Africa Brief: Timing vital for African success, Zambian telecoms, campaign begins in divided Mali and more

Timing vital for African success

Timing is crucial for both companies and investors, seen in a recent report produced by Avior. Wrong execution or timing could damage investor confidence and destroy capital. For instance, Altech operations in Nigeria and Kenya have been generating significant losses until disposal thereof in January 2013. Altech’s net cash re­sources have dwindled from Rl.6bn to a net debt position of around R800 million over the past four years.  The researchers concluded that the best time to buy into a company depended on the differential between growth in South Africa and growth across its borders, as well as the extent of the company’s exposure to the rest of Africa.

The sweet spot is to go for companies which get 15 percent or more of their revenue from Africa. By this point the growth contribution is typically meaningful, the company understands its market and the risk of failure is naturally lower.  MTN offered some of the best African exposure among JSE listed companies, with 57 percent of group revenue likely to be generated in Africa outside of South Africa.  Avior concluded that the best opportunities on the continent appeared to be those that “can make money off low end consumer items, resources and infrastructure”.

For the full story, read Timing vital for African success by Ethel Hazelhurst, published by The Star, Business Report on 08/07/13

Zambia’s telecoms regulator charges operators

Zambia has started criminal proceedings against all three cellphone operators in the country, saying they have failed to meet minimum quality standards.   Deteriorating service by the local units of Bharti Airtel, MTN Group and state-owned Zambia Telecommunication has made communications difficult, doing business harder, and led to a public outcry.

Sub-Saharan Africa has the fastest-growing mobile market in the world.  Mark Mobius, executive chairman of Templeton Emerging Markets Group, said that he is considering private equity investments as a way of tapping growth in Africa. Templeton has about $lbn invested in Africa.  Actis Capital and Ethos Private Equity are among those hunting for private equity opportunities in Africa to supplement the investment options provided by growing debt and equity markets.  Africa’s growing middle class is attracting wealth and asset managers as there is a great prospect in Africa which in turn hasn’t attracted many investors.

For the full story, read Zambia’s telecoms regulator charges operators by Staff Writer, published by Business Day on 08/07/13

Campaign begins in divided Mali

Campaigning for Mali’s water­shed July 28 presidential election officially began on 07/07/13, with the nation struggling to move from war to constitutional order after an 18-month political crisis.The ballot will be the first since a coup last March that ousted the democratically elected president just months before he was due to step down at the end of his final term. The transitional government lifted a nearly six-month state of emergency at the weekend of 6 July, marking what officials hope will be a gradual return to normality ahead of the nationwide polls. However, critics of the process argue that it is being rushed and, far from restoring democracy, it threatens to plunge the divided West African nation further into chaos.

United Nations (UN) Secretary-General Ban Ki-moon described the preparations last week as an “enormous undertaking”. “The situation in Mali is of great concern…. It is vital that these elections be credible and peaceful, with an outcome accepted by all Malians,” Mr Ban said in Geneva.

For the full story, read Campaign begins in divided Mali by Serge Daniel, published by Business Day on 08/07/13

Forex reserves under pressure

Egypt‘s foreign reserves fell by $1.12 billion (RU.4bn) last month to $14.92bn, the central bank said on 07 July 2013, underlining the perilous state of Egypt’s finances as a new military-backed government takes power. Reserves have been under pressure since the 2011 uprising that pushed out Hosni Mubarak and frightened away tourists and foreign investors. The reserves represent less than three months of imports. – Reuters

Excerpt from Forex reserves under pressure by Reuters, published by The Star, Business Report on 08/07/13

Giyani Gold lists on Namibia’s AIX Board

Giyani Gold, fresh from its debut on the JSE’s AltX last month, listed on the Namibian Stock Exchange (NSX) on Friday [05/07/13]. The Canadian gold exploration company’s latest listing has prompted speculation that it is one of the bidders for AngloGold Ashanti’s Navachab mine. Giyani is focusing on gold deposits in Southern Africa. It has a number of prospecting rights in the Giyani greenstone belt in northeastern SA, and wants -to consolidate a greater land pack­age around the prospects it already holds. Giyani is on the newly formed alternative investment board (AIX) of the Namibian exchange, after receiving approvals for the Central Bank of Namibia and the exchange’s listing committee. Giyani had no prospecting rights in Namibia, despite listing as a gold exploration company. The NSX has created the AIX for companies interested in com­ing to Namibia to explore business opportunities. At the end of last month that the company had converted debt into equity—using past expenditure and write-downs of C$5.6m (R54m) on its projects in Ontario — into up to C$11m of marketable securities, depending at which price the new vehicle’s shares trade.

For the full story, read Giyani Gold lists on Namibia’s AIX Board by Allan Secombe, published by Business Day on 08/07/13

David Okwara

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