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Wednesday 15th of May 2019 |
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Macro Thoughts |
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2019 Returns...@charliebilello Africa |
Bitcoin $BTC: +116% Oil $USO: +33% MLPs $AMLP: +18% REITs $VNQ: +18% Nasdaq 100 $QQQ: +17% Small Caps $IWM: +14% S&P 500 $SPY: +14% EAFE $EFA: +9% Commodities $DBC: +9% High Yield $HYG: +7% Investment Grade $LQD: +7% EM $EEM: +5% Bonds $AGG: +3% Gold $GLD: +1%
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China Vows 'People's War' as Trade Fight Takes Nationalist Turn @economics Law & Politics |
Among China’s most surprising responses to the trade war has been its reluctance to use its vast state media empire to rally the home front. That’s changed since U.S. President Donald Trump’s latest tariff barrage. In recent days, the once-banned phrase “trade war” has roared back into widespread use in Chinese media. Meanwhile, official news outlets gave high-profile play to commentaries urging unified resistance to foreign pressure, including an editorial from the nationalist Global Times calling the trade dispute a “people’s war” and threat to all of China. Such sentiments have found an eager audience, with a state television video vowing a “fight to the end” attracting more than 3 billion views since Monday. The clip was the most-read piece on China’s Twitter-like social media platform Weibo earlier Tuesday. The rhetorical shift underscores the risks that China’s Communist Party veers toward a more nationalistic position as the trade war drags on and weighs on economic growth. Chinese President Xi Jinping, like Trump, has promised to rejuvenate his country and can’t afford to look weak in the face of foreign power. So far, China’s state media have sought to tamp down the kind of patriotic passions that fueled a backlash against Japanese interests when a territorial dispute flared in 2012. Even now, state media commentaries focused the blame on the U.S. government, rather than the country as a whole. For instance, a commentary published in the Communist Party’s flagship People’s Daily newspaper, avoids any mention of Trump’s name and refers only to “certain people in America who brood over the so-called massive trade deficit,” said David Bandurski of the China Media Project The article “tries to avoid any sense of general animosity toward the U.S., and stresses that the American people and businesses are losing out as a result of tariffs,” Bandurski said. “Right now the messaging from the leadership through the state media is all about treading the line.” Although increased use of the term “trade war” in official media suggest a hardening of rhetoric, some media outlets are still prohibited from using the term, according to a person familiar with the matter. The suggested alternative is “an unclear external environment,” the person said, adding that publicity authorities have directed outlets to stress the stability and resilience of Chinese economy. Maintaining that balance is difficult in a country where all school children are taught about the country’s “century of humiliation” at the hands of colonial powers. China’s top trade negotiator, Vice Premier Liu He, has already found himself the targeted by unflattering comparisons to the Qing dynasty official who signed an 1895 treaty with Japan that surrendered the island of Taiwan. Liu stressed in remarks to state media after failed trade talks Friday in Washington that any deal should be “balanced” to ensure the “dignity” of both nations. On Wednesday, the People’s Daily ran another commentary saying China will never make decisions that "give up power and humiliate the country," a phrase used in school textbooks to describe the treaties China signed at the turn of the 20th century. "The Chinese people’s belief in upholding the rights and dignity of the nation, their determination, is rock solid." The “people’s war” mentioned in the Global Times editorial was introduced by party patriarch Mao Zedong in an oft-cited 1938 speech in which he argued that China would eventually repel the Japanese invaders. Mao argued that while conflict was affected by political, economic military and geographic elements, the people are the decisive factor. Earlier on Tuesday, the People’s Daily, the mouthpiece of the Communist Party, posted an image on its WeChat account of the Chinese flag with the words “Talk -- fine! Fight -- we’ll be there! “Bully us -- delusion!” superimposed over it.
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TRUMP ADMINISTRATION PREPARES MULTIPLE MILITARY OPTIONS FOR IRAN, INCLUDING AIRSTRIKES AND SETTING UP GROUND INVASION @Newsweek Law & Politics |
When President Trump’s top national security advisers met for a classified meeting at the Pentagon last Thursday, Acting Defense Secretary Patrick Shanahan laid out several U.S. military options for Iran, separated into two distinct categories: retaliatory and offensive. The revised Iran options ordered by John Bolton, President Trump’s national security adviser, have different degrees and redlines for escalation, ranging from airstrikes to targeted incursions, Pentagon officials told Newsweek. Defense Department officials who have been briefed on the details of the updated military plans for Iran agreed to speak with Newsweek on condition of anonymity. Pentagon officials confirmed a report published in The New York Times on Monday outlining an option to deploy as many as 120,000 U.S. troops to the Middle East if Iran initiates an attack on U.S. forces or continues to work on what the U.S. has alleged were secret nuclear proliferation objectives. Pentagon officials told Newsweek that if deployed, the role of the 120,000 U.S. forces would center on logistical support and developing infrastructure to preposition U.S. forces for the option of a ground invasion. The original 120,000 would integrate into an additional surge of U.S. forces sent into the region.
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The Gulf of Tonkin incident was a false flag event which was used as a pretext for the Vietnam War. Law & Politics |
The Gulf of Tonkin incident (Vietnamese: Sự kiện Vịnh Bắc Bộ), also known as the USS Maddox incident, was an international confrontation that led to the United States engaging more directly in the Vietnam War. It involved either one or two separate confrontations involving North Vietnam and the United States in the waters of the Gulf of Tonkin. The original American report blamed North Vietnam for both incidents, but eventually became very controversial with widespread belief that at least one, and possibly both incidents were false, and possibly deliberately so. On August 2, 1964, the destroyer USS Maddox, while performing a signals intelligence patrol as part of DESOTO operations, was pursued by three North Vietnamese Navy torpedo boats of the 135th Torpedo Squadron.[1][5] Maddox fired three warning shots and the North Vietnamese boats then attacked with torpedoes and machine gun fire.[5] Maddox expended over 280 3-inch (76.2 mm) and 5-inch (127 mm) shells in a sea battle. One U.S. aircraft was damaged, three North Vietnamese torpedo boats were damaged, and four North Vietnamese sailors were killed, with six more wounded. There were no U.S. casualties.[6] Maddox "was unscathed except for a single bullet hole from a Vietnamese machine gun round."[5]
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MK BhadraKumar writes "If there can be a lethal game of Russian roulette in international politics, this is it" Law & Politics |
Russian roulette is a game of chance where players spin the cylinder of a revolver with a single bullet in turns, put the muzzle against their head and pull the trigger.The player has 16.67% chances of firing a bullet into his head if there is one bullet in the 6-chamber revolver. Each player starts by spinning the cylinder, thus each player has an equal chance of being killed by the bullet. Quite obviously, it’s an insane game that US President Trump started on May 8 last year. A big question can be put whether Trump himself wants another Middle Eastern war. The Price of Oil has surged +34.173% in 2019 and in big part because of the ratcheting higher of tensions with Iran. No number of Trump Tweets will dampen down the price.
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Traders Look to China Tech Earnings to Stem Losses: Taking Stock @economics International Trade |
Investor hopes that Wednesday’s nascent equity market rebound will continue likely depends on the imminent results from two of China’s biggest companies -- Tencent Holdings Ltd. and Alibaba Group Holding Ltd. The two technology giants -- the ‘A’ and ‘T’ in the BAT complex -- are set to report today against a backdrop of renewed anxiety over the Sino-American trade war and ongoing concern about the health and resiliency of China’s economy. Investors stand to get fresh insights on both fronts when the companies unveil their latest quarterly earnings. Expectations are high for the two biggest stocks in the MSCI Asia Pacific Index, with a combined weight of almost 6%, according to data compiled by Bloomberg. Alibaba and Tencent have been key drivers for gains in the benchmark with the pair up 28% and 19% respectively so far this year, bouncing back from losses in 2018. Morgan Stanley raised its price target for Tencent ahead of the results, to HK$430 from HK$408, while also boosting earnings estimates by 5% in 2019 and 6% in 2020 on expectations the tech conglomerate will win market share and outperform peers in coming quarters thanks to its game pipeline. Meanwhile Alibaba is forecast to post a 48% increase in revenue from a year ago, according to data compiled by Bloomberg. The company hasn’t had quarterly revenue growth of less than 40% since 2016. The options market is also pointing to more earnings-day volatility than normal following results, implying a 6.9% move that is more than double than the two-year average. Looking beyond the results, analysts forecast continued substantial upside for both stocks. Tencent, with 53 buys, 6 holds and no sell ratings, is expected to climb 14% from its current price according to its consensus 12-month target price of HK$428.53. Alibaba, with 52 buys, 1 hold and 1 sell, has 21% upside by the same measure. At the moment, Asia equities are getting a lift from a relief rally in the U.S. overnight, with the MSCI Asia Pacific Index 0.4% higher to halt a two-day slide. Stocks in Shanghai and Hong Kong are leading gains, as disappointing April economic data from China is spurring speculation the government will introduce more stimulus measures. U.S. stock-index futures are also higher Wednesday. China’s industrial output rose 5.4% year-over-year, falling short of median estimates, while retail sales slowed to 7.2%, also short of expectations. “Assuming we see further easing soon, we think growth should stage a mild recovery in the second half of this year,” said Julian Evans-Pritchard, senior China economist with Capital Economics in a note to clients.
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Jumia Wins Over Wall Street for Its African E-Commerce Strategy @technology International Trade |
Wall Street is finally turning more bullish on Jumia Technologies AG as its debut results as a public company quelled some fears after a nearly 50 percent decline in the stock this month and a scathing report from short-seller Citron Research. Results from the e-commerce firm -- which has been dubbed the Amazon.com Inc. of Africa -- prompted analysts at Raymond James and Berenberg to upgrade shares to a buy-equivalent rating, citing revenue growth. The banks’ ratings changes followed Stifel’s Scott Devitt, who became the company’s first bull on Monday afternoon. “Strong first-quarter results confirm continued progress," Berenberg analysts wrote. “For the first time ever, Jumia’s gross profit covered total fulfillment costs, having previously achieved this only in Nigeria.” However, the firm stressed that “it is obviously not easy to take a firm view on what should be exactly the right price for this company” given the early-stage nature of the business. The Berlin-based company is higher by 4% in trading prior to the U.S. market open, on track to add to a more than 80% rally since last month’s public offering. The stock now has buy ratings from three analysts and is rated as a hold by three others with Morgan Stanley maintaining a sell-equivalent. Raymond James analyst Aaron Kessler cited expectations for strong merchandise growth, improving margins and the recent sell-off as reasons for his upgrade. He expects robust ecommerce growth in Africa and notes that Jumia has significant potential beyond its core marketplaces including payments and other services. On May 9, Citron founder Andrew Left attacked the company, saying it was "worst abuse of the IPO system since the Chinese RTO fraud boom almost a decade ago." The cautious mention triggered a share sell-off, however, sell-side analysts remained quiet ahead of Monday’s earnings. The company’s co-chief executive officer Sacha Poignonnec shrugged off the comments on an earnings call with analysts saying, “we will not be distracted from executing on our strategy and carrying out our mission by those who seek to create doubts to profit at our expense and that of our long-term stakeholders.”
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Jumia's Nigeria chief stands by sales figures queried by short-seller Citron International Trade |
African ecommerce company Jumia is trying to encourage more prepayment to discourage returns or cancellations, the head of its Nigerian business said after a report last week by Citron Research questioned some of Jumia’s sales figures. Jumia became the first African tech stock to list on Wall Street on April 12. Its shares initially soared, but fell sharply on Friday after the publication of the report by Citron Research, run by short-seller Andrew Left. “We stand by what we disclosed... the way GMV (gross merchandise value) is calculated in the industry is gross of cancellations and returns,” Juliet Anammah, chief executive of Jumia Nigeria, told Reuters by telephone after cancelling a trip to address a retail event in Amsterdam at short notice. She said many customers in Nigeria, Jumia’s biggest market, still only pay by cash when they receive their orders, but Jumia was trying to move customers to its Jumia Pay solution to pay in advance when they check out online. Loss-making Jumia was making progress towards reaching its goal of breakeven by the end of 2022, Anammah added. It plans to make its marketing spending more efficient, charge merchants for storing their goods in its warehouses, boost sales of advertising on is site and charge sellers to create content, such as images of their products, she said. “We are going to monetise value-added services such as Jumia Express and add on more advertising. We have just started a whole lot of opportunities,” she said. Jumia shares were trading 3.5 percent higher at $27.52 by 1658 GMT after two brokerages raised their ratings.
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Sudan's military reaches deal with protesters on three-year transition @FinancialTimes. Africa |
Sudan’s military leaders have reached an agreement with the country’s popular opposition movement for a three-year transition to a fully civilian administration after President Omar al-Bashir was toppled in a military coup last month following four months of demonstrations. At a joint press conference in the early hours of Wednesday morning the military council said that a deal would be signed within 24 hours, which will include the formation of two ruling bodies — a sovereign council and a 300 member legislature — to run the country until elections are held. “We agreed on a transitional period of three years” Lieutenant General Yasser al-Atta said, according to al-Jazeera. “We vow to our people that the agreement will be completed fully within 24 hours in a way that it meets the people’s aspirations” he said. Two-thirds of the seats in the legislature would go to members of the opposition movement that spearheaded the protests, the Declaration of Freedom and Change Forces, while the rest would be taken by groups not part of the alliance, Lt Gen Atta said. The announcement came after at least four people were killed on Monday in new clashes between protestors and the security forces. Many in the protest movement remain suspicious of the military leaders, most of whom had loyally served President Bashir for decades. Talks between the two sides had previously stalled over the protestors’ demand that the transition is led by a civilian, a contentious point which is yet to be agreed. Despite the new tone of cooperation, Lt Gen Atta did not say whether the sovereign council would be headed by military or civilian leaders.
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Africa |
After Omar al-Bashir was deposed on April 11, Western diplomats made no mistake about who was in charge. Ambassadors from the United States, Britain, and the European Union did not shake hands with the transitional military council’s president, the little known army general Abdel Fattah al-Burhan; they met with his younger deputy Mohamed Hamdan Dagolo, better known by the nickname “Hemeti.” The story of how an uneducated 40-something chief of the janjaweed—the Arab militias that brought death and destruction to Darfur 16 years ago—became more powerful than his seasoned mentors in the Sudanese junta is, to many, a mystery. In fact, Hemeti is the main legacy of Bashir’s 30-year rule. Bashir himself was a product of an alliance of the army and the Muslim Brotherhood, unseen elsewhere in the Arab world, but the army grew tired of the wars it had to fight in Sudan’s south, and the Islamists fragmented. When a new war began in Darfur in 2003, Bashir was convinced by Darfuri Arab hard-liners that turning their youths to militias would allow him to win. But by creating the janjaweed and relentlessly empowering them under Hemeti, the Sudanese regime has created a monster it cannot control and who represents a security threat not only for Sudan but also for its neighbors. I met Hemeti a couple of times in 2009, first in a vaguely Orientalist furniture shop he owned in South Darfur’s state capital of Nyala (one of his early business efforts), from which I was driven to a more private office setting. He was a tall man with the sarcastic smile of a naughty child—yet he was then the newly appointed security advisor to South Darfur’s governor, his first official government position, obtained through blackmail and threats of rebellion. Hemeti hails from a small Chadian Arab clan that fled wars and drought in Chad to take refuge in Darfur in the 1980s. As he told me, his uncle Juma Dagolo failed to be recognized as a tribal leader in North Darfur state, but South Darfur authorities welcomed the newcomers and allowed them to settle on land belonging to the Fur tribe, Darfur’s main indigenous non-Arab group. The place, called Dogi in the Fur language, was rebranded Um-el-Gura, “the mother of the villages” in Arabic, an old name for Mecca. The authorities also armed Dagolo’s followers, who, as early as the 1990s, began attacking their Fur neighbors. Hemeti was then a teenager who, as he told me, dropped out of primary school in the third grade to trade camels across the borders in Libya and Egypt. When the Darfur rebellion began in 2003, he became a janjaweed amir (war chief) in his area, leading attacks against neighboring Fur villages. To justify joining the government-backed militias, he said the rebels had attacked a caravan of fellow camel traders on their way to Libya, allegedly killing 75 men and looting 3,000 camels. That fell short of his own brutal record as a militia leader. In 2006, armed with new equipment, he led several hundred men on a raid across the rebel-held area of North Darfur. The janjaweed rammed non-Arab men with their pickup trucks and raped women in the name of jihad—according to witnesses I met at the time. His violent methods even created tensions with accompanying army officers. At the same time, Chad and Sudan began a proxy war through their respective rebel groups. The Chadian government used its own Arab officials to push the janjaweed to betray Khartoum. Bichara Issa Jadallah, a cousin to Hemeti, was then the defense minister in Chad. In 2006, he invited the janjaweed leader to the Chadian capital, N’Djamena, and had him sign a secret nonaggression pact with the Darfur rebel Justice and Equality Movement, behind the back of Khartoum. Shortly afterward, Hemeti announced that he had become a rebel. He then received a visit from a TV crew working for Britain’s Channel 4, which shot a documentary in his camp—his first exposure to TV—a medium to which he has become addicted since. But the journalists reportedly came late, and, as they were filming, government negotiators were also in the camp, bargaining over the price to bring Hemeti back into the government fold.
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Malawi is Southern Africa's next big election @mailandguardian Africa |
On a superficial reading, Malawi’s story seems to epitomise many preconceived narratives about sub-Saharan Africa. It is one of the world’s least developed countries. It labours under astronomical unemployment numbers. It has low life expectancy, high infant mortality and a high prevalence of HIV and Aids. Its population is predominantly rural and it has to rely disproportionately on foreign aid. It has been ranked the fourth poorest country in the world — more than half of its 18-million people live below the poverty line. The May 21 elections will mark 25 years of multiparty democracy in Malawi — a trend that began only after the one-party regime, mediated by Hastings Kamuzu Banda, came to a halt in 1994. Before then, Malawi had, in effect, been a democratic dictatorship for 30 years. This wasn’t a terrible state of affairs, according to some accounts. Even Africa historian Martin Meredith, known for his pessimism, insists that under the eccentric Banda, Malawi’s economy was “often cited as an example of how a poor, landlocked, heavily populated, mineral-poor country could achieve progress in both agriculture and industrial development”. Yes, Banda deployed his country’s wealth to build his own business empire, but his actualised vision was for that empire to benefit the country, eventually producing a third of the nation’s GDP and employing more than 10% of its workforce. The top boarding school he built, Kamuzu Academy, was ultimately gifted to the nation. The Economist commended his avoidance of “grand socialist plans, which lured other African countries to destruction”, praising him by saying that “instead, he gathered the most valuable parts of the economy into a company”. But dictators maintain their stranglehold at great cost, and Banda was no exception — banning women from exposing their knees, prohibiting kissing in public, unleashing spies on his compatriots, banning books, putting more than 250 000 people in jail, supervising the murder of political opponents and locking others up. In 1971, the legislature named him president for life. At the end of his 30-year rule, Malawians remained poor. In 1994, they had had enough, electing him out of office and putting him on trial for the murder of four politicians in 1983. For more than a decade afterwards, the country continued to suffer the consequences of his dictatorship, plunging on crucial indices until sustained competitive democracy pulled them back up. It is also possible to blame this on the fact that the ruling party, the United Democratic Front, did not win a majority in Parliament. By 2005, under President Bingu wa Mutharika (who died in office), Malawi had turned a corner. With the Democratic Progressive Party (DPP) in charge of both the presidency and Parliament, reliance on aid began to decrease and its economic outlook began to improve, showing progress in the economy, education and health from 2007. The country was praised for its economic reform and for its food security policies. In 2009, its ministry of finance reported that the number of citizens living in poverty had fallen, over a period of four years, from 52% to 40%. Mutharika was praised as a champion of the poor. Then power appeared to get to Mutharika’s head. After being re-elected in 2009, he moved his attention from policy to politics — expelling ambassadors, cutting off ties with donors, attacking political opponents and battling (unsuccessfully) his own vice-president, Joyce Banda. Growth began to slow and the country began to suffer. The first big symptom of it was the huge “Cashgate”’ scandal, in which some $32-million was stolen over the course of just six months in 2013 from government funds. The scandal was revealed by an audit commissioned by Joyce Banda when she took office after Mutharika’s death. The funds went from government to vendors for goods and services that were never supplied. The current president Peter Mutharika, Bingu’s brother, came into office in 2014 promising to wipe away the corruption, but his party can’t seem to get rid of this virus. In 2017, there was “Maizegate”, in which the minister of agriculture, George Chaponda, was found to be breaking the law, and was fired after a court injunction. Last year, the president himself was linked in a leaked anti-corruption report with misappropriating funds in a police contract. This, alongside a controversial 2016 land reform law that took power away from community leaders and centralised authority in government, has led to widespread dissatisfaction. Mutharika and his ruling party face stiff competition this year from his vice-president, Saulos Chilima, who is running under the banner of the United Transformation Movement; and from the Malawi Congress Party, which has entered into an alliance with Joyce Banda’s People’s Party. There may well be a new face in Lilongwe’s State House next month. But even if Mutharika does survive, it will be in the knowledge that there is credible opposition to his rule —and that fortunes can change very quickly. Chude Jideonwo is founder of Joy, Inc and sits on the board of StateCraft, Inc, which has worked in elections and for governments in Nigeria, Ghana, Kenya and Senegal
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South Africa Burdened by Utility's @Eskom_SA Near $35 Billion Debt Load @markets Africa |
The embattled South African state power utility’s debt burden, described by Goldman Sachs Group Inc. as the biggest threat to the nation’s economy, has burgeoned, compounding the difficulty the government faces in formulating a turnaround plan. Eskom Holdings SOC Ltd.’s debt is approaching 500 billion rand ($35 billion), according to data compiled by Bloomberg from public records, including bonds and issued loans, up from about 370 billion rand a year ago. While the utility declined to comment on the current number, its Chief Executive Officer Phakamani Hadebe last month put total debt at about 450 billion rand. The composition of the utility’s debt has also changed, with loans accounting for just more than half of its total burden, up from 40% a year ago. The switch to short-term financing hasn’t been smooth sailing -- a loan agreed with China Development Bank failed to come through as scheduled earlier this year and Eskom had to take out an urgent 3 billion rand bridge loan from Absa Group Ltd. to avoid a call on existing guarantees.
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Military Stake Stymies $4 Billion Zimbabwe Platinum Project @markets Africa |
A plan to build Zimbabwe’s biggest platinum mine at a cost of about $4 billion is floundering because a military stake in the project has deterred potential backers, according to people familiar with the funding discussions. The African Export-Import Bank has the mandate to raise money for the mine, a joint venture between Russian and Zimbabwean investors. While the bank provided $192 million of its own funds, meetings in the past year with investors including South Africa’s Public Investment Corp., the continent’s biggest fund manager, failed to bring additional commitments, one of the people said, asking not to be identified because the talks are private. Zimbabwe has the world’s third-largest reserves of platinum, palladium and related metals such as rhodium -- which typically occur together -- after South Africa and Russia. President Emmerson Mnangagwa is trying to lure investment to the country to help rebuild the economy, devastated during the 37-year rule of Robert Mugabe. The sticking point is a Zimbabwe military company that once was subject to U.S. sanctions. Zimbabwe Defence Industries Ltd. and Zimbabwe Mining Development Corp. together hold 30% of the joint venture, known as Great Dyke Investments, through Pen East (Pty) Ltd., a company they control, according to documents seen by Bloomberg. Vi Holding, led by Russian entrepreneur Vitaliy Machitski, has a 50% stake in Great Dyke, and 20% is held by undisclosed Zimbabwean investors, the documents show. While the documents are dated 2012, the shareholdings are about the same today, two of the people familiar with the discussions said. The $4 billion figure is a government estimate of the cost to develop the mine and associated infrastructure. “If there is any kind of military shareholding it will make western investors very uncomfortable, especially the banks,” said Peter Major, a mining analyst at Mergence Corporate Solutions Ltd. in Cape Town. “Who is going to risk it? I think they will battle to get funding from traditional and western institutions.” South Africa’s PIC declined to comment. Zimbabwe’s defense ministry, ZDI and Vi Holding didn’t respond to phone and email requests for comment. The U.S. Treasury imposed sanctions on Zimbabwe Defence Industries, or ZDI, and several politicians in 2004 because of violence and irregularities in the nation’s 2000 and 2002 elections. Vi Holding groups Russian companies including state-controlled Rostec Corp. and development bank VEB, according to the people. Both companies also have been sanctioned by the U.S. because of Russia’s 2014 annexation of Crimea. Global Witness has previously tied ZDI to diamond mining in eastern Zimbabwe through an indirect shareholding in a Chinese company. Mugabe said his government lost large sums to theft from that deposit, and Human Rights Watch in 2009 accused the military of shooting and killing 200 miners there. This wouldn’t be the first time military involvement thwarted a mining project. In 2000, Oryx Diamonds Ltd. scrapped plans to trade in London after its adviser withdrew support under pressure from the U.K. government. Oryx had planned a diamond mine in Democratic Republic of Congo with investors that included another Zimbabwe military company at a time when Mugabe’s forces were fighting in Congo. Mugabe handed the Great Dyke concession to Russian investors in 2006 after the government repossessed land from a unit of South Africa’s Impala Platinum Holdings Ltd., or Implats. The first joint venture to try to tap the deposit was Ruschrome Mining, according to the Zimbabwean government. Vi Holding took over Ruschrome’s shareholding in 2014, the people said. An offer about eight years ago by a “large international mining house” to buy out Pen East from the project for $30 million was rejected, according to a proposal prepared by CDF Trust & Consulting BV, a Zimbabwean consultancy, that was seen by Bloomberg. CDF Trust Managing Director Caleb Dengu declined to comment. Agreements signed by Great Dyke, Afreximbank, Vi Holding, the Russian Export Center and African Finance Corp. to develop the mine were exchanged at a meeting between Russian President Vladimir Putin and Mnangagwa in Moscow in January. The project could produce more than 800,000 ounces of platinum-group metals a year, only one-fifth less than Zimbabwe’s total current output from mines owned by Implats and Anglo American Platinum Ltd. A freximbank is seeking funding at a time when supplies of the metal are balanced and a significant increase in production could depress prices. Afreximbank, which is based in Egypt, will allow potential backers of the mine at Darwendale, north of the capital, Harare, to use a $1.4 billion guarantee it provided to Zimbabwe, one of the people said. Afreximbank is partly owned by African governments. African Finance Corp., whose holders also include African governments, has agreed to invest $75 million, said Hesphina Rukato, Great Dyke’s chairwoman. Afreximbank will complete financing details for the project around June, she said. Afreximbank doesn’t comment on “ongoing transactions,” said Obi Emekekwue, the bank’s spokesman.
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President Kenyatta in Rwanda for a one-day state visit, where he will address the 2019 Transform Africa Summit in Kigali. #MetropolTVKE @MetropolTVKE Kenyan Economy |
As requested yesterday in the email, below are the details of the issue.
Issuer: The Republic of Kenya, acting through the National Treasury Exp. Issue Ratings: B+ by S&P (stable) / B+ by Fitch (stable) Form of Issuance: Rule 144A/Regulation S Status: Senior Unsecured Currency: US$ Coupon: Fixed, semi-annual, 30/360 Settlement: [22] May 2019 (T+5) Size: Benchmark | Benchmark Final Maturity: [22] May 2027 | [22] May 2032 WAL: 7yr | 12yr Redemption: 3 Instalments in | 3 Instalments in 2025 / 2026 / 2027 | 2030 / 2031 / 2032 IPTs: Mid 7%s | Mid 8%s Denominations: US$200k x US$1k Listing: Irish Stock Exchange, London Stock Exchange Law: English Law JLMs: J.P. Morgan (B&D), Standard Chartered Bank Timing: Books open, today’s business Target Market: MiFID II - eligible counterparties and professional clients
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Kenyan Economy |
Par Value: 2.50/- Closing Price: 54.75 Total Shares Issued: 188542286.00 Market Capitalization: 10,322,690,159 EPS: 5.9 PE: 9.280
Nation Media Group Limited FY through 31st December 2018 vs. 31st December 2017 FY Revenue 9.6606b vs. 10.6249b -9.076% FY Profit before tax 1.6340b vs. 1.9546b -16.402% FY Other comprehensive income/ [ loss] [60.8m] vs. 40.1m -251.621% FY Total comprehensive income for the year 1.0567b vs. 1.3509b -21.778% FY Equity 7.8776b vs. 8.1663b -3.535% Cash and cash equivalents at the end of period 867.1m vs. 1.6926b -48.771% EPS 5.9 vs. 6.9 -14.493% Total dividend per share 5.00 vs. 10.0 -50.000%
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Audiences have migrated to different platforms and they exhibit diverse consumption patterns Dr. Wilfred Kiboro, Chairman Board of Directors NMG on innovation within the media space. NMGFY2018 @NationMediaGrp Kenyan Economy |
Conclusions
Its a Top Quality Franchise but we have seen a more than 5 year decline in Turnover, EPS and the Dividend Pay Out is at a decade low. The Trend speaks to a perfect storm of the Switch to Digital [However, In Africa we have not seen the switch to paid digital subscription unlike the New York Times and the Washington Post and the FT, for example]. So there has been a big macro gale force wind and Print has been in the firing line and the Daily Nation was always the Cash Cow. The violence of Dr. Kiboros comments speaks to a deep level of unhappiness about the local conditions which have been adversarial for quite a time [counterintuitively that absolutely informs us that they have been meeting their watchdog role] The Share Price has retreated dramatically over time and at todays valuation the business is worth $115.18m which is clearly too low. The dividend is the equivalent of 8.09% which is in fact juicy. I would have thought this is a share worth looking at more closely particularly on any reverses. Of course, the question is about the PIVOT. It is after all a Schumpeter level moment in this industry. And can the pivot lead to a rebound across all the metrics. I would say Yes eventually.
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.@KCBGroup invests Sh905m in Tanzania, Rwanda units @BD_Africa Kenyan Economy |
KCB Group has invested an additional Sh905 million in its Tanzania and Rwanda units to shore up their capital and position them for more growth. The lender provided Sh519 million to its Tanzanian subsidiary in the year ended December, according to its latest annual report. This raised its cumulative investment in the unit, which runs 14 branches, to Sh3.5 billion. The Rwandan subsidiary, which also operates 14 branches, received a new capital investment of Sh386 million in what raised total investment in that unit to Sh2.2 billion. The additional investments left KCB’s ownership unchanged at 100 percent in each case.
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