Sub-Saharan African markets are attracting interest from foreign fund managers seeking to diversify risks in their global portfolio. Andre DeSimone, Executive Director at Kestrel Capital tells us why Africa’s stock markets continue to perform remarkably well despite their small size and low liquidity.
The global financial crisis affected African markets resulting in, among other problems, the drying up of credit lines. What is the status now?
As Africa’s financial system was not highly integrated with America’s or Europe’s, it was not so heavily impacted by the global financial crisis. Also, most African countries never experienced the sort of financial, real estate, or consumer leverage that was experienced in the US and Europe, for example. Aside from a few Nigerian banks, generally the banking systems in Africa weathered the storm quite well. In fact, in Kenya, no major bank suffered badly and many, if not most, continued to record positive earnings growth over the past year. So while the days of easy credit may be gone, in places like Kenya credit is still available to creditworthy clients and real estate development continues briskly. Read the rest of this entry »
Telkom Kenya on Wednesday revised its Internet charges downwards, raising the stakes in the battle for control of the data market which is expected to be the next frontier of revenue growth for telecoms firms. Subscribers will pay KSh1 per megabyte (MB), one of the lowest Internet tariffs currently on offer from a telecom firm. 
Kenyans will be able to send and receive money to UK through Safaricom’s M-PESA in the company’s first commercial cross-border transfer service.
“We have over seven million customers who have registered for M-PESA … Our average transaction is actually less than $40 [£24] – this is the kind of customer we are addressing … But in total we are moving in excess of $8.5m per day.” – Pauline Vaughan, Head of M-PESA, Safaricom
The rising cost of living and waning confidence of local investors in the Kenyan stock market have triggered major re-alignments at the Nairobi Stock Exchange (NSE), and appears to have put foreigners in control of trading volumes.
Pressure to reduce the price of communication intensified on Tuesday after national data solutions provider, Kenya Data Networks (KDN), lowered its connectivity rates by 90%. However, consumers are not yet experiencing cheaper retail rates.
Safaricom, Kenya’s biggest mobile operator wants to borrow up to KES 11 billion (USD 143 million). Safaricom has picked ABSA Bank, CFC Stanbic, and Barclays Capital to arrange the bond issue. Safaricom, which is partially held by Britain’s Vodafone, has had to contend with falling revenue per user as it has entered a price war with rivals such as France’s Orange and Kuwait’s Zain.
The Kenya Electricity Generating Company (KenGen) plans to raise KES 15 billion (USD 195 million) in a bond whose first tranche will be sold this year. Funds raised will be used to set up thermal generators. KenGen is the country’s biggest electricity producer. Most of its power is derived from hydrodams and a small percentage from geothermal wells. The rest is made by fuel-run turbines. 
