23rd April 2021 Trade & Financial Services Round Up

  • 23 Apr 2021
  • 5 Mins Read
  • 〜 by Acha Ouma

Foreign investors pull Sh2 billion from NSE

Foreign investors have withdrawn Sh1.98 billion from the Nairobi Securities Exchange (NSE) since January, with more than half of the takeaways coming in this month alone, highlighting the impact of profit-taking and fresh Covid-19 control measures announced late March.

Foreign traders have been net sellers for all the trading days of April to date as they cut exposure in equities in search of shelter in fixed income assets, including government bonds.

Market data from Capital Markets Authority and AIB-AXYS Africa show that foreign investors withdrew Sh976 million between January and March and Sh1.01 billion between April 1 and April 20.

This means that foreign investors were pulling out an average of Sh15.25 million daily from the NSE in the first quarter of the year but have raised this nearly five times to Sh72.16 million.

Investment banks have linked the increased sell-off on profit-taking following the release of results as well as the setback from fresh tough rules to curb the spread of coronavirus on sectors such as banking, hospitality and aviation.

Source: Business Daily

Carrefour penalised for forced supplier discounts

Supermarket chain Carrefour has been ordered to revise all its agreements with some 700 suppliers within a month after a tribunal found it has been exploiting traders.

Carrefour, Kenya’s second largest retail chain, will need to expunge up to six items from its supplier contracts that are said to give the store the power to offer ultra-competitive pricing to boost sales and increase market share.

The clauses include forcing suppliers to pay a non-refundable fee to do business with it and compelling merchants offering the retail chain goods to provide extra rebates or discounts.

Carrefour was found to be in breach of the law for forcing suppliers to post their own staff at its outlets at the expense of the traders. It was also accused of rejecting goods already delivered.

The order by the Competition Tribunal, which largely affirmed earlier decisions taken by the Competition Authority of Kenya (CAK), sets a major precedent in the retail sector and could be relied on to remove similar trade practices among other players.

Source: Business Daily

Insurers review clauses as Covid reality sinks in

Insurers are reviewing clauses in their contracts to reduce potential conflict with customers after Covid-19 pandemic exposed them to unforeseen claims.

Onset of the pandemic in Kenya early last year saw many underwriters reject Covid-related claims, only for them to realise that the contracts they had with customers had no exclusions.

The Insurance Regulatory Authority (IRA) said insurers are responding by rewording clauses in contracts signed with customers to clear the air on what is not included in the policies.

Source: Business Daily


Lending rates edge up to 19.9 per cent

During February, government borrowed Shs 901.21b from the domestic market through two T-Bill auctions and one T-Bond auction. At least Shs440.11b was raised from T-Bills while Shs461.11b came from T-bonds.

Interest rates for both shilling and dollar-denominated loans edged in February, according to data from the Ministry of Finance.

This was contrary to a stable Central Bank Rate that the Central Bank has maintained at 7 per cent since December.

Interest rates on shilling-denominated loans rose to an industry average of 19.9 per cent during the period from 17.4 per cent in January, which represented a 2.2 percentage rise while those on foreign currency loans edged up to an average of 5.3 per cent from 4.7 per cent.

Source: The Monitor

Absa loan book grows by 9.6% amid Covid-19

Absa has registered a 9.6 per cent growth in its loan book for the period ended December 2020, signalling an increase in borrowing in a period in which the economy had been dampened by Covid-19.

Speaking during a media roundtable in which the bank also released its financial results in Kampala yesterday, Mr Mumba Kalifungwa, the Absa managing director, said that despite an industry decline in lending, “our gross loan book grew to Shs1.5 trillion maintaining a three- year compounded annual growth rate 9.6 per cent.

Source: The Monitor


Brela registers 7,148 new companies

The Business Registration and Licensing Agency (Brela) has reached third quarter of its target of registering 9,528 new companies for the current financial year, thanks to the new online registration system.

The Agency’s chief executive officer Godfrey Nyaisa told a press conference today that so far some 7,148 companies have been registered representing 75.02 percent of the target.

“With the online registration system and given that all applicant’s documents are intact, it takes only a single day for the registration to be completed,” said Mr Nyaisa.

Source: The Citizen

Foreigners inject Sh1.5bn in DSE via block trading

Foreign investors stimulated activity at the Dar es Salaam Stock Exchange (DSE) on Tuesday after injecting in Sh1.56 billion through block trading.

According to the bourse’s market report for April 20, 2021, two trading counters – CRDB Bank and NMB Bank – traded a block of two million and 675,000 shares respectively on the pre-arranged market board.

At the end of the trading session, the two banks recorded a total turnover of Sh1.5 billion, namely: Sh1.14 billion for NMB and Sh428.16 million for CRDB, the daily report says.

Source: The Citizen

TTCL targets 6 pc market share

TTCL Corporation is planning to increase its market share by going both in rural and urban areas.

The telecom, full-owned by the government, is targeting to increase its market share from current 2.0 per cent to 6.0 per cent at the end of this year.

TTCL, Acting Commercial Director, Laibu Leonard, they would reach their target by rolling fast services to reach the mass at affordable rates.

“We are going fast to ensure Tanzanians get the best communication services from TTCL,” Mr Leonard told journalists when announcing the reintroduction of old internet bundles, yesterday.

Source: Daily News


MTN Rwanda to list on RSE early May

MTN Rwanda will list on the Rwanda Stock Exchange on May 4th following approval by the Capital Market Authority (CMA), the Rwanda Stock Exchange (RSE) and Crystal Telecom’s (CTL) shareholders.

The listing will see 20 per cent of MTN Rwanda’s shareholding held by CTL directly held by the public.

During the listing, 1,350,886,600 ordinary shares will be registered with the RSE at an initial listing price of Rwf269 per ordinary share.

CTL shareholders will become direct shareholders in MTN Rwanda and be able to trade their MTN Rwanda shares on the RSE.

Source: The New Times


Ethiopia Suggests Meeting of Bureau of the Assembly of the AU to End Impasse over GERD Talks

Ethiopia suggested meeting of Bureau of the Assembly of the African Union (AU) to end impasse over GERD talks, according to Ministry of Foreign Affairs.

Ethiopia said the way forward on the GERD negotiations is to request the Chairperson of the African Union, President Felix Tshisekedi to call the meeting of the Bureau of the Assembly of the AU in a letter addressed to the Prime Minister of the Sudan Abdalla Hamdok.

Prime Minister Abiy Ahmed, in response to the letter of Prime Minister Abdalla Hamdok dated 13, April 2021, stated that assuming the negotiation process as a failure is not right because we have seen some tangible results including the signing of the Declaration of Principles (DoP) and the establishment of the National Independent Scientific Research Group (NISRG) and its work in relation to stage based filling schedule.

Source: ENA

Ethio-Telecom Hands Over 122 Million Birr Mobilized for GERD

Some 122.5 million Birr was has been mobilized for the construction of the Grand Ethiopian Renaissance Dam (GERD) through SMS service, Ethio-Telecom announced today.

The fund raised through the third-round SMS service was handed over to Ethiopian Electric Power at a ceremony held at  Hayat Regency Hotel.

Speaking on the occasion, Ethio Telecom CEO Firehiwot Tamiru said the 1.3 million mobile subscribers contributed the money over a year starting from March 2020.

The CEO appreciated Ethio Telecom’s mobile subscribers for rasing 252 million Birr in three rounds starting from August 2014 for the construction of the dam.

Firehiwot added that Ethio Telecom has also purchased 111 million Birr bond for the  Grand Ethiopian Renaissance.

Source: ENA