Kenya has declared a National Emergency because of the drought affecting the north and east of the country. 10 million people, some 30% of the population, are affected.
The crisis is affecting rural and non-industrialised parts of the country. The ports and tourist areas, as well as manufacturing centers, are so far unaffected. GDP is being downgraded, inflation is likely to to increase and the current account deficit will widen.
Tuesday, 13 January 2009
Monday, 12 January 2009
Lebanons network renewal attracts bidders
The Lebanese Telecom industry is set for a shake up with the expiry of MTC Touch and Alfa's license. Orascom Telecom Holding, France Telecom and Kuwait's Zain have all submitted offers their cellular networks.
Unusually, the Lebanese contracts are for one year and are subject to renewal only once. Lebanon currently has 1.3m mobile subscribers.
Unusually, the Lebanese contracts are for one year and are subject to renewal only once. Lebanon currently has 1.3m mobile subscribers.
Naira interbank market suspended
In a suprise move the interbank market in Nigeria was suspended. The market opened today with an exchange rate of NGN 146.50 to the US$ but within half an hour this had detrriorated to NGN 153 to the US$.
Sunday, 11 January 2009
More oil finds in Ghana
Our opinion that the oil potential in Ghana is far larger than officially disclosed was confirmed after Tullow Oil and Anadarko Petroleum made another discovery in their Jubilee field. The drilling showed the field extended far further to the southeast than previously thought.
Global Investment House defaults
Global Investment House, Kuwaits biggest institutional investor, defaulted on a $200m loan and had appointed HSBC to renegotiate its debts.Rumours were that the Kuwaiti government would bail them out but that appears not to have happened.
Fitch immediately cut its rating to C. and Standard & Poor's cut the group's rating to "speculative default", both a far cry from last weeks investment grade rating.
The biggest creditior is German investment bank WestLB
Fitch immediately cut its rating to C. and Standard & Poor's cut the group's rating to "speculative default", both a far cry from last weeks investment grade rating.
The biggest creditior is German investment bank WestLB
Thursday, 8 January 2009
Oil volatility
Oil price volatility is on the rise again. Turmoil in Gaza, combined with output cuts by OPEC and the Russia and Ukraine added dispute is also driving oil prices up. Economic data, at the same time, continues to deteriorate and drive prices down. This all adds to volatility. Today, oil fell 8% since to US$46.58/bbl.
Crude inventories are at an eight-month high. Looks like the upside is limited.
Crude inventories are at an eight-month high. Looks like the upside is limited.
HSBC begins coverage of African telecoms
HSBC has begun coverage of Kenyan telecoms, confirming our view that these markets will continue to attract attention despite the global slowdown. Safaricom Ltd., and Celtel Zambia Plc were rated “underweight”. AccessKenya Group Ltd., the only publicly traded Internet company in the Kenya, was rated “overweight”.
HSBC notes that handsets are becoming more affordable and that the roll out of fiber optic cables will drive internet broadband penetration.
HSBC notes that handsets are becoming more affordable and that the roll out of fiber optic cables will drive internet broadband penetration.
South Africa
Daniel Broby is currently visiting Silk Invests South African office. He reports that the South African market appears to be 'relatively' resilient in the face of the global slowdown. That said, the JSE fell yesterday and today following six days of gains and the mood is deteriorating. Industrials are statring to experience negative sentiment. Arcelormittal reoported a decline in factory output and this only reinforces the message that manufacturing data has been in decline for two months now.
The rand is likely to remain vulnerable to risk aversion.
The rand is likely to remain vulnerable to risk aversion.
Monday, 5 January 2009
Anglo American PLC
Anglo American PLC, which represents about 10% of the South African index, has been one of the worst performers among the world's major diversified mining companies.It has now addressed issues with its under-performing management team. Chief executive officer, Cynthia Carroll, is focusing on cost savings which should help. The stock, however, will require In the scenario both a weaker South African Rand, and a stronger price for platinum, rhodium, palladium and diamonds in order to regain its comparative position against other majors.
Friday, 2 January 2009
Uranium One joint venture
South Africa's Uranium One has entered into a Joint Venture with Mitsui & Co., Ltd. of Japan. Mitsui has acquired a 49% interest in the Honeymoon project which they will jointly devleop.
Uranium One is one of the world`s largest publicly traded uranium producers,
with assets located in Kazakhstan, the United States, South Africa and Australia.
Uranium One is one of the world`s largest publicly traded uranium producers,
with assets located in Kazakhstan, the United States, South Africa and Australia.
Saudi Hollandi Bank issues sukuk bond
Saudi Hollandi Bank has just issued an Islamic bond issue with a 10-year maturity. Pricing was 200 basis points above the Saudi Interbank Offered Rate 3.1925 percent for one-year maturities.
UAE Sunday trading
UAE stock markets will remain closed on Sunday as a mark of respect following the death of Sheikh Rashid bin Ahmed Al Mualla, former UAE Supreme Council member and ruler of Umm al-Quwain.
Egyptian rally attributed to foreign investors
The year end rally in Egypt was attrributed to Non-Arab foreign investors. Analysis shows that these investors accounted for more than 22 percent of the turnover in the market in the final days of 2008.
Kuwaiti banking sector robust
The Central Bank of Kuwait has announced that Kuwaiti bank assets are 40 billion dinars ($144 billion), their highest-ever average. Bank assets increased 12.6 percent n 2008. The figures included claims on the government which came to two billion dinars, as well as foreign assets (9.8 billion dinars), local interbank deposits (739 million dinars), and other assets.
The good news is only overshadowed by the fact that credit facilities are also on the rise.
The good news is only overshadowed by the fact that credit facilities are also on the rise.
New year message
After a dramatic year in 2008, we enter the New Year reaffirming our faith in the African and Middle Eastern story. At Silk Invest we have spent the year building our platform and planning the launch of our funds. The fact that financial markets faced unprecedented events and almost stopped functioning did not deter us. We believe 2009 will be another challenging on a macro and on corporate levels but we also believe that we are now well positioned to address these challenges. Our portfolio managers believe the key question for 2009 will be how to go re-engineer growth and improve fundamentals but they have strong conviction in the now attractive fundamental value that we find in our markets.
We shall be planning a number of marketing trips in early 2009 to highlight our view that Arab and African markets have very strong fundamentals and are well positioned to strongly outperform both developed as developing markets. In our opinion, the key catalysts for this are:
Growth - While predicting around 1% growth for the global economy, the World Bank still predicts growth of around 4% for both regions
Population - The population mix and its annual growth of 2-3% is sustaining the growth in demand in especially the consumer sector
Corporate earnings - Current market valuations price in a deterioration of earnings of close to 50% while most companies in the region are still expecting positive earnings growth
Trade - Although the global trade growth will be minimal in 2009 growth among developing growth is still strong
On the risks side, most investors mention the impact of lower potential commodity prices on these economies. While commodity prices may affect certain sectors or countries, we think that the overall impact is limited. First, most of these countries are in much shape due to the combination of low sovereign debt levels, strong financial reserves and the size of their wealth funds. Second, not all countries in this region are resources rich and in fact different of our key investment markets will benefit from lower commodity prices. Third, even in the commodity rich countries, lower prices will lower inflation pressure and will lower the costs of the petrochemical and logistics industries in these countries. Fourth, FDI may go down but remittances have historically been very resilient and have grown through different cycles.
Silk Invest is closing the year with an even bigger commitment to frontier markets. Over the last weeks we have strengthened our proposition by integration frontier markets hedge funds specialist Danfonds under our platform. Attached you can find a press release which we will send out to the media. Our new team of 15 specialists makes us the most credible proposition in the market and we hope it will allow us to strengthen our relationship in the coming year. We will contact you in the coming weeks to further introduce our team and in the mean time please also check our updated website www.silkinvest.com.
In conclusion our key hypothesis is that these frontier markets will show a strong corporate earnings quality and that investors will be less driven by panic but more by fundamentals.
We shall be planning a number of marketing trips in early 2009 to highlight our view that Arab and African markets have very strong fundamentals and are well positioned to strongly outperform both developed as developing markets. In our opinion, the key catalysts for this are:
Growth - While predicting around 1% growth for the global economy, the World Bank still predicts growth of around 4% for both regions
Population - The population mix and its annual growth of 2-3% is sustaining the growth in demand in especially the consumer sector
Corporate earnings - Current market valuations price in a deterioration of earnings of close to 50% while most companies in the region are still expecting positive earnings growth
Trade - Although the global trade growth will be minimal in 2009 growth among developing growth is still strong
On the risks side, most investors mention the impact of lower potential commodity prices on these economies. While commodity prices may affect certain sectors or countries, we think that the overall impact is limited. First, most of these countries are in much shape due to the combination of low sovereign debt levels, strong financial reserves and the size of their wealth funds. Second, not all countries in this region are resources rich and in fact different of our key investment markets will benefit from lower commodity prices. Third, even in the commodity rich countries, lower prices will lower inflation pressure and will lower the costs of the petrochemical and logistics industries in these countries. Fourth, FDI may go down but remittances have historically been very resilient and have grown through different cycles.
Silk Invest is closing the year with an even bigger commitment to frontier markets. Over the last weeks we have strengthened our proposition by integration frontier markets hedge funds specialist Danfonds under our platform. Attached you can find a press release which we will send out to the media. Our new team of 15 specialists makes us the most credible proposition in the market and we hope it will allow us to strengthen our relationship in the coming year. We will contact you in the coming weeks to further introduce our team and in the mean time please also check our updated website www.silkinvest.com.
In conclusion our key hypothesis is that these frontier markets will show a strong corporate earnings quality and that investors will be less driven by panic but more by fundamentals.
Wednesday, 31 December 2008
Silk Invest Ltd acquires a majority interest in Danfonds Frontier Funds SPC
Silk Invest Ltd, a specialist asset management firm regulated by the FSA, has acquired Danfonds Frontier Fund SPC, a Cayman based hedge fund, in an all equity deal.
Danfonds Frontier Fund SPC will be renamed Silk Invest Frontier Fund SPC and Danfonds Investment Management (Cayman) Limited will be renamed Silk Invest (Cayman) Limited.
Danfonds Frontier Fund SPC will be renamed Silk Invest Frontier Fund SPC and Danfonds Investment Management (Cayman) Limited will be renamed Silk Invest (Cayman) Limited.
Zambia to get S&P rating
Zambia will get its first credit rating from Standard & Poors in 2009. A sovereign rating is long overdue. Zambia could possibly get a B/B+ credit. It has had good economic growth, modest budget deficits and now has low debt. Its political history, with its Presidential elections and volatile exchange rate will probably work against it.
Asian Frontier Markets 2009 - Hong kong
Daniel Broby, Chief Investment Officer of Silk Invest, will speak at the Asian Frontier Markets 2009 - Hong kong.
5 March 2009 - Day 1
Macro view on Asian Financial Liberalization
Understanding Vietnam’s Market Fluctuation
Frontier Market in the context of Global Financial Crisis
Panoramic view on Cambodian Market
Investment Strategies in Frontier Market
Mitigating Idiosyncratic Risk in Frontier Market
Encouraging better investments in Bangladesh Market
6 March 2009 - Day 2
Positive positioning: Asian Frontier Markets in attracting Foreign Investors
Exploring the potential of Capital market on pre-emerging countries
Evolution Hedge Funds in Frontier Market
Kazakhstan: Leading Central Asia market
Most preferred Asset Class in Frontier Market by Mainstream Investors
Forecasting Asian Frontier Market
Lessons Learned: Investment Strategies in African Frontier Markets
5 March 2009 - Day 1
Macro view on Asian Financial Liberalization
Understanding Vietnam’s Market Fluctuation
Frontier Market in the context of Global Financial Crisis
Panoramic view on Cambodian Market
Investment Strategies in Frontier Market
Mitigating Idiosyncratic Risk in Frontier Market
Encouraging better investments in Bangladesh Market
6 March 2009 - Day 2
Positive positioning: Asian Frontier Markets in attracting Foreign Investors
Exploring the potential of Capital market on pre-emerging countries
Evolution Hedge Funds in Frontier Market
Kazakhstan: Leading Central Asia market
Most preferred Asset Class in Frontier Market by Mainstream Investors
Forecasting Asian Frontier Market
Lessons Learned: Investment Strategies in African Frontier Markets
Tuesday, 30 December 2008
Unity Bank
Unity Bank Plc and Shenzhen Energy are looking to Nigeria's power industry and discussing a potential JV. Shenzhen Energy Group has strong expertise in gas-turbine powered plants. Unity Bank has already assisted Shezhen Energy Group to secured a site in Geregu, near Ajaokuta in Kogi State, to build a power plant.
Sunday, 28 December 2008
Soveriegn wealth funds rumours
Shares in Qatar, Oman and Saudi Arabia all rose sharply on rumors local soveriegn wealth funds intend to buy shares in local companies. Oman Telecommunications and Saudi Basic Industries Corpóration were the biggest benefitiaries of the rumours.
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