Investmentsandequity-blog - Investments And Equity

Alioune and Moustapha Ndoye, two brothers from Senegal, decided to move back to their homecountry from the U.S. to start their company Xtreme Design and Engineering. It seeks to build innovative solutions for Africa’s growing hospitality industry.

After completing their engineering studies in...

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French scientists have managed to generate red blood cells from stem cells and inject them back in to the donor. This major achievement opens up the possibility of a stem cell-based alternative to donated blood cells.

In a tender involving global giants such as Total and China National Offshore Oil Corporation (CNOOC), Russian Rostec wants to set up the first oil refinery in the fast growing market of Uganda, one of the most business-friendly places in Eastern Africa.

The subsidiary of  Russian state corporation Rostec - RT – Global Resources -  will partner the VTB Capital, while Tatneft will take over the operational role.  

Preliminary estimates suggest the cost of the country’s first oil refinery to be built in the city of Hoima will be around $3 billion, the Izvestia paper reports.

The Ugandan oil market is growing 10 percent annually. It’s one of the most politically-stable countries in Eastern Africa, with not local conflicts or warring neighbors, the paper quotes Karen Simonyan, the President of the Russian-African fund to support science, culture and business cooperation. Production from the refinery will go both to internal and external markets, which don’t have any refineries. Because the country is landlocked the oil products will carry a premium. 

According to the tender 40 percent of financing will be provided by Uganda, while the company that wins will be responsible for the remaining 60 percent. More than 50 international bidders are interested in developing the refinery. The results of the tender will be announced in 2014, while construction process will commence in 2015, according to Daily Monitor.

New exploration will also take place at Alberta Lake that has estimated reserves from 6 to 8 million barrels of oil. The refinery is expected to provide 1.5 million tonnes of products a year by 2017, which will almost completely cover Ugandan needs. By 2020 production at he plant is expected to double.

Investment from Russia will be less than $1 billion, according to Andrey Korobov, the General Director of RT – Global Resources,Izvestiya reports. The consortium aims to recoup the money spent on the project in a short time due to the high oil price.

Rostec considered 25 companies as major rivals, including those from the UK, US and China. The main criterion for Uganda is the construction time. Ugandan representatives have only visited Russia to talk about the proposed agreement.

(Russian oil looks to Africa: Rostec bids for first $3bn Uganda refinery via rt.com)

European Credit Manager Avoca Sells

The Europe's Avoca Capital Holdings is an employee owned investment management firm. They have recently announced that they will be selling to the American private equity firm KKR.

Avoca Capital Logo This sale should be a good deal for both companies, which should complement each other well. Fitch ratings claims that the transaction should not affect Avoca Capitals highest standard's asset manager rating. Fitch also claims there will be good synergy between the two companies. The combined assets of both firms is approximately $28 billion, of which $8 billion is under management by Avoca Capital. There may be some conflicts of interests between assets of the two firms but this should not create any major problems. Fitch believes that Avoca will grow supported by KKR's brand and distribution capability. In addition KKR will assist Avoca to meet new European risk retention regulations. These rules make operations more expensive for smaller firms who are unable to handle the burden. The operational transaction risk for the two companies is relatively low. Moving forward all Avoca staff will become KKR employees, however there will be no change in reporting lines or processes, systems or locations. Short term measures have been taken to retain senior Avoca staff through incentives. operational risk associated with transaction will be low. avoca staff will become kkr employees, but there will be no change in reporting lines processes, systems or locations on the short term. measures have been taken to incentivise the retention of senior staff.

Stock markets are now trading at new all time highs. Last week, the Federal Reserve announced that they would not cut their current $85 billion a mont…

Stock markets are now trading at new all time highs. Last week, the Federal Reserve announced that they would not cut their current $85 billion a month QE-3 program. In other words, the central bank to the United States wants to keep interest rates extremely low in order to boost the U.S. economy. They also continue to buy mortgage backed securities and U.S. treasuries to keep the recent housing boom intact. Some members of the Federal Reserve such as Richard Fisher have strongly opposed the action by the Federal Reserve, but that does not seem to change the fact that the central bank’s balance sheet is now around $4 trillion. That is a lot of money printing over the past five years and it is still growing. Next, there is the United States debt ceiling debate between President Obama and the U.S. Congress that is heating up. The U.S. debt has climbed to $16.95 trillion. Many individuals will blame President Obama for the large increase in debt, but in all fairness every U.S. president has raised the debt ceiling. The only thing that could bring down the current U.S. debt would be economic growth, but unfortunately when a country grows at 2.0 percent a year it is very difficult to bring down the U.S. debt in a meaningful way. The number of people in the United States receiving benefits from the Supplemental Nutrition Assistance Program (formerly known as food stamps) is now just over 47 million. Then there is the money spent on wars and other conflicts, some experts say that the Iraq war cost over $3 trillion alone. Is all of this spending by the United States government ever going to stop? How can a country in so much debt continue to spend money it does not have? At this time, that does not seem to matter. The stock markets remains at or near all time highs. The markets do not seem to be worried about the weak U.S. economy, the debt, the people on public assistance, or the wars. When the stock market starts to panic that will be the time to worry that the problems are becoming to big too handle. Remember, the warning signs that told us that the housing and credit bubble was about to burst started to show up late 2005 when the housing stocks topped out, but the Dow Jones Industrial Average did not top out until October 2007. At that time, the central bankers were telling us that there were no problems on the horizon, but we all know now that the great recession was already underway despite the calming words from Ben Bernanke and the central bankers. Right now we are looking at the great disconnect, but everyone should just trade until the market tells us otherwise.

Nicholas Santiago

InTheMoneyStocks.com

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