The African Markets, Technology and Venture Capital

Technology group Altech said it has acquired an 8.5% stake in the East Africa Marine System (Teams) data cable via its subsidiary Kenya Data Networks (KDN).
The 5 000km, $130m undersea fibre-optic cable project is being spearheaded by the Kenyan government and stretches from Mombasa to Fujairah in the United Arab Emirates.

The $11m investment by Altech KDN bought it a 10% voting right along with the effective 8.5% equity stake in Teams. Altech said it will fund its portion of the purchase price from cash reserves.

Said Altech CEO Craig Venter: “Africa is in the infancy stages of a sustained growth trajectory in broadband across multiple technologies, services and geographies. The acquisition of a stake in Teams complements KDN’s strategy of being a cross-border, Pan African network operator.

“Shareholders in Teams will be allocated cable capacity proportionate to shareholding. KDN’s stake will thus grant us access to additional bandwidth, provision for redundancy of broadband connectivity and significantly increase KDN’s service quality, all the while unlocking a wide range of additional services for the group as a whole,” he said.

KDN is 60.8% held by Altech. (Merali seems to have sold down his stake considerably.)

Altech said that, with terrestrial fibre laid in Kenya, Uganda and soon Rwanda, the acquisition of a stake in Teams is a perfect fit for KDN’s plans.

In August 2008, KDN became the first ICT company to construct a termination point at the Kenyan coast in anticipation of the landing of East Africa’s three international undersea cables.

KDN said its fibre-optic cable will connect the undersea cables that land in Mombasa to the rest of East Africa, creating a five-country, fibre-optic terrestrial network linking Kenya, Tanzania, Uganda, Rwanda and the DRC.
Altech also predicted cost savings from the investment.
It said the price for satellite connectivity is $1 900 per Mbps per month in Africa, whereas the expected price for submarine cable connectivity drops dramatically to $90 per Mbps per month. This cost is anticipated to decline even further to $27 per Mbps per month by 2020.

-Courtesy of Fin24.com

Is Merali selling off most of his investments, he is now only holding a 5% stake in Zain.
Who says South African firms are not taking over and being successful in a few industries in Kenya.

The new Complaints Handling Unit by the NSE was set up today.
The promise is that they will solve our problems and fast at that.

Investors now have a one stop point of reference to have their problems received and resolved quickly and efficiently. The Complaints Handling Unit (CHU) is centralised and automated system that ensures issues are handled fast. he Nairobi Stock Exchange(NSE) in collaboration with the Capital Markets Authority (CMA) and the Central Depository and Settlement Corporation (CDSC) have come together to make your stock market experience positive and problem free.

Log onto: http://complaints.nse.co.ke
Call: 020 2831000 Fax: 020 2224200
Here is the speech by the NSE chairman Eddy Njoroge during the Launch of Complaints Handling Unit (CHU).

Lets hope this initiative is for real and does not die out as investors start trickling back to the NSE.
All in all its a good step if all departments actually action the queries as people log them.

The Central Bank of Nigeria has moved to inject N400 billion(about $2.5Bn) into five banks in the country following the decision to remove the CEOs and executive directors of the affected banks. The affected institutions are Intercontinental Bank Plc, Union Bank of Nigeria Plc, OceanicInternational Bank Plc, Finbank Plc and Afribank Plc.

The CEOs that have been sacked by the CBN are Erastus Akingbola(Intercontinental Bank); Okey Nwosu (Finbank); Sebastian Adigwe(Afribank); Mrs Cecelia Ibru (Oceanic Bank); and Bartholomew Ebong(Union Bank). The CBN governor, Sanusi Lamido Sanusi, who made this decision known this morning at the Emergency Bankers’ Committee convened by the CBN in Lagos, explained exclusively to THISDAY that the decision was being taken to safeguard the financial sector from systemic collapse.He said following the audit exercise conducted by CBN’s examiners it was discovered that five of the banks had accumulated margin loans of N500billion, among other loans, that had gone bad and eroded their shareholders’ funds.

“Some of these banks are quite large institutions and they have been mismanaged, so we had to move in to send a strong signal that such recklessness on the part of bank executives will no longer be tolerated.”He said the CBN had obtained the approval of the President to inject N400 billion into the affected banks to shore up their tier 2 capital to minimum acceptable levels.
Sanusi added that the funds being injected by the CBN was just temporary and does not translate to the government taking a stake in the five banks, as the interim management will be given a period to recapitalise the affected institutions, following which the N400 billion will be paid back to the CBN.
On how the CBN will prevent a run on the banks and create panic in the economy, Sanusi said the CBN intends to make it clear that the money being injected by the reserve bank as well as the decision to guarantee interbank placement should allay depositors’ concerns.The CBN, he stated, stands ready to ensure that no bank collapses in the country, but will encourage them to seek for funds to raise fresh capital and merge with stronger banks.He said an interim management and board for the affected banks will be put in place to run the institutions until they are taken over by new management teams and owners.

The Riba Take:
Margin Loans: Are loans given to investors to buy shares in the stock market, the shares act as collateral for the money borrowed. What went wrong in Nigeria is that the market which 2 years(or about that) back was among the best performing globally in terms of returns collapsed and at some point the govt even had to intervene by putting interim measure preventing shares from depreciating by a certain percentage within a day, almost similar to the margins we have in Kenya, but these were more stringent due to the nature of the collapse and the fact a very huge number of Nigerians were investing heavily in the market especially after the famous bank mergers and reorganization.

When the banks called on these loans people started defaulting and this downward spiral has taken its toll on these five institutions, but rest assured this is just the first group of banks, more will be disclosed.

A weird step the Nigerian govt had taken was to prevent banks from disclosing how much of margin loans they had on their books, thus further putting away investors especially in bank stocks and thus further depressing their prices downwards, and in turn more margin loans being defaulted on.

This step will definitely lead to a run on some of these banks, and a further downward spiral of banking stocks in particular which were the star performers in the boom times.

Lets wait as this story develops further………

Kenya ranks number 2 on the Yahoo search engine soon to be powered by Microsoft’s Bing.

Essar Energy has completed acquiring a 50% stake from Shell, BP & Chevron in Kenya Petroleum Refineries Ltd, this is a subsidiary of Essar Group the parent of Essar telecommunications which has a majority stake in Yu.

The Govt of Kenya holds the remaining 50% stake in KPRL which processes about 4M metric tonne per annum.

Essar Oil is currently operating a 280000 bpd refinery in India. The Mombasa refinery is the only refinery in Eastern Africa and currently produces LPG, gasoline, diesel, kerosene and fuel oil. The refinery is planned to be upgraded by adding secondary units at a project cost of USD 450M.

KPRL’s products are sold into the Kenyan market and exported to neighbouring countries including Tanzania, Uganda, Burundi and Rwanda. Demand for petroleum products in these markets is estimated at 5M tonnes per annum.

Essar also operates “yu”. It launched the GSM service in Oct 2008 and already has approx. 400,000 subscribers on its network mostly in Nairobi and Mombasa

About Essar Energy

Essar Energy is a fully integrated oil & gas company of international scale with strong presence across the value chain — from exploration & production to oil retail. It has a portfolio of onshore and offshore oil & gas blocks worldwide, with about 70,000 sq km available for exploration. It also has over 310,000 bpd (barrels per day) of crude refining capacity together with operating over 1,240 Essar branded oil retail outlets in various parts of India.

About KPRL

The highly ineffecient KPRL serves the East African region with lpg, petrol, diesel, fuel oil and bitumen and grease. It has two refinery complexes with distillation, hydrotreating, catalytic reforming and bitumen production units. Crude oil from the Middle East is transported by sea to Kipevu Oil Jetty in Kilindini Harbour (3km from the complex at Changamwe) and then carried by pipeline to the refinery. The finished products are also mostly transferred to customers by pipeline.

And The Net is live…. now lets wait for those prices to come down.. soon hopefully…. other bloggers

In this 2 part series.. We will venture into the last frontiers. Developed world treasuries are yielding close to nothing; US, UK, Japan etc are all yielding sub 1% returns.. but the emerging markets and the more riskier ones at that, are returning some high yields, of course, this will be pricing in the risk appetite for the investor.

In Part 1, I will look at Iraq then in part 2 we visit our brothers and sisters in Zimbabwe where the economy is now dollarised. i.e. the US dollar is also acceptable as legal tender.

In Iraq, there is a new $10 Million hedge fund; called Babylon Fund which is investing exclusively in Iraqi quoted companies or Iraqi exposed companies(i.e. companies which earn most of their income from Iraq reliant activities) The Iraqi Stock Market has a market capitalisation of around $2 Billion , with 75% of this being financial services industry.

The Market has around 80 listed securities, and yes these are more than in Kenya. If you are wondering what about the Oil companies, there are no listed Oil companies because the government owns the oil companies and they are not publicly traded. The Iraqi Stock Exchange trades for only two-and-a-half hours a day, twice a week, on Mondays and Wednesdays. During these sessions, Only about a quarter of the roughly 80 companies listed on the exchange trade, with a total turnover of between US$2 million and US$4 million.

For more information click on below links: Hedge Week and Final Alternatives