Dialectic Africa Analyst

Dear Africa Interested Individuals:                                                          South Africa is Africa's second largest economy (dethroned two years ago by Nigeria) and most advanced economy.  South Africa is competing perennially as the   second   largest investor (foreign direct investment) in Africa typically behind the United States of America. South Africa has continually made it difficult for other African countries' companies to break into its market or export products into South Africa that these African countries have an absolute and/or comparative advantage over South Africa in through protectionist policies and high import tariff barriers . South Africa's foray into the continent creates relatively few  new   job opportunities.  This is despite the country being the second largest FDI investor in Africa and its massive investment outlay across the African continent from Morocco to Mozambique. There are over 60 successful South African

Dear Africa interested individuals,                                                         I said in the post script of my article about Forte Oil dated May 3, 2016 that Tigerbrands is an event driven 'play' that should be acted upon. The only  stock with the largest and maximum gain (10.00%)  for stocks traded on May 4, 2016 on the Nigerian Stock Exchange was Tigerbrands. I also wrote an article on where there is value and picked FBN to generate at least 200% within two years.  Both articles were published more than four hours before trading started on May 4, 2016. The stock with the largest volume & value traded for May 4,2016 was FBN Holdings .  The stock traded 117,002,338 shares valued at approximately $2.1m .  No other stock among the 87 stocks traded on May 4, 2016 traded more shares or more value.                                                 Until next time, hold on tenaciously to the                                            TRUTH: The Real Underst

Dear Africa Interested Individuals:                                                         I wrote an article about Forte Oil on August 4, 2015 on this blog.   You should read or reread it as applicable .  Prior to that article, I had sent an email about the company's Q1 2015 result which was opaque and not fully reflective of the business reality of the company at the time.  The CFO of the company respectfully disagreed with me and the stock declined briefly and then went on a run during the last four months of 2015.  My conviction did not waver.  The price was rising artificially in my opinion.  One day, the price support will end and the price will fall to its equilibrium point as we are witnessing presently.  I believe its landing point should hover around N150.00.  Wish I could short...  In February, 2016 on this blog under the title: "Passing through the Nigerian market today" I also spoke about the share price of Forte Oil which was at N342.00 on that day.

Dear Africa Interested Individuals:                                                           CRDB Bank Tanzania was trading at 125 Tanzania Shilling four years ago and now trades at 385 Tanzania Shilling.  This is a gain in excess of 200% .  Most of the movement actually happened over the past two years.  The bank's debt/capital is just at my maximum of threshold level of 30% and is expected to trend further downward.  NPL ratio of 8% still yielded a pre-tax income margin of 27%.  Its off-balance sheet items are 12% of its assets which is reasonable. CRDB is not the largest bank by assets in Tanzania.   Tanzania's economy is expected to grow close to 7% this year and Uganda just opted to route its crude-oil pipeline through Tanzania as opposed to Kenya for export purposes.  CDC group acquired a stake in CRDB in September 2015.  You may have missed out on the 200% CRDB gain thus far over four years but, this journey appears not to be over .  Over to you.   The lar

Dear Africa interested individuals:                                                                                                               I have mentioned multiple times in the past that retail investors are critical to the positive performance of any developing countries' stock market.  This has largely fallen on deaf ears in Nigeria.  The appeal of foreign portfolio investors with their large briefcases have stolen the hearts and minds of market regulators in Nigeria.   The refusal to raise the domestic retail investor to a major player from a peripheral player has been the bane of the Nigerian market for more than five years now.  This has led to market returns being consistently inconsistent.   The Exchange hierarchy have advised retail investors to invest in mutual funds instead of directly.  I have never been in support of this especially in Nigeria where their operations are shrouded in secrecy with the tacit cooperation of market regulators.   I lo

Dear Africa interested individuals:                                                        Access Bank has released its Q1 2016 earnings.  Let me state some quick observations and comments. 1. Access Bank's loan-value added has gone negative for the first time in over two years in Q1 2016.  Loan value-added is now -0.41% (negative).   It was +1.41% for FY 2015 and +1.09% for FY 2014.  It was also +0.2% for H1 2015.   This is the same quarter the bank gave out fresh loans amounting to about $355 million between January 2nd and March 31st, 2016  in a rising interest rate environment coupled with rising defaults.   2. Debt/Capital has risen from 44.4% at FY 2014 to 52.1% as at Q1 2016.  A bank is relying on capital in which it pays interest and is also depending on interest on loans disbursed to generate revenue.  Its spread will have to widen to make business meaningful.  Risks amplified.   Any bank that has a debt/capital ratio of this magnitude is living life on the edg

Dear Africa interested individuals,                                                          Business people around the world are shouting themselves hoarse for Nigeria to further devalue its currency.  Yes, it was devalued formally in February 2015 to 200 naira from 160 naira to the dollar four - five months prior.  This is a 25% devaluation.   The IMF and foreign investors want more.  The logic is that this will boost revenue oil receipts in local currency terms and help the country to generate more revenue from lower oil prices.   This will also enable foreign investors to bring in $1 million and get 300 million naira instead of 199 million naira presently.   Naira supply will flood the system, further spike inflation and send the naira on a further downward spiral post devaluation.  The naira lost a further 10% after the CBN Governor at the time (Soludo) devalued the currency in one fell swoop in December 2008 by 25% from N120 to the $.   The failure of the governme