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Kenya KCB Group to manage and may buy closed Chase Bank

20 April 2016 Comments (0) Africa, Business, Latest Updates from Reuters

NAIROBI (Reuters) – Kenya’s KCB Group has been appointed to manage Chase Bank and could buy a majority stake in the closed lender whose branches will reopen next week, the central bank said on Wednesday.

The Central Bank of Kenya said in a statement that an understanding had been reached with KCB on “modalities to reopen Chase Bank Ltd in the next few days and the eventual acquisition of a majority stake in the bank.” It said KCB would carry out due diligence to inform its decision on taking a stake.

Central Bank of Kenya Governor Patrick Njoroge told a news conference he had received nine indications of interest in the mid-sized lender that was put into receivership this month.

 

 

(Reporting by Duncan Miriri; Writing by Edmund Blair; Editing by George Obulutsa)

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South Africa’s rand weakens as oil price retreats

20 April 2016 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – South Africa’s rand weakened against the dollar on Wednesday, in line with a pullback in commodity currencies as the global oil price fell one more.

The rand fell to 14.3750 versus the dollar earlier in the session, and was trading at 14.3015 by 0656 GMT, 0.2 percent lower than Tuesday’s New York close.

Commodity-linked currencies such as the rand reversed the previous day’s gains as a recovery in crude oil prices stalled after a workers’ strike which had cut output ended in Kuwait.

The rand had touched a near five-month high of 14.1900 on Tuesday in the wake of improved global risk sentiment linked to better oil prices.

“Commodities are off their highs from yesterday and trade softer so far; this has seen the rand get back above 14.3500 with more resistance at 14.4000/4100 likely to attract offers first up,” said Standard Bank trader Oliver Alwar.

Traders and analysts said the rand could take further direction from domestic CPI data due out at 0800 GMT, with analysts polled by Reuters expecting the main year-on-year number to ease to 6.3 percent from 7 percent.

Government bonds also weakened, and the yield for the benchmark instrument due in 2026 rose 4 basis points to 8.925 percent.

The stock market looked set to open slightly down, with the

Top-40 futures index down 0.5 percent by 0656 GMT.

 

(Reporting by Tanisha Heiberg; Editing by Stella Mapenzauswa)

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Sinosteel cedes half its chrome claims in Zimbabwe to state

19 April 2016 Comments (0) Africa, Business, Latest Updates from Reuters

HARARE (Reuters) – China’s Sinosteel Corp Ltd’s business in Zimbabwe has ceded half its mining claims to the government, complying with Harare’s demands to chrome producers to give up some of their claims, a company official said on Tuesday.

The Southern African nation holds the world’s second largest deposits of chrome, which is smelted to produce ferrochrome, a raw material used in the making of stainless steel.

Zimbabwe’s mines minister last year asked Sinosteel’s Zimasco and Zimbabwe Alloys, which owned 80 percent of all chrome mining claims, to release some ground for distribution to new investors. The companies were owned by Anglo American until 2006.

The government has previously said it wants to redistribute some claims to several local investors as part of its black economic empowerment drive and would not pay compensation.

Zimasco held 45,900 hectares of claims before giving up half to the government, Clara Sadomba, the company’s general manager for administration told Reuters.

“It is accurate regarding Zimasco in that we have indeed ceded 50 percent of our chrome claims to the government,” said Sadomba.

Zimbabwe Alloys officials would not say whether they had also given up some of the company’s claims.

Zimbabwe holds more than 950 million in chrome reserves, according to ministry of mines data.

In 2014 Zimbabwe produced 260,000 tonnes of high-carbon ferrochrome, which was 2.3 percent of global output. Zimasco produced 68 percent of Zimbabwe’s ferrochrome in 2014.

 

(Reporting by MacDonald Dzirutwe; Editing by Alexander Smith)

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France signed deals worth 2 bil Euros with Egypt

19 April 2016 Comments (0) Business, Latest Updates from Reuters, Middle East

PARIS (Reuters) – France signed several deals worth about 2 billion euros ($2.26 billion) with Egypt during a visit by French President Francois Hollande to Cairo, the French president’s office said on Monday.

The deals included a satellite communications contract agreed upon following discussions between the two presidents and their defence ministries, the Elysee said.

The military telecommunications satellite is expected to be build by France’s Airbus Space Systems et Thales Alenia Space.

French energy Engie firm said earlier that it also signed LNG and renewable energy contracts during the visit.

 

(Reporting by Elizabeth Pineau and Jean-Baptiste Vey; Writing by Bate Felix; Editing by Sandra Maler)

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Tripling of South African bond buying signals new faith in rule of law

18 April 2016 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – A tripling of South African bond sales this year on Monday added to signs that investors’ faith in its institutions has been somewhat restored following a court ruling against President Jacob Zuma and the appointment of a former finance minister.

Securities exchange figures showed foreign investors bought a net 30 billion rand ($2 billion) worth of South African debt in 2016, compared with 10 billion in the same period last year.

The Treasury is flush with cash after a $1.25 billion 10-year bond sale this month was two times oversubscribed, and bond yields have recouped heavy losses in December after Zuma fired his finance minister, raising fears of political interference.

Benchmark yields, which spiked to a record 10.38 percent after Zuma briefly replaced Nhlanhla Nene with a virtually unknown politician, have since recouped nearly 140 basis points, a third of which was after the ruling against Zuma.

Sentiment, helped by Zuma bringing back Pravin Gordhan as finance minister, improved further after the Constitutional Court found that the president was wrong to ignore an order to repay state funds used to upgrade his Nkandla home.

“Having Pravin Gordhan back in control, and having this noise around Nkandla and Jacob Zuma, is showing the market that South African institutions are still strong,” Investec fixed income portfolio manager Vivienne Taberer said.

Analysts said markets were also cheered by a backlash against the Gupta family and its businesses. South Africa’s four big banks cut ties with a Gupta-owned investment company over criticism that the family has undue influence with Zuma.

“Government and state owned enterprises can get about their constitutionally mandated activities, less encumbered by predatory actions of (the) president and his allies,” BNP Paribus Securities South Africa analyst Nic Borain said.

“We expect markets – especially the bonds, currency and banks – to track the ebbs and flows of Jacob Zuma’s fortunes.”

Added to that, signals from the central bank and Treasury that they will pursue prudent policy have seen South African assets leading emerging market gainers, boosted by signs that the U.S. may not hike interest rates as quickly as expected.

Recent economic data out of China, a major consumer of emerging market commodities, has also lessened worries over a slowdown in the world’s second largest economy.

“If this environment, where we see the Fed not really doing much and being cautious over the balance of this year, continues and we continue to see reasonable data coming out of China … then this constructive risk environment can continue for the next three or so months at least,” Investec’s Taberer said.

The litmus test for assets will be whether credit rating agencies decide to downgrade debt. A cut from Moody’s would mean a loss of its investment grade status and possible ejection from the prestigious World Government Bond Index (WGBI).

“Such an ejection would represent possibly the most dramatic outcome of a ratings downgrade and should be South Africa’s biggest cause for concern,” Citadel chief strategist Adrian Saville said.

 

(By Stella Mapenzauswa. Editing by James Macharia and Louise Ireland)

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Dubai Islamic Bank aims to open in Kenya before year-end: sources

18 April 2016 Comments (0) Africa, Business, Latest Updates from Reuters

DUBAI/NAIROBI (Reuters) – Dubai Islamic Bank (DIB) plans to be operating in Kenya before the end of 2016, despite the Kenyan authorities’ moratorium on issuing new banking licences, according to sources familiar with the matter.

The largest Islamic bank in the United Arab Emirates will start operating at a time when Kenyan banks have come under closer scrutiny from the regulator because of increasing bad debts, prompting officials and analysts to conclude the sector is ripe for consolidation.

Three medium-sized and small banks have been taken over by the regulator since August last year, with the latest, Chase Bank Kenya, taken over earlier this month after a run on deposits.

In November the central bank placed a moratorium on the licensing of new commercial banks in an attempt to bring stability to an industry that has more than 40 banks.

But DIB had been in talks with the regulator before then, meaning a decision on its licence would not be affected by the moratorium, the sources said.

DIB is now awaiting the final go-ahead from Kenya’s central bank, said the sources, as it has already been granted outline approval for a commercial banking licence having planned to open in Kenya last year, only to find the process had taken longer than expected.

In a statement the central bank said on Monday it was processing an application for a banking licence from DIB Bank Kenya, without elaborating.

A separate source at the central bank said DIB was one of a couple of banks expected to start operations in the country this year.

No one at DIB responded to a request for comment.

DIB has already recruited staff for its Kenyan operation, which will initially comprise three branches offering consumer, corporate and treasury services, the sources said.

Kenya will not be DIB’s first foray overseas. It holds stakes in banks in Pakistan, Sudan, Jordan, Bosnia and late last year raised its stake in Bank Panin Syariah, the Indonesian sharia-compliant lender, to 39.6 percent, according to a presentation on the bank’s website.

It would become the third Islamic lender to operate in Kenya, where Muslims account for about 10 percent of the population of some 44 million.

 

(By Tom Arnold and Duncan Miriri. Editing by Greg Mahlich)

 

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Shell says theft from its Nigerian oil pipeline network fell in 2015

18 April 2016 Comments (0) Africa, Business, Latest Updates from Reuters

LONDON (Reuters) – Theft of crude oil from the pipeline network of Shell’s Nigerian subsidiary fell to 25,000 barrels per day (bpd) in 2015, the company said on Monday, roughly 32 percent less than the previous year.

The number of sabotage-related spills on the SPDC network also declined to 93 in 2015, compared with 139 the previous year, Shell said in its annual sustainability report.

It attributed the decrease to divestments in the Niger Delta and increased surveillance and security by the Nigerian government, but said theft and sabotage were still responsible for around 85 percent of spills from SPDC operations.

President Muhammadu Buhari has said theft siphons as much as 250,000 bpd of crude of its roughly 2 million bpd of production and last week promised to crack down on groups responsible for pipeline attacks.

Still, the issue has continued to plague the country. Shell currently has a force majeure in place on Forcados crude oil exports following an attack on a subsea pipeline in February, while Italian oil major ENI reportedly declared force majeure on Brass River exports late last week.

 

(Reporting by Libby George and Karolin Schaps; Editing by Mark Potter)

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StanChart eyes growth from African companies with broader horizons

15 April 2016 Comments (0) Africa, Business, Latest Updates from Reuters

NAIROBI (Reuters) – Growing African businesses looking to sell their products and services beyond the continent present a growth opportunity for Standard Chartered, the bank’s chairman said on Friday.

The group has operations in 16 African nations, including Kenya, and offers services via correspondent banks in 22 more markets in Africa, where sliding commodities prices have put the brakes on previously strong growth.

Rival Barclays has responded by reducing its exposure to Africa, but StanChart takes an alternative view.

“We see Africa as an opportunity to invest rather than exit or divest,” Standard Chartered Chairman John Peace told Reuters in Nairobi, adding that the Internet and other technology is linking more African companies to global trade.

“You can run a business, not just a large corporation but a medium-size business, here in Kenya and be connected to the world,” he said. “Banks, therefore, have a duty to be able to support that connectivity and that is what we are trying to do.”

The World Bank cut its 2016 growth forecast for sub-Saharan Africa this week to 3.3 percent, from a previous estimate of 4.4 percent, citing the drop in commodities prices.

Commodity exporter South Africa and oil producer Nigeria have been hit hard. But Kenya, an oil importer now enjoying cheaper crude prices, has kept annual growth around 6 percent.

Peace said that Standard Chartered’s wealth-management products were finding customers in nations such as Kenya.

“We certainly, as part of our new strategy globally, emphasise the opportunity we have in retail, the opportunity we have in private banking and wealth management, and I think that is true in Kenya and in Africa,” Peace said.

Standard Chartered has not, however, been immune to the commodities slide and has adjusted its risk profile accordingly.

“We tightened our risk tolerance, recognising that things are going to remain choppy for the foreseeable future,” said Peace, who has said that he wants to retire from his post at the end of this year.

 

 

(By Duncan Miriri. Editing by Edmund Blair and David Goodman)

 

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Shares in South African airline Comair fall 3% as strike continues

15 April 2016 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – South Africa’s airline operator Comair’s share price fell more than 3 percent by Friday, the third day of a strike by ground staff demanding higher wages.

Shares in Comair, a franchisee of British Airways and the owner of South African low-cost airline Kulula.com, declined by 3.1 percent to 3.10 rand ($0.2) by 1050 GMT.

The share price has fallen by more than 5 percent since Tuesday, after the United Association of South Africa (UASA) said its members were preparing to strike.

The union wants a 35 percent increase over three years, while Comair is offering a 22.5 percent increase over three years, the airline said on Tuesday.

Both the company and the union were not immediately available for comment.

($1 = 14.5070 rand)

 

(Reporting by Zimasa Mpemnyama; Editing by James Macharia)

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AB InBev agrees concessions with South Africa over SAB deal

15 April 2016 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – Anheuser-Busch InBev will invest 1 billion rand ($69 million) to support small South African farmers as part of concessions agreed with the government to secure regulatory approval for its $100 billion-plus takeover of SABMiller, it said on Thursday.

The world’s biggest brewer said the concessions, which also include a five-year freeze on layoffs, were agreed with the South African Ministry of Economic Development.

“It is expected that the agreement on terms between government and the merger parties will expedite the merger proceedings before the South African competition authorities,” AB InBev said.

“The commitments made by the company are the most extensive merger-specific undertakings made to date in a large merger. In our view, they meet the requirements of the competition legislation,” Economic Development Minister Ebrahim Patel said.

South African Competition Commission this week extended its scrutiny of the deal, saying it needed at another 15 days to complete its investigation. It has already extended the deadline four times.

South Africa has a history of taking its time over approving takeovers partly because competition authorities have a public interest mandate to safeguard jobs, in addition to an anti-trust mandate to protect competition.

In 2011, the regulator told U.S. retailer Wal-Mart Stores not to cut jobs for two years following its acquisition of South African retailer Massmart, delaying implementation of the $2.4 billion deal by at least two months.

The Commission investigates deals for any anti-trust issues and submits its views to the Competition Tribunal, which makes a final ruling on whether a deal should go ahead

Ab InBev has already told European regulators of its plan to sell SABMiller’s premium European brands to try to secure approval for its deal.

($1 = 14.5350 rand)

 

(Reporting by Tiisetso Motsoeneng; Editing by Jane Merriman)

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