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<p>Safaricom shareholders paper wealth rose by Sh90.1 billion yesterday as investors rushed to buy the company’s shares after it was awarded a license to enter Ethiopia’s market. It marks one of the largest one-day gains on a single stock in the history of the Nairobi Securities Exchange. Stellah Swakei, Investment analyst at Cytonn joins CNBC Africa for more.</p>


Safaricom shares hit record high on Ethiopian licence

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<p>A licence to operate telecommunication services in Ethiopia has been awarded to Kenya’s telco giant Safaricom in a consortium made up of Vodafone, Japan’s Sumitomo and UK finance agency CDC Group. One of the people involved in awarding of this licence is the Senior Adviser to the Minister of Finance for Ethiopia, Brook Taye. He spoke to CNBC Africa for more.</p>


Safaricom pips MTN to Ethiopian operating licence

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<p>A license to operate telecommunication services in Ethiopia has been awarded to a consortium made up of Safaricom, Vodafone, Japan’s Sumitomo and UK finance agency CDC Group.</p>


Global consortium wins telecom license in Ethiopia

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<p>For the first time in nine years, Kenya&#8217;s biggest telecoms operator, Safaricom, has posted a drop in its full year core earnings. The CEO of Safaricom, Peter Ndegwa spoke with CNBC Africa&#8217;s Arnold Kwizera for more.</p>


Safaricom delivers resilient performance amid COVID-19 challenges

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<p>The share price of Kenyan telco Safaricom has been growing steadily in recent weeks and has seen it account for around 60 per cent of all stocks at the Nairobi Securities Exchange. Its dominance of the NSE along with 4 other companies has been flagged by the capital market authority as a big risk. CNBC Africa spoke to Ann Wacera, Investment Analyst at Cytonn investments for more.</p>


The impact of market concentration on the Nairobi Securities Exchange


<p>NAIROBI (Reuters) &#8211; Kenya’s biggest telecoms operator Safaricom has chosen its former chief executive, Michael Joseph, as board chairman, it said on Thursday.</p>



<p>He replaces the long-serving Nicholas Ng’ang’a, who has retired.</p>



<p>The move is part of a shareholder deal reached last year.</p>



<p>Under it the government, which holds a 35% stake in the company, won the right to pick a Kenyan as CEO, while the other major shareholder, Vodacom, got to pick the chairman, sources told Reuters last year. Vodacom is part of Britain’s Vodafone Group.</p>



<p>Peter Ndegwa, a Kenyan national, took over as chief executive in April, joining from Diageo, where he was the managing director of continental Europe.</p>



<p>Joseph, a dual American-Kenyan national, was Safaricom CEO until 2010 and has been a board member of the company since then. Ng’ang’a had been chairman since 2007.</p>


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Kenyan telecoms operator Safaricom picks ex-CEO Joseph as chairman

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<p>A $70 million investment deal for cold storage; a partnership to see 5G rolled out to the most remote locations; and the beginning of construction for the Nairobi Railway City; these are the headlines making news in Kenya and CNBC Africa spoke to Journalist, Joseph Bonyo for more.</p>


Safaricom

Safaricom, Aviate Networks partner to roll out 5G to remote locations


<p>By Dr Adrian Saville, CE, Cannon Asset Managers</p>



<p>In September 2006, economics professor Nouriel Roubini warned an incredulous audience of fellow economists at the International Monetary Fund (IMF) that the US housing market was at risk of collapsing – an event that could ruin the global financial system. This was at a time when the global economy had recorded its fastest patch of growth in 30 years and, in the space of a decade, US house prices had doubled, making for the sturdiest gain in house prices in the post-war era.</p>



<p>Unfortunately, Roubini was right. Soon after his address, the global financial crisis (GFC) struck, and the little-known scholar of emerging markets quickly became the Wall Street celebrity “Dr Doom”.</p>



<p>The lessons learned from the GFC encouraged policymakers worldwide to work furiously to get economies back into shape through a series of fierce and co-ordinated policy responses to the impacts of Covid-19. In turn, this has encouraged a consensus view amongst economists that the recovery from the crisis will be V-shaped. Wall Street&nbsp; agrees, with the S&amp;P500 and NASDAQ having rebounded sharply since March’s meltdown. In fact, it seems that markets anticipate that the bold responses from the world’s leading policymakers will produce an equally fierce rebound in economies and earnings.</p>



<p><strong>Groundhog Day</strong></p>



<p>Yet, as if trapped in the tragicomedy of Groundhog Day, Dr Doom again disagrees with this consensus, and suggests the economic trajectory is likely to be L-shaped. Admittedly, Roubini expects an economic rebound in the pandemic’s immediate aftermath, but insists that this recovery will quickly collapse beneath the weight of the global economy’s accumulated debts, giving rise to the prospect of an economic depression.</p>



<p>It’s tempting to dismiss Roubini as having been “spectacularly right” the first time because he was banging on the disaster drum for many years before the GFC struck. But there is more than enough evidence in the post-pandemic makeup to suggest that we should be paying close attention to a depression scenario.</p>



<p>Markers for concern include a collapse in vehicle sales; the imposition of trade barriers to protect domestic markets; falling commodity prices; a wave of consumer debt thanks to easy money; a dive in the federal funds rate; a surge in unemployment; sharp market swings; deepening fiscal deficits; and the risk of a deflationary price spiral.</p>



<p><strong>The risk is that Roubini is right</strong></p>



<p>This list bears eerie similarity to the features that characterised the Great Depression of the 1930s. So, in deliberating on Roubini’s diagnosis and the implications for policymakers and investors, the risk is not that he is wrong, but that he is right.</p>



<p>We ignore this risk at our peril. In depression scenarios, conventional economic policy stops working, and markets behave differently. For example, in terms of policy, economists Lawrence Summers and J. Bradford DeLong have shown the importance of fiscal expansion – rather than fiscal prudence – in depressions.</p>



<p>Depressions also offer a good reason to seek and maintain some price inflation. Nominal interest rates of zero can’t be lowered much further. But the real rate of interest – the nominal interest rate minus expected inflation – can be taken far below zero by policies that push inflation rates higher.</p>



<p>Positioning portfolios for a depression scenario, then, means preparing for a world of higher rates of price inflation, government spending stimuli, nominal interest rates of zero, and negative real interest rates.</p>



<p><strong>Diversify, diversify, diversify …</strong></p>



<p>In this world, the first three rules of investing must be enforced with the strictest discipline: diversify, diversify, diversify. Portfolio diversification is a free lunch available to every investor, and the surest form of risk management.</p>



<p>We don’t know how or when the pandemic period will end – and we can’t be sure that Roubini is right. But diversifying your portfolio across asset classes, geographies, currencies and industries has a surer prospect of getting you to your investment destination than investment decisions that, in the absence of diversification, could be perfectly right or exactly wrong. This means gold and growth assets, not gold or growth assets; it means China and the US, not China or the US; and it means healthcare and resource stocks, not healthcare or resource stocks.</p>



<p><strong>… and look for </strong><strong>transformative assets</strong></p>



<p>Additionally, investors should consider investing in transformative assets. If Roubini is right, it’s likely that even in an environment of hardship and misery, investments that are inclusive, co-operative, and collaborative will thrive. Covid-19 bonds could be one such asset, where issuers include the African Development Bank, or even the Bank of America, which has come to market with a $1 billion four-year Covid-19 bond to fund lending to hospitals, nursing facilities and healthcare manufacturers.</p>



<p>Then there are transformative businesses that will do better in hard times by doing good business, taking the place of current portfolios winners. In March, Kenyan telecom operator Safaricom made all person-to-person transactions under 1,000 Kenyan shillings free on the mobile money service M-Pesa. Near term, this put one-quarter of Safaricom’s revenue at risk, but long term is likely to entrench the business’s position in the payments market. Likewise, British restaurant chain Leon has reinvented itself by converting 57 sites into shops selling groceries and takeaway meals, saving 1,500 jobs and looking after 70 suppliers.</p>



<p>In other words, depression times do not spell the end for businesses or investors. Rather, as Joseph Schumpeter implores, our task is to create out of the destruction, by redesigning, reinforcing and reinventing.</p>



<p>For more coverage on COVID-19 visit: <a href="https://www.cnbcafrica.com/covid-19/">https://www.cnbcafrica.com/covid-19/</a></p>


COVID-19: Investing for Roubini’s Greater Depression


<p>NAIROBI (Reuters) &#8211; Kenya’s top telecoms operator Safaricom has seen a 70% surge in data usage as people stay at home to <a href="https://www.cnbcafrica.com/east-africa/2020/04/08/how-african-economies-can-survive-the-covid-19-crisis/">curb the spread of the new coronavirus</a>, it said on Tuesday.</p>



<p>The government closed schools and asked people to work from home where possible last month, after the East African nation reported its first case of the virus.</p>



<p><a href="https://www.cnbcafrica.com/videos/2020/04/14/how-kenya-plans-to-help-its-informal-sector-survive-the-covid-19-crisis/">Confirmed cases have risen to 208</a> and additional restrictions, including a night time curfew, have been imposed.</p>



<p>Safaricom, which is partly owned by South Africa’s Vodacom and Britain’s Vodafone, said mobile phone data usage had jumped 35% as users streamed movies, worked from home and used social media sites like Facebook.</p>



<p>The company is one of the biggest providers of internet access in Kenya, supplying 300,000 homes with a fibre connection, and nearly all of the 47 million population with second, third and fourth generation mobile internet coverage.</p>



<p>Along with financial services platform M-Pesa, the data business has been one of the key drivers of earnings growth for Safaricom in recent years.</p>



<p>(Reporting by Duncan Miriri; Editing by Jon Boyle and Mark Potter)</p>



<p>This article was first published on Reuters Africa <a href="https://af.reuters.com/article/investingNews/idAFKCN21W1NH-OZABS">https://af.reuters.com/article/investingNews/idAFKCN21W1NH-OZABS</a> and is republished with its permission.</p>



<p>For more coverage on COVID-19 visit: <a href="https://www.cnbcafrica.com/covid-19/">https://www.cnbcafrica.com/covid-19/</a></p>


Here’s how to apply for SA’s COVID-19 loan guarantee scheme

Kenya’s Safaricom sees 70% jump in data usage during COVID-19 lockdown

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<p>Safaricom and Vodacom recently announced the completion of the acquisition of the M-pesa brand as well as product development and support services from Vodafone through a newly created joint venture.  This move is expected to accelerate M-pesa&#8217;s growth in Africa. Sitoyo Lopokoiyit, Safaricom Chief Officer for Financial Services joins CNBC Africa for more.</p>


Ethiopia closes door on M-Pesa

Ethiopia closes door on M-Pesa, only local companies allowed

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<p>In Kenya, Foreign investors withdrew about $106 million from the Nairobi Securities Exchange in February and March, leading to a sharp fall in the value of blue chip stocks like Safaricom and Equity Bank Group. Also, Moody&#8217;s has warned that measures put in place to shield Kenya’s banks from disruptions associated with the coronavirus outbreak, might not hold should the situation worsen. Rodney Omukhulu, Assistant Investments Analyst at Cytonn joins CNBC Africa for more.</p>


Tracking movements shaping the Kenyan market space amid COVID-19 crisis

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<p>As the world copes in quarantine, the Kenyan private sector is making moves to alleviate customers&#8217; experience during this time with Safaricom waiving transfer fees and increasing daily M-Pesa transaction limits, to large supermarket chains like Tuskys providing home delivery services. Journalist, Joseph Bonyo joins CNBC Africa for more.</p>


Kenya increases transaction limits

Kenya increases transaction limits, encourages delivery services to halt COVID-19 spread

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<p>Safaricom has launched a new strategy on the occasion of their 19 year Anniversary that they describe as &#8220;Simple, Transparent and Honest&#8221;. The strategy includes new data, SMS and calling plans that will offer data bundles and calling minutes with no expiry. This comes after a lawsuit made news of Safaricom, Airtel and Telkom Kenya being sued over just that – the expiry of data and loss of unused Internet bundles. Journalist, Joseph Bonyo joins CNBC Africa for more.</p>


Safaricom backs down on data expiry losses

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<p>Safaricom&#8217;s M-pesa revenues are expected to take a hit to 13.3 year-on-year from 18.20 per cent that was reported in the first half of 2019 according to a report by Genghis Capital, now the decline has been attributed to the performance of the betting industry which accounts for about 7 per cent of M-pesa revenues. For more on this, Research Analyst from Genghis Capital, Patrick Mumu joins CNBC Africa for more.</p>


M-pesa revenues decline attributed to betting industry

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<p>As the conversation on the fourth industrial revolution and it&#8217;s expected benefits and challenges continues to take shape, Africa is still trying to find it&#8217;s footing on how best it can take advantage of this wave. Chief Business Development Officer at Safaricom, Debra Mallowah joins CNBC Africa for more.</p>


Safaricom’s Debra Mallowah on how the 4IR can bridge inequality gap


<p>NAIROBI (Reuters) &#8211; Kenya has ordered telecoms firm Safaricom to stop processing payments for sports betting companies, potentially shutting down a lucrative source of revenue for the company.</p>



<p>Online sports betting companies such as SportPesa have grown rapidly in the East African nation in recent years, riding a wave of enthusiasm for sports to achieve combined revenue of 204 billion shillings ($2 billion) last year.</p>



<p>However, that has sparked concern in the government about the social impact of betting. In May, the country introduced new gambling regulations, including banning advertising outdoors and on social media.</p>



<p>The gaming companies rely on Safaricom’s market leading network to take bets, communicate with users and process payments on the company’s popular M-Pesa mobile cash platform.</p>



<p>Each betting firm is assigned a unique number, known as a pay-bill, which is used to process payments from users who place bets on their mobile phones and to pay off those who win.</p>



<p>Customers using basic feature phones rely on short codes assigned to each betting company.</p>



<p>Liti Wambua, the acting director of the regulator Betting Control and Licensing Board (BCLB), told Safaricom in a letter seen by Reuters on Thursday that licences for all 27 betting firms had not been renewed, pending the outcome of an ongoing inquiry about their suitability to operate in the country.</p>



<p>“Consequently, we request you to suspend their pay-bills and short codes until otherwise advised,” Wambua said in the letter.</p>



<p>In a response, through its lawyers, Safaricom said it required time to carry out the order since abrupt implementation would result in shutting millions of users out of funds already deposited in the gaming wallets of the various betting firms.</p>



<p>“The directive by the board will impact over 12 million customers,” Safaricom said.</p>



<p>It added that two of the gaming companies had also obtained court orders allowing them to continue their operations without a renewed licence, further complicating the situation.</p>



<p>Safaricom executives have told Reuters in the past that the betting industry, through text messages and M-Pesa, has become a significant part of its revenue in recent years.</p>



<p>The betting firms defend their activities.</p>



<p>“SportPesa is a law-abiding corporate citizen that upholds all tax and regulatory requirements,” said SportPesa, one of the biggest online betting and gaming companies.</p>



<p>($1 = 102.8500 Kenyan shillings)</p>



<p>Reporting by Duncan Miriri and Humphrey Malalo; Writing by Duncan Miriri; Editing by Mark Potter</p>


Safaricom

Safaricom shares hit record high on Ethiopian licence

Safaricom pips MTN to Ethiopian operating licence

Global consortium wins telecom license in Ethiopia

Safaricom delivers resilient performance amid COVID-19 challenges

The impact of market concentration on the Nairobi Securities Exchange

Kenyan telecoms operator Safaricom picks ex-CEO Joseph as chairman

Safaricom, Aviate Networks partner to roll out 5G to remote locations

COVID-19: Investing for Roubini’s Greater Depression

Kenya’s Safaricom sees 70% jump in data usage during COVID-19 lockdown

Safaricom, Vodacom partner to grow M-pesa across Africa

Ethiopia closes door on M-Pesa, only local companies allowed

Tracking movements shaping the Kenyan market space amid COVID-19 crisis

Kenya increases transaction limits, encourages delivery services to halt COVID-19 spread

Safaricom backs down on data expiry losses

M-pesa revenues decline attributed to betting industry

Safaricom’s Debra Mallowah on how the 4IR can bridge inequality gap

Kenya has ordered Safaricom to shut down betting payments, here’s why

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Safaricom

Safaricom shares hit record high on Ethiopian licence

Safaricom pips MTN to Ethiopian operating licence

Global consortium wins telecom license in Ethiopia

Safaricom delivers resilient performance amid COVID-19 challenges

The impact of market concentration on the Nairobi Securities Exchange

Kenyan telecoms operator Safaricom picks ex-CEO Joseph as chairman

Safaricom, Aviate Networks partner to roll out 5G to remote locations

COVID-19: Investing for Roubini’s Greater Depression

Kenya’s Safaricom sees 70% jump in data usage during COVID-19 lockdown

Safaricom, Vodacom partner to grow M-pesa across Africa

Ethiopia closes door on M-Pesa, only local companies allowed

Tracking movements shaping the Kenyan market space amid COVID-19 crisis

Kenya increases transaction limits, encourages delivery services to halt COVID-19 spread

Safaricom backs down on data expiry losses

M-pesa revenues decline attributed to betting industry

Safaricom’s Debra Mallowah on how the 4IR can bridge inequality gap

Kenya has ordered Safaricom to shut down betting payments, here’s why

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