For Online E-newspaper
The East African : May 5th 2014
56 MAY 3-9,2014 BUSINESS, MARKETS AND FINANCIAL ANALYSIS THE MARKET WHISPERER EQUITY MARKETS (WEEKLY CHANGE IN BENCHMARK INDEX) NSE 20 Share Index Kenya 4,959.91 0.06% (CUMULATIVE MOVEMENT) DSE All Share Index Tanzania 2,040.68 1.16% USE All Share Index Uganda 1,598.48 4.34% RSE All Share Index Rwanda 145.04 0.53% JSE All Share Index 49,023.38 -0.03% South Africa NGSE All Share Index 38,569.84 Nigeria - -0.96% the past decade is told, what keeps cropping up is infrastructure development, the millions joining the middle-class and the growing sophistication of consumers. But the soft underbelly of the continent’s economies rarely gets a mention. Now, the International Mon- Economies st≥uggle to maintain momentum W hen the story of the African economic revival over etary Fund has warned sub-Saharan African countries that their economies are facing downside risks on both the domestic and external front, despite the high growth projected for this year. In particular, the IMF cites slower economic growth in the large emerging economies, lower prices for key commodities and tighter global conditions that have raised the cost of financing. Governments keen to maintain their infrastructure growth plans are struggling to fund them in the face of rising debt to GDP ratios, narrow tax brackets, limited revenue sources and a host of macroeconomic challenges. The dilemma faced by Afri- can countries is best summed up by the IMF take on the Tanzania economy. The lender notes that the key objective mobilise additional revenues, beginning with the VAT reform, while ensuring that revenue assumptions are realistic, so as to eschew the accumulation of new arrears and to avoid abrupt expenditure cuts during budget execution,” says the IMF. Thus, the country needs to set up appropriate institutional arrangements to ensure that the benefits from the exploitation of natural gas fields accrue to all Tanzanians. This will involve establishing a fair taxation regime, transparent contracts, and a framework to manage resource wealth that promotes inter-generational equity and is fully integrated with the budget process. The IMF argues that the The IMF has warned sub-Saharan African countries that their economies are facing downside risks despite the high growth projected for this year for the remainder of this fiscal year for the country will be to contain expenditure within the limits set in the mid-year budget review and to strengthen revenue administration. The country faces spending pressures as the government seeks to maintain the current infrastructure spending plans. “Efforts will be needed to According to the IMF, Tanzania must contain expenditure as it seeks to maintain current infrastructure spending plans. Pic: File country needs to loosen its grip on the exchange rate. The lender says as Tanzania is becoming increasingly interconnected with the global economy, a greater focus on international competitiveness is warranted. Accordingly, the exchange rate should fully reflect market conditions, and a variety of reforms need to be undertaken to dismantle remaining impediments to trade, including infrastructure bottlenecks, and to improve the business climate. DFCU backpedals on employee sha≥e owne≥ship Following months of deadlock between DFCU Ltd and minority shareholders over a new employee share ownership scheme, the company’s directors have dropped the proposal in the face of stiff opposition from small investors scared of share dilution and poor results from a seemingly weak reward strategy. The proposal was revealed to shareholders at last year’s annual general meeting but failed to achieve consensus, prompting shareholders to set up a special committee to seek common ground on the matter. Under the proposal, the company was to issue an additional 1,399,089 shares equivalent to 0.5 per cent of its share capital and allocate them to a new Employee Share Ownership Scheme (ESOP) that would in turn distribute these shares to targeted senior managers in an effort to retain critical talent and minimise the frequent loss of top tier executives experienced since 2009. Meetings but no success However, several meetings held by the com- mittee since last year have yielded little success, with some independent members accusing the management of withholding information on DFCU Bank’s existing reward schemes. Fearing a backlash at this year’s AGM scheduled for June 26, the company’s directors resolved to drop the proposal at a board meeting held in March and settle for a softer option. Consequently, the company will utilise a por- tion of funds allocated to its annual staff bonus scheme to finance issuance of new shares to be held under a stock options incentive plan designed for senior managers, according to Juma Kisaame, DFCU Bank’s managing director. 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 KCB now appoints two executives East African lender KCB has appointed two new executives to fill vacant positions in the new organisational structure it implemented last year. The bank has picked Paul Russo from Absa Financial Services Ltd (AFS) Barclays Africa Group, South Africa to head the human resource function. It has also appointed Avijit Mitra, a former executive at Morgan Stanley and IBM, as the chief information technology officer. Last year, the bank reviewed its structure, introducing a managing director for Kenya and heads for its five subsidiaries in Uganda, Tanzania, South Sudan, Burundi and Rwanda, reporting to the group chief executive. Previously, the heads of the subsidiaries reported to the chief business officer (international), which was below the CEO’s position. On Wednesday, KCB said its first-quarter net profit rose 28.7 per cent to Ksh3.9 billion ($45.8 million), thanks to increasing fees and commissions with international business.
April 28th 2014
May 12th 2014