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Ground-breaking Report to be Released on East Africa’s Family-Owned Businesses



  • Ground-breaking Report to be Released on East Africa’s Family-Owned Businesses

London (Thursday 26th September 2019) — Asoko Insight, Africa’s leading corporate data provider is producing a groundbreaking report that will be published by Business Intelligence Unit, on East Africa’s Family-Owned Businesses (FOB).

The landmark report aggregates data from in-country repositories including credit reference bureaus, tax authorities, registrars, regulators and private sector associations, as well as five years of on-the-ground research in Africa conducted by Asoko’s team of over 50 in-country analysts.

The report will contain a structural analysis of the key sectors where FOBs are concentrated, including manufacturing and construction, agro-processing, and consumer goods, as well as deep dives into major companies within them. Readers will have access to key actionable information and an understanding of consequential forces at play in the rapidly evolving economic landscape of sub-Saharan Africa.

East Africa’s FOB environment offers unique investment opportunities for the Africa-focused global finance and corporate community. These businesses typically have a long, multi-generational history, are robust and interested in modernisation and expansion. The main obstacle to creating synergies within this sector has been its opacity, as details on these companies’ nature, size and shareholding are largely unavailable. This report brings those details to light in a transparent, methodology-driven, data-centric manner.

Along with a structural analysis of each FOB sector and deep dives into major companies within them, readers will have access to key actionable information and an understanding of consequential forces at play in the rapidly evolving economic landscape of sub-Saharan Africa. Asoko has released several teasers from the report in recent months, providing a brief look into the composition and characteristics of the FOB landscape. For example, a Kenya focused teaser revealed that there are 490 family-owned firms in the country earning revenues in excess of $10 million, with a highlight on 22 of them earning over $100 million. Further analysis indicated that these firms operate across various sectors, from banks to air freight and logistics companies. This diversification sets it apart from other countries in sub-Saharan Africa, where the leading FOBs are largely concentrated in the industrial manufacturing and agro-processing sectors.

Another teaser focused specifically on FOBs in Rwanda’s construction sector, with Asoko research identifying 14 family-owned businesses with revenues over $10 million, three of which sit within the construction industry. Further Asoko analysis revealed that Rwanda’s construction sector is booming, with revenues rising by 60% since 2012 and regulatory changes helping to propel the country into the second spot in sub-Saharan Africa in The World Bank’s 2019 “Doing Business” report.

The final report, scheduled for publication by the end of the year is set to deliver a holistic view of East Africa’s FOB universe. Combining macro-level analysis with detailed company data, the report is set to be invaluable to readers looking to do business with this key segment of the market across East Africa.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and, with over a decade long experience in the global financial market.

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Barclays Tell High Net Worth Investors to Shun Africa and Other Emerging Economies



Barclays Bank

Barclays to High Net Worth Clients, Stay Off Africa and Other Emerging Economies

Barclays, one of the world’s largest investment banks, has started advising high net worth clients to stay off Africa and other emerging economies.

According to Barclays, despite the recent recovery noticed in emerging-market stocks, investors are better off avoiding the risks that still abound in emerging nations. Barclays Plc, however, advised high net worth clients to focus on U.S equities despite the S&P’s breakneck rally.

The investment bank said emerging economies do not have enough fiscal buffers to spend their way out of the COVID-19 pandemic and will likely continue to struggle in the near-time compared to the US with 12 percent of gross domestic product fiscal-support.

It said the huge US stimulus may halt rebound in emerging-markets stocks as more money is expected to flow into the world’s largest economy and its European counterparts.

“Compared to the U.S., emerging-market economies appear more vulnerable,” said Haider, the London-based managing director and head of global growth markets. “Their central banks have less room to maneuver, their governments may not be able to provide unlimited support and equity markets, given their sector mix, can be more challenged by an economic slowdown.”

Barclays added that even after 33 percent rebound in stocks of emerging markets since the panic selloff subsided in March, stocks are still down by 9 percent from year-to-date while the US S&P 500 stocks are up by 45 percent. Presently, their stocks trading at a 36 percent discount to US stocks, up from 25 percent three months ago.

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Crude Oil Rises to $43.1 Per Barrel on Production Cuts Extension



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  • Crude Oil Hits $43.1 Per Barrel Following OPEC’s Production Cuts Extension

Brent crude oil, against which Nigerian oil price is measured, rose by 1.25 percent on Monday during the Asian trading session following OPEC and allies’ agreement to extend crude oil cuts to the end of July.

OPEC and allies, known as OPEC plus, agreed to extend production cuts of 9.7 million barrels per day reached in April to July on Saturday.

In the virtual conference, delegates agreed that members, including Nigeria and Iraq presently struggling to attain a 100 percent compliance level must keep to the agreement or be forced to do so in subsequent months.

Nigeria, Iraq and others failed to keep to the cartel’s agreement in May after reports show that Nigeria only managed to attain a 19 percent compliance level during the month while Iraq struggled to attain just 38 percent in the same month.

Russia and Saudi Arabia, the two largest producers of the group, warned members to stick to the agreed quota if they want to rebalance the global oil market.

While the errant producers such as Iraq and Nigeria have vowed to reach 100% conformity and compensate for prior underperformance, we still think they will likely continue to have some commitment issues over the course of the summer,” said Helima Croft, head of global commodity strategy at RBC Capital Markets.

The potential return of Libyan output could also cause considerable challenges for the OPEC leadership.

Earlier on Monday, Brent crude oil hits $43.1 per barrel, more than a month record-high, before pulling back slightly to $42.83 per barrel.

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Gold Dips by 2 Percent on Better Than Expected Job Report



gold bars
  • Gold Dips by 2 Percent on Better Than Expected Job Report

Gold prices declined by 2 percent on Friday following a better than expected US non-farm payroll report.

The report showed an increase of 2.5 million payroll numbers against a decline of 7.5 million predicted by many experts.

The surprise number boosted investors’ confidence in US recovery as many dumped their haven investment (gold) for the stock market.

“We had significantly stronger-than-expected U.S. payroll numbers – an increase of 2.5 million versus an expectation of a decline of 7.5 million – that 10-million swing has brought forward expectations of the economic recovery in the United States,” said Bart Melek, head of commodity strategies at TD Securities.

Spot gold immediately declined by 1.9 percent per ounce to $1,678.81 while the U.S. gold futures slid 2.6 percent to settle at $1,683.

Gold was also being pressured by stronger yields and a slightly firmer dollar, “meaning the opportunity cost to hold gold in the portfolio has gone up,” Melek added.

The surprise didn’t stop there, US Dow Jones was up 614 points despite the protest going on the US and US-China tension.

Also, NASDAQ rose by 29 points while the S&P index added 50 points increase.

Note: Investors generally increase their investments in gold and other haven assets during a crisis to avert risk exposure and do the opposite once they sense a better economy.

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