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Nothing stimulates chatter about the rise of China like a big US-targeted M&A deal, and last week we had one of the biggest to date. The deal struck by the Chinese meat processor Shuanghui to buy US pork producer Smithfield Foods for just shy of $5bn will – if completed – be the biggest ever Chinese takeover of a US company. But what’s the overall picture when it comes to China-US M&A? Chart of the week takes a look. Read more
French retail giant Carrefour has its sights set on sub-Saharan Africa’s booming consumer markets, and will begin setting up shop on the west coast of the continent within the next two years.
A joint venture between the supermarket retailer and the Africa-focused trading and distribution company CFAO – a subsidiary of Toyota Tsusho, the Toyota Group’s trading arm – announced on Thursday will open outlets across eight central and west African countries. Read more
A torrid week of economic news for South Africa has been rounded off by the rand breaching the symbolic level of 10 to the US dollar on Thursday, as it continues to lose ground. The currency has weakened by over 15 per cent against the dollar since the start of the year, reaching its lowest point since the dark days of global recession in March 2009. Read more
For Nigerian banks and their investors, the financial crisis of 2009 may feel like a long time ago. The Nigerian Stock Exchange has been one of the world’s standout performers over the past year and prices of bank shares have soared. They’re not out of the woods yet though, according to the International Monetary Fund, which has taken an in-depth look at the sector in a report released this week calling for further tightening of regulation. Read more
From the ‘hopeless’ to the ‘hopeful’ continent, a decade of strong growth has changed perceptions of sub-Saharan African economies – not least among international investors, who have rushed to recent Eurobond offerings from the likes of Zambia and Rwanda. Rubbing against the optimism though are criticisms that the growth achieved has been far from inclusive, with human development lagging behind. Chart of the week takes a look. Read more
South Africa’s economic gloom darkened on Tuesday, with government figures showing that GDP growth slowed in the first quarter of the year as a fall in manufacturing output overshadowed strong improvements in mining.
Year-on-year GDP growth of 1.9 per cent was less than a consensus forecast of 2.2 per cent, while on a quarter-on-quarter basis, the seasonally-adjusted growth rate of 0.9 per cent was significantly under analyst forecasts of 1.6 per cent and the Q4 2012 rate of 2.1 per cent. Read more
Stuck between the rock of currency depreciation and the hard place of a slowing economy, South Africa’s Reserve Bank kept interest rates on hold at 5 per cent on Thursday while revising down its predictions for 2013 GDP growth.
With governor Gill Marcus declaring herself “increasingly concerned about the deteriorating outlook for the South African economy,” the bank downgraded 2013 growth forecasts from 2.7 per cent to 2.4 per cent – a far from insubstantial cut for a country where about a quarter of the working population is unemployed. Read more
Investing in Zimbabwe is not for the faint-hearted. But its stock exchange has been booming of late. To maintain the momentum, management at the Zimbabwe Stock Exchange is planning to sell shares in the organisation this year to raise funds for modernisation.
Tafadzwa Chinamo, chief executive of the Zimbabwean Securities Exchange Commission said in an interview with Bloomberg that an initial public offering would take place before the end of the year, with a likely valuation of around $15-20m. Read more
Central Bank Governor Henry Kofi Wampah noted risks to economic growth arising in part from tightened credit, but decided the weakening of the currency was the bigger threat. Read more
Zambia’s government is the latest in sub-Saharan Africa to propose measures to claw back a bit more of the wealth extracted by foreign mining companies. But this time it’s not the proceeds of a major commodity like copper that are in the spotlight, but the rather more niche trade in emeralds.
Zambia is the third largest producer of the gemstone after Colombia and Brazil, and last Friday Yamfwa Mukanga, mining minister, gave mining companies a jolt when he said that any emeralds dug up in Zambia will have to be auctioned there from now on, too. Read more
Anglo American may have passed on this one, but Nippon are up for it. Japan’s largest steel company, Nippon Steel and Suminato Metal Corp, was given the go-ahead on Thursday to develop the Revuboè coal project in Mozambique’s Tete province. It now hopes to begin production by 2016, nestled in among other major extractors in one of the world’s most important new mining regions.
The announcement comes little over a week after the London-listed mining giant, Anglo American, said it had dropped plans to acquire a $555m majority stake in the Revuboè venture, which is situated adjacent to Vale’s Moatize mine and Rio Tinto’s Zambezi and Benga mines. Read more
After coming out on top against Heritage Oil in a tax appeal tribunal at home, the Ugandan Revenue Authority claims to be winning the away leg in London as it chases the Jersey-based company for a tax bill of $435m.
Heritage disputes the claim, and says the arbitration is still at a preliminary phase. A swift conclusion seems unlikely, but the case signals a determination on the part of the Ugandan government to ensure it gets a cut of the spoils in its nascent oil industry, and underlines the risks facing investors. Read more
Since its establishment in 2010, Amcon has issued five series of zero-coupon bonds with a combined face value of just under N5.7tn – that’s almost $36bn – which it has used to buy non-performing loans and recapitalise struggling banks. The first series – face value N1.7tn ($11bn) – matures in December 2013, and with African sovereign debt in high demand, Amcon is considering turning to international markets for refinancing. Read more
It began 20 years ago, carting meat around Lusaka in the back of an ageing Land Rover. Since then, Zambeef has grown into one of the largest companies in Zambia’s booming economy. Now it hopes to replicate its success in west Africa.
The FTSE AIM traded company, whose primary listing is on the Lusaka Stock Exchange, is a curious entity in the modern food industry: a near fully vertically-integrated operation which produces, processes, distributes and retails, all in-house. Read more
Multinational brewers have been doing a roaring trade in Africa lately, but with normal lagers too expensive for many consumers there is now an increasing focus on products for the mass market.
SABMiller has already rolled out its lower-cost cassava beer in Mozambique (called Impala). Now it’s launching a cassava based beer in Ghana, to be brewed by its local subsidiary, Accra Brewery, and called Eagle. Read more
Since getting much of its overseas aid cut off last year, the Rwandan government has faced problems plugging a gap in its budget.
No surprise then that it plans to take advantage of low borrowing costs in international debt markets. President Paul Kagame this week revealed more details of the east African nation’s anticipated debut eurobond issue. Read more
Maree leaves at a point in which the bank, South Africa’s largest by assets, is going through significant changes, scaling down some international operations to focus on Africa. Its full-year results for 2012, also released on Thursday, show the transition is far from smooth. And while the growth opportunities in its back yard are big, so are the challenges. Read more
The Kenyan currency had strengthened over the past week and remained steady during the election. But in the face of uncertainty over the outcome of the vote on Wednesday it fell 1.5 per cent against the US dollar, reaching 86.75 by the end of the day. Read more
However, with many votes still to be counted and a final result from the electoral commission not due until Wednesday, the balance could still tip, and Odinga issued a message to supporters that many of his major strongholds had yet to be counted. Read more