Dialectic Africa Analyst

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

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:                     

Dear Africa interested individuals:                                                   The Nigerian government has just completed the introduction of policies that have culminated in a trifecta of pain on its citizens and residents that will have a massive and immediate impact on the standard of living of its people.   Never before in the history of Nigeria has there been a combination of the below official events all within a six-month period . 1 .    Electricity prices were increased on average by 80% per kilowatt hour more  to residential customers effective February 1, 2016 .  Commercial customers were also not left out.  The abolishment of fixed monthly charges may reduce the overall charge to a 40% increase which is what the media is reporting.   Electric power distribution (supply and quality) actually got worse after the increase took effect and majority of customers nationwide are still getting estimated billing  and not actual usage bills .  The regulator/governme

Dear Africa interested individuals:                                                      I mentioned in my article titled "29 African Banks published on May 23, 2016" that ETI is one of two banks (the other is National Bank of Egypt) in grave danger due to a combination of excessive leverage and high contingent liabilities relative to total assets. The CEO of ETI recently spoke about changes to the status quo during a presentation to stockbrokers at the Nigerian Stock Exchange.  His speech reflects the understanding at the helm of ETI that significant changes to the way the business is being run presently have to be made.  I could not agree more.     The key takeaways for me are: 1. ETI has simplified its operating model which has led to the redefinition of business segments and geographical regions.  Portfolios will be clarified across countries and businesses.  No more investing in products in which the cost of equity exceeds the return on equity.        2.

Dear Africa Interested Individuals:                                                                       Corporate debt continues to rise across emerging markets.  Some observers are unconcerned because a financial crisis has not set in as a result of rising corporate debt.  Debt accumulation should be of concern even when a financial crisis has not been triggered.   China's Central Bank governor warned in March 2016 that "the country's corporate debt levels are too high and are stoking risks for the economy."  The Bank for International Settlements also warned in March 2016 that "a steep rise in private and corporate debt in emerging market economies - including the largest - was eerily reminiscent of the pre-crisis financial bloom in advanced economies."   Glencore (Anglo-Swiss commodity trading and mining company) recently agreed to sell a 9.99% stake in its agricultural business to help cut its debt amid a prolonged rout in commodity pri

Dear Africa interested individuals:                     I had a flash about something I have noticed on multiple African exchanges for awhile and felt it was best to finally put my thoughts in written form.  I did not know what to expect from my findings but, felt I would uncover something insightful.   Over the years, I have noticed parent companies listing wholly or majority owned subsidiaries on African stock exchanges at higher prices per share than the listed parent on the SAME exchange . When you mention this, the other side tells you to focus on the market value.  They tell you the market value of the parent is larger than that of the subsidiary and that is what is more important.  The market value is more important to the owner(s) of the company; the price per share of the stock is (or at least should be) more important to the investor.        The more I thought about this readily more prevalent scenario, the more unsettled I became.  "It just does not feel r

Dear Africa interested individuals:                                                                When a country has a large population in comparison to most other countries in the world, its has to overly prioritize feeding its population.  Efforts should be focused on responsible agricultural investment within the populous country.  Beyond feeding a country's population and generating produce for internal consumption and export, agriculture is also the world's largest provider of jobs.   The twenty (20) most populous countries in the world as at 2015 are: 1. China 2. India 3. USA 4. Indonesia 5. Brazil 6. Pakistan 7. Nigeria 8. Bangladesh 9. Russia 10. Japan 11. Mexico 12. Phillipines 13. Ethiopia  14. Vietnam 15. Egypt 16. Iran 17. Germany 18. Turkey 19. Democratic Republic of Congo (DRC) 20. Thailand     There are four (4) African countries among the twenty most populous countries in the world.  How are these coun