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The East African : Sep 15th 2014
56 SEPTEMBER 13-19,2014 BUSINESS, MARKETS AND FINANCIAL ANALYSIS THE MARKET WHISPERER EQUITY MARKETS (WEEKLY CHANGE IN BENCHMARK INDEX) NSE 20 Share Index Kenya 5,169.50 0.18% (CUMULATIVE MOVEMENT) DSE All Share Index Tanzania 2,522.38 4.16% USE All Share Index Uganda 1,788.00 0.51% RSE All Share Index Rwanda 141.96 -1.14% JSE All Share Index South Africa 51,170.01 -0.97% NGSE All Share Index Nigeria 40,672.94 -1.00% African Exchange (EAX), is looking for storage facilities in the region, offering warehouse owners an opportunity to cash in on its expansion. In Rwanda, EAX is ac- EAX seeking sto≥age facilities in ≥egion T he East Africa commodities exchange firm, East quiring 15 warehouses from the government while in Kenya it is looking to enter into a partnership with the National Cereal and Produce Board (NCPB) of Kenya. NCPB owns most of the maize and wheat storage facilities in Kenya but after the cereals sector was liberalised, most of its warehouses are underutilised. EAX’s country manager, Rwanda, Dr Kadri Alfah said the exchange was negotiating for warehouses in Kitale, Eldoret and Loitokitok. It has targeted November to close the storage deals. It is hoped that EAX’s network of warehouses and electronic trading system is likely to address the supply and demand gaps not only in Kenya but also in the region. “The regional expansion helps EAX to diversify as crops traded are seasonal. They are expensive during scarcity and cheap when there is plenty. We shall link surplus to deficit and, as a market, have the volumes traded,” said Alfah. The commodities ex- change has also started the process of acquiring warehouses in Burundi, Uganda and Tanzania which it The market plans to increase traded items to include coffee, tea, cereals, as well as minerals hopes smallholder farmers will use to store their beans and maize. In Uganda, warehouses with a grain storage capacity of 100,000 tonnes are targeted, offering opportunities for space owners. East Africa Exchange is wholly owned by Africa Exchange Holdings Ltd (Afex), whose shareholders include Lawye≥s taken to task ove≥ mining t≥eaties PUBLIC SECTOR lawyers came under the spotlight during a meeting convened by the East African Development Bank to strengthen capacity on negotiating contracts for the extractive industry in East Africa. Tanzania Prime Minister Mi- zengo Pinda asked the lawyers to put public interest first when negotiating contracts with investors in the natural resources sector and “avoid undue influence.” “Some ill-conceived Mining Agriculture Principal Secretary, Sicily Kariuki (right), the National Cereal and Produce Board acting managing director and Cornel Ngelechey (centre) in a grain store in Eldoret. Commodities Exchange wants to enter into a partnership with the cereals board. Picture: File Tony O. Elumelu of Heirs Holdings, Nicolas Berggruen of Berggruen Holdings, Dr Jendayi Frazer of 50 Ventures and Rwandan investment company Ngali Holdings. The EAX was launched in January last year and has traded in maize and beans but has not invested in warehouses to date. The market plans to in- crease traded items to include coffee, tea, cereals, as well as minerals. The Food and Agricul- ture Organisation (FAO) and the African Union (AU) have said sub-Saharan Africa loses more than $4 billion per year due to post-harvest grain losses. The exchange has signed Collateral Management International to ensure safe custody and compliance with contracts. When farmers store their produce, they will be issued with an electronic warehouse receipt, which can be used as collateral for loans. LeapF≥og to invest $100m in insu≥ance, savings KENYA’S FINANCIAL sector is set for a big lift from LeapFrog Investments which plans to inject a quarter of its newly closed $400 million fund into deepening the country’s insurance and savings segments. The emerging markets focused US equity investor says it is looking to put up to $44 million in any one company that demonstrates high growth potential. Kenya is listed as a priority country for the LeapFrog Financial Inclusion Fund II with $100 million set aside for the financial institutions. The fund is backed by the world’s top private development financiers such as CDC, DEG, EIB and FMO; insurers, reinsurers, pension funds, and asset managers. “This is a highly attractive mar- ket, with strong fundamentals, including stable interest rates, currency and inflation; and an appealing investment environment,” said Dominic Liber, LeapFrog partner. The equity firm is motivated by the huge headroom for growth in Kenya, Tanzania and Uganda where insurance penetration rates Insurance firms at an exhibition. The sector will gain from the Fund. Picture: File is below 4 per cent “We will be looking to invest in financial services businesses with strong management teams, an appetite for growth and profitability, and a focus on the emerging consumer,” Mr Lipa said. In 2011, LeapFrog invested inA- pollo Investments Limited (AIL), helping build its health and motor insurance offerings and piloting of crop, livestock for rural communities in Kenya, Uganda and Tanzania. LeapFrog Investments boasts over $500 million in companies across Asia and Africa. Published at Nation Centre, Kimathi Street, and Printed at Mombasa Road, Nairobi by Nation Media Group, Box 49010, GPO Nairobi, 00100. Registered at the GPO as a newspaper. Nairobi Office, Tel: 3288000, 211448, 337710, Fax 214531, 213936. Dar es Salaam Office. Tel: 2119657/8. Kampala Office, Tel: 232771, 232772. Fax 232781 Download free QR Readers from the web and scan this QR (Quick Response) code with your smart phone for pictures, videos and more stories Agreements have in the past led to public outcry forcing governments of affected countries to seek redress through re-negotiation. Unfortunately, re-negotiation is often a difficult, virtually impossible undertaking,” said Mr Pinda. EADB Director General, Ms Vivienne Yeda said local communities should derive tangible benefits in form of appropriate royalties, taxes, dividends, business opportunities, professional jobs and employment for skilled labour from exploitation of natural resources.
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