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Egypt awards four offshore oil and gas exploration licences

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

CAIRO (Reuters) – Egypt has awarded four new licences to explore for oil and gas off its Mediterranean coast, weeks after ENI’s giant Zohr gas find piqued fresh international interest in the area.

Egypt’s state gas company EGAS said in a statement it had awarded one licence to Britain’s BP and one to Italy’s Edison. A consortium involving BP and ENI’s Egyptian subsidiary had also picked up a bloc as had another consortium involving ENI, BP and France’s Total.

ENI announced in late August that it had discovered the largest known gas field in the Mediterranean off the Egyptian coast, predicting that the find could help meet the country’s energy needs for decades to come.

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Sudan expects to hit record gold production in 2015

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

sudan gold

DUBAI (Reuters) – Sudan said it expects to produce 80 tonnes of gold in 2015, its minister of minerals said on Tuesday, topping last year’s record-high production in the war-torn African nation.

“In the first three quarters of the year we produced about 72 tonnes so we are on track for our target of producing 80 tonnes for 2015,” Sudan’s Minister of Minerals Osheik Mohamed Taher told a mining conference in Dubai.

Gold mining is an important part of government efforts to keep the economy afloat after losing three quarters of its oil production — the main source of state revenue and dollars needed to pay for imports — when South Sudan split off in 2011.

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Oando aims to pick up Nigerian assets from embattled majors

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

LONDON (Reuters) – Nigerian-based oil producer Oando wants to double its oil output by 2019, targeting assets likely to be shed by majors hit by the crude price drop.

Chief Executive Wale Tinubu told Reuters in an interview on Monday the retreat among the world’s major producers from the onshore Nigerian oil industry would likely leave a lot of assets on the market.

“When you compare the size of the resource base (the majors) have in Africa vis-à-vis the rest of the world, it’s clear that they will have to do Nigerian divestments and we are the natural buyer of choice,” he said.

Oando, which produces some 50,000 barrels of oil a day, already bought ConocoPhillips’ Nigerian assets for $1.5 billion in July last year, with a view to meeting its target of hitting 100,000 bpd by 2019.

“We are driven, we are keen and we are on the lookout for opportunities and we are confident of securing opportunities towards increasing our reserve base and our production,” he said.

The price of oil has halved to below $50 a barrel over the last 12 months, as global supply has outstripped demand.

“We’re betting on an eventual oil price rise and we see the best time for securing those reserves as being now and not when the market rebounds,” Tinubu said.

Nigerian onshore oil projects have been plagued by industrial scale oil theft, security problems and oil spills, the latter having become a growing legal liability for major oil companies.

Nigeria is Africa’s largest oil producer and contributes some 2 million barrels a day to total world supply.

Shell has already sold some of its Nigerian oilfields and said last week it will focus its future investments there on natural gas. Its French peer Total agreed in March to sell a stake in an onshore oilfield to Nigeria’s Aiteo Eastern E&P.

Local oil producer Afren Plc, which went into administration in July, owns oilfields in Nigeria, but Tinubu said Oando was not considering them.

“We looked at it but we’re not really interested. It doesn’t satisfy our criteria we believe there are many better opportunities out there,” he said.

 

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Egyptian business activity grows at slower pace in September

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

CAIRO (Reuters) – Business activity in Egypt expanded for the second consecutive month in September, although the pace of gains in output and new orders slowed, a survey showed on Monday.

Egypt’s economy is still struggling since a popular uprising ousted autocrat Hosni Mubarak in 2011 and was followed by political instability that kept foreign investors and tourists away.

In a survey, the Emirates NBD Egypt Purchasing Managers Index (PMI) for the non-oil private sector fell to 50.2 points in September, from an eight-month high of 51.2 in August, but stayed above the 50-point mark that indicates growth in activity.

The index was below 50 points for the first five months of 2015.

“Given ongoing weakness in the export sector, it is encouraging that the overall PMI index continued to show an expansion in private sector activity,” said Jean-Paul Pigat, senior economist at Emirates NBD.

“While the pace of growth is moderate, the survey nevertheless points to a slight improvement in domestic demand in the first quarter of Egypt’s fiscal year FY2015/16. The challenge will be to maintain this momentum through the remainder of the year.”

The PMI’s output sub-index eased to 51.5 points in September from 52.8 points in the previous month, and only one-in-five panellists reported improved activity due to stronger demand.

The new orders index slipped to 50.5 points, from August’s 52 points, while the new export orders index shrank for the third consecutive month, to 47.8 points from 49.2 points a month earlier.

The employment index for the non-oil private sector fell to its lowest level in five months at 48.7 points, from 49.3 points in August.

President Abdel Fattah al-Sisi has pledged to reduce the jobless rate to 10 percent over the next five years. Unemployment stood at 12.8 percent during the first three months of 2015 according to the government’s statistics agency, but analysts believe actual unemployment may be higher.

The index of output prices fell to 49.5 points from 50.2 points in August.

Egypt’s urban consumer inflation has slowed, to 7.9 percent in August from 8.4 percent in July, official data showed in early September.

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Ghana delays Eurobond it expected to launch on Friday

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

Ghana money

ACCRA (Reuters) – Ghana has postponed a Eurobond sale of up to $1.5 billion it had expected to launch on Friday amid a rise in borrowing costs for emerging market nations, a senior government official said.

Analysts said the delay, following roadshows in London and the United States, was probably a response to the prospect of having to pay higher yields after concerns about China’s economy and a possible U.S. rate rise roiled global markets.

Eurobonds issued by other commodity-exporting African countries have sold off sharply in recent weeks as metals prices have plunged.

Ghana’s planned issuance was mainly to refinance debt. The country is heeding an International Monetary Fund programme to stabilize its economy in the face of a fiscal crisis that includes a debt to GDP ratio around 70 percent.

Senior Ghanaian financial policymakers have concluded a roadshow in London and U.S. cities and are returning to Accra. Officials said the launch could still happen in the near future.

“What it means is that we are not closing the book (launching the Eurobond) today,” said the official, who declined to be named. “But we are still live in the market and could seal a deal anytime we deem fit.”

A finance ministry statement said Ghana continues to consider the bond issue subject to market conditions. Another senior official told Reuters there was significant interest in the bond but the yields were not attractive.

“The reason why the deal is not announced yet, I suspect, is that the government was surprised that the cost of funding was still elevated relative to their expectations,” said a London-based fund manager.

Investors were demanding a high premium despite a World Bank guarantee for the bond of $400 million and the government appeared to be considering cutting the bond to $1 billion or lower to get the desired pricing, the manager said.

The manager said Ghana wanted to pay a 9.5 percent yield for the bond, while a source involved in book running for the launch said the market was demanding closer to 11 percent.

Angola on Wednesday cancelled plans for a $1.5 billion Eurobond due to challenging economic conditions and has not set a new time frame for the issue.

GROWTH SLOWS SHARPLY

For years, Ghana had one of the strongest economies in sub-Saharan Africa thanks to exports of gold, cocoa and oil. But growth has slowed sharply in the last two years due to a fall in global commodity prices and economic instability.

The government forecasts GDP growth at 3.5 percent this year and is under pressure to boost the economy ahead of what is expected to be a tight election battle in 2016, when President John Mahama will run for a second term.

“The Eurobond is critical in helping to anchor stability in foreign exchange rates and for government to refinance existing Eurobond issues,” said Sampson Akligoh, managing director of InvestCorp investment bank, which is based in Ghana.

The cedis gained slightly on Friday against the dollar but a trader said sentiment could turn bearish next week if the bond was not launched, given the market expected inflows from it and a $1.8 billion cocoa loan.

The yield on Ghana’s outstanding 7.87 percent Eurobond due 2023 has surged to record highs above 11.3 percent, according to Tradeweb data.

The average yield premium investors demand to hold emerging sovereign dollar bonds over U.S Treasuries soared almost 100 basis points in the third quarter. It now stands at 470 bps, close to 6-1/2 year highs hit at the end of last month, according to JPMorgan’s EMBi Global index.

But the average premium demanded of African sovereigns rose by an even greater 160 basis points in the third quarter and stands at 520 bps over U.S. Treasuries on the EMBIG index, while Ghana’s premium has jumped by 200 bps in this period to 914 bps.

(By Matthew Mpoke Bigg and Kwasi Kpodo, Reuters)

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South Africa’s Brait sells Steinhoff stake for $1 bil to pay debt

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

Steinhoff-International-Holdings-Logo-EPS-vector-image

JOHANNESBURG (Reuters) – South African investment firm Brait SE sold its stake in Steinhoff International for about 16 billion rand ($1 billion) and will use most of the proceeds to pay off debt, it said Friday.

Brait, which earlier this year sold its stake in low-end retailer Pepkor to Steinhoff for a combination of cash and a minority stake in the furniture retailer, said it would up its stake in British supermarket chain Iceland Foods.

After netting 15 billion in cash from the sale of its Pepkor shares, Brait has been on a buying-spree, lapping up gym chain Virgin Active and Britain’s clothing retailer New Look.

But the Pepkor deal, one of the largest in South Africa, also left it with 200 million Steinhoff shares.

“Brait’s minority shareholding in Steinhoff was not aligned with the company’s strategy of acquiring majority stakes in sizeable unlisted companies,” the investment house said.

The company plans to use the bulk of the money to pay off 14.2 billion rand debt. Brait also said it would pay 172 million pounds ($262 million) to raise its stake to 57 percent from 19 percent in Iceland Foods.

Brait said it would fund the Iceland Foods transaction from the 350 million pounds raised in a convertible bond issue earlier this month.

($1 = 0.6567 pounds)

($1 = 13.8925 rand)

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World Bank approves $500 mil loan for Tunisia

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

TUNIS (Reuters) – The World Bank has approved a $500 million loan for Tunisia to help finance economic reforms and face the consequences of two big militant attacks targeting its tourism industry.

The bank said on Friday the operation would aid restructuring of state banks and administration as a way to help economic growth.

The North African state has mostly completed its democratic transition since the 2011 uprising that ousted Zine El Abidine Ben Ali. But international lenders want to see more economic reforms to help reduce the deficit and high public spending.

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Orange in final talks to sell Kenyan mobile stake

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

NAIROBI (Reuters) – France’s Orange SA is in the final round of negotiations with an unidentified party to sell its 70 percent stake in Orange Kenya, Kenya’s finance minister said.

Orange is the latest international operator to quit Kenya, where Safaricom, part owned by Vodafone, has 67 percent of Kenya’s 36 million mobile users.

“(Orange) wants to exit so they are selling their 70 percent,” Finance Minister Henry Rotich, who oversees the government’s 30 percent shareholding in Orange Kenya, told Reuters. “They are in final negotiations.”

Without naming the other party, Rotich said he expected the transaction to be completed “very soon”, adding that it could be completed before the end of year.

Orange paid $390 million for its stake in 2007, aiming to capitalise on what were fast growth rates in the sector. Its plan was to make the firm, then known as Telkom Kenya, profitable and then to take it public in five years.

Orange was not immediately available for a comment.

Faith Mwangi, a research analyst at Standard Investment Bank, said Orange Kenya has struggled in recent years despite enjoying a monopoly in fixed-line telephones.

“They essentially failed to innovate,” she said, adding Orange’s strategy of offering cheaper calls had helped it claw back some market share in recent years.

Orange increased its users to 4.0 million in the quarter ended June from 3.7 million in the previous quarter, industry regulator Communications Authority of Kenya said.

“They have been consistently gaining market share,” Mwangi said.

One of Safaricom’s main advantages has been the development of its pioneering M-Pesa mobile money system, which allows users of even the most basic mobile phones to make payments. Rival offerings have yet to break Safaricom’s dominance.

Kenya has two other telecom operators, India’s Bharti Airtel and Finserve, which is owned by one of the country’s biggest banks’ Equity. India’s Essar Telecoms sold its Kenyan business, Yu, last year after it failed to make it profitable.

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Africa and the Middle East: Going Mobile

1 October 2015 Comments (0) Business, Featured, Middle East

ME mobile

By Enu Afolayan, Contributor

Going mobile. That’s the tune businesses, and marketers, are singing in the Middle East and Africa as the end of 2015 nears. If you don’t have a plan or haven’t started one, for the mobile marketplace, then you are at risk at being a generation behind the competition. You’re still driving a moped while everyone else is passing you by in their sleek, new electric cars that are almost driving themselves. Moreover, they are working on an app for that.

The people of the MEA market are snatching up mobile devices at a rapid rate and are second only to the Asia-Pacific market as the largest users of mobile phones. According to eMarketer, an independent market research company, 606 million people in the region have at least one mobile phone. They expect an increase to over 789 million in 2019. That’s a lot of phones. That’s a lot of people with phones who use mobile services and are increasingly buying goods and other services with them.

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Mauritius MCB Group full-year pretax profit up 26 pct

29 September 2015 Comments (0) Africa, Business, Latest Updates from Reuters

PORT LOUIS (Reuters) – Mauritius Commercial Bank Group’s (MCB) pretax profit for the full year to June rose 26 percent to 6.90 billion rupees ($195.19 million) on the back of higher net interest income, fees and commissions, it said on Tuesday.

MCB, the biggest bank by market value in East Africa and the Indian Ocean region, said that net interest income increased by 12 percent to 8.15 billion rupees in spite of pressures on margins posed by excess liquidity and restrained demand for credit locally amidst subdued private investment.

In a statement, MCB said loan book growth was supported by its international financing activities.

Net fee and commission income rose 17 percent to 3.36 billion rupees, driven by growth in revenues from regional trade finance, wealth management and card business activities.

“We are confident to grow the business further, which should result in higher profits for FY 2015/16,” the statement said.

Earnings per share rose to 24.04 rupees from 18.34 rupees.

Shares at MCB Group closed lower at 206.50 rupees from 207 rupees before the results were released.

 

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