The African Markets, Technology and Venture Capital

According to these stats, Internet penetration is at 6.7% with Africa accounting for only 3.9% of the world’s internet users.  Whats more Kenya scores fewer internet users than Sudan. Though we cannot ignore the fact that Sudan’s population is higher than Kenya’s and that their economy is also larger.

But hopefully these numbers will shoot higher if the promised reduction in internet access prices materialize eventually.

Anyway this means if am looking at starting an online business in Kenya my potential market is currently at only 3.4M and thats assuming full market penetration for ‘my business’.  Now to put this into perspective, the same report claims that China has over 338M users and India has 81M.

The South African Reserve Bank left the Repo Rate unchanged at 7%, while the Kenyan Central Bank also decided to leave the CBR unchanged at 7.75%.

The difference here only being that South African banks actually benchmark the lending rate based on the Prime Rate which is 10.5% (Repo rate of 7% + 3.5%). While Kenya’s CBR is almost ceremonial and mostly just an indication of what the Central Bank would like banks to do as opposed to a market based benchmark.

The decision by CBK to leave rates unchanged was based on the impact of drought on Kenya’s economic performance and the slow growth in private sector credit.

Here is Prof Ndungu’s press release after the monetary policy meeting yesterday.

Updated on 29th Sept: Download the final press release from the CBK here, which has a detailed outlook of the Kenyan economy from the eyes of the Central bank economists.

Kenyan tea prices have hit record highs at the past few week’s auctions in Mombasa on drought fears ahead of Ramadan, when trading in Islamic countries falls sharply and consumption rises but improved quality and overall tight world supply also contributed.

This demand is being driven by Middle East countries. And what’s more most of the tea offered for auction is actually being sold off at these high prices.
The average price for Best BP1s hit $4.03 per kg, up from a previous high of $3.97 reached in August. Tea offered at the weekly auction in Mombasa has fetched higher prices this year with buyers stocking up as drought in the world’s biggest exporter of black tea hit production. These prices are almost reaching the records of 1996 and 1997.

This might as well be reflected in the next financial reporting period of the listed tea companies. Which include Williamson Tea, Sasini Tea & Coffee, Kapchorua Tea and Limuru Tea among others.

Reason for the short-term optimism:
- The Shilling is still weak against the US dollar at about Kes 75-78 to the $.
- Tea prices at their highest in almost 10 years
- Increased Govt. investment in the tea industry.

More on this from Nation Media and Bloomberg.

Engen, South Africa’s leading refined petroleum products company, and KenolKobil , the largest indigenous African petroleum marketing company in the East and Central African Region, have signed a sale and purchase agreement to jointly acquire all the shares in Shell Zimbabwe and BP Zimbabwe.

The acquired entities were previously operated by BP on behalf of the joint venture which marketed under both the BP and Shell brands in Zimbabwe.

With this transaction, Engen and KenolKobil have acquired the best developed assets in the oil industry in Zimbabwe, consisting of more than 75 service stations spread across the country, as well as several depots, located in Harare, Bulawayo,Mutare, Gweru and other major towns in Zimbabwe.

This seems a good move especially if the coalition govt. in Zimbabwe can hold it together and emerge as a better  run country which would only mean an upside for KenolKobil and with this move now KenolKobil has a footprint in East, Central and Southern Africa Regions.

The acquisition is in line with KenolKobil’s expansionary plans, as evidenced by the recent entry into Burundi where they acquired from Engen in Burundi; Oil Burundi Limited.

KenolKobil was suspended from the NSE today as this transaction takes place.

Post based on KenolKobil press release to be found here from KenolKobil and here the softcopy for download.

Kuwait based Zain which operates in 24 countries and has nearly 70M mobile subscribers has signed a $13.7Bn deal, transferring a 46 per cent ownership of the company (Zain Group) to an Indian/Malaysian telecoms consortium.

The buying consortium is led by  India’s conglomerate Vavasi Group and Syed Mokhtar al-Bukhary, a Malaysian billionaire. This sounds like another name change is on the cards.

Its now not clear if the Zain Group is still interested in selling off its African assets as reported here.

Although separate reports indicated that the Zain Africa sale seems to be still on, but Morocco and Sudan businesses will not be up for sale in the Africa assets batch. Which after Vivendi walked out of a deal is now in talks with Reliance Communications of India.
But this will depend on whether these new shareholders are willing to let go those ‘valuable’ African assets, or prefer to reinvest in them and grow the businesses. More details here.

Here the KenGen 10 year public infrastructure bond offer Information Memorandum

Plans are to be underway to unbundle CFC Stanbic holdings and potentially create more value for investors.

CFCStanbic is the holding company of: CFC Stanbic Bank Limited, CFC Stanbic Financial Services Limited, CFC Life Assurance Limited and The Heritage Insurance Company Limited .

This might be done by CFCStanbic offloading some of its shareholding in Heritage Insurance and CFC Life and listing these as separate entities, or even merging both and lisiting them as a separate general Insurance business.
The group plans to do this by offloading some of their stake to a strategic Investor.

Standard Bank Group the parent of CFCStanbic is the largest South African banking group ranked by assets and earnings and operates a financial services supermarket in South Africa, with interests in Insurance through Liberty Life and could possibly introduce it in Kenya by chopping up CFCStanbic, and reinvesting in them through Liberty Life.

CFC Stanbic was formed in June 2008 out of a merger of Stanbic Bank Kenya and CFC Bank. The entity is now Kenya’s  fourth largest bank measured by total assets.
CFCStanbic bank reported a 5 percent rise in pretax profit for the first half of 2009.
While CFC Stanbic Financial Services reported a Sh51 million loss for the first six months of 2009 .

I will closely watch this transaction toas my hodling in this company have been under water for sometime now.

Find here the Cautionary Statement provided by the group MD.
And here for the Half year finacial results released recently.
Fact Sheet on Standard Bank Group.

Note: I hold shares in CFC Stanbic