BIG DEALS BIG BUSTS IN THEHORIZON
New Beer Boys:United Dutch
Breweries, Netherland’s 3rd largest
beer maker, has entered the
Kenyan market.
Hooray for a housing fund:
Letshego, a Botswana-based
micro-financier has set up a Sh16
billion housing fund targeting low-
income housing mortgages.
Family Shares: Family Bank kicks
off its Sh 4 billion rights issue.
CMA’s list of shame: From July,
the regulator will name and shame
rogue firms and traders in the
financial markets. Well in!
Pricier Beer? : EABL distributors
want higher commissions (like
their friends in Uganda). EABL is
standing firm, doesn’t want to lose
customers. Let’s see how this
cookie crumbles.
Bad credit: Kenya might be facing
a downgrade from Standard &
Poor’s (S&P) due to rising political
tensions. We are B students now.
Bad beans: Coffee prices drop at
the Nairobi Exchange Auction due
to low-quality beans.
THE WEEKLY DIGEST
Insight
SCVI
SCVIEDITOR'S
NOTEINSIGHT
I’m really excited to bring to you our first ever edition of The Weekly Digest courtesy ofSCVI Insight, the publications arm of Strathmore Centre for Value Investing (SCVI). It hasbeen a long time coming and I know this is the start of very good things going forward.
In this publication, you will find the week’s top stories as well as a snapshot of movementsin macro-variables over the past week i.e. the NSE-20 Share Index and the USD/KESexchange rate.
Our aim is to keep you informed of happenings locally and from all four corners of the worldso that you may stay up-to-date and enlightened (and also impress your friends with yourerudition!).
Look forward to a new edition every Saturday of every week.More importantly - Enjoy!
ISSUE 001
[29th May-3rd June]
Nor
th A
mer
ica
Ind
ia, R
uss
ia &
Ch
ina
Sou
th A
mer
ica
&T
he
Ca
rrib
ean
Sub-
Sah
aran
Afr
ica
India’s good fortunes: When a billion people speak, you listen. With a population of approximately 1.3 billion humans
(as of 2013), the world should start listening to India. Earlier this year, the country has knocked China out of the
“World’s Fastest Growing Economy” race. India did it again by grabbing the pole position as the world’s top destination
for foreign direct investment (FDI) away from, you guessed it, China. Can it repeat the fete in the world of Crude oil
demand growth?
Why Uber likes China: Uber likes China. Why? It’s starting to make money there (and who doesn’t like money?).
It seems that China’s efforts to shift its growth model away from investment to consumption is starting to pay off,
for the country and for Uber. Go go China!
Russia’s dilemma: Higher oil prices in Russia should be a good thing, right? Well, not really. Higher prices may just
help Russia bounce back from a crippling recession. However, higher prices also make exports expensive and imports
cheap, meaning that we might be looking at a higher trade deficit. Blessing or curse? You decide.
Argentina dumps its debt: Argentina is celebrating just coming out of a debt crisis, which is great news given
its rich history in sovereign debt defaults. Bring out the Champagne and throw a party.
Bad days for Brazil: Brazil is having it tough. What with the Zika virus and scary political unrest. Economic
experts just joined the pity party and declared a shrinking economy on top of everything. Boohoo for Brazil.
Silver lining though: it still has plenty of beautiful women. Cheers for Brazilian Babes!
No more beers bruhv!: Beer lovers beware! Venezuela is in a bit of a bind what with a shortage of the sweet
stuff. No more drinking our troubles away. Producers cite a shortage in raw materials (starts with a B, odd!) Poor
Venezuelans. Ration the Rum!
Kenya says 'No!' to refugees: Big news. The world’s largest refugee camp is in Kenya. Furthermore, it’s closing. It’s
called Dadaab and has been home to approximately 34,000 humans who mostly originate from war-torn Somalia as well
as Ethiopia. The announcement, made by President Uhuru Kenyatta is generating a lot of heat. Word heat. But heat
nonetheless.
Nigeria’s gas crisis: Nigeria is in big trouble. Bad men (read ‘terrorists’) are tearing the country apart and have
successfully brought the African country’s economy to its knees (Yikes!). Now nasty crews are shutting down the
country’s gas generators. Credit goes to Niger Delta Avengers, who really should stop watching too many sc-fi movies.
Zimbabwe’s cash crunch: Zimbabwe is Africa’s economic problem child. It manages levels of hyperinflation that seem
straight out of Wonderland -79.6 billion % in 2009 (I’m not kidding). Now everything is coming to a halt (big surprise)
given a recent crunch in cash. What’s the government doing about it? What it does best: print more money!
Raising US interest rates - the Fed decides: The US Federal Reserve Bank want to hike up interest rates. It’s
worried about rising inflation and the economy heating up. Don’t want to overcook the big macro meal, do we Yellen?
We wonder what this means for emerging and frontier markets. Will we see depressed markets and despondent policy
makers?
US job growth slows: Jobs are getting scarce in the States (USA). It actually recorded the largest drop in jobs created
in 5 years. Word on the street is striking Verizon workers as well as dropping volumes of job-creating goods. This might
give Yellen ideas. Yikes!
Canada’s cuts: It seems that bad, i.e. cheap, oil is bad for business (and the trade deficit) in Canada. The decline in
crude oil prices has led the Bank of Canada to cut interest rate twice to boost the economy. Three times a charm
maybe?
News from Around the World
Sou
th E
ast
Asi
aE
uro
pe
Hopes inflated in Europe: Good things in the air for Europe, at least according to the European Central Bank (ECB).
It raised its inflation outlook for 2016 to 0.2% (from 0.1%), and hopefully eased concerns about the region falling into a
deflationary spiral. Phew!
VW pays the piper: Volkswagen is in pain. Not ‘flesh and blood’ pain but rather business pain what with profit
tumbling 20% in the first three months of 2016. People seem to think it’s that pesky scandal about emissions that got
them into this mess. Time to pay the Piper VW!
The fidgety French: The land of good wine, fresh bread and nice cheese is facing some serious problems. A rail
strike is threatening to put Euro 2016 in jeopardy in France. The country’s largest union also called a strike and
workers have blockaded power plants, petrol stations and oil refineries. They don’t like the planned labor laws.
Nothing a good bottle of wine can’t fix no?
TheTeam
EDITORTim Avedi
CONTRIBUTING WRITERS
Ronald WakhuJulie Songok
Rose KagumbaIvy Mwende
Valentine MuhonjaKoki Gachui
MACRO SNAPSHOT
ASEAN, China and the US: a geopolitical love triangle: The world’s greatest superpowers, US and China,
are looking to win the hearts and minds of ASEAN countries. Competing trade agreements from both wooers
have got the ASEAN region in a bit of a bind. Can it keep them all?
Billionaires and inequality in emerging markets- insights from a new study: How do entrepreneurs in
emerging markets get super-rich? Are they building fortunes at the expense of rising inequality? How do we
separate the clean tycoons from the corrupt cronyist types? All these questions are addressed and tackled in a
study done by the Peterson Institute in Washington D.C. Should make for interesting reading.
News from Around the World
LINKS TO STORIES
ASEAN, China & the US
Billionaires and inequality inemerging markets
Argentina dumps its debt
Bad days for Brazil
No more beers bruhv!
Kenya says 'No!' to refugeesNigeria's gas crisis
Zimbabwe's cash crunch
Raising US Interest rates
US job growth slows
Canada's cuts
Hopes inflate in EuropeVW pays the piperThe fidgety French
India's good fortunes
Why Uber likes China
Russia's dilemma
The Local Beat
India, Russia &China
Europe
South America &Carribean
Sub-Saharan Africa
South-east Asia
North America
New Beer Boys
Hooray for a housing fund
Family shares
Bad creditBad beans
CMA's list of shame
Pricier Beer?
BIGDEALS
BIGBUSTS
IN THEHORIZON
SCVI
INSIGHT
@scvi_insight
scviinsight.wordpress.com
GOT FEEDBACK ON THE DIGEST?MAIL OR TWEET US!
The End!