Obi 1 Kanobi wrote:Thiong'o wrote:hisah wrote:I must say I'm between shocked and impressed that KES has put up a steely show against the USD. Globally the USD has been on a dizzy rally since last year and going strong post QE end. Most emerging market currencies have been crashed by the forceful USD strength. Commodities too have been taken to the cleaners as well just like the currencies. That KE eurobond was a lucky charm. Otherwise USDKES would likely be trading above 120 and NSE would be in the selling dustbin.
How long KES artificial strength vs USD lasts is the million dollar question. But should KES weaken rapidly the NSE party will be overdone and the econ will feel that nasty effect.
Effect already felt in Nigeria with Africa's Richest Man loosing half of his fortune due to currency depreciation in Nigeria, The 57-year-old billionaire reportedly lost $10.3 billion in the last one year. Dangote was worth $25 billion in 2014. However, he lost more than the half of his fortune and is worth much less at the moment. The owner of the “Dangote Group” suffered heavy loss due to a reduced demand for cement and the depreciation of the Naira. The Nigerian Naira is at 200 to the dollar.
Dangote is the biggest loser among the richest people in Nigeria due to the depreciation in the Nigerian Naira. His stock prices fell and he lost more than $7.8 billion of his fortune since February. Dangote was worth $21.6 billion on Nov. 7, 2014. However, he lost $4.4 billion more in the next four months.
Many companies on the Nigerian Stock Exchange suffered disastrous outcomes in the last few weeks. Several companies like Dangote Cement, Transcorp, Zenith Bank and United Bank for Africa hit one-year-lows as oil prices fell.
Africa's largest manufacturer of cement, Dangote Cement, shed nearly 40 per cent of its market value since November. Dangote also lost more than $230 million in paper value on his stakes in publicly-traded Dangote Flour, Dangote Sugar and National Salt Company of Nigeria.
http://au.ibtimes.com/af...ciation-nigeria-1428409
One could argue that Nigeria has been done in by the price of oil.
Whats happening to the Usd is mostly a result of the collapse of the international oil price. net importers of oil ala USA are having a major party with improved BOP.
Kenya happens to fall in the same basket and thats why of late the news is awash with info on how well the Kenya economy is doing and "forecasts of it leading the African growth".
@ Obi 1 Kanobi, oil price is a major contributor and key players in the industry (large oil companies) other than governments, are gaining support from an unlikely source as they confront the industry’s worst slump since the financial crisis ie lower oil prices.
They have sway in commodities trading, largely unknown outside the industry and set to pay off in 2015 as the bear market allows traders to generate higher returns by storing cheap oil today to sell at higher prices later and using lower prices to make more bets with the same capital.
From dealing floors that resemble the operations of Wall Street banks in cities including Geneva, London, Houston, Chicago and Singapore, oil trading could provide BP, Shell and Total with an edge over U.S. rivals Exxon Mobil Corp. and Chevron Corp., which sell their own production, but largely eschew pure trading as a means of generating profits.
“We’re in a very strong commodity trading position,” Shell CFO Simon Henry said in a call with analysts on a Jan. 29. “Our ability to take advantage of volatility is some protection to mitigate the low price environment.”
The companies also make significant bets in the derivatives commodities markets. Such is the scale of BP and Shell in the financial market that both are registered swap dealers in the U.S. under the Dodd-Frank act. Together with agricultural trader Cargill Inc., they’re the only non-financial firms among nearly 50 banks, insurers, brokers and others registered as swap dealers.
http://finance.yahoo.com...ng-slump-084926157.html