Trading volumes in Tanzania

Talk about uncorrelated. In fact, some countries are totally being overlooked in current market conditions. Tanzania is one of them. Today, the market recorded activity in only five names. TWIGA, TCC, and Swissport led the pathetic volume. DCB traded only 174,538 shares of which 75.37% where on the Foreign Board.

Standard & Poor’s assigns AA+ rating for SAR 1 billion 5 year-floating rate notes

Another good rating for a large liquid bond in the GCC. Standard & Poor’s has assigned an AA+ rating for a SAR 1 billion 5 year-floating rate note issued by BNP Paribas Riyadh branch. This rating is the first of its kind in Saudi Arabia.

The rating agency highlighted the Saudi operations of BNP Paribas s being strong and highly diversified with a sound financial position, characterized by contained risk, satisfactory profitability, adequate capitalization, and high financial flexibility.

EMPEA Webcast

EMPEA Webcast
Risk Management in Emerging Markets Private Equity
An EMPEA event with PricewaterhouseCoopers

Emerging market investing involves a unique set of risks outside of those typically encountered in developed markets. Investors and managers must therefore anticipate and mitigate risks endemic to emerging markets to diminish the likelihood of incurring undesirable outcomes and costs and increase the probability of seizing potential opportunities.

LINK

https://empea.webex.com/mw0304l/mywebex/default.do?siteurl=empea

A word on our currency hedging

Our currency hedging strategy in this market is focused on the premise that banking crises are almost always bad news for currencies. In addition, banking crises in emerging market countries tend to be associated with currency capitulation. So its long the 'boring frontier markets' and short the currencies bouyed by FDI with poor budgetary outlooks.

Recent stock market movements

Frontier markets did not enjoy the same bounce as the rest of the world on Friday. The MSCI Emerging Markets Index 5.6 percent rise was hard to match. That said, it is always instructive to look at which frontier markets stocks rose most in such fast markets.

Mumias Sugar surged around 8%, Kengen was +8.75%, Bank of Baroda up 8.28%, and KPLC closed up 10% and traded 50,700 shares worth 8.365m. Now we know where the hot international money is going...

Crisis - What crisis?

The Botswana stock exchange has proved to be totally uncorrelated with this weeks unfolding credit crisis in developed markets and associated volatility.

CNBC Interview: Are There Opportunities in the Frontier Markets?

As the world's developed markets tumble on the financial crisis in the US, how are the frontier markets, or the less-developed emerging markets, faring? Daniel Broby, CEO of Danfonds, sees opportunities in these markets in the long term.

http://www.cnbc.com/id/15840232?video=859620073

Nigeria acts to ease monetary conditions

In a bid to stop the selling in its markets, Nigeria has just cut rates by 50bp to 9.75% and injeted 150bn Naira into the banking system. At the same time it has halved bank reserve requirements to 2% and lowered liquidity ratios for banks to 30% from 40%!

Pakistan American relations

On Tuesday, the Pakistan's military ordered its forces along the Afghan border to repulse all future American military incursions into Pakistan. American forces have recently been violating Pakistani sovereignty. Clearly.. an unwelcome a potentially dangerous turn in events.

Latin American Frontier spreads.

Another interesting credit crisis metric. Sovereign spreads across Central America are remarkably tight. The spreads on Costa Rican and Guatemalan sovereign bonds are 286 bps. Panamanian sovereign risk trades 245 bps over Treasuries, and El Salvador is at 325. Hmm...

Frontier markets best performers in the last month

Movement for the Emancipation of the Niger Delta

Movement for the Emancipation of the Niger Delta have announced an escallation in hostilities. They say, "Following a previous warning that any attack on our positions will be tantamount to a declaration of an oil war, the Movement for the Emancipation of the Niger Delta has declared an oil war in response to the unprovoked aerial and marine attacks on a MEND position in Rivers State of Nigeria on September 13, 2008 by the armed forces of Nigeria."

Just how an oil war is going to be any different from the criminal attacks that have been a regular feature of this group remains to be seen.

Qatar's Doha Securities Market falls 13% in two days

Looks like the fast money is finally coming out of Qatar's Doha Securities Market. In fact, it looks like it has gone into freefall. On Sunday the DSM fell 6.2%, and today it dropped a further 7.1% to close at 8,216.

Middle Eastern equities continue to be hit by falling oil price

Middle Eastern equities fell further over the weekend and this Monday despite having strong Sovereign fundamentals. The falling oil price, (sharply down again today), the global economic slowdown, and the turmoil caused by the collapse of Lehman Brothers (not to mention losses at AIG and takover of Merrills) are all contributing to reducing the regions risk appetite.

Romanian Credit Default Swaps

One CDS we are watching closely. The outlook for the Romanian 5-Year credit default swap has deteriorated dramatically. The spread has widened from key support at 250bps on September 10, widened to 256bps today. Going forward, it could still widen, possible as high a 330bps.

Romania's Economy and Finance Minister, Varujan Vosganian, recently estimated economic growth rate at around 8.5 and 9.1 percent. Romania could end this year with an economic advance of 8 percent.

Sonatel sell off

Senegal based Sonatel has been collapsing since the sentencing on September 3 of former managing director of US-based ITXC on charges of bribery relating to seven western African telcos between 2001 and 2003. Of these, Sonatel is the listed company affected by the judgement's revelations of problems of governance and corruption.

The decline has dragged down the 38-company west African regional bourse, BRVM. This has sold off considerably in recent days, having broken through support.

BioEnergy Africa Limited

Mozambiques BioEnergy Africa Limited has just raised £8.6 million through a placing of 68,825,600 Shares at 12.5 pence per share. The Company has a market capitalisation of approximately £41.5 million.

The funds raised will be used to develop its first project, the 30,000ha Massingir Fuel Ethanol Project in Mozambique. Sugar cane is considered the most efficient, commercially viable ethanol feedstock and southern Africa has the potential to be one of the most cost effective regions for sugar cane production.

Saudi Basic Industries Corp (SABIC AB)

Take a look at this. Earnings going north and price going south. Leaves the frontier markets largest market capitalisation company on a PE 0f 9.57.

Kenya facing famine

As if the riots and rising prices were not enough to contend with, we understand that many parts of Eastern Province are facing severe famine. Prolonged drought has led to massive crop failure.

Worst-hit areas are in the northern frontier districts of Chalbi, Moyale, Marsabit, Laisamis, Garbatulla and Isiolo. There are also problems in the Ukambani districts of Kitui, Mwingi, Machakos and Makueni.

The Ghana Commercial Bank,

What do you do if your business is being held back by virtue of the government being the biggest shareholder and also biggest lender from your bank. The Ghana Commercial Bank's solution is to ask for more capital and for more business from the government. Unfortunately for the Ghana Commercial Bank, the Government is not too pleased with its branch expansion program ouside of the country. It is also, quite rightly, not keen to expand this cosy relationship.

We visited the Ghana Commercial Bank last month. To us, the solution is for the government to dispose of its stake and to put the government's refinery loan on a commercial footing.