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Prompt Board Next day settlement
Expert Board All you need re an Individual stock.

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Macro Thoughts

I put out a Buy Recommendation a few sessions ago,

08-JAN-2018 :: The Crypto Avocado Millenial Economy.

The ‘’Zeitgeist’’ of a time is its defining spirit or its mood.
Capturing the ‘’zeitgeist’’ of the Now is not an easy thing because we
are living in a dizzyingly fluid moment. Whether its President Trump’s
rat-a-tat Tweets or a mind boggling 625% share price advance because
an erstwhile Tea Company [The Long Island Iced Tea Corp was a
little-known company making non- alcoholic lemonades and ice teas]
renamed itself the Long Blockchain Corp. We are living in
extraordinarily fast moving times. Paul Virilio has said ‘Wealth is
the hidden side of speed and speed the hidden side of wealth’ and he
is not wrong.

Home Thoughts

Political Reflections

The scale of an Indian general election can be hard to grasp. With
close to 900m registered voters and 1m polling stations, it is as if
every country in the European Union, plus America, Canada and Mexico,
as well as Japan and South Korea, were all to vote together. Yet the
process generally runs smoothly. The voting this time started on April
11th and is divided into seven phases, to reduce the burden on
election personnel and police. The use of nearly 4m portable,
battery-operated voting machines will make it possible to tally all
the votes on a single day, May 23rd.

The counting may run with symphonic precision, but the rest of the
proceedings are pure cacophony. With 8,000 candidates from more than
2,000 parties vying for seats in the Lok Sabha, the lower house of
parliament, this is less a national election than 543 separate
battles. Rules on election spending are loose and often flouted.
Estimates of the cost of this year’s contest are as high as $10bn.
Since mid-March the Election Commission has seized some $500m of cash,
gold, drugs and alcohol it suspects were intended for bribing voters.

Given the advantages he enjoys, Mr Modi is widely tipped to win. The
prime minister himself is a talented and tireless campaigner,
delivering relentlessly on-message blasts of boosterism mixed with
searing swipes at his enemies. Another leg-up comes from having vastly
more money. Some of this is unaccountable, but one measure is the
value of donations via “electoral bonds”. Since this vehicle for
anonymous political gifts was created by the bjp in the name of
“transparency” last year, some 95% of all bonds have gone to the
ruling party.

Being in power also helps. As elections approached, Mr Modi’s
opponents have found themselves targeted by tax raids or police
probes.

Mr Modi has mercilessly milked nationalist sentiment, threatening to
rain missiles on the enemy in a “night of killing” and scorning his
opponents as wobbly-kneed defeatists. Although many Indians,
especially those far from the border with Pakistan, find local issues
more pressing, the unrelenting bombast has flummoxed Mr Modi’s
opponents. Instead of coalescing, they have drifted apart. If the bjp
and its closest allies fail to win a majority, he will almost
certainly be better placed than Mr Gandhi to court a clutch of
regional parties to form a coalition. “If this election were about the
fundamentals, Modi and the bjp would be in a pickle,” says Milan
Vaishnav of Carnegie, a think-tank. “But given Modi’s popularity, the
security dimension and the opposition’s foibles, my sense is the bjp
has found a way to make lemonade out of lemons.”

Conclusions

The Prime Minster is a racing certainty.

Wiig said an inscription on the harness they later recovered read
“Equipment St. Petersburg.” He said he had handed the harness over to
Norway’s special police security agency (PST).

The Chavez Revolution was always a rebellion in the Superpower’s back
yard and the machine was eventually going to bring it to heel by hook
or by crook.

''In this lovely season of early Summer when every living thing is
full of energy, I wish to welcome all of you, distinguished guests
representing over 100 countries, to attend this important forum on the
Belt and Road Initiative held in Beijing'' said H.E. Xi Jinping

International Markets

Euro 1.1157
Dollar Index 97.947
Japan Yen 111.48
Swiss Franc 1.0206
Pound 1.2997
Aussie 0.6997
India Rupee 69.3245
South Korea  1170.35   Won Korean Won drops to 2 year low 1171.75
Wonder if the smart people will remember Korea as leading indicator of
global growth. [@SunChartist]
Brazil Real 3.9676
Egypt Pound 17.1775
South Africa Rand 14.5468

The Most Valuable Company (for Now) Is Having a Nadellaissance
Under Satya Nadella, Microsoft has more subscribers than Netflix, more
cloud computing revenue than Google, and a near-trillion-dollar market
cap
Nadella appears irritated by questions about the company’s ascendancy.
“I would be disgusted if somebody ever celebrated our market cap,” he
tells Bloomberg Businessweek.
He insists the valuation—which passed $1 trillion on April 25 and is
up more than 230 percent since his watch began in February 2014—is
“not meaningful” and any rejoicing about such an arbitrary milestone
would mark “the beginning of the end.”
Microsoft marketers like to attribute its reemergence as a tech power
to a sort of cultural rehab, involving what Nadella calls corporate
“empathy” and a shift of his team from a “fixed mindset” to a “growth
mindset.”
The reality of the company’s turnaround was more painful, according to
interviews with more than four dozen current and former executives,
board members, customers, and competitors.
Under Nadella, it cut funding to Windows and built an enormous cloud
computing business—with about $34 billion in revenue over the past
year—putting it ahead of Google and making progress in key areas
against the dominant player, Amazon Web Services.
“I don’t know of any other software company in the history of
technology that fell onto hard times and has recovered so well,” says
Reed Hastings, CEO of Netflix Inc.
Microsoft’s Office collection of productivity software, formerly a
one-off purchase that included the famously inept virtual assistant,
Clippy, is now a cloud-based service boasting more than 214 million
subscribers who pay around $99 a year; it has more subscribers than
Spotify and Amazon Prime combined.
At the same time, Azure, Microsoft’s cloud platform, has won marquee
customers such as ExxonMobil, Starbucks, and Walmart.
There’s a bit of Silicon Valley cred, too, thanks to its acquisitions
of LinkedIn, the professional social network, and GitHub, the software
code repository.
Shelley Bransten, a Microsoft corporate vice president, suggests that
what makes Nadella unique is that he has “no swagger.”
Nadella’s game plan was to reorient Microsoft around Azure, a nascent
business he’d been working on since 2011, which would turn the company
from a provider of boxed software (which many users simply pirated) to
a global computing engine that would rent out its processing power and
online storage to businesses.
Of the 100 or so CEO candidates considered, Nadella most impressed
then-Chairman Gates and the board with his strategic and engineering
chops.
The cloud is conceptually thought of as a digital exchange of bits,
but it’s actually all about physical
infrastructure—airplane-hangar-size data centers and transoceanic
cables yo-yoing petabytes of information. Amazon, Microsoft, and the
other big cloud players enable other companies to outsource vast
computing requirements to these costly infrastructures, which means
Netflix can seamlessly stream movies to your phone or Citibank can
process billions of online transactions without having to do major
construction projects.
 Then, 13 minutes in, he piped up, pitching a cloud partnership. “We
don’t want you to think of this as just building an app on our
platform,” Nadella said. “We want to enable you to build your own
platform.”
Nadella didn’t acknowledge it, but everyone knew this was a dig at
Amazon. Jeff Bezos’ company has been ruthlessly expanding, posing a
potential threat to cloud customers, such as big-box retailers and
entertainment companies, even as it seeks to store their data in its
servers. “Microsoft does it in a tasteful manner, but they don’t leave
you mistaken in your impression that Bezos could be lurking in your
backyard and machine learning your data and targeting your customers,”
says a former e-commerce company vice president who struck a large
cloud partnership with Nadella. “In the Ballmer days, it was bluster.
But Satya has gotten really good at pointing out, ‘Do you want your
technology partner to be your competitor?’ ”

Commodities

Frontier Markets

Sub Saharan Africa

Yet the latest IMF figures confirm that since Bali, it has reduced
2019 growth predictions for over 20 economies in SSA and North Africa
including: Algeria, Angola, Cameroon, Ethiopia, Kenya, Nigeria, South
Africa, Tanzania, Tunisia, Zambia and Zimbabwe.
The World Bank slashed its projections of 2019 SSA growth from 3.3% in
October and 3.4% in January to 2.8% now and, unlike the IMF, now says
overall SSA growth decelerated between 2017 and 2018. The Bank, like
the IMF and most economists, believes that, overall, the SSA economy
will expand more quickly this year than last.
Like the IMF, the Bank has since October reduced its growth
projections for SSA's three largest economies, South Africa, Angola
and Nigeria. They remain a drag on the region's growth and are
predicted, as a group, to register negative per-capita growth this
year, in 2020, and in 2021.
The African Development Bank (AfDB), ahead of its June-scheduled
annual meeting in Malabo, Equatorial Guinea, maintains that East
Africa will, as in 2018, outpace, in declining order of growth, North
Africa, West Africa, Central Africa and Southern Africa this year and
next.
Yet the AfDB's prediction for Africa's fastest growing region, at less
than 6%, falls short of the IMF's predicted economic expansion in
Emerging and Developing Asia even if faster, on average, than the
group of 'ASEAN-5' economies (Indonesia, Malaysia, Philippines,
Thailand, Vietnam).
Convergence of average SSA living standards with more
economically-developed regions appears improbable for now.
Aside from potential debt struggles, Africa's economies remain
vulnerable, like the world economy, to a number of risks.
The IMF estimates, for example, that the combined impact of a
deterioration in financing conditions, commodity prices, increased US
trade policy-related uncertainty and trade tensions, and slower China
growth could conceivably reduce SSA growth by 2% this year – with
commodity exporters the most affected.
Other risks to African growth remain: banking sector fragility, the
economic impact of insecurity and conflicts, and adverse climate
conditions.
As climate change protests attract international attention, climate
shocks have already impacted Africa's economy this year, including
Cyclone Idai, which has already Zimbabwe's short-term economic
prospects, and caused a humanitarian crisis in Mozambique.
Despite reduction in African growth projections, and persistent
downside risks, other developments are seized upon by Africa
optimists. In particular, hopes have been raised of an economic boost
from the African Continental Free Trade Area, now ratified by over 20
African economies albeit not, for example, Angola and Nigeria.

The liquidity problems are getting worse and state asset sales are
looking more likely as a last resort to avoid debt default
The lavish spending and borrowing of President Edgar Lungu's
government is starting to catch up with it.
Africa Confidential has learned that in March, it had to raid the
state pension fund, the National Pension Scheme Authority (NAPSA), to
pay overdue February salaries for public service employees.

Some saw President Abdel Fattah el Sisi's 89% 'yes' vote in the
referendum on extending his presidential term to six years from four
and allowing him to stand for a further term in 2024 as evidence that
Egypt is unlikely to follow the insurgent path of Algeria and Sudan.
Others wonder if Sisi – who has been working hard to legitimise the
new military regime in Khartoum – forced through his referendum out of
fear for his future.

“Given that the president of the republic has made easing political
tensions his priority ..., we consider it inopportune to continue the
investigation,” Congo’s top military prosecutor, Timothee Mukuntu,
wrote in a formal decision abandoning the probe into Katumbi.
The document was dated March 1 but was only made public on Tuesday.

MTN Group Ltd. plans to sell at least half of its $655 million
interest in newly listed Jumia Technologies AG as Africa’s biggest
wireless carrier looks to pay down debt and enter new markets,
according to people familiar with the matter.
A selldown of the 19 percent stake in the online retailer could happen
before the end of the year, said the people, who asked to remain
anonymous as the deliberations are private.
Johannesburg-based MTN first needs to wait out a half-year investor
lock-in period that followed Jumia’s successful share sale in New
York, they said.
“We have a six-month lock-up period where we can’t sell our
shareholding,” an MTN spokesman said. “Post that period we will apply
our minds on what to do with the investment.”
MTN is the biggest investor in Jumia, the best performing IPO in New
York this year with its share price more than tripling since its April
12 debut.
Yet MTN has earmarked e-commerce assets as not central to the
company’s main business of phone and data services, and has announced
a 15 billion-rand ($1 billion) disposal plan.
Other investments that could be sold include interests in
flight-booking site Travelstart.co.za and telecommunication
masts-operator IHS Towers Ltd.
Net debt rose to 63.5 billion rand from 57 billion rand in 2018, and
proceeds will be used to pay that down, MTN said in March.
Often nicknamed Africa’s Amazon.com, Jumia operates in 14 African
countries including Nigeria and Ivory Coast where the U.S. giant lacks
distribution infrastructure and much presence.
The company is headquartered in Germany and run by its two French
founders, Sacha Poignonnec and Jeremy Hodara.
MTN’s shares have gained almost 7 percent since the Jumia IPO, valuing
the company at 194 billion rand. The stock hit eight-month highs
earlier in April.

Investors are looking through the accumulated losses, seeing eCommerce
penetration levels of 1% or less in Africa versus something like 24%
in China and betting that Jumia can parlay its first mover advantage
into a seriously meaningful head start.

Kenya

Par Value:                  0.05/-
Closing Price:           29.55
Total Shares Issued:          40065428000.00
Market Capitalization:        1,183,933,397,400
EPS:             1.58
PE:               18.7025

Safaricom FY 2019 Results for the year ended 31st March 2019 vs. 31st March 2018
FY Voice revenue 95.94b vs. 95.64b +0.3%
FY Mpesa Revenue 74.99b vs. 62.91b +19.2%
FY SMS Revenue 17.50b vs. 17.72b -1.3%
FY Mobile data revenue 38.69b vs. 36.36b +6.4%
FY Fixed service revenue 8.19b vs. 6.67b +22.7%
FY Other service revenue 5.00b vs. 5.24b -4.5%
FY Service revenue 240.30b vs. 224.54b +7.0%
FY Handset revenue and other revenue 9.58b vs. 8.98b +6.7%
FY Other income 0.46b vs. 0.51b -8.9%
FY Total revenue 250.96b vs. 234.22b +7.1%
FY Direct costs [71.82b] vs. [70.55b] +1.8%
FY Contribution margin 178.53b vs. 163.47b +9.2%
FY Operating costs [53.65b] vs. [50.61b] +5.8%
FY Forex loss on trading activities 0.06b vs. [0.03b] +300.0%
FY EBITDA 124.94b vs. 112.83b +10.7%
FY Depreciation and amortization [35.33b] vs. [33.56b] +5.3%
FY EBIT 89.61b vs. 79.27b +13.1%
FY Net financing, FX and fair value gains 2.24b vs. 0.63b +255.6%
FY Earnings before taxation 89.61b vs. 79.27b +13.1%
FY EBIT Margin 35.8% vs. 33.9% +1.9%
FY Net income 63.40b vs. 55.29b +14.7%
EPS 1.58 vs. 1.38 +14.7%
Shareholders’ Funds 143.24b vs. 123.91b +15.6%
Cash and cash equivalents 20.03b vs. 9.50b +110.842%
Total Net Cash 16.00b vs. 5.46b +193.040%
Free cash flow 63.11b vs. 55.39b +13.938%
Normal dividend per share 1.25 vs. 1.10 +13.636%
Special dividend per share 0.62
KEY HIGHLIGHTS
Full-Year Guidance Achieved
• Service revenue growth of 7% to KShs 240.30bn.
• Voice service (incoming and outgoing) revenue grew by 0.3% to KShs 95.94bn.
• M-PESA revenue grew by 19.2% to KShs 74.99bn.
• Mobile data revenue increased by 6.4% to KShs 38.69bn.
• Messaging revenue declined by 1.3% to KShs 17.50bn.
• Fixed service revenue increased by 22.7% to KShs 8.19bn.
• Total customer base increased by 7.7% to 31.8m.
• 30-day active M-PESA customers increased 10.2% to 22.6m.
• 30-day active mobile data customers increased 6.6% to 18.8m.
Strong financial performance
• 13.1% growth in EBIT (Earnings before Interest) to KShs 89.61bn with
an EBIT margin of 35.8%, up 1.9ppts YoY.
• Net Income increased by 14.7% to KShs 63.40bn.
• Free Cash Flow up 13.9% to KShs 63.11bn.
Bob Collymore, Safaricom PLC CEO commented:
In a year where macro issues weighed on customer choice, we continued
to generate positive momentum. We achieved this by focusing on the
customer, investing in the quality of our service, the performance of
our network and creating differentiated customer experiences. Our
actions were guided by our purpose of transforming lives.
Our top priority for FY19 was focusing on the customer and I am
pleased to advise that we have witnessed improved customer sentiment,
through measures such as NPS and brand consideration. This translated
into an accelerated growth in customers from 400k in the first half of
the year, to 1.9m in the second half of the year.
We increased the use of data analytics to provide predictive,
proactive and personalised offers to our customers, driving down
effective prices of our offering. This impact can be clearly seen
within mobile data and voice with the average rate per megabyte
reducing 42% YoY, and the average rate per minute reducing 10%.
We sustained our level of investment in FY19, with capital expenditure
totalling KShs 37.25bn for the year. This enabled us to expand our
network to ensure the widest reach to our customer base. We increased
our sites by 9% year on year, and our 3G and 4G coverage to 93% and
57% respectively, and we have plans to accelerate our 4G roll out this
coming year to cover every town in the country, thus cementing
ourselves as Kenya’s best 4G+ network.
We extended our fibre footprint to 6,700kms, up from 5,000kms last
year. We also invested in network quality including rolling out a
capacity upgrade on the M-PESA platform to support 1200 TPS
(transactions per second) up from 900 TPS and the deployment of a 400G
network link.
Innovation and partnerships continue to define our approach to revenue
diversification and growth. This year we made good progress by
securing key partnerships for our M-PESA business including AliExpress
to drive our payments business, Western Union to drive remittances and
“Fuliza”, our overdraft product, to drive lending.
We continue to accelerate our digital transformation and agile agenda.
Our continued focus on digital engagement with customers enabled us to
launch “Zuri”, an artificial intelligence (AI) Chatbot assistant, to
meet our customer requests through automated, digital support. Zuri
enables our mobile data users to perform a wide range of tasks saving
on costs and driving efficiencies.
Looking ahead, the business will sustain its momentum of investing in
the quality of our service and diversification of our revenue
portfolio to ensure sustained returns to shareholders. We are excited
about the future of M-PESA expansion, Home including surveillance and
content, E-commerce, Agri-business and Enterprise solutions including
IoT (Internet of Things).
We remain committed to our purpose of transforming lives. Our latest
True Value Report indicates that Safaricom’s value to the Kenyan
society increased by 12% to KShs 543 billion. This was 10 times more
than the financial profit the company made during the same period, and
we contributed a total of 6.5% to the country’s Gross Domestic
Product. We continue to leverage in the power of mobile technology to
deliver on shared value propositions that disrupt inefficiencies and
impact lives positively in health, agriculture and education sectors,
such as M-Tiba, DigiFarm, Shupavu and M-Salama.
Operating review
Service Revenue growth of 7% for the year was driven by strong M-PESA
performance, contributing roughly three quarters of the service
revenue growth. Mobile data and fixed data combined contributed
roughly one quarter of the growth.
Voice and messaging
Voice grew 0.3% and messaging declined 1.3%, driven by competitive
pressures and migration to newer technologies. Voice and messaging are
now 47.2% of service revenue.
M-PESA
M-PESA grew 19.2% for the year. The growth in M-PESA has been driven
by an increased number of users, higher velocity of funds within the
ecosystem, and adoption of new use cases. In the period, we added 2.1
million active M-PESA customers. MPESA now accounts for 31.2% of
service revenue, further accelerating displacement of traditional
voice and messaging services.
Mobile Data
Mobile data revenue increased by KShs 2.33bn on an absolute basis, and
continued to witness a slow-down in the growth rate from the first
half of the year, growing at 6.4% for the full year. The slow-down in
growth reflects both competitive conditions in the market and
increased taxation that was absorbed for in bundle customers. Mobile
data is now 16.1% of service revenue.
Fixed Data
The business continues to extend the reach of fibre broadband which is
now available to more than 100k homes connected. Safaricom has now
passed nearly 300k homes and has more than two thousand fibre ready
buildings. Fixed data now contributes 3.4% to total service revenue
and grew at 22.7% year on year in the period.
Capex
We sustained strong investments in FY19. Our capital additions of KShs
37.25bn, expressed as a percentage of our revenues remained in the
‘mid-teens’, driven by our focus on enhancing monetization and cost
savings opportunities upon deployment.
IFRS15
During the 2019 financial year, the Group adopted IFRS15 accounting
standard, which has been reported alongside our results in FY19 on an
IAS18 basis.
Dividend
The board remains committed to investing in the business and
continuing our strong record for paying progressive dividends each
year. The proposed dividend for FY19 is KShs 50.08bn, an increase of
13.6% year on year. Given the strong position of the balance sheet, we
are also happy to propose a special dividend for this year of KShs
24.84bn.
Summary and outlook
We are pleased with the strong results we have delivered for the year,
building on our long track record of consistent delivery, protecting
shareholder wealth and putting the customer first, and we foresee
continued growth in the future
Our financial outlook for 2020 reflects the adoption of the IFRS 15
and IFRS 16 accounting standards guidance for EBIT moving from KShs
89bn to KShs 93-97bn, with Capex remaining within the KShs 36-38bn
range.

Safaricom have tweaked the Mpesa ecosystem with good effect. They have
made the Mpesa garden richer [the average user is transacting 12 times
a month] and have increased retention and circulation in the
ecosystem. This is a very big deal.

Conclusions

The Dividend + Special Dividend will keep this share sweet.
MPESA is a Stand Out.
Continue to tilt data prices lower in order to juice consumption.

9 teams
100 days
23,000 kmsq covered
39,265 kms driven
1743 predator detections of which
618 lion
300 spotted hyaena
288 bb jackal
235 wild dog
92 bat-eared fox
50 genet
44 leopard
36 cheetah
33 serval
15 striped hyaena
8 caracal

#kenyacarnivoresurvey #tsavo