Millenial Money

5 things people are talking about this week(January 8th 2018)

New segment!!!

I’m honestly very excited to start this new thing where I will be discussing 5 things that are running amok or pushing forward in the business and investment world and especially in the African space. I am partnering with a phenomenal woman called Ekra Gituire to keep this up and to make sure we do not flake or give up along the way. So shall we? I hope we will get to learn some fascinating things along this journey together.

1.Two diamonds, each larger than 100 karats found in Lesotho mine

Gem Diamonds Ltd. has discovered two huge diamonds, each bigger than 100 carats, at its Lesotho mine in southern Africa. It unearthed the 117 carat and 110 carat D color Type IIa diamonds at the Letseng mine, Gem said in a statement on Monday. Type IIa diamonds contain very little or no nitrogen atoms and are the most expensive stones. The company’s stock rose as much as 8.2 percent in London trading. It’s a good start to the year following Gem’s discovery of at least seven stones bigger than 100 carats in 2017 and five the year before. It recovered a dozen diamonds bigger than 100 carats in 2015.

Source, Bloomberg

2. China insurer up 100 billion trades

Insurance may lack the buzz and cachet enjoyed by tech companies, yet the stock of one Chinese company in the industry has kept pace handsomely with some of the highest-flying champions of the digital revolution. Ping An Insurance (Group) Co.’s success shows how the lines between “new” and “old” economy businesses are breaking down, forcing investors and strategists to rethink classifications and appropriate valuations. China is at the forefront of this melding of industries, thanks to its pressure on companies to move up the value chain, and a regulatory approach that gives firms a freer hand at innovating new products and services. “The world has moved too much to ‘new’ and ‘old’” categorizations, says Joshua Crabb, head of Asian equities at Old Mutual Global Investors in Hong Kong. Ping An’s “phenomenal performance” reflects its emergence as a combination of a “boring old” life insurer and a “leading internet company,” he says. Another star that’s transcended the “boring” classification is China Molybdenum Co., which at one point focused on a metal used to toughen steel, but now enjoys a new-economy style valuation thanks to its holdings of cobalt, which is essential for electric vehicles. Or consider Midea Group Co., a household appliance maker that’s seen its stock soar as it developed smart-home technology and became a leader in manufacturing automation.

Source, Bloomberg

3. Kohlberg Kravis Roberts Exits Afriflower, an Ethiopian Company

Subscription is needed to view this article but the last thing I remember about KKR, they were disbanding their African team since they could not find big deals to do. They had invested USD 200 million in the flower farm.

Source, Africa Capital Digest

4. VAT removal pushes transit cargo 35% up

VALUE Added Tax (VAT) removal on transit cargo has fuelled the increase of a number of containers handled at the port by 35.5 per cent, last year. The government in 2016/17 budget scraped off VAT on transit goods, hence increased transit traffic. Tanzania International Container Terminal Services (TICTS) said the containers handled by its unit climbed to 501,690 twenty equivalent units (TEUs) in 2017. TICTS attributed the increase to the government initiative to scrap-off VAT on transit goods ancillary services. Chief Executive Officer, Mr Jared Zerbe, said the transit bound cargo has increased by more than 35.5 per cent, last year, in comparison to previous year. Also to bring service closer to its customers, TICTS opened a regional office in Rwanda to market the port in that area. The CEO said last year the company also enabled to increase its market share, especially for customers from Rwanda, Zambia and Uganda. The firm also faces some challenges including transit cargo dwelling time that led to decrease terminal storage capacity.

5. NICOL Submits a relisting application to the DSE

NATIONAL Investment Company (NICOL) Investment has finally submitted a re-listing application to Dar es Salaam Stock Exchange. The mutual fund submitted the re-listing application this week and is under the bourse committee for evaluation. DSE’s Senior Marketing Officer Mary Kinabo told ‘Daily News’ yesterday that the committee for evaluation expected to peruse the proposal before coming out with an accepting or rejecting response. “The application is under evaluation process. “The date of relisting will be determined on the outcome of the evaluation process,” Ms Kinabo said. NICOL was delisted in mid-2011 after failing to comply with listing regulation including disclosing of their financial statements and reporting the progress of its subsidiary companies. However, after years of management wrangles, the private equity firm settled and declared a first dividend of 25/- per share after ten years after inception last month. NICOL Chairman Gideon Kaunda told the third annual general meeting here in the first week of last December that they hadn’t paid any dividend in a decade to shareholders. “….But this is the right time to do so as the company is doing well,” Mr Kaunda said. The dividend was declared after NICOL posted a profit after tax of 8.67bn/- in 2016. The firm assets increased from 23.4bn/- in 2010 to 94bn/- while investment income from 1.0bn/- to 3.7bn/-.

 

Any other news making the markets tingle?

Happy week!

About 
Ekra Gituire is a corporate finance and investments professional based in Nairobi, Kenya. She has been in the investments sector for close to two years and is now working on her CFA qualification. Her other interests include writing and travelling.

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