REPORT OF WEDNESDAY 23/10/13
by Dario Galluccio
This Blog is sponsored by http://www.reflexecogroup.com
Africa: Ecobank is world best frontier market bank
Global Finance, the renowned magazine that focuses on emerging market insights and intelligence, has named Ecobank Group as its first-ever ‘World’s Best Frontier Markets Bank’ in 2013. Additionally, the Group won the magazine’s ‘Best Bank in Africa’ award for the second year running.
These distinctions were based on Ecobank’s performance over the past year, as well as other subjective criteria, including reputation and management excellence. Global Finance made their selections after extensive consultations with bankers, corporate finance executives and analysts worldwide.
‘In light of the uncertainty facing developed markets, and with emerging markets struggling to maintain their growth rates, the corporate world is beginning to take notice of frontier markets as a new area of opportunity,’ said Global Finance’s publisher, Joseph D. Giarraputo.
‘These markets are in a position comparable to where emerging markets were 20 years ago and they are poised for serious growth. Ecobank has demonstrated vision and confidence in Africa’s long-term growth potential, bringing mobile banking services to previously unbanked frontier markets.’
Nigeria: NSE targets 500 firms in five years
The Nigerian Stock Exchange targets 500 companies for initial public offerings over the next five years as Africa’s second-largest bourse seeks to attain $1tn market capitalisation by 2016. Bloomberg quoted the Director-General, Securities and Exchange Commission, Ms. Arunma Oteh, as saying the NSE expects five companies to start trading their shares by the end of the year; she did not, however, identify the businesses.
The bourse needs oil and gas, power and telecommunications companies to list stock to meet its market-value objective, she said.
The NSE’s All Share Index gained 33 per cent this year, compared with a 1.3 per cent decline in the MSCI Emerging Markets Index, for a market capitalisation of $74bn, excluding exchange-traded funds and depositary receipts.
The nation’s economy, the continent’s second largest after South Africa, which also has the largest stock and bond markets, may expand 6.75 per cent next year, compared with an estimate of 6.5 per cent in 2013, according to the Minister of Finance, Dr. Ngozi Okonjo-Iweala.
The benchmark equities gauge of Africa’s largest crude producer is the 10th best performer among 94 indexes tracked by Bloomberg this year and fourth best in Africa after the key measures of Ghana, Kenya and Zambia.
Ghana: Eurobonds retreat as deficit target raised
Ghana’s Eurobonds dropped for the first time in six days, sending yields higher after Finance Minister Seth Terkper said rising wages and falling gold prices means the budget deficit will be more than initially forecast.
Yields on the debt due August 2023 advanced four basis points, or 0.04 percentage point, to 7.91 in London, according to data compiled by Bloomberg. A close at that level will be the highest in almost a week.
The fiscal gap in Africa’s second-biggest gold producer will be 10 percent of gross domestic product, Terkper said in an interview on Oct. 19. The government was initially targeting 9 percent. Prices for the metal slumped 21 percent this year, and the government’s wage bill accounts for about 70 percent of tax revenue.
Ghana began removing subsidies on gasoline, diesel and other petroleum products in February to reduce spending. Water and electricity tariffs were raised this month as the slide in the cedi reached 13 percent this year against the dollar, the worst in Africa after the rand and currencies that are pegged to it.
Uganda: Total to commence oil exploration
French-based oil major Total this week said it had started searching for oil and gas in the Lake Albert district in Uganda. Ahlem Friga-Noy, Total’s spokesperson in Uganda, told Reuters: “UPDF (Uganda Peoples Defence Force) has declared 80 percent of the northern area of Block 1 safe. Therefore, 3D seismic activities have immediately resumed in this area, leading to a partial lifting of the force majeure.”
Officials from the defence forces have also evaluated the area and declared it secure. In essence, this represents an opportunity for the french oil major to kick-start operations in the area.
Total’s exploration activities were suspended over a month ago after it was discovered that there was unexploded material in the area. The exploration area – known as Block 1 – is situated in northern Uganda where the defence forces clashed with Lord Resistance Army (LRA) rebels for close on 20 years. Uganda discovered “hydrocarbon deposits” of commercial quantity in the Albertine rift basin a little more than seven years ago. This basin is situated on Uganda’s boundary with the DRC and the Ugandan dispensation reckons reserves currently stand at an equivalent of 3.5 billion oil barrels.
According to Reuters, China’s CNOOC and Total acquired a third of Tullow Oil’s exploration assets in a deal valued at $3 billion. Tullow Oil is the British oil explorer.
Ghana: TDC generates GHC28.9 million in 2012
The Tema Development Corporation (TDC), in 2012, generated a total income of GH¢ 28.9 million representing 82.9 per cent increment over that of 2011’s GH¢ 15.8 million.
The gross income which grew across all components comprised GH¢10.3 million from its Estate Department, GH¢ 6.3 million accruing from land management fees, GH¢ 4.8 from rental income and GH¢ 7.5 million from investment. Mr Joe Abbey, Managing Director of TDC, disclosed this on Tuesday, at the Corporation’s 2013 stakeholders’ and Annual General Meeting.
According to him, TDC’s profit before tax also increased from 2011’s GH¢ 4.3 million to GH¢ 10.6 million last year. Profit after tax also increased by 168 per cent from GH¢3.2 million in 2011 to GH¢ 8.6 million in 2012.
South Africa: De Beers invests $2billion in new mine
De Beers, the world’s second-biggest diamond producer, began construction of a new underground mine beneath its open pit Venetia Mine in Limpopo province, South Africa. The Anglo-American owned miner said the US$2-billion (R20-billion) investment would extend the life of the mine beyond 2040 while replacing the open pit as South Africa’s largest diamond mine.
The new mine is expected to start underground production in 2021, De Beers said, and to treat in the region of 130-million tonnes of ore containing an estimated 96-million carats of diamonds over its life span, in the process creating over 8 000 jobs directly and a further 5 000 jobs through the supply chain.
President Jacob Zuma said De Beers’ investment, “the biggest single investment in the diamond industry in decades, signals that indeed our mining sector is poised for growth, and that it has a bright future”.
Zuma said the government was investing time and effort in strengthening the mining sector so that it could contribute “to inclusive growth and jobs as envisaged in the National Development Plan”.
Ghana: Central bank to tighten monetary policy
Ghana’s central bank plans to tighten monetary policy after inflation (GHCPALLY) in West Africa’s second-largest economy quickened to the fastest pace this year, First Deputy Governor Millison Narh said.
We will tighten monetary policy to check inflation,” Narh told reporters in the capital, Accra, yesterday. “We’re still in a tightening mode so far as monetary policy is concerned,”
The central bank held the benchmark interest rate at 16 percent in September to support the cedi and an economy limited by falling gold prices. The bank has raised borrowing costs 350 basis points, or 3.5 percentage points, to curb price increases since the end of 2011.
Inflation quickened to 11.9 percent in September from 11.5 percent in August, the highest this year, as the government removed subsidies for fuel and the cedi weakened to a record against the dollar boosting the prices of imports higher. Ghana imports most of the fuel it consumes. The cedi has dropped 13 percent against the dollar this year, the worst performing currency in Africa during that period.
Price increases will slow to within the bank’s target of 9 percent plus or minus 2 percentage points in the first half of next year, Bank of Ghana Governor Kofi Wampah said.
Nigeria: Alstom to expand Africa investment plans
French engineering group, Alstom has revealed plans to increase its investment into African markets in a bid to improve the continent’s development plans. To this end, the company’s CEO Patrick Kron, said it will assist in Nigeria’s electricity supply process and play a more active role in the country’s gas related projects and the renewable energies sector, according to a report on CNBC.
According to Kron, Alstom can “provide solutions which will be at the core of public policies since infrastructure is key in the economic development of any country and its social welfare.” He also hinted that Nigeria needs private investors with ambitious developments for its privatization strategy to succeed.
Last week, Alstom signed a technical co-operation deal with Taleveras Group Limited – owned by Nigerian oil tycoon Igho Sanomi – for supplies and rehabilitation of the Afam power station and is now set to supply a 160 megawatt GT132E2 gas turbine for the second phase of the power plant. The company has also signed a $5.1 billion contract to provide passenger trains in South Africa – said to be the largest contract in the company’s history – amid plans to participate in more metropolitan and mainline transport projects.
South Africa: Inflation falls to 6.0% in September
South Africa’s annual inflation fell to 6.0 percent in September, official data showed on Wednesday, 23th October, ahead of the unveiling of the national mid-term budget.
Statistics South Africa said that consumer prices had eased from a 6.4-percent peak in August, thanks in part to a fall in petrol prices; the drop was in line with economists’ expectations.
Analysts forecast the annual inflation rate for 2013 to average about 5.9 percent, while repo rates are likely to remain unchanged at five percent.
The inflation announcement comes just hours before South Africa’s Finance Minister Pravin Gordhan was due to release his mid-term budget in which he is expected to address the country’s current account and budget account deficit.
Low consumer and business confidence combined with weak domestic demand continues to plague growth in Africa’s biggest economy, beset by a weak rand and labour strife.
- Anglo to Keep South Africa Investments as Long as Costs Balanced – Bloomberg (bloomberg.com)
- Anglo to keep investing in SA mines (iol.co.za)
- Morgan Stanley, others see big Africa returns (cnbc.com)
- VIDEO: Investing in Frontier Markets (marketcurator.com)
- To Invest In Frontier Markets, Private Equity Is the Only Way To Go (realclearmarkets.com)
- Ecobank Nigeria Plc – Graduate CV/Resume Submission Nationwide (fadojubabajide.wordpress.com)
- Ecobank, Fidelity, others sign $7.5bn deal with Total (vanguardngr.com)
- Morgan Stanley, Abraaj among those seeing big Africa returns (klikfinance.wordpress.com)
- Ecobank CEO Denies Misconduct Amid Corporate Governance … – Bloomberg (bloomberg.com)
- Jim Rogers Calls Frontier Markets The Next Big Thing? (etfdailynews.com)