Dialectic Africa Analyst

Dear Africa interested professionals,                                                             Allow me to take you on a quick and concise trip to East Africa and the banking industry. Barclays Kenya offers a full spectrum of solutions to its customers through its four business units: Retail, Corporate, Treasury & Card Services . The key strategic drivers of the company's current performance and into the future are: 1. Expanded existing business through renewed SME focus including a new hire to spearhead the bank's renewed focus and optimism about the SME space in Kenya. The bank has also increased fixed income trading with 18% of its total assets being committed to fixed income trading with none held to maturity as at September 2015 (all available for sale.)  Bond yields are averaging 16% in Kenya with a relatively stable exchange rate unlike 11% in Nigeria with an exchange rate fully insulated from market forces.     2. Accelerated opening of new revenue s

Dear Viewers:                        Long time!  The current prices of popularly traded stocks on the Nigerian Stock Exchange in 2016 will appear alien to all except the regular.  What can I say?  The low price of some stocks has not been seen ever in some cases and this got me writing again on this blog for the first time in almost 5 months .  Here are two of the companies that I was taken aback by their stock prices  moving in opposite directions for varied reasons.  1. Forte Oil trading at N342.00 per share.   This is pretty much double what the stock was trading at about a year ago. The company's pre-tax income rose by 17% from FY 2014 - 2015 and its share price has pretty much doubled over the past twelve months after rising 133% from December 31st 2013 - 2014.  This movement is definitely not market driven given that the Nigerian market index has been on a downward spiral in 2015 and this has continued into 2016 unabated with the market down almost 15%.  So is the pric

Dear Africa Interested Individuals:                                                          Six years ago, Lamido Sanusi (then CBN governor) used his executive powers to take over control of 8 banks in two batches.  Six of the eight banks were later on sold to other existing banks while one was sold to a core investor who recapitalized it and the other is still awaiting sale by the Asset Management Company of Nigeria. I remember being on a conference call four years ago with Access Bank CEO when the acquisition of Intercontinental Bank was announced.  Size and the capabilities it provides clearly stuck out as the driving force behind the acquisition.  So, four years on, how is the merged entity doing compared to when either bank was independent and immediately after the merger?  Given that size is most clearly evidenced by assets and performance is most clearly evidenced by profit, the ratio pre-tax income to assets will guide our discussion in this article.     Access Ban

Dear Africa Interested Individuals:                                                         Appointments typically send a particular message to the general public.  It shows the direction the person appointing wants to go with the organization in question.  Appointments of a federal nature are supposed to be driven by national best interests and not personal best interests even though the appointments are made by people.  I picked six countries and four are in Africa to review their Central Bank appointments which were all made in the past two years (this was not a preset criterion for selection.)  I picked the USA, U.K., Nigeria, Kenya, Angola and South Africa.  I picked the USA and U.K. because they are developed countries with advanced financial systems that should understand by now the proper way to do things.  I picked Nigeria as the largest economy and most populous nation in Africa, Kenya as the dominant economy in East Africa and a prominent frontier market, Angola as a maj

Dear Africa Interested Individuals:                                                         After reviewing Nigerian banks over the years and up to the half-way mark of 2015, I have now come to the following nutshell summations.   1. Nigerian Banks have always had a problem with fully disclosing their state of affairs.  There has been a slight improvement with the emergence of conference calls, investor relations teams and IFRS reporting.  Have looked extensively at the financials of African Banks from North to the South of the continent, I can say without a doubt that Nigerian banks have a lot more information to provide (and can provide) to the investing public and have not yet done so.  I will mention a few : Capital expenditure broken out into replacement & addition .   Breaking out of loan book into detailed tenors: <1 year, 1year - 2 years, above 5 years etc. Revealing interest rate(s) charged on comprehensive loan book in narrow value ranges   Employee turnov

Dear Africa interested individuals;                                                                 I got thinking today when I saw the different price trends for ZCCM on the Lusaka Stock Exchange and NYSE Euronext.  Why are prices on majority of African stock exchanges not fully reflective of present day operational, structural and event specific developments?  Let us welcome Ecobank Transnational Incorporated (ETI) into the picture. ETI trades on the Nigeria, Ghana & BRVM stock exchanges.   ETI on the Nigeria Stock Exchange closed on September 21st, 2015 at $0.093 , $0.094 on the BRVM exchange and $0.076 on the Ghana stock exchange (GSE.)  ETI's price on the GSE is 18% - 19% less than that on the NSE & BRVM respectively. Clearly, Ghanaian investors do not rate ETI equitably and the reason may not be farfetched. Ecobank Nigeria was delisted from the NSE in January 2012.  Just prior to delisting, ETI was trading at a price approximately 5X greater than that o

Dear Africa interested individuals:                                                          Tea is a major foreign exchange earner for Kenya.  Kenya Tea prices have risen about 66% year-to-date.  How did the stock price of three of its listed tea companies fare so far this year?  Williamson Tea rose 35% , Kapchorua Tea rose 33% and Limuru Tea rose 41% .  The price of the Tea companies have risen but, below the price surge of the underlying commodity.  The overall market gloom in Kenya may have something to do with this.  The key is that both (commodity price & commodity company price) are in positive growth territory.   Raw Tobacco prices in Zimbabwe have risen by about 1.5% so far in 2015 while, British American Tobacco, Zimbabwe has risen 4.46% year-to-date as at September 18th, 2015.  Both are on the same page in terms of direction though, the stock price is ahead  of the commodity price which is the reverse of the Kenya case.   Zimbabwe is also a major exporter of