Friday, 28 November 2008

Qatar Telecom increases offer for PT Indosat Tbk

Qatar Telecom lifted its offer price to raise its stake in PT Indosat Tbk. Qtel is in the process of holding a tender offer for Indosat shares up to its maximum allowed limit.

Indonesia limits foreign ownership in the telecommunication sector, to a maximum of 65 percent for mobile phone operators and 49 percent for fixed-line operators.

Government support for Oman stock market

Oman is planning to set up a $390m investment fund backed by the government and other investors to support the Muscat Stock Market, which has lost a third of its value this year.

Oando wins merit award (again)

Oando has won the Nigerian Stock Exchange Presidential Merit Award for the Best Quoted company in the Downstream Petroleum Marketing Sector. It also won the award in2001, 2003, 2004 and 2006.

Oando is clearly showing the way with its adherence to post-listing requirements and corporate governance.

Oando’s is Nigeria’s foremost integrated energy company. It is the nation’s leading oil retailer, with one in every five litres of petroleum products being sold or distributed by Oando via its 500 retail outlets.

MENA fertilizer production

Fertilizer production in MENA have increased at a CAGR of 3.5% in the last seven years, against the world CAGR of 2.8%. The region’s share in the world’s total capacities is now 12%.

The major reasons for the increase in capacity are needless to say the ample availability of gas in the region and abundance of raw materials such as Potash and Phosphate, supported by high demand for fertilizer from the South & East Asian regions.

Our prefered name in the region is the Arab Potash Company in Jordan.

Thursday, 27 November 2008

PA Resources finds oil in Tunisia

Swedish oil company PA Resources struck oil at its Didon North prospect offshore in Tunisia. Logging and pressure data prove the presence of an oil column of 14 metres.

The discovery confirms the exploration potential in the Zarat area, where oil discoveries have been made at the Zarat and Elyssa as well as at Didon.

PA Resources is operator and has 100 percent of the Zarat permit, but Tunisian state oil company ETAP can acquire up to a 55 percent working interest if a discovery is deemed commercial.

Royal Jordanian Airlines

Samer Majali, President/CEO of Royal Jordanian, gave an upbeat view of the airlineon the back of recent lower fuel prices. The airline is witnessing an increase in the number of passengers and that the company has registered growth in all operational indicators this year.

The load factor increased from 71 per cent to 73 per cent, the number of passengers increased by 18 per cent and the flight frequency by 14 per cent.

Wednesday, 26 November 2008

Bail out for Dubai?

Abu Dhabi may provide Dubai with a credit facility to repay short-term debt. Goldman Sachs, Morgan Stanley, UBSand Credit Suisse Group are helping advising on the restructure the $80 billion debt of Dubai and its state-owned companies.

Ecuador facing political instability

After seven years of economic stability, Ecuador is trying to consolidate all political power in the hands of the President. President Rafael Correa is bent to consolidate all political power within his hands. There are deep division between the country's sierra region and the coast. In addition, there is indigenous unrest. This does not look like good news for the economy.

Sanitas has free cash flow yield of 30.6%

We have just screened out universe for Free Cash flow yields. There are some suprising results. One of the highest FCF yields is Sanitas, a Lithuanian company.

Sanitas is a Generic Pharmaceuticalcompany. It has modern manufacturing facilities in Lithuania, Slovakia and Poland, producing a variety of medicines often though of as defensive.

Not much wrong with the company, other than being in a small illiquid market exposed to foreign currency risk. The compny even converted its outstanding loans from banks Bank Polska Kasa Opieki S.A. and Bank Zachodni WBK at favourable terms. Maybe there is real value out there?

Dubai property crash

It was only a matter of time. Prices in Dubai are heading south. In particular, property prices on the Palm Jumeirah, the 'eighth wonder of the world', have plummeted by as much as 40pc since September. A four-bedroom house on the Palm,(developed by the Nakheel Group), is now selling for 10 million UAE dirhams (£1.8m), down from 15 million dirhams in September.

Saturday, 22 November 2008

African Explosives secures largest contract

Zambia's African Explosives Ltd has signed its biggest ever explosives contract to supply the Lumwana copper mine.

AEL intends to invest more than $6-million to upgrade its production and deliver the required quantities of bulk emulsion. The company will build a bulk emulsion manufacturing plant in the mine's light industrial area. The plant, which was established for commissioning in September 2008, will have a capacity of 3 000t of bulk emulsion each month.

We understand that African Explosives does not make explosives for military use.

Kenyan core banking capital adequate

At yesterdays experts' seminar on the impact and opportunities of the global financial crisis on the Kenyan economy the Central Bank Governor, Prof Njuguna Ndung'u stated that "it is upto the banks to decide how much capital they require". The feeling was that, as Equity Bank, Kenya Commercial Bank, Diamond Trust and Fina Bank are all expanding branches, they must have adequate capital.

Overall, the seminar felt that the direct impact of the financial crisis on Kenya would be volatility in the exchange rate, lower exports (horticulture).

Thursday, 20 November 2008

Nigerian government support for financial market

The Nigerian government has injected nearly 1. 7 trillion Naira into iits financial system and had taken numerous regulatory and supervisory actionssince the sell off in its market began.

Wednesday, 19 November 2008

Zain recognised for its African roll out

Zain Group was awarded the Best Pan African Initiative Campaign of the Year Award for its African borderless mobile network which now links 16 countries.

The award reflect the renewed vigour from the rebranding from Celtel to Zain.

Monday, 17 November 2008

Iraqi stock markets are rising as security increases

As security increases in Iraq the local stock market is up - apparently as much as 40% in the month of September, when the global financial crisis were raging through the rest of the world.

It is now becoming more and more official that things in Iraq are really improving. There were already some clear indications in the summer, when many of the major US news stations cut down on their staff in Iraq. Sorry to be blunt, but most of their news coverage included people - especially Americans - getting blown up. Since that number is falling, the number of stories fell and the need for journalists fell. Now the Journalist have to write the positive stories to get attention. Like this wonderfull story from CBS news.

Friday, 14 November 2008

Nigeria's foreign reserves rise

Nigeria's foreign currency reserves rose this week to 59.7 billion dollars said the Central Bank of Nigeria. The rise breaks a trend over the last months still dropping crude oil prices in the international market. Oil prices have more than halved since hitting record levels of above 147 dollars in July on concerns about the faltering global economy. Since the beginning of 2006, militant attacks have cut Nigeria's oil output from 2,6 million barrels to around 1,9 million barrels.

Thursday, 13 November 2008

Major roadbuilding through Kazakhstan

The Asian Development Bank is extending 700 million U.S. dollars to Kazakhstan to help build a "new Silk Road" that will transform the country's economy.

The "Central Asian Regional Economic Cooperation Transport Corridor I" will run 2,715 kilometers, from the city of Khorgos on Kazakhstan's border with China to the western border with Russia

This new silk road will boost trade between Beijing and Brussels, and create extraordinary economic opportunities for the people of Kazakhstan and their neighbors. The improved road will increase travel speed, and reducing freight transport costs by 50 %.

The new road, spanning the world's largest landlocked country, is expected to be comparably transformative by 2020, the road is expected to increase domestic product in Kazakhstan, and to increase the GDP of neighboring Central Asian countries.

The overall investment for the road project is approximately 6.7 billion dollars. Other financiers behind the overall corridor development plan include the government of Kazakhstan, the private sector, the World Bank, and European Bank for Reconstruction and Development.

Safaricom sales +20% and EBITDA +15%

The company was hit by time costs below he line. We are encouraged that the numbers of subscribers to the company’s services reached 11,96 millions. This is the first release of numbers after the company was listed. Kenya is pushing mobile-phone companies to expand their service, to help boost Economic growth. The market for mobile-phone subscribers expects to double to about 25 million in the next few years.

The current price puts the stock on a PE multiple of 10.5x which is at a reasonable discount to the 12.8x average.

Wednesday, 12 November 2008

Naïade Resorts Ltd

Mauritius has specialised in up-market tourism, 67% of which come from Europe and the UK. The sector has sold off on the back of the credit crisis and economic implications. We believe that at current levels value is starting to emerge. Our favoured name is Naïade Resorts Ltd, the third largest market capitalisation.

Tuesday, 11 November 2008

Danfonds in Kenya

This week and next week we are visiting companies in Kenya. Internet access is very slow, hence we will not report as much as normal. We have found out from Safaricom that there will be a new underwater high speed connection to Kenya within a year, but that is a long time to wait. Word on the ground is that the Co-Operative Bank IPO is really struggling.

Thursday, 6 November 2008

Unique Trust oversubscribed 170%

The Initial Public Offer of Unique Trust, UT Financial Services, closed with a strong over-subscription. This is not surprising as it is an indigenous Ghanaian businesses champion. Still, its good going in the current current turbulent financial environment, reflecting the bouyant Ghana market in general.

We met with the charismatic Chief Executive Officer, Prince Kofi Amoabeng, a few months ago in Accra. He is focused and a great salesman. This will prove a very interesting company to follow.

Seychelles inflation hits 40%

Seychelles', already in selective default, expects to see annual inflation to rise to 40 percent this month from 30 percent in previously. The central bank is likely to increase interest rates .

Economic slowdown in the United States and Europe and the oil price spikehave hit travel to the islands.

Wednesday, 5 November 2008


The Euromoney Nigeria conference that we attended yesterday was fascinating in its upbeat nature despite the carnage in the stock market. Turns out the property market is still on rising sharply. Also, although there is some USD 20bn in margin loans, even if all that were written off, the banks would still be over capitalised. Infrastructure and private equity are clearly the place to be.

Ukraine bail out being impacted by politics

The politicians in Ukraine seam to be struggling to agree the IMF bail out. This begs the question, will Ukraine default? Ukrainian Government Eurobonds Prices Spread to UST10 USA, more than 3.000 b.p. Yield to maturity 34%.

Tuesday, 4 November 2008

Bank PHB Plc (Nigeria)

Bank PHB Plc announced its results for the 12-month period ended June 30, 2008 and we are pleased to note that its total assets exceeded N1 trillion, 172 per cent higher than last year.

Bank PHB’s total assets plus contingents hit an all time high of N1.15 trillion, 140 per cent more than N479 billion in June 2007.

The growth in assets is similar to that seen throughout the industry growth in the last three years due to the consolidation in the Nigerian banking industry. The bank was formed by themerger of Habib bank and Platinum bank.

Access bank's exposure to margin loans

Access Bank disclosed its exposure to the margin lending that has been plaugeing the Nigerian stock market.

As at 30th September 2008, total stock-collateralised margin loans from Access bank to investors and brokers stood at N55.695bn ($476.0m). That is 8.6% of total
assets and 18.4% of total loans. The bank claims the value of collateral against these loans exceeded exposure, giving them a coverage ratio of 125%.

Makes you wonder what the systemic Nigerian exposure is when Access bank claim they are conservative. No wonder the maket has been falling. Could easily be $10bn on margin loans!

Monday, 3 November 2008

Telekom Networks Malawi Ltd +75% on IPO

Telekom Networks Malawi Ltd (TNM) listed today closing at MKW 3.50 on an IPO Issue Price of MWK 2.00.

The premium is attributed to the failed bid by a consortium led by Telekom Malaysia to acquire a majority stake.

The company has raised over MK2.4bn of new share capital which will be applied directly into continued improvement and expansion of its telecommunications services. we note that the company is set for growth through continued improvement of service, growth in subscribers and expansion of its existing mobile network. Its core capacity shoudl increase from 1 million subscribers to 1.5 million subscribers by 31 December 2009.

The Co-operative Bank IPO struggling

The Co-operative Bank KES 35bn IPO was launched on Thursday 30 October but may be facing possible local under-subscription.

In any IPO, the capital markets regulations specify that at least 40% of the shares must be taken up by local investors which presents the company with a problem. In the event that all the 40% of the shares are not taken up, balance can be applied for by foreign investors after approval is granted by the Capital Markets Authority (CMA).

Zimbabwe gold mining sector on verge of collapse

Zimbabwe's gold mining industry, Africa's third biggest nine years ago, is fighting with the central bank to pay for the gold the government has bought. Gold mining companies are obliged by law to sell their gold to the central. The central bank owes more than 30 million dollars to the mines. Without the payments, one of the countries most reslient industries stands to go bankrupt.

Kenyan Shilling to weaken further?

The report on the post election violence earlier this year calls for prosecutions of ten lawmakers and cabinate level politicians. Although a good thing in the long run, such action will pur pressure on the Kenyan Shilling short term.