Items filtered by date: Tuesday, 03 July 2018
Gulf Arab energy companies retreated from debt markets in the first half of 2018 after a banner year for borrowing as higher oil prices curbed financing needs for existing operations and new projects.
 
Oil and gas producers, pipeline operators and refiners in Kuwait, the United Arab Emirates, Saudi Arabia, Oman, Bahrain and Qatar borrowed $6 billion through loans and bonds in the first half of 2018, the slowest start in four years, according to data compiled by Bloomberg. By comparison, U.S. energy companies, driven by resurgent shale production, issued a record $74.3 billion in debt so far in 2018.
 
The diverging debt appetites between the six Arab exporters and U.S. suppliers shows that Gulf Cooperation Council, or GCC, producers are bringing in more cash to finance operations and expansion after crude prices rose 18 percent this year.
 
It also reflects how higher prices are spurring a debt-fueled surge in U.S. production, which is pumping a record 10.9 million barrels a day and has averaged 10.4 million barrels this year, according to Energy Information Administration data. GCC countries pump about 17 million barrels a day and their energy industries borrowed a record $28.7 billion in 2017, with $12.8 billion in the first half.
 
Oil and gas producers in the U.S. are far more dependent on debt than GCC exporters. Borrowings in the U.S. tend to rise with oil prices to finance drilling activity, while Gulf Arab producers seek debt when prices are low and companies have to send more cash to their government owners to help plug budget deficits.
 
GCC producers “raised what they wanted last year. This year oil prices are much stronger than anyone anticipated, and they don’t have the capital needs to go back to the market,” said Robin Mills, chief executive officer of consultant Qamar Energy in Dubai. “The U.S. seems convinced that the shale boom is more sustainable, and this is the rush that everyone goes for.”
 
Oil and gas producers in Saudi Arabia, Kuwait and the U.A.E. plan to spend more than $600 billion on energy projects over the next five to 10 years, officials from the countries have announced. Some of that will be financed by debt, especially for refineries and petrochemical plants, but borrowings will likely be subdued in 2018 because many of the projects won’t begin for a few years, Mills said.
 
The biggest borrowing in the GCC this year was a $3 billion loan to Abu Dhabi National Oil Co. U.A.E.-based oil field services providers Shelf Drilling Holdings Ltd. and Borr Drilling Ltd. took out a combined $1.25 billion, Saudi Aramco Total Refining & Petrochemical Co. issued a $150 million revolving credit line, and Kuwait Integrated Petroleum Industries Co. borrowed about $1.3 billion to finance the construction of its liquefied natural gas import terminal.
 
Source: Bloomberg News
Published in World

Dubai-based Emaar Hospitality Group has signed a deal with the Kalyan Group to manage its landmark property in Sub-Saharan Africa, Address Hotel 2 Février Lomé Togo.

Formerly known as Hôtel 2 Février, Address Hotel 2 Février Lomé Togo is set in a 30-storey tower that is 102 metres high, offering spectacular views of the city and beyond. It is in walking distance of ministerial offices, embassies, banks, corporate offices and 4 miles from the Lomé-Tokoin International Airport.

The company said the Address Hotel 2 Février Lomé Togo will open doors to welcome guests shortly following the rebranding of the property, which was first established in 1980.

The hotel will have 256 rooms and suites and 64 serviced apartments as well as an array of themed restaurants, meeting venues and other attractions.

With free high-speed WiFi, spectacular meeting and event facilities including a ballroom, congress hall and auditorium, luxury spa, open air swimming pool, concierge services and retail shops,

Address Hotel 2 Février Lomé Togo will serve as a refreshing getaway for business and leisure guests. Its presidential suites and apartments are ideal for high profile guests, with features including expansive living rooms and 10-seater dining areas as well as a range of in-room amenities.

Address Hotel 2 Février Lomé Togo is a hotel project under Address Hotels + Resorts, which has six operational hotels in Dubai that are popular among African guests to the city.

Togo marks the sixth international destination for the hotel brand that has upcoming hotel projects in Saudi Arabia, Egypt, Turkey, Bahrain and The Maldives, in addition to several new openings in the UAE.

The management agreement was signed by Olivier Harnisch, CEO of Emaar Hospitality Group, and Ashok Gupta, CEO of Kalyan Hospitality Development Togo SAU, and Founder and CEO of Kalyan Group, which owns the hotel.

Olivier Harnisch said: “Our management agreement to operate Address Hotel 2 Février Lomé Togo is a significant landmark in our expansion to Sub-Saharan Africa.

“Togo is also strengthening its tourism sector with the goal of increasing the share of the industry from 2 to 7 per cent by 2020 and investing infrastructure upgrades and boosting the industrial sector.”

Ashok Gupta said: “Address Hotel 2 Février Lomé Togo is a prestigious asset in our real estate and hospitality investment portfolio; being entrusted by the Republic of Togo with what is widely regarded as the ‘Jewel of West Africa’.

“A truly historic hotel that also serves as Togo’s landmark, Address Hotel 2 Février Lomé Togo is envisaged to bring a new dimension to hospitality services through our management agreement with Emaar Hospitality Group. Address Hotels + Resorts has demonstrated clear industry leadership through its committed approach to enriching the guest experience. Address Hotel 2 Février Lomé Togo will add to the pride of Togo and serve as a referral point for the hotel industry.”

Emaar Hospitality Group now has 13 operational hotels and three serviced residences in Dubai under Address Hotels + Resorts; Vida Hotels and Resorts, the upscale lifestyle hotel and residences brand; and Rove Hotels, a contemporary midscale hotel and residences brand.

 

Published in Travel & Tourism
The South African Reserve Bank has written to the National Credit Regulator requesting a probe into loan-origination fees charged by Capitec Bank Holdings Ltd., according to a person familiar with the matter.
 
The referral came after the issue was raised in a report by short-seller Viceroy Research in January, said the person, asking not to be identified because the matter is private. The investigation is ongoing, the person said. Capitec Chief Financial Officer Andre du Plessis said he was unaware of the central bank’s referral, or of an investigation by the Johannesburg-based NCR.
 
Capitec shares dropped as much as 4.3 percent and were trading down 1.9 percent at 870.89 rand at 9:05 a.m. in Johannesburg. The stock has declined 21 percent so far this year, more than any other lender in the six-member FTSE/JSE Africa Banks Index, which is down 5.3 percent.
 
In the January report, Viceroy said Capitec boosted its income by charging excessive fees on its multi-loan product, which carried a monthly charge for allowing a previously vetted customers to extend their facility by answering some questions. While Capitec said it terminated the product in 2016, after rules introduced by the NCR meant it was no longer viable, Viceroy said that the lender rebranded it and that Capitec’s methods risk over-indebting consumers.
 
Capitec denied this, saying Viceroy did not understand the product or how its processes work. The NCR had previously probed the multi-loan facility and was satisfied with the fees and interest charged, Capitec said on Feb. 8.
 
‘Very Active’
Both the Johannesburg-based NCR and Pretoria-based central bank declined to comment.
 
The central bank monitors lenders for their compliance with rules ranging from their operations and capital levels to staffing and money laundering, with the ability to fine companies or revoke their licenses. The NCR can also administer financial penalties on lenders which violate the National Credit Act, legislation aimed at protecting consumers from becoming over-indebted.
 
Officials from the central bank and the NCR told lawmakers in March that many of the allegations made by Viceroy were not new and that not all of them were accurate.
 
“The Reserve Bank is very active in doing ongoing reviews at all the banks,” said Du Plessis, speaking more broadly on the regulator’s oversight. “If anything bothers them, they actually contact us or ask that we report on something. That happens on an ongoing basis.”
 
On Friday, Capitec announced it had reached an agreement with Summit Financial Partners, which was challenging the lender in court and before the NCR on behalf of six complainants. The cases, which mostly centered on Capitec’s now defunct multi-loan facility, were withdrawn.
 
Source: Bloomberg News
Published in Bank & Finance

Domestic sales figures in June 1028 have exceeded industry expectations but export sales continue to disappoint, reports Naamsa.

Vehicles sales by the numbers

New vehicle sales at 46 678 units show an improvement of 1346 vehicles (3.0%) from the 45332 vehicles sold in June 2017.

Overall, export vehicle sales at 26 790 vehicles reflect a decline of 4805 units (-15.2%) compared to the 31 595 vehicles exported in June last year.

Industry break down

Overall, out of the total reported Industry sales of 46 678 vehicles, an estimated 38 498 units or 82.5% represent dealer sales, an estimated 11.0% represent sales to the vehicle rental Industry, 3.7% to industry corporate fleets and 2.8% to government.

Car sales

The new car market in June 2018 at 29886 units registered a marginal improvement of 1261 cars or a gain of 4.4% compared to the 28 625 new cars sold in June 2017. Naamsa said: "On the back of fleeting replenishment the car rental industry contribution had recovered substantially by 15.1% during the month."

Bakkie market

Domestic sales of new light commercial vehicles, bakkies and mini buses, at 14261 units, declined during June, 2018 by 58 units or 0.4% compared to the 14 319 light commercial vehicles sold during the corresponding month last year.

Naamsa comments on June sales

Naamsa said: "The improvement in domestic sales, particularly new car sales, was encouraging given recent weak economic growth and investment numbers. It appeared that the new car market had been supported by improved business and consumer confidence.

"However, the decline in the leading indicator of the Reserve Bank over the past two months – suggested a challenging economic environment going forward. Normally new vehicle sales during the second half of a calendar year tended to show improvement on first half sales and this reinforced NAAMSA’s expectations of a modest annual improvement in 2018 domestic sales volumes compared to 2017.

The SA car market future

The organisation said: "Naamsa continued to project growth in export sales over the balance of the year. However, the industry’s export performance was likely to be affected by current protectionist policies in the United States which had increased the risk of a global trade war and this could impact on international trade flows, including vehicle exports."

Published in Economy

The 2019 presidential elections in Nigeria will be the country’s sixth since 1999, when it shifted to democracy after a long period of military rule. Most of these elections have been tarnished by acts of violence – including attacks on politicians – and vote rigging often influences the results.

In the past, election violence has been blamed on a lack of education among citizens, poverty, the long history of military rule and corruption. However, political patronage is also to blame in a country where power and state resources are often exploited for personal use by office holders. The scramble for the “national cake” by the political elite is often the real reason for many politicians’ do-or-die attitude.

Such was the case when the former president, General Olusegun Obasanjo declared in 2007 that the April elections would be a do-or-die affair for the country and his ruling People’s Democratic Party (PDP). The election was marred by fraud and violence.

With the 2019 elections less than a year away, Nigeria’s ability to hold free and fair elections is open to question. Of particular concern are the security threats posed by the Boko Haram insurgency and clashes between farmers and herdsmen in northern Nigeria. There is also a threat posed by the arming of rival political supporters. Finally, there is the lack of election financing regulations which leaves the door open for patronage networks to fund campaigns using public funds.

Boko Haram problem

Although the government claimed to have “technically defeated” Boko Haram in December 2015, the armed group was still able to carry out 135 attacks in 2017, five times higher than the 2016 number of attacks. The insurgents most recently killed at least 31 people in twin bomb blasts targeting people returning from Eid celebrations in Borno state.

The insurgency, which has affected 14 million Nigerians, resulting in 1.7 million being displaced, still poses a significant threat in the north-east. In 2015 elections, the Boko Haram threat affected elections in many parts of northern Nigeria. If the threat is not significantly contained, it poses a threat to free and fair elections next year.

New threats

Apart from the Boko Haram insurgency, several states in Nigeria, such as Benue, Taraba and Nasarawa, have witnessed violent clashes between herdsmen and farmers in recent years. Although this was not an issue in previous elections, the intensity of the clashes has increased tremendously. There have been 716 clashes and thousands of deaths recorded in the country since 2012.

In the same way Boko Haram was the primary campaign issue prior to 2015 elections, the clashes between herdsmen and farmers pose an election risk. Several opposition political parties have already seized on the insecurity as a campaign rallying point. Violent clashes could potentially ensue if the security situation is not addressed before the elections.

The proliferation of arms prior to elections also remains a huge threat. Since the 2003 elections, the arming of supporters has become an election tool.

As seen in previous elections, political patronage is often behind the formation of insurgent groups towards the time of elections. Politicians have been known to arm youths prior to elections in order to seek undue advantage over their political opponents.

Indeed, former Nigerian vice president Atiku Abubakar claimed to have personally warned some state governors against arming youths prior to elections.

Campaign finance

Political patronage extends to the crucial factor of election funding. Previous elections have been marked by allegations of mismanagement of public resources to fund campaigns. It was estimated that the total amount spent by the electoral commission, political parties and candidates for the 2015 elections was about one trillion naira (USD$4 billion). A large percentage of these were “untraceable” public funds.

About half of this amount was allegedly siphoned out of the Nigerian National Petroleum Commission by the former national security adviser Sambo Dasuki to finance the 2015 election campaign of President Goodluck Jonathan. The implication of using public funds to finance personal ambition is that it often gives the incumbent an unfair advantage over their opponents and creates a cycle of corruption which hinders development.

Although the Independent National Electoral Commission (INEC) has called for the regulation of campaign finance towards the 2019 elections, it is unclear how this will be done.

Towards a credible election

The sum of all these challenges is that Nigeria is far from ready to hold a credible ballot in 2019. In order to conduct a credible election in Nigeria, four key issues are very important. First, the government needs to completely defeat Boko Haram. Second, the conflict between herdsmen and farmers must be addressed and third, electoral commission must strengthen the electronic voting system introduced in 2015 and finally the formation of insurgent groups for the purpose of the election must be prevented.

An election that is not free and fair risks negatively compromising Nigeria’s already fragile economy, and sparking further conflict.

 

Olayinka Ajala, Associate Lecturer and Conflict Analyst, University of York

This article was originally published on The Conversation. Read the original article.

Published in Opinion & Analysis
Regional Head, Middle East and Africa, WorldRemit, Andrew Stewart, has said that its company is committed to ensuring that money transfer is seamless, secure, efficient and cost effective.
 
This is coming barely a month when the digital money transfer service company partnered First Bank of Nigeria Limited (FBN) to help migrants abroad transfer money directly to their FBN accounts in Nigeria.
 
Speaking at a roundtable in Lagos, Stewart said WorldRemit was pioneering a mobile-first approach to remittances, offering instant transfers.
 
“Using WorldRemit is easy because we do the hard bit, connecting hundreds of banks, money agents, mobile operators and payment systems around the world. These were never designed to work together, but WorldRemit makes it happen.
 
“As opposed to most of its competitors, WorldRemit prides itself in offering instant money transfers, powered by our 100 percent cashless transfers on the send side, and our mobile-drive approach.
 
A typical customer in the US, UK or Canada might send around £100 per transaction for bank deposit.
 
“Our fees in Nigeria are very competitive to make sure our customers can send as often as needed to support their friends and family at home,” he added.
 
He said that since its launch in Nigeria in 2011, the company has entered into partnership with leading banking institutions, including First Bank of Nigeria Limited, Guaranty Trust Bank, Access Bank Plc and Ecobank Plc.
 
Stewart assured that its system is fraud proof as the company has three levels of compliance checks in place to check the activities of fraudsters.
 
WorldRemit is the leading digital money transfer service that makes sending money as easy as sending an instant message.
 
Known for its mobile-first approach, the majority of WorldRemit’s customers are migrant workers who send money back home to support their friends and family.
 
Users can even pay for school fees, utility bills and groceries via their mobile phones.
 
Source: The Guardian
Published in Bank & Finance

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