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Nigeria’s Stanbic IBTC cuts 2015 loan growth forecast to 3%

Comments (0) Africa, Business, Latest Updates from Reuters

LAGOS (Reuters) – Nigeria’s Stanbic IBTC has cut its 2015 forecast for loan growth to 3 percent from 10 percent, citing the impact of slowing economic activities on businesses, the local unit of South Africa’s Standard Bank said on Monday.

Africa’s biggest economy posted its lowest output growth for five years in August with its economy expanding 2.35 percent in the second quarter against 6.54 percent a year ago. Stanbic said the slowdown continued in the third quarter.

The mid-tier lender said loans grew marginally by 1 percent to 418.3 billion naira ($2.1 billion) in the first nine months and lowered its return on equity (ROE) target to 15 percent from 18 percent, it said in a presentation.

 

(Reporting by Chijioke Ohuocha, editing by David Evans, Reuters)

 

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South Africa’s Vodacom lifts H1 profit on data boom

Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – South African mobile phone operator Vodacom on Monday reported a 6 percent rise in half-year profit, buoyed by sharp growth in data revenue.

The South African unit of Britain’s Vodafone has spent billions to expand its network in recent years with a strong focus on providing faster internet to its customers as more of them get smartphones.

“We’re becoming more of a big data provider, an internet provider if you like,” Vodacom Group Chief Executive Shameel Joosub said in a conference call with reporters.

The company said headline earnings per share – the main profit measure in South Africa and strips out certain one-off items – rose to 440 cents from 415 cents, in the six months ended Sept. 30.

Data revenue was up 33.5 percent as Vodacom increased 4G coverage in its home market, the company said.

“In South Africa, LTE/4G coverage increased from 32.2 percent to 46.8 percent,” said Joosub.

Customers that have access to 4G have increased to nearly 2 million in Africa’s most advanced economy and they use almost three times more data than those stuck with lower speeds, Joosub said in a statement released with the results.

The company is forming partnerships with content providers to get its customers to consume more videos and music on smart devices as it tries to rake in more data revenue.

“We need to play more in the content space,” Joosub said.

Vodacom’s smartphone users consume around 425 MB of data per month, compared to 2 GB in the U.S. and Britain which Joosub sees as an opportunity for growth.

Shares in Vodacom were up 1.5 percent to 150.73 rand by 0755 GMT.

 

(Reporting by TJ Strydom; Editing by James Macharia, Reuters)

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ArcelorMittal SA plans $323 mil rights issue, plus possible bond

Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – ArcelorMittal’s South African business plans to raise up to $323 million through a rights issue and is considering a $350 million bond issue, it said on Friday, as it battles falling steel demand, rising cheap imports and higher costs.

Steel companies around the world are grappling with a global supply glut that has sent producers’ share prices to their lowest levels in more than a decade and prompted the ArcelorMittal parent company to cut its full-year profit guidance on Friday.

ArcelorMittal SA, Africa’s biggest steelmaker, plans to raise between 4 billion rand and 4.5 billion rand ($322.77 million) from new shares that could dilute the current shareholding by 30 percent, it said after flagging an annual loss expected to be 11 times bigger than last year’s 277 million rand.

The cash call, at least 14 percent bigger than the company’s market capitalisation, is fully underwritten by the parent company.

The South African business is also considering issuing up to $350 million of bonds, finance chief Dean Subrimanian told Reuters.

“The bond would be subject to how much we raise on the rights issue,” he said.

The company said it would use the money to pay off debt, which stands at 3.2 billion rand, with the balance used for operational and capital expenditure.

Shares in ArcelorMittal SA fell as much as 12.6 percent to their lowest level in 14 years on Friday. By 1125 GMT, the stock had recouped some of the losses to trade 6 percent lower at 7.36 rand.

 

JOB CUTS

To cope with weak demand and rising costs, the company has said it would close parts of its Vereeniging Works plant and cut about 283 jobs as part of a review of its operations.

Along with industry rivals, ArcelorMittal SA has also asked the South African government to introduce import and anti-dumping tariffs to help them compete against cheap steel coming mainly from China.

“If we go, the industry goes.” Chief Executive Paul O’Flaherty told reporters on Friday.

ArcelorMittal SA reported 16 percent higher output in the quarter to Sept. 30, but sales to China fell 20 percent.

“Market conditions are expected to remain tough and all our units are expected to maintain their current below-capacity production levels,” it said

Separarely, the company and its raw material supplier Kumba Iron Ore have amended their supply agreement, under which ArcelorMittal SA paid costs plus 20 percent for iron ore.

Under the new deal, ArcelorMittal SA would pay an export parity price, or the price Kumba can expect to get if its product is exported, that would be discounted by as much as 7.5 percent depending on the market price of iron ore.

“This pricing amendment is commercially acceptable and sustainable for both parties,” Kumba Chief Executive Norman Mbazima said in a statement.

 

(Editing by Tiisetso Motsoeneng and David Goodman. By Zandi Shabalala. Reuters)

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South Africa’s rand falls to record low on strong U.S. jobs data

Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – South Africa’s rand weakened sharply to a record low against the dollar after firmer-than-expected non-farm payrolls data from the United States on Friday.

By 1413 GMT the rand had slipped 2.0 percent to 14.1700, its weakest level ever against the greenback as the growing likelihood of a rate hike by the Federal Reserve in December pressured emerging assets.

“The move is dollar bound, because of the non-farm payrolls. It means they (U.S. Fed) can start lifting interest rates and that is obviously bad for the rand,” NKC African Economics chief economist Christie Viljoen said.

The local unit ignored central bank data showing domestic net gold and foreign exchange reserves edged up slightly to $41.308 billion in October but succumbed to dollar strength following the positive jobs data.

The dollar rose to a 6-1/2 month high after the U.S. jobs report beat expectations, increasing 271,000 last month to its largest rise since December 2014.

Stocks also fell, with the blue-chip index down 2.5 percent to 47,332 points following the U.S employment figures.

 

(Reporting by Mfuneko Toyana; Editing by James Macharia, Reuters)

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An Untapped Resource: Emerging Fields of Employment for Women in the Middle East

Comments (0) Business, Featured, Middle East

middle east women in tech

Echoing global trends, in the Middle East the number of women pursuing a university degree is equal to, or higher than the number of men. In Kuwait, Qatar, Saudi Arabia, and Jordan women constitute respectively 67%, 63%, 57%, and 51% of university graduates. Arab women outnumber men in even the hard sciences. Indeed, the number of female STEM graduates is higher in the Middle East than it is in Western Europe. But as of yet, these advances in education have not translated into jobs. The number of women in paid employment in the MENA region is the world’s lowest, at 32%. In Jordan that figure is 16%. And women are more than three times as likely to be unemployed as men in Saudi Arabia and Qatar. In Kuwait, nearly 80% of the unemployed are women.

Persistent social and economic barriers – both perceived and real – are standing in the way. How will women travel to work when they’re not allowed to drive? Who will escort them? Who will look after their children? And what happens if they become pregnant? Comprehensive female employment will require governments to enact new laws. And it will require companies to create separate offices, bathrooms, entrances, and more.

However, representing a highly educated talent pool and an untapped resource that could offer the region a competitive advantage, women are perfectly qualified to play a productive role in the workforce. And indeed, there are now some positive signs that fields of female employment are starting to emerge and that businesses are starting to capitalize on the potential of Middle Eastern women.

More female Internet entrepreneurs in the Middle East than in the West

Technology is playing a significant role. In a region where nearly a third of the 355 million population are aged 15 to 25, Internet and social media penetration is very high. Nearly 90% access the web from home (except in Jordan and Egypt where the figure is 44%-50%). And nearly nine in ten Internet users log in to social media every day. Nowhere in the world does Twitter have more active users in proportion to the population than in Saudi Arabia. Unsurprisingly, the region is also the world’s fastest-growing e-commerce market.

The combination is creating opportunities for women, allowing them to set up small businesses from home where they can at once conform to traditional social norms and work. Indeed, where only 10% of Internet entrepreneurs across the world are women, in the MENA region that figure is 35%.

sheburgerJust a few examples: Emirati Shaikha Eissa has built a successful burger company, She Burger, on Instagram utilizing her 25,000 followers. Mona Ataya has launched a baby product retail site, Mumzworld, targeting female shoppers, which employs 40 people and sells more than 100,000 products. And prominent Palestinian Instagrammers Ruba Abdulhadi and Badea Jaber, have brought luxury western fashion to the Middle East with an e-shop, ElMuda.com, which leverages social content.

ElMuda.com was supported by Oasis500, the first early stage and seed investment company in Jordan and the MENA region. And there are many other bodies similarly investing in the region’s female entrepreneurs. The Gaza Sky Geeks accelerator is actively working to increase women’s leadership in the Gaza start-up sector. Girls in Tech is working to inform women in urban and rural communities around the world about the possibilities that tech can open up. And the US State Department has a TechWomen initiative which pairs MENA female tech entrepreneurs with American counterparts in Silicon Valley.

Fetchr is revolutionizing Middle Eastern delivery with a female workforce

E-commerce is also creating further employment opportunities for women. For example, GPS delivery app Fetchr has developed a female workforce to revolutionize delivery in the region. Currently, much of e-commerce is paid for cash on delivery (60%), but if a woman is home alone she won’t answer the door for a male driver. This results in returned products, lag times in payment, and repeat delivery trips. In solution, Fetchr, operating in Saudi Arabia, Dubai, and Bahrain, has employed women to make the deliveries.

Co-founders Joy Ajlouny and Idriss al-Rifai say: “In Saudi Arabia, women are not allowed to drive. Our deliverywomen will not be driving, they’ll just be knocking on doors. And because Saudi law dictates that all women must be accompanied in public spaces by a mahram, a male-relative or in-law escort, Fetchr employs family teams. Father-daughter, brother-sister, uncle-niece.” The company is also actively hiring female drivers in the UAE where women are allowed to drive.

Creating new business spaces for women

Fetchr is not the only company capitalizing on the business benefits of a female workforce. In Saudi Arabia, the Olayan Group, a 30-company conglomerate led by Lubna Olayan, is similarly committed to female employment. The Group, which deals in investing, real estate, manufacturing and distribution for foreign brands including Coca-Cola, Ritz Crackers, and Oreos, currently employs some 400 women (3% of its 12,000 Saudi-based employees). It has set a target to have 1,000 female employees in roles at all levels, from the factory floor to sales and management, by 2016.

Lubna Olayan

Lubna Olayan

The Group’s first female employees, mostly disadvantaged women, made history when they became Saudi Arabia’s first ever female factory workers, sewing surgical gowns at Enayah. Coca-Cola bottling now has an all-female bottling line. And Nabisco Arabia has a woman-only production line. Olayan companies have installed female prayer rooms and created partitions in offices, canteens, and factory floors to give their women workers privacy in line with regulations. There are also women-only buses to and from work.

Because yes, in the short term female employment in the MENA region will take some investment. But in the long term, capitalizing on the potential of a whole sector of society will also come with benefits.

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Botswana’s August trade balance slips to $159 mil deficit y/y

Comments (0) Africa, Business, Latest Updates from Reuters

GABORONE (Reuters) – Botswana’s trade balance swung to a 1.7 billion pula ($159 million) deficit in August from a 1.82 billion pula surplus in the same period last year due to a sharp fall in diamond exports, the statistics agency said on Friday.

On a month-on-month basis, the trade balance recorded a 1.7 billion deficit in August compared with a 486 million pula in July.

The data shows that while imports remained relatively flat, the August month-on-month deficit was driven by a significant 34 percent decline in exports from 4.6 billion pula to 3.03 billion pula.

 

(Writing by Mfuneko Toyana; Editing by James Macharia, Reuters)

 

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Mauritius tourist arrivals rise 10.4% in 10 months to Oct

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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

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

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

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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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