Dialectic Africa Analyst

Dear Africa interested individuals:                                                         On Monday, April 25, 2016, I wrote an article on this blog titled:  "Nigeria All-Share Index: Retail investors will determine how it moves."   I have been a vocal proponent of retail investors being given the necessary support to return in droves to the Nigerian stock market and for their outstanding grievances to be addressed e.g. the dividends not yet paid out for banks that were taken over by the Central Bank (Bank PHB, Afribank etc) during the tenure of Sanusi.  Where is the money?   No one is talking.  The Nigeria Stock Exchange (NSE) leadership has a different opinion.  Retail investors should be pushed to invest indirectly in the marketplace by investing in mutual funds instead of directly purchasing equities into their own accounts.  Some mutual fund companies were even engaged by the NSE to do investor education (of course marketing their funds) to retail investo

Dear Readers:                        The most disturbing business relationship in the world is one where one party compensates another party that is supposed to to be loyal to the society at large and uphold certain fiduciary principles.  You are paid by one party but, your allegiance is to a larger group that has not compensated you in cash and/or kind but expects your human values to trump monetary value.     Auditors get paid by the client but, the general public is expected to believe the audited financial statements meet certain standards and do not serve the selfish interests of the paying client. Equity, fixed income and alternative investments analysts get paid by companies and the public is expected to believe the published reports reflect the honest, selfless view of the analysts and not the business and personal interests of his/her employer who pays the analysts' wages and bonus.  A boss of mine once upon a time called equity research a 'game.'  Lying to

Dear Africa interested individuals:                                                                   Kenya has been in the nose in recent years with one accounting scandal after the other.  The scandals came into the public domain through aggrieved parties, Institute of Certified Public Accountants of Kenya (ICPAK) or foreign parent companies.  Investigations into the "cooking of the books" exposed corrupt dealings and outright looting in some cases.  These are definitely worrying developments as is the recent case of Tesco in the UK and Toshiba in Japan where profits were overstated. In Kenya, accounting scandals of note over the years are: 1. Uchumi Supermarkets 2. Mumias Sugar 3. Haco Tiger Brands 4. CMC Motors 5. Kenya Airways The only acknowledged accounting scandal in Nigeria till date is that involving Cadbury Nigeria.  On paper, corporate governance and cooking of the books is more prevalent in Kenya, than in Nigeria. I am of the strong opin

Dear Africa interested individuals:                                                                 Over the past one year under the leadership of Patrick Njoroge, three Kenya banks have gone into receivership and the National Bank of Kenya has had its CEO & CFO removed along with four others.  A net profit of 2.25B Ks by September 2015 turned into a net loss of 1.15B Ks by December 2015 for National Bank of Kenya.  Patrick Njoroge, has stated that " never again will fuzzy numbers and creative accounting be used to deceive investors in banks."  The system is rotten and he has decided to openly acknowledge it and resolved to clean up the system.  Kenya is in tune with the rot within its banking system and is putting in place a better structure and closer surveillance and reporting to restore investor confidence in its banking system. Let's take a five hour flight to Nigeria, the most visible frontier market in Africa.  Skye Bank reported a pretax profit of N1

Dear Africa interested individuals:                                                         On June 20, 2016, I published an article titled: "Nigerian Naira: The misfortune of its people is the glee of foreign investors."  This article turned out to have the most one day views of any article ever written since the inception of this blog about fourteen months ago. Two months later, let us concisely review my major short-term expectations as stated in the article against present economic and market reality In Nigeria.    1. Expectation: The stock market will have a transient positive bump and then tank as the reality of pain sets in.  The naira free float policy commenced on June 20, 2016.   Reality:  The Nigeria All Share Index rose by 1.12% from June 20 to June 30.  The NGSE index declined by 4.42% in July and has declined by 2.25% as at August 25, 2016.  The market had a transient boost during the last nine trading days of June and then has been on a persisten

Dear Africa interested individuals:                                                                  Gradually it is becoming more evident that human prejudices that have existed since time immemorial are also impacting the way fund managers make decisions in Africa. The first angle I will look at is the demographic composition of staff of hedge funds that invest in Africa.  I have looked at Brazilian, Chinese, Eastern Europe, Asian, South East Asia, Latin American, American, Middle East and African funds.  The funds whose investment staffing is least similar in makeup to the region of portfolio inflows is Africa. People of European and American origins dominate African and frontier market funds.  This staffing domination is not seen anywhere close to the extent it is in funds invested in non African markets. Why are funds more open to talent from regions of investment focus except when it is Sub-Saharan Africa? The matter is further laid bare when South Africa domiciled A

Dear Africa interested individuals:                                                         I will keep this one short.  On May 3, 2016 ( search May archive on this blog for Forte Oil ) I published my view that Forte Oil was expensive and deserved to fall to around N150.00 .  Ten weeks later, on July 13, 2016, Forte Oil fell to N155.75 exactly as I predicted, despite persistent support at the N190.00 level prior to that.  The article on May 3, 2016 will lead you into another article published in February 2016.  Current feelers are that it is now on the rise today after falling into the N150.00 level I determined is its logical (natural) rebound price.  All my assertions are still available for viewing to verify.   While I have always intended to make this blog not be about buying and selling, I will not hesitate to stick out my neck every now and then to showcase my abilities.   Buy-side research is its own boss; you do NOT need a fellow human being to validate your abil

Dear Africa interested individuals:                                                   Most African stock exchanges are thinly traded on a volume and activity basis.  Some listed companies rarely trade at all and others that trade regularly do so in insufficient quantities relative to demand.  African companies across industries have embarked on an expansion spree across the African continent in the quest for revenue as markets became saturated in their home countries.  As these companies improve their performances through the conquering of new territory, are investors across the continent being given a chance to partake in ownership of these companies?  Shakespeare said "to know you is to love you"  Investors say "to see you is to buy you"   There are two types of cross listings: Listing of the parent company's ordinary shares on another stock exchange in another country or the listing of depository shares of parent company on another exchange in anothe

Dear All:                 This unique blog is now one year old and has over 100 articles.  Seems like just yesterday I kicked off as a hobby.  I have provided a few stock picks, helped people avoid expected losses, talked about African economies and where the bright lights and challenges are.  I have talked about what some companies need to do to improve their fortunes and exposed companies not being transparent about their financial performances where applicable.  I have talked about Africa in the context of power, energy, commodities, agriculture, infrastructure, currency depreciation, GDP growth and stock exchanges.  Most importantly, I have been loyal to the TRUTH without fear or favor .   I sincerely hope the continent improves and this starts with people in decision making positions being selfless and not selfish.  Unfortunately this has been the bane of Africa courtesy of its rulers and corporate oligarchs.   The donate button is visible on desktops and tablets at

Dear Africa interested individuals:                                                         Developed and major African markets took a tumble after British citizens voted to leave the European Union last week Thursday.  As the markets tumbled in Africa, analysts were (and still are) screaming themselves hoarse that Brexit is the cause.  Is Brexit a coincidental excuse for the market downturn in Africa over the past three trading days or does it run deeper?  This got me thinking and I went looking for answers.   I picked three developed markets and seven African markets for assessment purposes.   1. U.K.  (FTSE 100)  The U.K. is included here as a reference constant .  2. U.S.A.  (Dow Jones) 3. Germany (Frankfurt Dax) 4. Egypt 5. Kenya 6. Nigeria 7. Cote D' Ivoire (BRVM) 8. Ghana 9. Morocco 10. South Africa The big concern for any country should be: how much do we earn from U.K. imports and will this figure be negatively impacted post-Brexit?  The

Dear Africa interested individuals:                                                         I dedicate what I am about to write to all those around the world that fearlessly stand up for the truth in whatever sphere of life they operate in and earn their livelihood.  The happenings discussed in this article are all direct experiences of mine and one hundred percent truth .  You are free to remain in denial; this does not change what the truth is and remains.  I am putting this into the public domain to bring certain things to light.  If I did not meet certain people I never expected to meet, this write-up would never have seen the light of day.   Sometime in May 2016, I was finally able to set up a meeting with a frontier market fund manager based in USA that I had not yet met in person.  He had previously commended me on the quality of one of my articles in the past.  I walked into his office for the first time and sat down.  I felt with his passion for frontier markets inve

This is a repeat article originally published on September 25, 2015 and still available on this blog.  I felt it was pertinent to bring the article back to the top due to a particular policy action from the Central Bank of Nigeria (CBN) which reminded me of this article.  A few add ins in the last two paragraphs.    Why will the Central Bank Governor allow banks to sell dollars received from the CBN to their customers at self-determined rates?  There should be a narrow defined spread between the daily inter-bank closing stop rate and rates at which dealing banks sell to their customers.  Nigerian banks are once again being given an opportunity to 'milk' the system.  A policy decision that affects the nation is actually enriching pockets of interest and sending more pockets of people into penury.  Greed has become ubiquitous while patience needed by policy makers and the populace has gone AWOL.   Read on.          Dear Africa Interested Individuals: