FT Administrative Expenses [422.452m] vs. [350.812m] +20.421% FY Operating profit 358.364m vs. 231.696m +54.670% FY Finance costs [85.218m] vs. [52.549m] +62.169% FY Profit before income tax 273.146m vs. 179.147m +52.470% FY Profit for the year 183.604m vs. 133.876m +37.145% EPS 0.67 vs. 0.49 +36.735% Total Assets 2.407529b vs. 1.858734b +29.525% Cash and cash equivalents at the end of year 418.780m vs. 11.649m +3,494.987% Dividend 0.42 vs. 0.38 +10.526%
Commentary
product diversification, entry into new markets and growth of the digital offering. Growth of operating margin from 16% - 21% Expanding into new territories within Southern Africa and Francophone territories
Conclusions
Strong FY Earnings.
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