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Mauritius tourist arrivals rise 10.4% in 10 months to Oct

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

PORT LOUIS (Reuters) – The number of tourists visiting Mauritius rose 10.4 percent in the 10 months to October from the same period last year, with more arrivals from Asia, figures showed on Friday.

Tourism is an important component of the economy and a key source of hard currency for the Indian Ocean island state, best known for its luxury spas and beaches.

Arrivals increased to 912,770 during the period, the ministry of Tourism said. Numbers from Asia rose 24.1 percent to 166,487, with visitors from China up 42.4 percent.

“Barring any unexpected circumstances, we should attract an additional 100,000 tourists this year,” Xavier-Luc Duval, the minister of Tourism said in a statement.

Last month Duval told Reuters in an interview that a major focus was boosting numbers during the island’s winter season, running from June to September, by drawing more visitors from India, China, Africa and Russia.

The number of tourists visiting from Europe, which accounts for two-thirds, rose by 9.9 percent to 487,487.

Despite the rising numbers, central bank figures suggested tourist revenues in the first half had fallen by 3.5 percent. The tourism minister said hotels had not seen a revenue fall and the central bank has said it is reviewing its figures.

 

(Reporting by Jean Paul Arouff; editing by Drazen Jorgic and John Stonestreet)

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Tunisian annual inflation rises to 4.6% in October

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

TUNIS (Reuters) – Inflation rose to 4.6 percent in October after remaining steady for the past three months at 4.2 percent, official figures showed on Thursday.

The food and drink price index rose 5.6 percent in October from a year earlier, the state statistics institute said.

Tunisia’s central bank said last week it had cut its main interest rate to 4.25 percent from 4.75 percent to boost economic growth, as inflation rates fell.

Inflation dropped to 4.4 percent in the first 10 months of this year, compared with 5.5 percent last year.

The bank does not target a particular inflation rate but says the highest that should be tolerated is 5 percent.

 

(Reporting by Tarek Amara; Editing by Tom Heneghan, Reuters)

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South Africa’s Harmony Gold narrows quarterly loss, output rises

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

JOHANNESBURG (Reuters) – South African bullion producer Harmony Gold on Thursday reported a smaller first quarter loss and said it aimed to wipe out its debt over the next two years.

Harmony said headline loss per share for the three months to end-September totalled 120 cents from a loss of 725 cents in the preceding quarter mainly due to benefits from restructuring and optimising efforts resulting in higher production.

The loss was mainly due to 14 percent weakening of the rand against the dollar in the period, the company said.

Gold production rose 10 percent to 281,385 ounces from 256,465 ounces in the previous quarter.

South Africa’s gold industry is being squeezed by falling prices and rising costs such as electricity and labour and companies are slashing costs to stay afloat.

By the end of September, Harmony had cash of 1.5 billion rand ($1078 million) and debt totalling $250 million.

Chief financial officer Frank Abbott told reporters on a conference call that the company intended to repay all its debt over the next two years before spending on its Golpu mine in Papua New Guinea intensified.

“The intention is to repay our debt over the next two years so when the bigger funding starts at Golpu we are sitting with a balance sheet without debt,” he said.

Harmony, which reaps about 90 percent of its gold from South Africa, expects to start a study on the second stage of development of its Golpu mine by December 2015.

Harmony said it expected the gold price to remain flat in the medium term but expected a long term recovery due to gold being used as an investment tool and store of value.

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

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Lonmin faces collapse if shareholders reject $400 mln cash call

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

JOHANNESBURG (Reuters) – Lonmin, world’s No.3 platinum miner, urged shareholders to approve a $400 million equity cash call at a meeting next week, saying in a document posted on its website the injection was crucial to its survival.

Lonmin’s shares in London fell 6.8 percent to 23.93 pence by 1223 GMT. The Johannesburg-listed stock was down by 8 percent at 5.00 rand.

Battered by strikes, rising costs and weak platinum prices, Lonmin said last month it planned to raise the money and another $370 million in bank loans to refinance debt due in May 2016.

The firm, founded in 1909 as the London and Rhodesian Mining and Land Company, said that if shareholders do not approve the rights issue at a meeting on Nov. 19, lenders would not provide the loans to push back the maturity of the 2016 debt to 2020.

“As a result, the group may have to cease trading at some point between December 2015 and May 2016 and shareholders could lose the entire value of their investment,” the company said on its website.

Lonmin was hit harder than other producers by the platinum mining strike in 2014, South Africa’s longest and costliest, as unlike its peers, virtually all its operations are concentrated in the strike-affected Rustenburg area.

To try to turn around its fortunes, the miner announced a plan in July to close or mothball several mine shafts, putting thousands of jobs at risk. It employs around 38,000 staff, including contractors.

 

SOME SUPPORT

The cash call has the backing of Lonmin’s third-largest shareholder, the Public Investment Corporation (PIC), which has said it was willing to take up more than it is entitled to. The South African government-owned PIC owns about 7 percent of Lonmin.

The company said the Bapo Community, which owns 2.24 percent of its shares, would also back the rights issue.

Other top four shareholders in the company include South Africa’s Kagiso Asset Management, Capital World Investors and Old Mutual Investment Group.

Lonmin said the new shares would be issued at a “significant discount”, underscoring a more than 80 percent tumble in its stock price over the past year.

“We see this as a particularly stark warning by Lonmin but it is a reminder of the extreme pressures faced in the South African platinum industry,” Investec said in a note.

Spot platinum has fallen by about 20 percent over the last year to levels last seen in 2009 due to oversupply concerns and slowing demand in top consumer China.

 

(Reporting by Zandi Shabalala; Editing by Tiisetso Motsoeneng and Louise Heavens, Reuters)

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Zambia lifts benchmark rate to record 15.5% to curb inflation

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

LUSAKA (Reuters) – Zambia’s central bank raised its benchmark lending rate to a record 15.5 percent on Tuesday to curb soaring inflation which nearly doubled last month as the currency of the African copper producer weakened sharply.

The rate hike, the first since November 2014, also came after a steep fall by Zambia’s kwacha brought on by tumbling copper prices as the consumption in top copper consumer China slowed along with its economy.

The southern African nation had kept the key rate unchanged at 12.5 percent in August, saying it predicted inflation would breach the regulator’s 7 percent target by year end.

“Keeping inflation expectations anchored in single digits is critical,” Central Bank Governor Denny Kalyalya said.

But consumer prices rose to 14.3 percent from 7.7 percent in September, as Zambia’s currency weakened.

The central bank also lifted the cap restricting commercial bank lending rates to a maximum 24.5 percent to allow better functioning of the credit market, Kalyalya said.

The Zambian kwacha firmed 1.36 percent to 12.41 after the rate hike but later traded up 0.56 percent at 12.5000.

“This should allow the kwacha to at least stabilise,” Standard Chartered Bank Africa economist Razia Khan said.

“A more significant reversal of recent losses would require some turnaround in copper prices and much higher interbank rates.”

Economic growth is expected at 4.6 percent in 2015 due to weaker global activity and lower commodity prices as well as a domestic electricity crunch, but would tick up to 5 percent next year, finance minister Alexander Chikwanda said in the 2016 budget speech.

Zambia suffers from severe power shortages. The state utility firm Zesco Ltd has cut the electricity supply to mining firms and doubled prices for other industrial users and household consumers.

Despite these measures, the price of copper, Zambia’s main export, was still low and power outages were expected to continue putting pressure on the kwacha and spiralling inflation, BanABC head of Treasury John Mapiye said.

“We expect yields to rise and that may attract foreign portfolio investment in securities and help strengthen the kwacha temporarily,” Mapiye said.

“The cost of borrowing will increase and ultimately this will filter down to the consumer hence we still expect to see an upward spiral in the rate of inflation.”

 

(By Chris Mfula. Additional Reporting by Nqobile Dludla in Johannesburg; Editing by James Macharia and Raissa Kasolowsky. Reuters)

 

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Siemens could expand Egypt power deal, says CEO

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

FRANKFURT (Reuters) – Siemens could win an expansion of its record 8 billion euro ($8.8 billion) power deal with Egypt, the German industrial group’s chief executive said in a staff newsletter.

Joe Kaeser said Egypt, whose state-run electricity grid is creaking under the weight of fast-growing demand, needed extra capacity before the start of the hot summer months – faster than Siemens could build new turbines under the existing deal.

“We had to come up with a good plan as to how we could help – and this plan pleased the president,” Kaeser said after a trip to Egypt during which he met President Abdel Fattah al-Sisi.

“We have a handshake on which we can build,” he added in the interview with Siemens Welt seen by Reuters on Friday.

The extra capacity would be 800 megawatts, which would be produced by upgrading existing power stations and putting into place decentralised power-generation units, Kaeser said. He did not say how much the deal could be worth.

The 8 billion-euro deal signed in June was for 16.4 gigawatts and is designed to boost Egypt’s power-generation capacity by 50 percent after going online in 2017.

 

(Reporting by Georgina Prodhan; Editing by Mark Potter, Reuters)

 

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Nigeria gives MTN two weeks to pay $5.2 billion fine

31 October 2015 Comments (0) Africa, Business, Latest Updates from Reuters

LAGOS/JOHANNESBURG (Reuters) – Nigeria’s telecoms regulator on Friday gave MTN Group two weeks to pay a $5.2 billion fine imposed on Africa’s biggest mobile phone company for failure to cut off millions of users with unregistered SIM cards.

The Nigerian Communications Commission (NCC) imposed the penalty on Monday on MTN’s Nigeria unit, the group’s biggest market by subscribers, sending the phone operator’s stock tumbling by about 20 percent this week, though they bounced 2 percent by midday Friday.

The fine comes months after Muhammadu Buhari swept to the helm of Africa’s biggest oil producer after a campaign in which he promised tougher regulation and a fight against corruption.

The telecoms regulator said MTN failed to disconnect subscribers with unregistered or incomplete SIM cards, after ordering all network operators to do so. NCC said only MTN had failed to comply with the directive.

An NCC source has said the regulator’s decision was based on advice from Nigeria’s state security service, which suspected unregistered SIM cards were being used for criminal activity in a country facing Islamic militant group Boko Haram’s insurgency.

NCC spokesman Tony Ojobo said MTN had until Nov. 16 pay up, but the two sides were in talks to resolve the matter.

“The outcome of the discussion may affect the date. That’s why they are having the discussion so that they can reach a solution,” Ojobo said.

MTN declined comment.

 

INTERNAL SECURITY

Nigeria’s presidency and internal security agency were also involved in the talks, a regulatory source said. MTN Chief Executive Sifiso Dabengwa flew to Abuja to make what three sources familiar with the matter said was an attempt have the penalty reduced.

If it stands, the fine, almost a quarter of Nigeria’s 2015 budget of $22 billion, would wipe out more than two years of MTN’s annual profits.

It was unclear what would happen to MTN, whose Nigerian license is up for renewal in 2016, if the company fails to pay the fine, but NCC’s powers include revoking licenses.

Some analysts said the size of the fine risked damaging Nigeria’s efforts to shake off its image as a risky frontier market for international investors.

“Why this over-reaching regulation? It simply adds to perceptions about Nigeria as unfriendly place for foreign capital,” Vestact fund manager Sasha Naryshkine said in Johannesburg.

But Frost & Sullivan analyst Joanita Roos said the move helped, rather than damaged, Nigeria’s image. “The harsh action taken by regulators … does in fact protect and contribute positively to the reputation of the country.”

MTN also faces a Johannesburg bourse investigation on the timing of the announcement that it was facing the penalty. MTN’s confirmation came after news reports of the fine. South African companies are required to immediately disclose any price-sensitive information.

(By Chijioke Ohuocha and Tiisetso Motsoeneng. Additional reporting by TJ Strydom in Johannesburg; Editing by James Macharia and David Holmes.  Reuters)

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South Africa’s rand benefits from dollar weakness, stocks climb

30 October 2015 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – South Africa’s rand edged up against the dollar on Friday, mainly reflecting the greenback’s weakness against a basket of currencies and also buoyed by data showing a narrower South African trade deficit in September.

The Top-40 index on the Johannesburg Stock Exchange ended in the black for the first time this week as traders showed appetite for resource shares and renewed confidence in Africa’s largest mobile operator.

The rand hit a session high of 13.7645, and was trading at 13.8375 by 1504 GMT, a 0.4 percent gain over Thursday’s close.

South Africa’s trade deficit narrowed sharply to 0.89 billion rand ($65 million) in September from a revised 10.14 billion rand shortfall in August, data from the national revenue agency showed.

The local currency was however still down 1.5 percent this week to the dollar, partly due to week-long protests against high university fees which highlighted the economic woes facing Africa’s most developed economy, and dented investor sentiment.

The rand has also been under pressure for much of this year, as investors anticipating the start of policy tightening in the United States dump high yielding but riskier emerging markets.

“A stronger-than-expected payrolls print next week could very well place further pressure on the rand,” BNP Paribas Cadiz Securities economist Jeffrey Schultz said, referring to U.S. jobs numbers due out next Friday.

On the debt market, the benchmark government bond due in 2026 edged higher, with the yield shedding 6 basis points to close at 8.34 percent.

South African stocks ended positive for the first time this week, driven by strong gains in the resource sector, spurred by an appetite for shares in Anglo American.

The diversified miner was the biggest winner on the blue-chip Top-40 index climbing more than 3 percent to end at 116.46 rand.

Shares in mobile giant MTN Group shot up as high as 3 percent, its first gains this week, after slumping about 20 percent since Monday when it was fined $5.2 billion for failure to cut off users with unregistered SIM cards.

MTN’s shares closed 2.2 percent up to 158.80 rand.

“The general feeling is that the fine will more than likely be reduced to something more manageable, like $1 billion,” Inkunzi Wealth Group senior trader, Petri Redlinghuys, said.

The Top 40 index rose 0.79 percent to 48,317 points while the All-share index was up 0.73 percent at 53,793 points.

Trade was tepid with 180 million shares changing hands, almost on par with last year’s daily average of 183 million.

 

(Reporting by Stella Mapenzauswa and Peroshni Govender; Editing by James Macharia, Reuters)

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Nigeria planning $25 bil infrastructure fund

30 October 2015 Comments (0) Africa, Latest Updates from Reuters, Politics

ABUJA (Reuters) – Nigeria plans to set up a $25 billion infrastructure fund to invest in the transport and energy sectors in Africa’s most populous nation, a spokesman for Vice President Yemi Osinbajo said on Thursday.

Laolu Akande said money for the planned fund would come from local and international sources including Nigeria’s sovereign wealth fund and domestic pension funds.

“The vice president disclosed that other sovereign wealth funds have already indicated an interest in the fund, which would be used to address the nation’s decaying road, rail and power infrastructures,” said Akande.

He did not say when exactly the fund would be set up.

The nation of 170 million people is Africa’s top oil producer, but it requires infrastructure development to help boost economic growth.

The West African nation’s economy, the biggest on the continent, has been hammered by the fall in oil prices. The country relies on crude exports for around 70 percent of government revenues.

Osinbajo, who has been asked to oversee economic policy by President Muhammadu Buhari, referred to the infrastructure fund proposals while speaking to diplomats, including ambassadors from Italy and Canada, the vice presidency said in a statement.

Osinbajo also reiterated the administration’s view that Nigeria’s currency, the naira, does not need to be devalued, the statement said.

“It is not a solution. We are not exporting significantly. The way things are, devaluation will not help the local economy,” he was quoted as saying.

His comments come days after former central bank governor Lamido Sanusi said Nigeria would have to devalue and loosen monetary policy to stimulate its economy.

The naira was officially devalued last November and underwent a de facto devaluation again in February.

Godwin Emefiele, the current central bank governor, has repeatedly said the currency was “appropriately” priced and has ruled out another naira devaluation.

 

(Reporting by Felix Onuah; Writing by Alexis Akwagyiram; Editing by Hugh Lawson, Reuters)

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Egypt’s GB Auto says output resumes after 20-day stoppage

29 October 2015 Comments (0) Business, Latest Updates from Reuters, Middle East

CAIRO (Reuters) – Egyptian auto distributor GB Auto said on Thursday that production at some of its factories was halted for 20 days during September and October due to delays in supplies but is now back on track.

“GB Auto factories faced some turbulence in production during September and October due to delays of production input shipments which have led to the halting of production at some factories for 20 days,” the firm said in a bourse statement.

GB Auto said factories were now functioning in a “regular manner” due to the availability of production material.

Egypt is facing a currency shortage which is affecting the ability of businesses to import products.

GB Auto, Egypt’s largest listed auto assembler and distributor and the country’s distributor of tuk-tuks and motorbikes made by India’s Bajaj, has been affected by the currency crisis like many other companies in the country.

In August, the firm posted a 65 percent drop in its second-quarter net profit and said the currency shortage has depleted its inventory of some key models.

GB Auto made 22.4 million Egyptian pounds ($2.79 million) in the second quarter compared with 63.6 million in the same period a year earlier. [nL5N10L2EX]

(Reporting by Asma Alsharif, editing by David Evans, Reuters)

 

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