The Weekly Digest is a publication by SCVI Insight, focusing on finance and economics in East Africa and beyond, with recent updates including an expansion of coverage to include Africa at large and a recruitment drive that increased their team size. Current topics covered include banking sector challenges in Kenya, the rise of crowdfunding, and updates from East African economies. The publication aims to engage readers with a blend of informative and entertaining content while fostering undergraduate research and writing at Strathmore University.

1. Hello there! It’s been a minute. Okay, more than a minute, 10 weeks to be precise. Hope you have
been well. Let’s see if we can start afresh.
This is ‘The Weekly Digest’, a weekly publication by SCVI Insight which is an arm of Strathmore
Centre for Value Investing (SCVI) – more on this below. The Digest is for you, dear reader. There are
so many cool and crazy things going on in the world and we can’t wait to tell you about them! Think
of us like that nerdy friend who likes current affairs (with a great sense of humour of course).
Since most of us are students in Finance and Economics, that’s what we will talk about. We try to
make it a bit fun so that you don’t sleep halfway (hopefully). Well, I won’t ramble on! Here’s what’s
new in ‘The Weekly Digest’ since we last spoke:
The Regional Beat: First off, ‘The Local Beat’ has expanded to become ‘The Regional Beat’ covering
stories in East Africa (EA).
Africa at Large: the ‘Sub-Saharan Africa’ section is now ‘Africa at large’ covering all stories in Africa
(apart from EA).
Bigger team: we went on a huge recruitment drive and are now 20 or so friendly folk (or just
curious characters). Check out the credits at the end.
More Space! : We tried not to be too cramped this time.
New Blog! : We juiced up our blog and want to go pro…so look out for our content on Twitter!
In other news, don’t forget to follow us on Twitter for updates and content. We would love to hear
from you - so don’t be shy and throw a tweet our way.
I’m sure this is too long already so I’ll sign off now. As always: dig in and stay sharp!
Strathmore Centre for Value Investing (SCVI) is a research centre under the Strathmore Institute of
Mathematical Sciences (SIMS) - formerly SFAE - based in Strathmore University.
Started in 2014 under the leadership of our Director, Ishmael Maina (CFA), the centre is growing
by leaps and bounds with the goal of being the foremost undergraduate research institute in
Quantitative Finance and Economics with a bias towards Value Investing.
SCVI Insight is the publications and corporate communications arm of the Centre. It currently
produces The Weekly Digest, one of 3 planned publications by SCVI Insight. The other two will be
called The Monthly Report and the The Quarterly Review.
Our vision is to become the foremost platform for young undergraduate researchers and writers in
Strathmore University.
We believe in the value of ‘learning by doing -emphasized and highlighted in our publications and
projects.
Thank you for being a part of our story - which is just beginning!
WHOAREWEAGAIN?
THE WEEKLY DIGEST
AWORDFROMTHEEDITOR
ISSUE 003
[13th - 20th August 2016]

2. Banks have been playing dirty tricks with customer credit history gotten from the Credit Reference Bureau
(CRB). Some ‘bad’ borrowers weren’t really bad but banks needed them to be ‘bad’ to milk money out of
them. Fortunately, the CBK stepped in to set things straight. It promised huge fines and sanctions to any
naughty bank who obviously swore to play fair – in a year.
No fair! – CBK steps in to chastise rogue banks
It seems like Rwanda is a hot destination for global hotel brands. Marriot & Radisson Blue have set up
shop there over the past month, timing big conferences like the African Union Summit. Experts are on edge
though, wondering if Rwanda can handle all the attention it’s getting. Big name hotel brands are hard to
please and the local market a bit tricky to exploit. Don’t lose it Rwanda. Please
Hot stuff: Rwanda attracts big name hotels
Crowd’ is the new cool
Crowdfunding is now the in-thing in East Africa. Growth rates are massive in all three major economies
in the region, indicating a global trend estimated to reach 96 billion raised by 2025 (the World Bank said
so). So many factors make the region ripe for crowdfunding, but the major factor is the old trusty one
– high returns. Besides, the model is doing a lot of good for low-income individuals and cash-starved
Stanlib’s REIT revves up
Stanlib’s Fahari REIT (a fancy investment vehicle) is looking good. It clocked a 6.5% upside for investors
in the seven months to June. Sounds like a happy Christmas coming up for investors with full-year
distributions expected. Analysts still think the current retail price is discounted meaning more upside
potential. Let’s watch this baby go!
Fitch’s forecasts of banking sector’s future
Fitch, an international ratings agency, thinks banks may hustle to sell more loans if interest rates are capped
(which is actually a very big deal right now). It argued that bigger banks can handle it even if a ceiling is
placed on interest rates. Banks don’t think so, saying that their job will now be extra hard as they try to pick
out good from bad borrowers. However, MPs think banks are being greedy by posting huge profits as the
economy struggles. Let’s hope Fitch is right because MPs are super-serious about that cap thing.
Dismal day for DHL
DHL Kenya is letting go of some of its people after EABL ditched it as their service provider of warehousing
operations - for Bollore. Since DHL still wants to be a star employer, it’s trying to get gigs for its guys at the
new guy’s operation (Bollore). Basically, DHL is trying to leave in good grace after 5 good years with EABL.
Thumbs up DHL!
‘It’s too hot’: Juba needs a pill chill
It’s super-hot in Juba right now. About 600 degrees hot (in inflation terms). The economy is in free fall
what with the chaos of civil strife as hunger bites and prices keep rising. Traders from Kenya and Uganda,
Sudan’s main trading partners, have lost 1.2 billion or thereabouts as they fled the fledgling fiefdom (too
much effing perhaps?) In short, things are thick but Juba’s government is doing its level best to get goods
safely into the country to cool down the economy.
MoKash for me! : MTN trys to pull an M-Shwari
MTN Uganda is attempting to pull an ‘M-Shwari’ in the Banana Republic. Its name is Mokash and it works
just like M-Shwari. It’s partnering with CBA to provide a credit facility to the vast unbanked population in
the country, which is number one in terms of movement of money in the region. There is a lot that needs to
be done before the market is ripe for reaping according to experts. So easy does it MTN, let’s not lose our
bananas chasing money
THE REGIONAL BEAT
Tim avedi

3. Rooting for Rwanda: the US gamble
Back again to Rwanda. It’s now rooting for its small businesses in the US of A by mobilizing about 1
billion in export credit guarantees – subsidies basically. Since the country has been falling behind Ken-
ya, Senegal and Uganda in the US market, it’s high time Rwanda upped the ante – and the strategy is
lowering its prohibitively high prices. Let’s hope Rwanda’s gamble pays off
NEWS FROM AROUND THE WORLD
INDIA, RUSSIA & CHINASOUTH EAST ASIA
Asian stocks experienced varying per-
formance, call it a cocktail of sorts. De-
creased investments led to a fall in Indo-
nesian stocks. Singapore shares closed
among the top losers. On the sweeter
side, an increase in oil prices facilitated a
rise in Malaysian energy stocks. Vietnam-
ese shares also rose driven by oil and gas
stocks while Philippines recovered from
earlier losses.
A Mojito of stock price movements
In a duel similar to that of David and
Goliath, Japanese firms compete with
established European companies in the
ice cream industry. Ezaki Glico and Akagi
Nyugyo recently introduced their products
to the Asian market in a bid to promote
local sales channels thereby challenging
European players such as Unilever and
Nestle.
David and Goliath: Japan takes on
European giants
Rice is a staple food in Asia. The final
LEGATO Conference held in Philippines
marked the climax of five years’ research
on irrigated rice cultivation. It covered
biodiversity and nutrient provision through
the use of silicon in soils to improve yields
and combination of pollinators and soil
organisms.
Rice research in Asia
The sky is not the limit for the Chinese as
their latest innovation, The Transit Ele-
vated Bus (TEB) run its trial test in Hebei
Province this week. With its low cost of
construction, even way lower than of a
subway’s, the TEB is set to help reduce
road congestion. On the flip side, this
sparks fear among local investors as one
TEB is said to replace 40 conventional
buses.
High tech bus gets a ‘Boo!’ from local
investors
The Russian labour industry has reported
80% growth rise in foreign migration. In
a bid to curb the high migrant numbers,
Governor Vladimir has set out to lay off
low-skilled foreign workers of their jobs.
Will this work out for Russia? Idi Amin did
this with the Asians and the aftermath?
Well, Uganda is still a developing country.
Layoffs in Russia: the foreign migrant
mess
India has put a jaw-dropping Rs.115 mil-
lion ($17 million) financial value on its for-
ests. This eye candy value is higher than
the GDPs of major developed economies
such as Russia and Canada. This value
is attributed to the government directly
charging private investors as well as other
agencies for setting up projects on forest
land. This is India. India is investing in its
natural resources. India is smart. Kenya
be like India.
Save the Trees: India gets serious
about its forests
Gloria Kendi Ivy Mwende

4. NORTH AMERICASOUTH AMERICA
Oil is slippery business in Venezuela, a
country famed for its oil reserves (it has
the largest on the planet). Business has
been slow to say the least with production
hitting a 13-year low and fears of plunging
even lower. It doesn’t help that PDVSA,
the state-run oil company, owes a few
billions in debt which many believe it won’t
be able to pay. Venezuela is in free-fall
and looking for a saviour.
Somebody save me! : Venezuela’s
plunge in oil production
It’s getting a bit chilly in Chile what with all
the contractions going round. The econ-
omy has shrunk, mining output has fallen
and household spending is limping along.
This state of affairs is making the Central
Bank raise its foot from the brake and put
it down a bit on the gas by raising expend-
iture to compensate for the slowdown in
private spending. Like a warm bowl of
soup in chilly weather.
Make it stop! : Chile’s contractions
Pundits thought the Olympics would be a
disaster. They were wrong. Pundits also
thought the stock market would forever
dither. They were also wrong. It has per-
formed better than expected, rising by
more than 35% in local currency terms de-
spite Brazil going through its third straight
year of recession. There has also been a
recent increase in industrial production,
as well as in consumer confidence, which
means that the clouds above Brazil’s
economy might just be parting.
Brazil beats ‘Bound to fail’
expectations
Mr. Trump has been listed as one of the
downside risks the US of A may face in
the short term. This is attributed to his
radical views on NATO, and his seemingly
favourable view of Mr. Putin and Russia (I
smell a fish…or is it rat?). His antics have
also led to questions about his tempera-
ment as a leader (he got offended when
someone said he had small hands), which
may possibly scare investors away. Get
the popcorn. This is going to be one inter-
esting election to watch.
Trump the trouble-maker
The Federal Reserve (FED) is expected to
hike interest rates as early as next month.
Discussions have been on going and
minutes released on Wednesday give the
rationale for the hike. It basically pertains
to gains in the job market and recovery
in financial markets following the Brexit
vote. These set of events has led to the
improvement in economic conditions thus
giving the FED a reason to hike interest
rates. There is an elephant in the room
though: what will happen to emerging mar-
kets?
Hike me up! : The FED tries to decide.
It’s your fault Republicans! A study by the
Economic Policy Institute (EPI) suggests
that the slow recovery of the US economy
after the 2008 recession was due in part
to Republican policies. The EPI report
blames budget cuts in 2011, led by the
Republican Party, which meant that this
economic recovery was the slowest over
the past four business cycles. One won-
ders what will happen to the economy if
a Republican president came into power.
Scary.
Of Meddling Politicians
Julie songok Ronald Wakhu

5. AFRICA AT LARGE
Happily ever after never seemed as im-
probable as in Mauritania. With girls being
sold to the highest bidder at the tender
age of 12 years, their aspirations to be-
come medics, teachers and astronauts
remain just that: pipe dreams. However,
UNICEF’s education programs and health
are the light at the end of tunnel for these
refugee girls.
Mauritania’s maidens: Hope in the
midst of hopelessness
Dusty, hot, crowded. Those are the words
that an outsider may view the Mbera refu-
gee camp in Mauritania. However, for the
inhabitants of the camp, the deal could not
get any better. Far from the violent army
raids and constant fear of attack, these
refugees are well into their comfort zone.
Home is not a house but a feeling.
The Liberian government has proved to
be a no nonsense authority. They claim
that certain media institutions have been
evading tax so they must down their tools
whether they want to or not. However,
these institutions claim that it is their expo-
sure of corruption within the government
that has pre-empted these actions.
Too free not to pay tax? : No marks for
the Media in Liberia
EUROPE
The volume of card payments in Europe
has increased tenfold since 2000 thus 1 in
5 payments are still in cash. As countries
become richer, they tend to move away
from cash on grounds of security, conven-
ience and cost. However in Germany and
Spain, 83% of payments are in cash, this
trend being attributed to aversion to cards
and high rates charged by banks.
Cards vs Cash: Countries in Europe
can’t decide
The mining sector has benefited large-
ly from the Brexit spectacle despite the
depreciating pound. This is because the
mining companies trade in dollars and are
thus protected against downward currency
movements. Reduced interest rates also
led to the companies offering higher div-
idends, attracting more investors and lead-
ing to increased demand that propelled
high share prices.
No Brexit blues: British mining sector
emerges unscathed.
The results of the latest European bank
stress tests, released on July 29th con-
tained much that was reassuring. How-
ever, they did not dispel investors’ doubts
about the industry’s earnings prospects
since the Euro Stoxx banks index dropped
by 3% and almost 5% on successive
days. In aggregate, the results suggested
that European banks were in a healthier
position than when the last exercise was
conducted in 2014. In Italy’s case, the
tests led to a fall in banks’ share prices.
However, it’s unlikely to force an urgent
response.
Stressful tests? : Not this time
Koki Gachui Valentine Muhonja

6. Editor: Tim Avedi
Sub-Editor: Julie Songok
Contributing writers:Ivy Mwende,
Gloria Kendi,
Julie Songok,
Ronald Wakhu,
Valentine Muhonja,
Koki Gachui
Design: Adrian Myall
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