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Thursday 12th of May 2016 |
Morning Africa |
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If you are tracking the NSE Do it via RICHLIVE and use Mozilla Firefox as your Browser. 0930-1500 KENYA TIME Normal Board - The Whole shebang Prompt Board Next day settlement Expert Board All you need re an Individual stock.
The Latest Daily PodCast can be found here on the Front Page of the site http://www.rich.co.ke |
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Sid Verma ‏@_SidVerma I have no idea what's happening in the so-called Islamic State, and I wish it had benchmark-size on-the-run bonds so I could track sentiment Africa |
Home Thoughts
Many Years ago, we saw an advertisement for a Golden Retriever in the window of a Coffee Shop in Ratna Square in Nyali Mombasa. We went to the House and there was one dog left and she kept following us about and We all said she wants to be part of our Family. And Sahara came to Nairobi and was with us ever since. Sahara is a beautiful incredibly sensitive dog. She gave birth to three sets of Pups and the last was just under a Year ago. And we kept 3 of the Pups, Bruno, Caesar and Dewy [because he always looks mopey and sad]. Occasionally, the dogs would all run out of the Gate disappear in the Coffee Fields and return an hour or so later. Two days ago, Nishet tells me Sahara and Bruno have disappeared, coincidentally a couple of days after our Gardener left. I said to Nishet he won their Trust and he has taken off with them. Its quite sad.
“We shall meet in the place where there is no darkness.” ― George Orwell, 1984
“Power is in tearing human minds to pieces and putting them together again in new shapes of your own choosing.” ― George Orwell, 1984
“The object of terrorism is terrorism. The object of oppression is oppression. The object of torture is torture. The object of murder is murder. The object of power is power. Now do you begin to understand me?” ― George Orwell, 1984
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The poet Warsan Shire writes primarily about the immigrant experience, but also tweets about reality television. Africa |
the “surrealism of everyday immigrant life—one day you are in your country, having fun, drinking mango juice, and the next day you are in the Underground in London and your children are speaking to you in a language you don’t understand.”
She opens the book, her first, with “I have my mother’s mouth and my father’s eyes / On my face they are still together.”
It’s East African storytelling and coming-of-age memoir fused into one. It’s a first-generation woman always looking backward and forward at the same time, acknowledging that to move through life without being haunted by the past lives of your forebears is impossible.
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Thank You Barack Obama for Showing Us That Peace is War Law & Politics |
By contrast, Obama is continually compared to Martin Luther King Jr. In much of the world, especially among Africans, he is admired to the point of being worshipped. He was awarded the Nobel peace prize in his first year in office despite the fact that he had enlarged the war in Iraq and extended it in Afghanistan. Now he has brought total war to Syria, where at least a quarter million people have perished. He has orchestrated the subversion of Venezuela, a country that freely gave aid to many of Latin America’s most impoverished people. He has encouraged neo-liberal politicians to overthrow Brazil’s president, supervised a right-wing coup in Honduras, supported a neo-Nazi regime in Ukraine, helped to overthrow the government of Libya and created a failed state there, paid Kenya and Ethiopia to attack Somalia, supplied bombs to Saudi Arabia to use on Yemenis, and built up offensive US weapons on Russia’s borders. In Asia, his “pivot” has reasserted Japan’s importance—a nation that has never apologized for its role in World War II (not least for its kidnapping of more than 100,000 women whom it turned into sex slaves for its military). He pressured South Korea to draw closer to Japan and threatens China with drive-by aircraft carriers and provocative fly-overs.
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Jason Sterns believes that the allegations against Katumbi are far fetched. "This could be a message to Katumbi that he should watch out," Stearns told DW. Africa |
But, Jason Stearns, knows Katumbi as a populist person. "He is somebody known to spread money around to seduce people. This has given him very broad popularity," Stearns told DW. However, the expert has expressed doubt over the popularity of Katumbi outside Katanga region, saying - the opposition politician has spent a large part of his life outside the Congo. "He is not well known in the west of the country. He has rarely made appearances in Kinshasa and he allegedly doesn't speak very good Lingala," Stearns said.
He has yet to announce clearly his plans, but contrary to the constitution which only allows a two-term limit, some of his party members have asked him to run again - a proposal that has solicited protests across DRC. Kabila is in a difficult position now, says Stearns. "He received a lot of fierce resistance from various sectors, so he retreated from that option. I think the default option for him is to pray for time,"
President Joseph Kabila has been in power for 15 years. He has shown no sign of preparing to leave office; despite him calling for a "national dialogue" to allow for a peaceful vote. Opponents viewed the demands as a trap, which could allow his supporters to put off polls for two to four years until they can organize "credible" elections.
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"The revolutionary contingent attains its ideal from not in the place of production, but in the street" Africa |
“The revolutionary contingent attains its ideal form not in the place of production, but in the street, where for a moment it stops being a cog in the technical machine and itself becomes a motor (machine of attack), in other words a producer of speed.’’
As we look around the world today, we can see a battle for the ‘street’ from the streets of Bujumbura to the streets of Baltimore. In November last year, I wrote about Ouagadougou’s signal to sub-Saharan Africa and concluded that: We need to ask ourselves how many people can incumbent shoot stone cold dead in such a situation – 100, 1000, 10000?
This is another point: there is a threshold beyond which the incumbent cannot go. Where that threshold lies will be discovered in the throes of the event.
Therefore, the preeminent point to note is that protests in Burkina Faso achieved escape velocity.
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Nigeria's reliance on Chinese cash to rescue its currency gets short shrift BDLIVE Africa |
STRATEGISTS are criticising Nigeria’s latest plan to rescue its currency — this time by relying on Chinese cash.
On a visit to Beijing last month, President Muhammadu Buhari signed a currency agreement aimed at encouraging trade with China and reducing Nigeria’s demand for dollars to relieve pressure on its dwindling foreign reserves.
While the deal, details of which are still being negotiated, helps China’s push into Africa’s largest economy, it will buy Nigeria a few months, at most, before it is forced to follow the lead of other oil exporters and devalue, according to Citigroup and Bank of America.
The naira-yuan swap agreement is "very unlikely" to relieve pressure on the naira or Nigeria’s reserves, says Andrew Howell, a New York-based frontier-markets strategist at Citigroup, the world’s biggest foreign-exchange trader. "The market wants to see a clear path towards achieving a sustainable exchange rate, where supply and demand for foreign exchange are balanced."
Nigeria has held the naira at 197-199 to the dollar since March last year, even as oil revenue and export earnings plummeted and other crude producers from Angola to Russia let their currencies weaken. Reserves have fallen 29% since mid-2014 to the lowest in more than 10 years as the central bank’s capital controls slowed foreign investment to a trickle.
While the level of devaluation implied by naira forward contracts has dropped as Mr Buhari resists calls to let the currency weaken, they still predict a 37% decline in the next year. With the economy set to expand this year at the slowest pace since 1999, according to the International Monetary Fund, Mr Buhari last week signed off on a record budget that leaves the government with a deficit of 2.2-trillion naira ($11bn).
The recent rebound in oil prices has not helped: Nigeria needs to produce 2.2-million barrels a day and sell them at $38 a barrel to meet its fiscal targets. Production slumped to 1.7-million barrels in April, the lowest since 1994, because of militant attacks on oil facilities in the Niger delta. The country relied on oil and gas for about 70% of government revenue and 90% of export earnings in 2014.
Details of the currency swap agreement, such as its size, maturity and exchange rate, have yet to be announced, making it hard for investors to have faith in the accord.
The People’s Bank of China did not respond to faxed questions and Isaac Okorafor, a spokesman for the Abuja-based Central Bank of Nigeria, declined to comment when contacted by phone.
Beijing has signed several bilateral currency swaps in the past eight years, including with South Korea, Malaysia and Argentina, in a push to let the yuan trade more freely.
SA, which took on a 30-billion yuan ($4.6bn) three-year swap in April 2015, is the only African country to have agreed such a deal with China. Nigeria and China are considering a swap of about 20-billion yuan, Lagos-based newspaper ThisDay reported last month, citing unidentified sources in the Nigerian president’s office.
Mr Buhari and central bank governor Godwin Emefiele claim that letting the naira drop would hurt Nigerians by raising prices in a country that imports the bulk of its finished goods. Most businesses are forced to use the black market exchange rate, which trades about 60% weaker than the official rate, at 320 to the dollar. That is boosting inflation, which accelerated to 12.8% in March, the highest in almost four years.
"Nigeria runs a persistent trade deficit with China," says Oyin Anubi, a London-based economist at Bank of America. "Unless China is willing to take more naira than it needs to buy Nigerian crude, which it doesn’t tend to do in big quantities, then Nigeria’s deficit in foreign exchange, whether yuan or dollars, is likely to continue."
Investors are shunning Nigerian stocks and bonds until there is a devaluation, says Mr Howell at Citi, who predicts the central bank will be forced to let the currency depreciate to 226 per dollar by the end of 2016. Investors who still hold Nigerian assets are reluctant to sell as they would struggle to the buy foreign-exchange needed to exit the country, he says.
Nigerian equities have dropped 10% this year, the most in Africa after Zambia’s. The Nigerian Stock Exchange all share index has lost more than 25% since Mr Buhari was sworn into office at the end of May last year.
Local-currency government bonds have lost 6% in dollar terms, the only debt not to have gained among 31 emerging markets monitored by Bloomberg, aside from Egypt and Mexico.
While Mr Buhari may use a swap with China to try and delay a devaluation, it will not give him much respite, JPMorgan Chase says. The deal may simply increase the nation’s trade deficit with China, which ran to $15bn in 2015.
"It’s unlikely to have any meaningful impact in the short term," says Yvette Babb, a sub-Saharan Africa strategist at the New York-based lender, which forecasts an exchange rate of 240-260 to the dollar by year-end. "A swap has limited ability to influence the structural mismatch between supply and demand."
Conclusions
China will need to pony up a lot more. Carlo who visited a few weeks ago [and was conducting corporate Governance seminars in Nairobi] saw Nigeria through a Geopolitical Lens and was convinced that China saw it as a strategic Necessity to pick up Nigeria and make the monies available. This seems to be @NGRPresident's calculation. I however believe its not going to be sufficient to bail out the Naira Policy and therefore risks of a disorderly disruption via the FX markets remain elevated.
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Nigeria Should Mull Devaluation in FX Policy Review, VP Says Africa |
Nigeria needs a “substantial review” of its foreign-exchange policies, including further consideration about devaluing the naira, Vice President Yemi Osinbajo said.
Africa’s largest economy is facing dollar shortages as oil revenue declines due to weaker prices and a drop in production to the lowest in more than 20 years.
“There has to be a substantial re-evaluation of the foreign-exchange policy, especially with the view to increasing FX supply and capital importation,” he said, adding that he’s “confident” that measures can be put in place to “attract FX.”
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Nigeria lifts pump prices by 67% amid fuel shortage @FT Africa |
Amid shortages of fuel and hard currency, Nigeria’s government has raised pump prices by 67 percent, saying in a statement that the step will improve supply and competition.
The business community in Nigeria, particularly the downstream oil sector, and foreign investors had been hopeful that President Muhammadu Buhari would lift subsidies immediately upon taking office nearly a year ago, writes Maggie Fick in Lagos.
Historically Africa’s top oil producer, Nigeria heavily subsidies gasoline that is mainly imported due to the decrepit state of its local refineries. The subsidy system is rife with fraud, according to multiple international audits and a government report that found $6bn in fraudulent claims were made in 2012.
The increasingly costly subsidy system is seen as increasingly unsustainable due to the collapse in the price of Nigeria’s main export, oil.
But the former military ruler has to date held off on removing subsidies, a decision that analysts have said suggests he is not heeding market realities. The same charge has been leveled against him when it comes to the value of the naira. Mr Buhari maintains that he is not convinced that devaluing the currency will benefit everyday citizens in the import-dependent country of 180m.
A statement signed by the minister of state for petroleum, Emmanuel Ibe Kachikwu, and seen by the Financial Times made a case for taking the tough decision to raise prices:
We share the pains of Nigerians but, as we have constantly said, the inherited difficulties of the past and the challenges of the current times imply that we must take difficult decisions on these sorts of critical national issues. Along with this decision, the federal government has in the 2016 budget made an unprecedented social protection provision to cushion the current challenges.
We believe in the long term, that improved supply and competition will drive down prices.
When former president Goodluck Jonathan tried to end subsidies four years ago, the price of a litre of petrol doubled overnight and caused a nationwide strike that forced Mr Jonathan to reverse course.
The step will likely be viewed positively by investors and by the oil industry
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.@Safaricomltd banks strong growth as mobiles become tool of life @FT @johnaglionby #safaricomfyresults Africa |
Mobile money and data services drove strong profit growth over the past year at Safaricom, Kenya’s dominant telecoms operator, as mobile phones increasingly become essential to people’s livelihoods.
Bob Collymore, chief executive, said falling device prices and cheaper services meant cell phones were now “a tool, not a luxury”.
The number of smartphones in Kenya rose 128 per cent in 2015 to 7.8m, Safaricom said. There are now 37.7m mobile subscribers in the country, a penetration rate of more than 83 per cent.
“The mobile phone is ubiquitous,” said Mr Collymore, as Safaricom, which is 40 per cent owned by the UK’s Vodafone, reported a 19 per cent increase in profit after tax to Ks38.1bn ($375m) for the year to March. People are “relying on it for their productivity”, he added.
Revenue from Safaricom’s Mpesa mobile money platform increased 27.2 per cent to Ks41.5bn while mobile data revenue rose 42.7 per cent to Ks21.2bn. The total value of Mpesa transactions rose 27 per cent to Ks5.27tn.
Aly-Khan Satchu, a Nairobi-based investment analyst, said the results showed “the democratisation of data in Kenya”. “It’s no longer the preserve of the elite.”
The success of Mpesa has been helped by Kenya’s large unbanked population. South Africa’s Vodacom announced on Monday that it would axe its Mpesa service on June 30 citing “high levels of financial inclusion in South Africa” for its poor take up.
Revenue from voice and SMS services were the poorest contributors to the increased profit, rising 3.9 per cent and 10.6 per cent respectively. But voice, at Ks90.8bn, remained the biggest contributor to total revenue of Ks195.7bn, an increase of 19.8 per cent.
Safaricom’s market share fell from 67 per cent to 64 per cent in the year to March but the company attributed this to an adjustment in the way it counted active customers, bringing its figures in line with rivals. Its customer base rose 7.75 per cent to 25.16m.
Mr Collymore advised that there was likely to be slower growth in 2016. Earnings before interest, tax, depreciation and amortisation are expected to rise by a maximum of 10.8 per cent, compared with 16.7 per cent growth in the year that has just ended.
“Growth has to plateau at some point,” said Mr Collymore. “You cannot see exponential growth indefinitely.”
However, Eric Musau, an analyst at Standard Investment Bank, said that Safaricom has often given a soft outlook at the start of its financial year and then revised up its forecasts.
Safaricom reorganised its operations over the past year, dividing the country into six regions, with area managers being given greater autonomy after its centralised strategy failed to win over customers in some places.
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@Safaricom reports FY16 Earnings here Kenyan Economy |
FY Service revenue 177.784089b vs. 156.246631b +13.784% FY Total revenue 195.685224b vs. 163.364121b +16.681% FY Voice Revenue 90.8b versus 87.37b +3.93% FY MPesa Revenue 41.5b versus 32.63b +27.18% FY SMS Revenue 41.50b versus 32.63b +10.59% FY Mobile Data Revenue 21.15b versus 14.82b +42.71% EPS 0.95 vs. 0.80 +18.750% Dividend per share 0.76 vs. 0.64 +18.750% FY 17 Guidance we expect EBITDA for FY17 to be in the range of 89b-92b.
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