This bi-annual analysis of Africa's economic health shows that the continent's strong growth has not been as powerful in reducing poverty due to high levels of inequality.
Via Carlo A. Zanaboni
Africa : Commodity Bridgehead to Asia
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The year 2016 was not an easy one for South Africa, but investor outlook for the year 2017 certainly looks more positive.
“The year 2016 was not an easy one for South Africa, but investor outlook for the year 2017 certainly looks more positive. We take a look 12 things that are expected to improve investor outlook in South Africa during 2017”
Chance to shine at World Economic Forum 2017 for South Africa's Gordhan, Ramaphosa. President Zuma won't be there. It's not exactly his happy place.
"At the World Economic Forum, where finance ministers attract as much attention as presidents, South African Finance Minister Pravin Gordhan’s presence this week in Davos is expected to be a show of strength, leadership and survival. It will also be a rare opportunity for South African Deputy President Cyril Ramaphosa to shine on the world stage since President Jacob Zuma will not be attending"
Despite inequality in South Africa, African migrants go there more than they go to Europe. Just 3% of displaced Africans are in Europe.
"South Africa has the highest number of pending asylum claims in the world, with more than 1 million people waiting to be processed"
"The Deutsche Bank Currency Volatility Index - which indicates investors’ expectation of future currency volatility -reflected this, largely tracking sideways in 2016. Implied volatility was low despite events that ordinarily could have caused significant shocks to the market"
"Currency investors were relatively stoical during some significant events in 2016, including the attempted coup in Turkey, shifting political sentiment in Europe and the US and mixed signals from key central banks. The main exception was sterling, which fell to a 31-year low against the US dollar after the UK electorate voted in June to leave the EU"
David Older the new regime will provide a 'once in a lifetime' opportunity for mega-caps to swoop for innovative, smaller competitors.
"President-elect Donald Trump's proposed reforms in the US could lead to a large scale mergers in the technology industry, the head of equities at Carmignac has said"
According to Indeed data, the number of new oil and gas job postings had inched up at the end of 2016, after taking a dive for most of the year, with sector players struggling to adjust to the new oil price environment and focusing on cost cuts, which are more often than not incompatible with new hiring or even employee retention"
"The employment site Indeed has recently released a survey revealing the top 5 companies to work for in U.S. oil and gas, with Chevron and Anadarko topping the list"
Oil prices faltered at the start of the second week of the year, as fears set in about a rapid rebound in U.S. shale production. For the better part of two months, optimism surrounding the OPEC deal has buoyed oil prices, but bullish sentiment from speculators are showing early signs of abating, raising the possibility that the oil rally is running out of steam.
WTI and Brent sank more than 2.5 percent in intraday trading on Monday, after a report at the end of last week showed another solid build in the U.S. rig count, the tenth consecutive week that the oil industry added rigs back into the field. Aside from a single week in October, the U.S. oil industry has deployed more rigs in every week dating back to June, a remarkable run that has resulted in more than 200 fresh rigs drilling for oil. The gains in the rig count come even as oil prices have held steady in the mid- to low-$50s per barrel.
At the start of 2017, there are two major dynamics at play occurring at the same time, each pushing in opposite directions on the market. The OPEC deal is slated to take oil off the market, while U.S. drilling is expected to add new supply. The pace and magnitude of each trend will ultimately drive oil prices one way or the other.
On the positive side of the ledger, there are early signs that OPEC members are meeting their commitments. Saudi Arabia said last week that it is lowering its production in January by 486,000 barrels per day, a volume that it promised to cut as part of the November deal. That will take output down to 10.058 million barrels per day, a level that Riyadh was only required to meet as an average over the January to June time period. Cutting to that level ahead of time is a sign of good faith from Saudi Arabia, and increases the chances that OPEC will stay true to its promises.
On top of that, Kuwait’s envoy to OPEC said that Qatar, Kuwait and Oman were also complying with the cuts. In an interview with Bloomberg, Kuwait’s Nawal Al-Fezaia said that those countries already told customers that cuts were imminent. "It’s a good time to do maintenance on oil fields during production cuts," Al-Fezaia said, noting that Kuwait will lower output from 2.89 mb/d in December to 2.7 mb/d by the end of January.
Market analysts paused a bit on news that Iraq’s oil exports from its southern ports on the Persian Gulf hit a record high in December, but the data has no bearing on whether or not Iraq will comply with the agreed upon cuts. "Achieving this record average will not affect Iraq’s decision to cut output from the beginning of 2017," Oil Minister Jabbar Al-Luaibi told Bloomberg in an emailed statement. "Iraq is committed to achieving producers’ joint goals to control the oil glut in world markets."
It is still early but all signs point to a stronger commitment from OPEC to adhere to the specifics of the cuts than market analysts might have given them credit for. That bodes well for a narrowing supply surplus – and ultimately a deficit – as well as falling inventories. In other words, OPEC is succeeding in putting upward pressure on prices.
However, the flip side of the equation is faster drilling from the U.S., where rig counts continue to climb. Oil output, according to EIA weekly surveys, is up roughly 300,000 bpd from summer lows, with more supply expected to come online in the months ahead as drilling picks up pace.
It is unclear, at this point, how rising U.S. supply and falling OPEC output will ultimately balance out. For now, the consensus seems to be tightening conditions in the first half of 2017, with much greater uncertainty in the second half, but that remains to be seen.
What is clear is that oil speculators have built up such a large bullish bet on oil that they have opened up crude to near-term downside risk. According to Reuters, hedge funds and other money managers amassed net-long positions in WTI and Brent equivalent to 796 million barrels in the last week of December, which was nearly double the amount from mid-November. The OPEC deal clearly fueled a huge speculative rush in rising oil prices, which, not coincidentally, corresponded with real gains in crude prices.
But at this point, there are very few short positions left in oil, while a massive volume of long bets have built up. That suggests two things, both of which are bearish for oil: there is not a lot of money left to go long, lowering the chances of further prices gains; and the potential for a correction in prices is very high at this point. Indeed, in the most recent week for which data is available, net-long positions declined a bit, raising the possibility that bullish bets have peaked. All it will take is a bit of bearish news to spark a downturn in prices.
There are a few minor worrying signs for oil prices that could crop up as additional bearish forces in the next few weeks. The U.S. DOE announced on January 9 a "notice of sale" from its strategic petroleum reserve, with plans to sell 8 million barrels for delivery over the course of February, March and April. Meanwhile, Libya is seeing rapid gains in oil exports after the reopening of a key export terminal, with output jumping to 700,000 bpd, according to the latest data, up sharply from the 580,000 it produced in November and the 300,000 bpd it exported before it started restoring output last summer. Moreover, Nigeria – which, like Libya, is exempt from the OPEC deal – is intent on restoring production. It may struggle to do that with the recent shuttering of the Trans Niger Pipeline, potential strikes from oil workers unions and the announcement from the Niger Delta Avengers that attacks will resume this year. In fact, production appears to have declined in December, falling 200,000 bpd to 1.45 mb/d, becau se of some of these issues. But if those problems can be overcome, Nigeria has latent production capacity that could come back online at some point.
And in a sign that there is not a lot of room on the upside, a kerfuffle in the Persian Gulf over the weekend did nothing to affect oil prices. A U.S. Navy destroyer fired three warning shots towards Iranian ships, an incident that in the past would have led to a sharp, even if brief, rally in crude prices. Instead, the markets shrugged off the incident – WTI and Brent sank on the first trading day after the event, on unrelated news. "The market is overbought and under a lot of downward pressure," Bob Yawger, director of the futures division at Mizuho Securities USA Inc., told Bloomberg. "The shots fired at the Iranian boats in the Strait of Hormuz didn’t do anything to the market. A few years ago that would have added a couple dollars to the price."
Link to original article: http://oilprice.com/Energy/Energy-General/Oil-Prices-Running-Out-Of-Reasons-To-Rally.html
By Nick Cunningham of Oilprice.com
Oil prices faltered at the start of the second week of the year, as fears set in about a rapid rebound in U.S. shale production. For the better part of two months, optimism surrounding the OPEC deal has buoyed oil prices, but bullish sentiment from speculators are showing early signs of abating, raising the possibility that the oil rally is running out of steam
South Africans No. 1 in the world for watching porn on mobile devices, and in the top 20 countries for porn-watching traffic.
"South Africa is ahead of the rest of the continent, climbing four places in 2016 and contributing to 90 billion-plus video views of Pornhub around the world"
Presidential term limits are a slippery thing. That's what makes these upcoming African elections so riveting. Top 5 elections to watch in Africa in 2017.
"Presidential term limits are a slippery thing. Occasionally they can seem like a good idea. Most of the time though, not so much. That’s what makes these five upcoming African elections so riveting"
Ethiopia moves toward privatization of state-owned firms. It's not about money. It's about technology, the prime minister says.
“Fast-growing Ethiopia, long committed to driving its economy with state investment, has invited foreigners to invest in its state-owned shipping and logistics company. Other coveted sectors usually off limits to foreigners — like telecommunications and banks — weren’t mentioned in the solicitation”
The Dangotes are the exception. Most businesses built by African entrepreneurs are local. African entrepreneurs share advice on how they became successful.
“The vast majority of businesses built by African entrepreneurs are local. Local political patronage and connections often sustain African entrepreneurs, according to Ghanaian lawyer and entrepreneur Elikem Nutifafa Kuenyehia. Still, their efforts often turn these entrepreneurs into superstars in their communities. Some African entrepreneurs share advice here on how they became successful”
South Africa is among the top 5 global producers of Halal products despite the country's tiny Muslim population of 1.5 million.
“South Africa has one of the continent’s smallest Muslim populations — between 1.5 and 3 percent, depending on who you ask — but has become one of the five largest producers of halal products worldwide. The local halal industry is worth almost $3.3 billion in South Africa”
5 Things To Expect From African Tech In 2017. Another year, another milestone for the African technology space.
“Another year, another milestone for the African technology space. With things developing at a rapid pace, it is hard to predict what will be the next big innovation in this exciting sector. Let’s have a go, in any case”
Its medinas and alleys are crammed with hole-in-the-wall operations hawking everything. Shopping Marrakech: why it's a bit like Las Vegas.
“It’s an odd comparison, but it has some merit. Marrakech can sometimes seem a bit like Las Vegas. There’s the cloying heat the moment you step off the plane, the abundance of global mega-resort chains, and a rotating roster of world-class DJs touring colossal clubs — all the accoutrement of a glittering desert oasis luring high-rollers. And just like Vegas, Marrakech is a shopper’s paradise”
Nigeria, the second biggest oil producer in Africa, is likely to enjoy increased earnings from its exports by the end of 2017
“Global oil prices fell from a peak of $115 per barrel in June 2014 to below $35 in February last year before recovering to $ 50 per barrel in December”
Ethiopian Airlines just announced its 5th destination in China. China has invested heavily Ethiopian infrastructure, funding railways, roads and dams.
“Ethiopian Airlines plans to start new non-stop service in June from Addis Ababa to its fifth China destination in Chengdu, a logistics and transportation hub”
Fighting spirit required: A Zimbabwean solar entrepreneur debunks myths about doing business in a country with a bad reputation.
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Son of Equatorial Guinea president on trial in France for embezzlement. Teodorin Obiang says he came by the money legally.
“Teodorin Obiang, the son of Equatorial Guinea’s president, has a luxury home on Paris’s Avenue Foch worth $112 million with gold-plated faucets, a spa, a disco, hair salon and a movie theater. That’s just the tip of the iceberg”
Airbnb is set to miss out on more than £325 million in London bookings this year as it begins to enforce UK rules limitin
"Airbnb is set to miss out on more than £325 million in London bookings this year as it begins to enforce UK rules limiting rentals to 90 nights per year. Almost half of Airbnb nights booked in London would be threatened by the 90-day cap, according to data from accommodation search engine AllTheRooms"
The only facility that allowed elephant back riding in Botswana has been directed to terminate its rides.
"Botswana is seen as the international custodian of the African elephant and has the world’s greatest herds. At the CITES convention earlier this year, it voluntarily relinquished its Appendix Two listing of elephants, giving them maximum Appendix One status, seeking their further protection. It has also refused to sell it stockpiled ivory and has disallowed all hunting on state lands"
Airfares are priced according to their desirability and the amount of competition
"As you will appreciate, in any industry products are priced according to their desirability and the amount of competition. A non-stop flight from a rich city like Doha to a global hub such as London on a top-flight carrier such as Qatar Airways is a desirable commodity. The only other airline that flies Doha-Heathrow is British Airways, which is one-fifth owned by the Qatari carrier. Competition isn’t exactly cut-throat"
South African President Jacob Zuma and the parliamentary standing committee on finance appear to be headed for a stalemate over the provisions of the Financial Intelligence Centre (FIC) Amendment Bill, with the inevitable delay presenting dire consequences for South Africa’s financial services sector
A candidate could become eligible for credit if their personality has the “right” levels of qualities such as openness, conscientiousness, extraversion, agreeableness and emotional stability.
"Those who were previously disqualified from getting bank loans because they were deemed too risky or lacked a credit history may now qualify – if they have the right personality"
Rising electricity prices and cheaper alternatives are the cause of a considerable increase in investments in energy efficiency and embedded generation. The past few years have seen high-profile users such as the V&A Waterfront in Cape Town, long-haul company MAN Truck & Bus and Johannesburg’s Clearwater Mall install significant generation capabilities
"The process of grid liberalisation is already under way in South Africa. But rather than being a threat, it presents opportunities for all participants in the energy market, particularly Eskom"
"In the digital age, with a plethora of information at our fingertips, is the practice of tracking financial indicators still important? If it is, which indicators should we be paying attention to and why?"