tag:blogger.com,1999:blog-345739982024-03-07T02:06:46.929-05:00Investing in AfricaRyan Shen-Hooverhttp://www.blogger.com/profile/08135861280117351172noreply@blogger.comBlogger61125tag:blogger.com,1999:blog-34573998.post-18459381196489058932007-10-04T16:49:00.000-04:002007-10-04T17:10:31.864-04:00Botswana's Tourist Trade Roars<!--[if !supportEmptyParas]--><!--[endif]--><div style="text-align: left;">Wide-open skies, teeming wildlife, well-developed infrastructure, and a stable political scene combine to make Botswana one of Africa’s fastest growing tourist destinations. </div><p style="text-align: left;" class="MsoNormal"><!--[if !supportEmptyParas]--><!--[endif]--> How fast?</p><div style="text-align: left;"> </div><p style="text-align: left;" class="MsoNormal"><!--[if !supportEmptyParas]--><!--[endif]--> The World Travel & Tourism Commission <a href="http://www.wttc.travel/eng/News_and_Events/Press/Press_Releases_2007/WTTC_Highlights_Travel_and_Tourism_Potential_of_Botswana/index.php">estimates</a> that the US$486 million industry will grow by 7% in 2007 and 5% annually over the next ten years.<span style=""> </span>Over 23,000 Batswana work in tourist-related jobs. That’s over 4% of the country’s total employment.</p><div style="text-align: left;"> </div><p style="text-align: left;" class="MsoNormal"><!--[if !supportEmptyParas]--><!--[endif]--><a href="http://www.desertdelta.co.za/"> Chobe Holdings</a>, listed on the Botswana Stock Exchange, operates smack dab in the middle of this industry. The company operates luxury lodges and tours in Botswana, Namibia, and Zambia.</p><div style="text-align: left;"> </div><p style="text-align: left;" class="MsoNormal"><!--[if !supportEmptyParas]--><!--[endif]--> You can see the region’s tourist boom reflected in Chobe’s bottom line. Earnings increased an average of 96% annually from 2003-2006. Its stock price increased 346% in US$ terms over the past three years. The company now trades at a P/E ratio of 17.</p><div style="text-align: left;"> </div><p style="font-style: italic; text-align: left;" class="MsoNormal"><!--[if !supportEmptyParas]--><!--[endif]--> Disclosure: Ryan does not own shares of Chobe Holdings.</p><div style="text-align: left;"> </div><p style="font-style: italic; text-align: left;" class="MsoNormal"><!--[if !supportEmptyParas]--><!--[endif]--> To learn more about Africa’s stock markets, check out the <a href="http://www.investinginafrica.net/">Investing in Africa</a> newsletter.</p>Ryan Shen-Hooverhttp://www.blogger.com/profile/08135861280117351172noreply@blogger.com75tag:blogger.com,1999:blog-34573998.post-22731657043726121152007-06-27T20:40:00.000-04:002007-06-27T20:54:29.150-04:00Election No Poisoned Chalice for New Nigerian PrezSo far so good for Nigeria’s new president, Umaru Yar-Adua. The election that brought him to power can only charitably be <a href="http://news.bbc.co.uk/2/hi/africa/6582979.stm">described as a farce</a>. But his administration appears to have been on a roll since then.<br /><br />First, an increasingly cynical Nigerian public showed <a href="http://news.bbc.co.uk/2/hi/africa/6701559.stm">little appetite for organized protest</a> of the election results. Then he <a href="http://allafrica.com/stories/200706250908.html">stared down a union-organized general strike</a> against what most economists believe is a much-needed fuel price hike. Finally, his main opposition in parliament, the All Nigeria People’s Party, has <a href="http://news.bbc.co.uk/2/hi/africa/6246506.stm">decided to join his government</a>.<br /><br />Nigerian investors seem to like what they see. The Nigeria All Share Index is up 23% in US Dollar terms over the past three months.<br /><br /><a href="http://www.investinginafrica.net/">Investing in Africa</a>Ryan Shen-Hooverhttp://www.blogger.com/profile/08135861280117351172noreply@blogger.com14tag:blogger.com,1999:blog-34573998.post-28099299382939240202007-06-26T20:42:00.000-04:002007-06-26T21:09:42.602-04:00IPO Tracker: First Discount House, Dangote, and more<span style="font-style: italic;">Malawi</span><br /><a href="http://www.fdh.co.mw/site2/index.htm">First Discount House</a> looks to be <a href="http://allafrica.com/stories/200706251121.html">headed for a listing</a> on the Malawi Stock Exchange in August. The financial services firm will use the IPO proceeds to enter Malawi’s merchant banking market.<br /><br /><span style="font-style: italic;">Nigeria</span><br /><a href="http://www.investinginafrica.net/AnnualReportsService/Nigeria/DangoteSugarRefinery/tabid/445/Default.aspx">Dangote Sugar Refinery</a> won the IPO of the Year Award as presented by <a href="http://www.africa-investor.com/about.php">Africa Investor</a> magazine. The $450 million listing was 300% oversubscribed.<br /><br /><span style="font-style: italic;">South Africa</span><br /><a href="http://www.investinginafrica.net/AnnualReportsService/SouthAfrica/HI/Hulamin/tabid/622/Default.aspx">Hulamin</a>, an aluminum processor, debuted on the Johannesburg Stock Exchange (JSE) yesterday. Management <a href="http://www.busrep.co.za/index.php?fSectionId=&fArticleId=3866947">expects to double sales</a> over the next decade as they expand their 2% share of the global rolled aluminum market.<br /><br />Diamond miner, <a href="http://www.rockwelldiamonds.com/rcw/Home.asp">Rockwell Diamonds</a>, is <a href="http://www.miningweekly.co.za/article.php?a_id=109893">shooting for a joint listing</a> on both the Toronto and Johannesburg Stock Exchanges in September. The miner operates along South Africa’s middle Orange River and is noted for unearthing gem-quality stones.<br /><br />In a tricky little reverse listing, <a href="http://www.telepassport.co.za/">Telepassport</a>, a telecom cost-cutter, will <a href="http://allafrica.com/stories/200706200038.html">join the JSE</a> via Cenmag, an already listed holding company. Cenmag will sell all of its existing assets to make way for Telepassport’s operations. I was unable to locate a time-frame for this transaction.Ryan Shen-Hooverhttp://www.blogger.com/profile/08135861280117351172noreply@blogger.com7tag:blogger.com,1999:blog-34573998.post-68808417841229496602007-06-25T20:44:00.000-04:002007-06-25T21:10:47.593-04:00New Biz Takeover Law in Zimbabwe?<p class="MsoNormal">The government of Zimbabwe <a href="http://www.chron.com/disp/story.mpl/ap/fn/4918488.html">released plans</a> for the “indigenization” of the country’s publicly owned companies today. If the draft legislation becomes law (which it likely will), the government will disallow mergers and acquisitions that don’t result in majority-ownership by “indigenous” Zimbabweans. In Zimbabwe, the term “indigenous” refers to all races that were discriminated against prior to independence.</p> <p class="MsoNormal">It’s unclear how this will all play out on the Zimbabwe Stock Exchange. I have not checked, but I presume that few listed companies currently meet this criteria. The market was down only about 1% today.<br /></p><p class="MsoNormal">Perhaps investors took solace in the fact that the proposed law does not appear to demand immediate compliance. It may only pertain to major business deals going forward. A more likely explanation for the calm response is that Zimbabwean investors have nowhere else to go. The ZSE is the only investment vehicle that manages to keep up with the quadruple-digit inflation.<br /></p> <p class="MsoNormal">There’s no argument that black Zimbabweans endured severe discrimination before independence, and they continue to bear the legacy of this. But I see little good that can come of this legislation. What minuscule attractiveness Zimbabwe still held for international investors will surely dissipate.<br /></p> <p class="MsoNormal">Neighboring South Africa uses a system of incentives to entice public companies to increase black ownership. The program is not perfect, but it is surely less chilling than Zimbabwe’s Indigenization and Economic Empowerment Bill.</p><p class="MsoNormal"><a href="http://www.investinginafrica.net">Investing in Africa</a><br /></p>Ryan Shen-Hooverhttp://www.blogger.com/profile/08135861280117351172noreply@blogger.com3tag:blogger.com,1999:blog-34573998.post-24072029391794899322007-04-25T14:58:00.000-04:002007-04-25T15:06:34.603-04:00Pesa Tu on Access Kenya IPOMany of you are probably already aware of the ongoing Access Kenya IPO.<br /><br />Please check out Pesa Tu's very helpful prospectus summary and analysis <a href="http://pesatu.blogspot.com/2007/04/accesskenya-ipo-accesskenya-has-two.html">here</a>.<br /><br />For the complete prospectus, click <a href="http://www.accesskenya.com/IPO.php">here</a>.<br /><br /><a href="http://www.investinginafrica.net">www.investinginafrica.net</a>Ryan Shen-Hooverhttp://www.blogger.com/profile/08135861280117351172noreply@blogger.com19tag:blogger.com,1999:blog-34573998.post-89728991618326375542007-04-21T06:56:00.000-04:002007-04-25T15:07:39.465-04:00Reform and Prosper<p class="MsoNormal">File this one under: Confirmation of the Obvious. It turns out stock market reforms are indeed a pretty good thing for pretty much everyone concerned. </p> <p class="MsoNormal"><!--[if !supportEmptyParas]--> <o:p></o:p></p> <p class="MsoNormal">World Bank researchers recently released a study on the long-term impact of <a href="http://siteresources.worldbank.org/DEC/Resources/Schmukler_StockMarketDevptunderGlobalizationWhithertheGainsfromReforms.pdf">market reform measures</a> like insider trading laws, automated trading systems, and allowing foreign investment. They found that each reform correlated with increased levels of market capitalization, liquidity, and capital-raising.</p> <p class="MsoNormal"><!--[if !supportEmptyParas]--> <o:p></o:p></p> <p class="MsoNormal">The findings should be heartening to Nairobi Stock Exchange (NSE) investors. Why? Because the NSE recently launched an automated trading system, and privatization of Kenya’s state-owned companies continues apace. Moreover, Kenya’s Capital Markets Authority (CMA) has just <a href="http://bdafrica.com/index.php?option=com_content&task=view&id=636&Itemid=3054">proposed a raft of reforms</a> to the rules governing the NSE. These regulations include increased penalties for insider trading, disclosure requirements for brokers, and investors’ indemnity insurance.</p> <p class="MsoNormal">So, according to this research, the good times on the NSE could roll for quite a bit longer. <!--[endif]--><o:p></o:p></p> <p class="MsoNormal">But Kenyans may find another of the study’s conclusions rather more bittersweet. The more successfully a market reforms, the more attractive its participants become to the global market. <a href="http://bdafrica.com/index.php?option=com_content&task=view&id=547&Itemid=3054">Safaricom</a>, anyone?</p><a href="http://www.investinginafrica.net">www.investinginafrica.net</a>Ryan Shen-Hooverhttp://www.blogger.com/profile/08135861280117351172noreply@blogger.com3tag:blogger.com,1999:blog-34573998.post-35946028199758953592007-04-13T19:17:00.000-04:002007-04-13T19:37:09.973-04:00Africa's Crude AwakeningA few months ago, I posted a link to John Ghazvinian's article, <a href="http://http://www.vqronline.org/articles/2007/winter/ghazvinian-curse-of-oil/">The Curse of Oil</a>. His book on the subject, <span style="font-weight: bold;"><a href="http://http://www.amazon.com/Untapped-Scramble-Africas-John-Ghazvinian/dp/0151011389/">Untapped: The Scramble for Africa's Oil</a>,</span> has just been released. It looks like quite an informative read.<br /><br />Slate posts several excerpts from the book <a href="http://http://www.slate.com/id/2163389/entry/2163395/">here</a>.<br /><br />Via <a href="http://http//africaunchained.blogspot.com/2007/04/untapped-scramble-for-africas-oil.html">Africa Unchained</a>Ryan Shen-Hooverhttp://www.blogger.com/profile/08135861280117351172noreply@blogger.com2tag:blogger.com,1999:blog-34573998.post-31926585698499365472007-02-11T09:45:00.000-05:002007-02-11T09:58:20.962-05:00Kelly Group, South Ocean to List on JSE<p class="MsoNormal">South African investors look forward to two major new listings on the Johannesburg Stock Exchange in coming months. </p><p class="MsoNormal">The <span id="__firefox-findbar-search-id" style="PADDING-RIGHT: 0pt; DISPLAY: inline; PADDING-LEFT: 0pt; PADDING-BOTTOM: 0pt; COLOR: black; PADDING-TOP: 0ptcolor:yellow;" ></span><a href="http://www.kellygroup.co.za">Kelly Group</a>, South Africa’s leading provider of temporary staffing and business process outsourcing, plans to debut on the JSE in April. The company has benefited from South Africa’s strong economic growth along with increasing global demand for outsourcing services.</p><p class="MsoNormal">In recent years, Kelly’s been growing revenue at a 20% clip. Operating income was up 67.5% during the most recent fiscal year. No word yet on how large a chunk of the company will be offered to the public.</p><p class="MsoNormal">Next, the <a href="http://www.soew.co.za">South Ocean Electric Wire Company<span id="__firefox-findbar-search-id" style="PADDING-RIGHT: 0pt; DISPLAY: inline; PADDING-LEFT: 0pt; PADDING-BOTTOM: 0pt; COLOR: black; PADDING-TOP: 0ptcolor:yellow;" ></span></a> will begin a private placement of 45-49% of its share capital by the end of this month. The $100 million firm benefits from South Africa’s infrastructure boom. Its revenue tripled in the most recent fiscal year.</p><p class="MsoNormal">Upon conclusion of the listing, the company’s CEO will retain 23% of the shares, while the Taiwanese Hong-Tai Electric Industrial Company will hold 22%.</p><p class="MsoNormal">Thanks to <a href="http://www.investreview.wordpress.com">Sean's Investment Review</a> for the heads up on both of these new listings.</p><p class="MsoNormal"><a href="http://www.investinginafrica.net">www.investinginafrica.net</a></p>Ryan Shen-Hooverhttp://www.blogger.com/profile/08135861280117351172noreply@blogger.com3tag:blogger.com,1999:blog-34573998.post-61481029313562275092007-02-06T10:23:00.000-05:002007-02-06T10:31:08.655-05:00UK Guardian Reports on Kenyan Market BoomWord of the Nairobi Stock Exchange's performance has begun to reach international media outlets. Read the Guardian's article <a href="http://www.guardian.co.uk/kenya/story/0,,2006594,00.html?gusrc=rss&feed=12">here</a>.<br /><br />Do stories such as these portend the end of the Kenyan bull market?<br /><br /><a href="http://www.investinginafrica.net">www.investinginafrica.net</a>Ryan Shen-Hooverhttp://www.blogger.com/profile/08135861280117351172noreply@blogger.com6tag:blogger.com,1999:blog-34573998.post-76556964436567120502007-02-01T21:05:00.000-05:002007-02-01T21:16:16.923-05:00HFCK's MD Announces a Rights Issueby Coldtusker<br /><strong></strong><br /><strong>Brief History</strong><br />For most Kenyans, residential mortgages have always been synonymous with the Housing Finance Company of Kenya (HFCK). Other smaller firms included EABS & S&L (a KCB subsidiary). Recently, banks like Barclays & StanChart have entered the market.<br /><br />HFCK had an IPO in 1990, followed by Uchumi in 1991. Both firms were financially stable at the time. Then their paths diverged dramatically.<br /><br />HFCK suffered during & after the "Goldenberg Scam" years as interest rates shot through the roof. Goldenberg had accelerated monetary expansion thus leading to high inflation. Read Milton Friedman's theory on the link between Monetary Expansion & Inflation.<br /><br />The new CBK Governor, Cheserem, favoured using short-term but high-yielding T-Bills to mop up the excess liquidity to control runaway infaltion. The unfortunate side-effect was the shift of deposits at Financial Institutions to T-Bills.<br /><br />HFCK made long-term construction & real estate loans was faced with a asset & liability mismatch. They paid much higher interest rates for short-term deposits but were unable to pass on the entire "increase" to their customers.<br /><br />Ironically, Uchumi under the brilliant manager Suresh Shah, saw the opportunity & invested its surplus cash in T-Bills at rate exceeding 70%!<br /><br />The asset-liability mismatch & the related increase in interest rates led to extremely high default rates at HFCK. The increase in NPAs & Bad Debts depleted HFCK's Capital Reserves. At various times during this period, HFCK was in default of CBK's Capital adequacy ratios. Nevertheless, for political reasons, HFCK (just like NBK) was never put under statutory management by CBK.<br /><br />Since then, HFCK has used the courts, a long, expensive & laborious process, to bring some defaulters to the negotiating table. This resulted in a better quality Loan Book & Balance Sheet. Nevertheless, the path to "acceptable" profitability has been long & hard.<br /><br />There was speculation in 2005 that one of the larger banks e.g. BBK or SCBK will buy out HFCK but nothing came of it.<br /><br />2006 was a turning point for HFCK with the appointment of a new CEO & considerable interest from Trans-Century (a buy-out fund). Furthermore, it is no longer on CBK's watch list & HFCK profitability through 3Q 2006 is much higher in 2006 vs 2005.<br /><p>HFCK plans a Rights Issue in 2Q 2007 to:</p><ul><li>Strengthen its Share Capital</li><li>Expansion into core banking with a strong focus on mortgages</li><li>Meet Basel 2 requirements</li><li>Position itself for expected building boom in Kenya.</li><li>Counter competition from other banks e.g. Barclays, StanChart, KCB</li></ul><p><strong>Bottomline</strong></p><p>There are no firm details as to the amount to be raised but it will probably be at least KES 1 Billion. An interesting outcome will be the diminished influence of the government (assuming it relinquishes its Rights) while setting in motion the possibility of a takeover.<br /> </p>Ryan Shen-Hooverhttp://www.blogger.com/profile/08135861280117351172noreply@blogger.com8tag:blogger.com,1999:blog-34573998.post-28034690134723799802007-01-17T13:46:00.000-05:002007-01-17T15:30:18.933-05:00The 2007 Index of Economic Freedom<p>The Heritage Foundation’s <a href="http://www.heritage.org/research/features/index/index.cfm">2007 Index of Economic Freedom</a> has just been released. The report ranks nations according to their relative freedom across 10 different categories (e.g. property rights, taxation, corruption).<br /><br />How did Africa fare? Not so well, I’m afraid. Economic freedoms in Africa as measured by the Heritage Foundation actually declined a bit since last year. And Sub-Saharan Africa ranked last of all global regions in 7 of the Index’s 10 categories.<br /><br />Some individual African countries did move up in the rankings. Mauritius, Namibia, and Nigeria all significantly increased their scores. But all did this in part by curtailing workers’ rights. I’m not at all convinced that this represents true economic improvement. "Labor freedom," the euphemism that the Heritage Foundation uses for lax labor laws, was not included as a variable in previous reports.<br /><br />Any, for what it is worth, here are the top five most economically free nations according to the report:<br /><br /> 1) Mauritius<br /> 2) Botswana<br /> 3) South Africa<br /> 4) Namibia<br /> 5) Uganda<br /><br />And the five least free:<br /><br /> 36) Chad<br /> 37) Guinea-Bissau<br /> 38) Angola<br /> 39) Republic of Congo<br /> 40) Zimbabwe</p><p><a href="http://www.investinginafrica.net">www.investinginafrica.net</a></p><p> </p>Ryan Shen-Hooverhttp://www.blogger.com/profile/08135861280117351172noreply@blogger.com10tag:blogger.com,1999:blog-34573998.post-62074652120014217392007-01-16T19:35:00.000-05:002007-01-16T19:38:47.530-05:00IPO Watch: Stanbic Uganda Share AllocationIt’s official. The Stanbic Uganda IPO <a href="http://www.newvision.co.ug/D/8/220/543584">resulted in a 200% oversubscription</a>. Investors applied for more than $118 million worth of shares, but only $39 million was on offer.<br /><br />So it appears that there will be many disappointed punters. But by and large they won’t be Ugandan. All but 36 of the 15,488 individual Ugandan share applicants will receive all the shares that they applied for. Their stakes were capped at roughly $80,000.<br /><br />Foreign investors, on the other hand, will have their IPO stakes capped at 109,500 shares. This equates to $4,255 or Ksh307,850. The 21,000 foreign applicants were allocated 48% of the total shares offered.<br /><br />It could have been much worse for non-Ugandans. A $4,000 stake is actually heftier than I’d expected. Still, there will be some $60 million worth of foreign currency that will be looking for a new home.<br /><br />Refunds will begin to be sent out on January 19. Stanbic Uganda shares will begin trading on the Uganda Securities Exchange on January 25, 2006.<br /><br /><a href="http://www.investinginafrica.net">www.investinginafrica.net</a>Ryan Shen-Hooverhttp://www.blogger.com/profile/08135861280117351172noreply@blogger.com9tag:blogger.com,1999:blog-34573998.post-71219416404135245652007-01-15T14:18:00.000-05:002007-01-15T14:22:18.540-05:00Malawi Jumps on SME Exchange BandwagonNot to be outdone by neighboring Zambia, Malawi has decided to launch its own alternative stock exchange for small and businesses.<br /><br />Read all about it at Steve Brown's "<a href="http://africabusiness.wordpress.com/2007/01/15/malawi-stock-exchange-to-offer-alernative-exchange-for-smes/">A Look Into Business in Africa</a>."<br /><br /><a href="http://www.investinginafrica.net">www.investinginafrica.net</a>Ryan Shen-Hooverhttp://www.blogger.com/profile/08135861280117351172noreply@blogger.com1tag:blogger.com,1999:blog-34573998.post-1168545551704312992007-01-11T14:52:00.000-05:002007-01-11T14:59:11.920-05:00Commodities Exchange for EthiopiaTraders take note. Ethiopia <a href="http://nazret.com/blog/index.php?title=ethiopia_commodities_exchange_to_be_laun&more=1&c=1&tb=1&pb=1">aims to launch</a> a commodities exchange in September of this year.<br /><br />The Ethiopian Commodities Exchange (ECEX) will be fully automated and provide daily-indexed prices on the following goods:<br /><ul><li>Coffee</li><li>Sesame</li><li>Haricot beans</li><li>Teff</li><li>Wheat</li><li>Maize</li></ul><p>The market is an attempt to bring order and transparency to the agricultural sector, thus making it more efficient. Studies estimate that only a third of the grain produced by Ethiopian farmers makes it to market. I’m guessing that the farmers themselves consume much of the remainder, but apparently there is significant surplus that is not utilized.<br /><br />The ECEX will electronically connect 10 different warehouses throughout the country, establish 20 remote trading sites, and 200 electronic information boards in various rural areas. It is hoped that these initiatives will level the playing field between producer and purchaser. Smallholders will know what their produce is actually worth on the market, thus preventing them from being taken advantage of. It should also allow them to make more efficient cropping decisions.<br /><br />Dr. Eleni G. Medhin heads the project. She has <a href="http://www.ethiopianreporter.com/modules.php?name=News&file=article&sid=10465">contributed</a> a number of very thoughtful pieces on the nature of markets to the Ethiopian press recently.</p><p><a href="http://www.investinginafrica.net">www.investinginafrica.net</a></p>Ryan Shen-Hooverhttp://www.blogger.com/profile/08135861280117351172noreply@blogger.com8tag:blogger.com,1999:blog-34573998.post-1168463031765080302007-01-10T16:03:00.000-05:002007-01-10T17:05:00.460-05:00ColdTusker's Nairobi Stock Exchange ReviewThe NSE Index has risen over the 6000 mark but unless someone can tell me the guts of its composition and how it is calculated, I would not place much faith in it...<br /><br />IMHO, the Index should be weighted according to market cap and should reflect additional firms in the industrial sector since KenGen, Mumias (increased float) and Eveready have come on board in 2006.<br /><br />Financials also need greater representation as Equity is a new listing and Family Finance might join the board. Furthermore, KCB has a greater float in 2006 after the rights issue.<br /><br />The importance of the insurance sector should also be recognised with Jubilee or KenRe being included in 2007.<br /><br />Agriculture plays an important role in Kenya but the coffee sector has suffered and tourism is more important thus include TPSEA but decrease the percentage of agricultural firms. If Sarova lists in 2007 then TPSEA should be a component of this important sector.<br /><br /><strong>Views of Individual Firms</strong><br /><br /><em>KPLC</em> - It has shot out of the gate in 2007 in heavy anticipation of a bonus. The good rains will help increase the product for sale while decreasing dependence on expensive thermal power. The pricing battle between KPLC & KenGen continues. The solution is simple (but not populist)... let KPLC charge more for the product (i.e. pass on the extra costs from KenGen to the ultimate consumers!).<br /><br /><em>CMC</em> - Another bloomer while investors wait for a bonus. The need to replace 14-seater matatus with new 25-seaters will benefit CMC. A robust economy especially in agriculture will enable tractor sales to increase further.<br /><br /><em>BOC</em> – It’s rather idiotic to have BOC on ice/suspended from trading for over 6 months! It has performed rather well in spite of the drought in early 2005 & the price for BOC is expected to rise when trading resumes.<br /><br /><em>Carbacid</em> – It’s also rather idiotic to have Carbacid on ice/suspended from trading for over 6 months! It has performed rather well but until the CMA and/or the tribunal decides on its fate regarding its acquisition by BOC, the shareholders are stuck if they want to sell. The good news is that since it is well managed the firm's shareholders do benefit from larger profits & dividends while trading is suspended.<br /><br /><em>Banks</em> - How will the new banking law affect them? I think the Donde law is populist & like most populist ideas... stupid... I will post on it some time. The assets in the sector have risen strongly but there is a risk of over-expansion of credit. The court system can't cope with the caseload in an effective and efficient manner.<br /><br /><p><em>KQ</em> - The price has lagged & stuck at sub-120/- but if you believe in its long-term expansion - despite the competition - then the stock seems fairly valued.<br /><br />Cons:<br />Hedged fuel prices if hedged at $70+ levels<br />Competition<br />Local routes e.g. fly 540 & East African Safari<br />Regional routes e.g. VIA Uganda & Ethiopian<br />International e.g. Virgin (UK) & Jet (India)</p>Pros:<br />Lower fuel prices (25% is not hedged) & oil was at $56 on 10 Jan 2007<br />New planes - greater capacity & more fuel efficient<br />Increased destinations/frequencies in 2007 including Paris & Delhi<br />Code share with Air Mauritius for Australian bound students & tourists<br />Precision (49% owned) is growing fast<br /><br />The PE & PEG for many firms on the NSE are getting out of whack (IMHO) but there are a few stocks that seem price laggards even with decent performance e.g. KQ.<br /><br />The government will have a "liberal" monetary policy in 2007 since the elections are coming up but the effects will be felt in 2008. This could include higher interest rates and a weaker shilling. Thus, banks could benefit.Ryan Shen-Hooverhttp://www.blogger.com/profile/08135861280117351172noreply@blogger.com7tag:blogger.com,1999:blog-34573998.post-1168378717100636282007-01-09T16:35:00.000-05:002007-01-09T16:38:37.166-05:00IPO Watch: More for the NSE?The <a href="http://mjengakenya.blogspot.com/2007/01/2007-upcoming-great-investment.html">Kenya Capital Investment Group posted</a> a nice list of 2007's potential new listings on the Nairobi Stock Exchange. Check it out IPO fans!<br /><br /><a href="http://www.investinginafrica.net">www.investinginafrica.net</a>Ryan Shen-Hooverhttp://www.blogger.com/profile/08135861280117351172noreply@blogger.com7tag:blogger.com,1999:blog-34573998.post-1168377534408374392007-01-09T16:15:00.000-05:002007-01-09T16:18:54.636-05:00IPO Watch: Kenyan Investors Stalk Safaricom SharesBrace yourselves for another Kengen-style IPO frenzy. Kenya’s most profitable company, Safaricom, is <a href="http://www.timesnews.co.ke/02jan07/business/buns2.html">headed for a listing</a> on the Nairobi Stock Exchange this year.<br /><br />Safaricom is the larger of Kenya’s two cellular providers, boasting 5.3 million subscribers. It is a joint venture of government-owned Telkom Kenya (60%) and Vodafone.<br /><br />As I write, the Kenyan government is in the midst of negotiations with Vodafone, that, if successful, could fast-track the IPO. At issue appear to be the size of the stake offered to the public and Vodafone’s “pre-emptive” rights over the sale of shares.<br /><br />In any event, the company’s future looks bright. It will soon launch a new service called M-Pesa. M-Pesa will allow people to send and receive funds via their mobile phones. Initially, the service will only be available in Kenya, but Vodafone promises that it will eventually go global.<br /><br />This could be truly revolutionary for the African diaspora. People could send money home to family or friends with just a few clicks of their mobile phone.<br /><br /><a href="http://www.investinginafrica.net">www.investinginafrica.net</a>Ryan Shen-Hooverhttp://www.blogger.com/profile/08135861280117351172noreply@blogger.com4tag:blogger.com,1999:blog-34573998.post-1168300301532489482007-01-08T18:46:00.000-05:002007-01-08T18:51:43.413-05:00Nigeria: The Curse of OilWhile not directly related to equity investing, I found this article too provocative not to share. Worth reading as we approach presidential elections in Nigeria.<br /><br /><a href="http://www.vqronline.org/articles/2007/winter/ghazvinian-curse-of-oil/">The Curse of Oil</a><br /><br /><br /><a href="http://www.investinginafrica.net">www.investinginafrica.net</a>Ryan Shen-Hooverhttp://www.blogger.com/profile/08135861280117351172noreply@blogger.com3tag:blogger.com,1999:blog-34573998.post-1167955265842998522007-01-04T18:55:00.000-05:002007-01-04T19:01:06.066-05:00IPO Watch: ZANACO to List 25% Stake on LuSEThe first part of Zambia’s National Commercial Bank (<a href="http://www.zanaco.co.zm/reloaded/default.htm">ZANACO</a>) privatization is <a href="http://today.reuters.co.uk/news/articlenews.aspx?type=bankingFinancial&storyid=2007-01-01T230120Z_01_L29815120_RTRIDST_0_SP_PAGE_012-L29815120-OISBN.XML&WTmodLoc=Oddly+Enough-R6-MostRead-3">now complete</a>. The Netherlands’ Rabobank will acquire a 49% shareholding in the company for an undisclosed sum.<br /><br />(Rabobank is increasing its exposure in southern Africa. It already has a stake in a Tanzanian bank and will shortly be investing in Mozambique.)<br /><br />When the transaction is finalized, a 25.8% stake of ZANACO will offered on the Lusaka Stock Exchange (LuSE). The Zambian government will maintain a 25% holding.<br /><br />Founded in 1969, ZANACO is Zambia’s largest consumer bank with 50 branches countrywide and net assets of $384 million. Rabobank would like to see the bank increase expansion into the country’s rural areas.<br /><br /><a href="http://www.investinginafrica.net">www.investinginafrica.net</a>Ryan Shen-Hooverhttp://www.blogger.com/profile/08135861280117351172noreply@blogger.com14tag:blogger.com,1999:blog-34573998.post-1167945243957695042007-01-04T16:11:00.000-05:002007-01-04T16:14:08.126-05:00LuSE to Welcome Small CompaniesThe Lusaka Stock Exchange (LuSE) has just received permission from Zambia’s SEC to establish an exchange for small and medium-sized companies. The new exchange will provide a welcome alternative to high-interest bank loans for small, growing companies.<br /><br />South Africa (Alt-X), Kenya (Alternative Investment Market Segment), and Mauritius (Development & Enterprise Market) already have exchanges set up for the similar purpose.<br /><br />No word yet on when it will launch or on what companies plan to list.<br /><br /><a href="http://www.investinginafrica.net">www.investinginafrica.net</a>Ryan Shen-Hooverhttp://www.blogger.com/profile/08135861280117351172noreply@blogger.com15tag:blogger.com,1999:blog-34573998.post-1167867981560924752007-01-03T18:43:00.000-05:002007-01-03T18:46:24.766-05:00New Ugandan Finance NewsletterDo you have an interest in Ugandan finance matters?<br /><br />James Abola’s Akamai News is a new monthly that covers topics ranging from the impact of war to the Uganda Securities Exchange. Take a look at the most recent edition <a href="http://www.investinginafrica.net/AkamaiUganda/tabid/513/Default.aspx">here</a>.<br /><br />James currently offers this fine resource free of charge. To subscribe, simply send an email to <a href="mailto:akamai.uganda@gmail.com">akamai.uganda@gmail.com</a>.<br /><br /><a href="http://www.investinginafrica.net">www.investinginafrica.net</a>Ryan Shen-Hooverhttp://www.blogger.com/profile/08135861280117351172noreply@blogger.com3tag:blogger.com,1999:blog-34573998.post-1167777609220596672007-01-02T17:35:00.000-05:002007-01-02T17:40:09.516-05:00IPO Fever Grips USE (but not local Ugandans?)The Stanbic Bank (Uganda) listing appears to have been 3x <a href="http://www.nationmedia.com/eastafrican/current/News/Regional010120073.htm">oversubscribed</a>. So, many investors will likely receive fewer shares than they applied for, but the final allocation will not be released for at least two more weeks.<br /><br />The billion-share listing represents a 20% stake in the bank, a subsidiary of South Africa's Standard Bank Group.<br /><br />According to local brokers, most of the demand for shares came from overseas Ugandans, Kenyans and investors as far afield as the US and UK.<br /><br />The Uganda Securities Exchange is one of Africa’s more sleepy ones. I’m hoping this IPO stimulates more interest in the market among local Ugandans.<br /><br /><a href="http://www.investinginafrica.net">www.investinginafrica.net</a>Ryan Shen-Hooverhttp://www.blogger.com/profile/08135861280117351172noreply@blogger.com7tag:blogger.com,1999:blog-34573998.post-1166816651154434512006-12-22T14:42:00.000-05:002006-12-22T14:44:11.386-05:00Tanzanian Exchange Goes AutomaticThe Dar es Salaam Stock Exchange (DSE) automated today, putting an end to the “open-outcry” system, and hopefully allowing for an increased volume of shares traded.<br /><br />“We no longer need the (trading) bells, but we will miss their sound and the shouting,” the DSE’s CEO was quoted as saying.<br /><br />The Automated Trading System (ATS) was installed by the same Sri Lankan firm that automated the Nairobi Stock Exchange earlier this year.<br /><br />I’d be interested in hearing comments from Kenyan investors as to how they think the ATS has changed the NSE for better or worse.<br /><br /><a href="http://www.investinginafrica.net">www.investinginafrica.net</a>Ryan Shen-Hooverhttp://www.blogger.com/profile/08135861280117351172noreply@blogger.com4tag:blogger.com,1999:blog-34573998.post-1166731616679187852006-12-21T15:04:00.000-05:002006-12-21T15:06:56.760-05:00Private Equity Firms Hungry for South African FirmsPrivate equity firms have been snapping up some of South Africa’s most well-known companies recently. Financial giant, Alexander Forbes, looks to be bought by the Actis Consortium at a 16% premium to current market value. Grocery chain, Shoprite Holdings, will likely go private at a slight discount to its current price. And fashion retailer, Edcon, is rumored to be sold to private equity investors in a $3 billion deal.<br /><br />So, the Johannesburg Stock Exchange may see some of its blue chips disappear next year, and South Africans are debating the pros and cons of the trend. Business Day ran a nice <a href="http://allafrica.com/stories/200612070686.html">article</a> on the implications of the private equity surge.<br /><br /><a href="http://www.investinginafrica.net">www.investinginafrica.net</a>Ryan Shen-Hooverhttp://www.blogger.com/profile/08135861280117351172noreply@blogger.com5tag:blogger.com,1999:blog-34573998.post-1166659951804988712006-12-20T19:12:00.000-05:002006-12-20T19:12:32.356-05:00Nigeria: Cadbury Nigeria's Cooked Booksby Ryan Shen-Hoover<br /><br />Candy and drink-manufacturer, Cadbury Schweppes, found out that life really is like a box of chocolates last month. It didn't know what it was getting when it upped its shareholding in Cadbury Nigeria earlier this year, and it turned out to be a lot worse than a coconut creme. It discovered “significant and deliberate” earnings overstatements at Cadbury Nigeria going back to 1997.<br /><br />It only came to light when Schweppes retained PricewaterhouseCoopers to review the accounts. Cadbury Nigeria’s previous auditors were Akintola Williams Deloitte (AWD), who incidentally also failed to discover financial improprieties at Nigeria’s Afribank.<br /><br />Cadbury Nigeria will likely record a loss of $15 million on the year, and CEO Bunmi Oni and his finance director were quickly sacked for their roles in the scandal. (Ironically, Oni’s peers had recently selected him as one of Nigeria’s most respected CEOs.)<br /><br />Needless to say, Cadbury Nigeria shares have been hit hard on the Nigerian Stock Exchange. They immediately dropped 5% of their value (the maximum allowed in one trading day). As of this writing they are down over 26% since the scandal broke.<br /><br />The fact that such shenanigans could carry on undiscovered for such a long period is disturbing. Sadly, it will reinforce perceptions of Nigeria as hopelessly corrupt. But with US$ returns of 36% over the past year, foreign investors will find the potential rewards of investing on the NSE hard to resist.<br /><br />I personally, however, would be wary of firms audited by Akintola Williams Deloitte.<br /><br /><a href="http://www.investinginafrica.net">www.investinginafrica.net</a>Ryan Shen-Hooverhttp://www.blogger.com/profile/08135861280117351172noreply@blogger.com7