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Kenya central bank holds rate, says exchange rate steady

17 November 2015 Comments (0) Africa, Business, Latest Updates from Reuters

NAIROBI (Reuters) – Kenya’s central bank held its benchmark lending rate at 11.50 percent, saying the exchange rate had stabilised and the current account deficit had narrowed, the bank’s Monetary Policy Committee (MPC) said on Tuesday.

The decision was in line with a Reuters poll of 10 analysts in which eight had expected no change in the rate.

The bank raised the lending rate by 300 basis points earlier this year in part to support the weakening shilling.

As well as noting that the shilling had stabilised, the committee said in a statement that lower oil prices and a slowdown in consumer demand had helped narrow the currency account deficit. The trade gap has put pressure on the currency.

“The committee concluded that the monetary policy measures in place are appropriate to maintain market stability and anchor inflation expectations,” the committee said.

 

(Reporting by Duncan Miriri; Editing by Edmund Blair, Reuters)

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South Africa’s RBPlat delays ramp up of Styldrift mine due to low prices

17 November 2015 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – South Africa’s Royal Bafokeng Platinum will delay the ramp up of its new mine by a year as commodity prices sink to near seven-year lows, the company said on Tuesday.

The mid-tier producer now aims to fully ramp up production at the Styldrift project in the first quarter of 2020, compared with a previous plan for the first quarter of 2019, it said in a statement.

“Delaying the start of stoping at Styldrift I ensures that value is not destroyed by ramping up high quality Merensky ounces into a depressed market but that instead the business is well positioned to begin ramp-up when the market improves,” Bafokeng said.

Styldrift, with an estimated lifespan of more than 60 years, is a high grade, shallow mechanised mine in the North West province, about 100 km (62 miles) from Johannesburg.

Drilling at Styldrift could be further delayed from the first quarter of 2017 – after being pushed back from the third quarter of this year – if prices sink further, Bafokeng said.

The company had spent 5.19 billion rand ($361 million) by the end September on developing Styldrift, which is still expected to produce 2.76 million tonnes per year.

Spot platinum has recovered from seven-year lows of $851 hit on Friday on concerns about oversupply and slowing demand in top consumer China, but is still at levels last seen in 2008.

In the third quarter, Bafokeng cut its capital expenditure at Styldrift by 32 percent compared to the previous quarter on lower platinum prices while also slashing other “non-critical” spending.

Shares edged up 0.25 percent to 23.73 rand outpaced by the 1.17 percent rise in Johannesburg’s All-Share index.

 

(Reporting by Zandi Shabalala; Editing by Mark Potter, Reuters)

 

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BMW to invest $417 mil to make X3 model in South Africa plant

17 November 2015 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – BMW’s South African unit plans to invest 6 billion rand ($418 million) at its plant in the capital Pretoria where the German carmaker would manufacture its new X3 model for export and local sale.

The X3 is one of the most successful model ranges for BMW, the world’s biggest luxury carmaker, representing 28 percent of total global sales, the local unit of the global car maker said.

BMW said 2015 production at its Rosslyn plant in Pretoria is expected to reach 70,000 units.

“The production of the next generation BMW X3 at Plant Rosslyn will replace the BMW 3 Series Sedan, which will now be allocated to other plants within the global BMW production network,” the car maker’s local said in a statement.

BMW’s South Carolina plant in Spartanburg will continue producing the carmaker’s new version of the X3 and the X7.

 

(Reporting by Zandi Shabalala; Editing by James Macharia, Reuters)

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Africa’s richest man resigns from Dangote Flour as Tiger Brands cuts funding

16 November 2015 Comments (0) Africa, Business, Latest Updates from Reuters

LAGOS (Reuters) – Africa’s richest man Aliko Dangote and three other directors resigned from the board of Dangote Flour Mills on Monday as majority owner Tiger Brands cut funding support to its struggling Nigerian division.

South Africa’s Tiger Brands said it was “currently exploring various alternatives with regard to its investment in Dangote Flour Mills, which also announced a change of name to Tiger Branded Consumer Goods Plc.

Aliko Dangote holds 10 percent of the company’s equity in through Dangote Industries. The other directors who resigned are Olakunle Alake, Asue Ighodalo and Arnold Ekpe.

 

(Reporting by Chijioke Ohuocha, Reuters)

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Moroccan insurer AFMA aims to raise $18 million in share listing

16 November 2015 Comments (0) Business, Latest Updates from Reuters, Middle East

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RABAT (Reuters) – Moroccan insurance broker AFMA SA plans to raise 180 million dirham ($18 mln) in an initial public share offer, the country’s stock market watchdog said on Monday.

AFMA is owned by private Moroccan holding company Tenor group, which has subsidiaries in distribution, real estate and media. AFMA’s revenues have increased by about 10 percent annually over the last three years and reached 82.8 million dirhams for the first half of 2015, the company’s data showed.

The initial public offering (IPO) would be the second this year on the Casablanca stock exchange this year, which has suffered from the knock-on effects of the euro zone crisis and a lack of foreign investors.

Total Maroc listed in May.

Casablanca’s benchmark MASI index has fallen 3.7 percent this year. Morocco was downgraded to “frontier market” status by index provider MSCI in 2013, due to a lack of liquidity in the market.

Stock market watchdog CDVM said it had approved the issue. AFMA will sell 250,000 shares, or 25 percent of its shares, and they have been priced at 750 dirhams apiece. The offering is expected from Nov. 30 to Dec. 2.

Tenor group agreed also to sell 20 percent of the company’s shares in a block trade to Moroccan institutional investors CIMR and Fipar Holding for 130 million dirhams once the IPO is completed. CIMR is a pension fund for the private sector while Fipar is an affiliate of Morocco’s state investment vehicle Caisse de Depot et de Gestion (CDG).

CDVM said CIMR and Fipar had agreed to keep their stakes for at least three years.

(Reporting By Aziz El Yaakoubi; Editing by Susan Fenton, Reuters)

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Exxon Mobil to drill offshore post-Ebola Liberia in 2017

15 November 2015 Comments (0) Africa, Business, Latest Updates from Reuters

MONROVIA (Reuters) – Exxon Mobil Corp said it plans to start drilling in Liberia in 2017, in what President Ellen Johnson Sirleaf said was a sign of economic recovery after the Ebola epidemic.

The West African country produces no oil but has awarded a number of exploration blocs offshore, following the examples of Gulf of Guinea neighbours Ghana and Nigeria.

Exxon Mobil intends to start drilling late 2017, Steven Buck, its country manager for Liberia and Ivory Coast, said. The U.S. oil major signed for bloc 13 in 2003 but put the project on hold due to the Ebola epidemic.

The worst known outbreak of the haemorrhagic fever killed 4,800 people in the country and deterred investors. Liberia was declared Ebola-free in September but Johnson Sirleaf has said it will take two years to regain its economic footing.

“I am very excited to see Exxon Mobil here,” she said on Thursday after a meeting with Buck. “Their presence demonstrates to the world that Liberia is once more on the move.”

The United States has lifted economic sanctions on Liberia that it had put in place against former president Charles Taylor, who is serving a 50-year sentence for atrocities committed in Sierra Leone during its civil war.

 

(Reporting by Alphonso Toweh; Writing by Emma Farge and Makini Brice, editing by William Hardy)

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Kenyan shilling falls on importer demand, stocks in up

14 November 2015 Comments (0) Africa, Business, Latest Updates from Reuters

NAIROBI (Reuters) – Kenya’s shilling gave up gains made earlier in the day due to importer dollar demand after the central bank sold the U.S. currency, while stocks inched higher.

At close of trade at 1330 GMT, commercial banks quoted the shilling at 102.35/45 to the dollar compared with Thursday’s close of 102.25/35.

“There was slight weakening towards the end of the day. Demand is still there in the market. The shilling has been capped by the central bank (dollar) sales,” a senior trader at one commercial bank said.

“Going into next week we should see more (importer) demand coming in. Government security yields are coming down. That would put pressure on the shilling, and just be supported by the CBK sales.”

The trader said dollar demand would be from sectors such as energy and manufacturing.

Traders said the central bank sold foreign exchange early on Friday, giving the shilling support after yields on the 91-day Treasury bill fell below 10 percent at auction, making it less attractive to offshore investors.

The shilling touched an intraday high of 102.10/30.

The central bank does not normally comment on interventions.

The jump in yields on T-bills of various tenors last month to above 20 percent had attracted offshore dollar inflows, helping reverse some of the recent weakness in the currency.

Dealers said the fall in yields could now start putting more pressure back on the shilling, which in September had almost touched its 2011 all-time low of 106.80.

The currency has been under pressure from a range of factors such global dollar strength and Kenya’s widening trade gap.

On the Nairobi Securities Exchange, the main NSE-20 Share Index was up 1.01 points to close at 3,917.64 points.

On the secondary market, government bonds valued at 2.22 billion shillings were traded, down from 2.58 billion shillings on Thursday.

 

(Reporting by George Obulutsa and Edmund Blair; editing by Richard Balmforth, Reuters)

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Eskom applies to regulator to recover $1.6 bil via tariffs

12 November 2015 Comments (0) Africa, Business, Latest Updates from Reuters

CAPE TOWN (Reuters) – South African utility Eskom has asked the energy regulator to allow it to recover $1.6 billion in costs from 2013/14 when it ran expensive diesel plants and brought more green power to keep the lights on.

The regulator (NERSA) in Africa’s most advanced economy in June rejected a request from cash-strapped Eskom to raise tariffs and the utility said it would seek alternative ways of funding.

Eskom’s spokesman Khulu Phasiwe said the utility was over budget as it had to buy an extra 1,800 megawatts of green energy and used more diesel to run its expensive plants in 2013/14.

The regulator said it was assessing Eskom’s request and did not say when it would publish its outcome.

“Should the results of the assessment indicate that Eskom has to reimburse the customers then the price of electricity would have to decrease. Similarly, if the customers have to reimburse Eskom the price would have to increase,” National Energy Regulator spokesman Charles Hlebela said.

Eskom, which provides virtually all of South Africa’s electricity, is scrambling to repair its ageing power plants and grid. Earlier this year, the utility was forced to impose almost daily power cuts that hurt economic growth.

Eskom said last week, however, that it does not expect to implement electricity blackouts until April 2016.

The energy regulator could grant Eskom the full 22.8 billion rand ($1.6 billion) it wants to recover, or a portion thereof, with customers ultimately bearing the cost.

Independent energy analyst Ted Blom said if the full increase was granted, consumers could expect to pay between 11 and 15 cents extra per kilowatt/hour for electricity.

 

(Reporting by Wendell Roelf and Peroshni Govender; editing by David Clarke, Reuters)

 

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South African drought to cost Sappi up to $10 mil

12 November 2015 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – A drought in South Africa could cost paper maker Sappi between $5 million and $10 million in the first quarter of 2016 as it would result in slower production in its mills, chief executive Steve Binnie said on Thursday.

The drought – the worst in over a century in the eastern KwaZulu Natal province where Sappi has some mills – will negatively impact profits but Binnie told Reuters the first quarter of next year would still show improvement compared with the first three months of this year.

 

(Reporting by Zandi Shabalala; Editing by James Macharia, Reuters)

 

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New MTN boss hints at cut to $5.2 bil Nigeria fine

10 November 2015 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – The newly installed head of South Africa’s MTN has hinted that he would seek to reduce a $5.2 billion fine imposed on African’s biggest mobile telecoms company by the Nigerian authorities.

Non-executive chairman Phuthuma Nhleko was named executive chairman of MTN for up to six months after Sifiso Dabengwa stepped down as CEO with immediate effect on Monday.

His priority is dealing with the crisis in Nigeria, Africa’s most populous nation, which is MTN’s largest market and contributes more than a third of its revenues.

“I can’t say whether we’ll pay the whole fine. I don’t want to negotiate with Nigerian regulators on a public forum,” Nhleko, who is also a former CEO of MTN, told Talk Radio 702.

MTN has a deadline of Nov. 16 to pay the fine imposed on its unit in Nigeria for failing to cut off more than 5 million users with unregistered SIM cards.

The Nigerian communications regulator has been pushing cell phone network companies to verify the identity of their subscribers because of fears that unregistered SIMs were being used for criminal activity.

MTN would not comment on whether it has approached banks to ensure enough cash is available should the fine be enforced.

“The planning is based on all possible outcomes and contingencies and our aim is to comply with all regulations in Nigeria,” said MTN spokesman Chris Maroleng.

But analysts say Nhleko is pulling out all the stops to get the fine reduced.

“Nhleko will bring the matter to a conclusion,” said 36One Asset Management analyst Jean-Pierre Verster.

“I expect there will be a discount of somewhere between 5 percent and 75 percent.”

He sees the Nigerian regulator’s renewal of MTN’s operating licence last week as a sign that the regulator could cut MTN some slack.

Political risk consultancy eurasia said MTN would probably secure a reduction to the fine.

“We expect an eventual compromise to sharply scale back the size of the penalty (to less than half the original amount), especially as MTN takes concrete steps to address the regulator’s concerns,” it said in a published note.

Shares in MTN were down 3.9 percent at 153.75 rand by 1252 GMT, compared to a 1.6 percent drop in the Johannesburg Stock Exchange’s benchmark Top-40 index.

 

(Reporting by TJ Strydom; Editing by James Macharia and Keith Weir)

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