CBx Vibe: “Icon” Jaden Smith
Nigeria isn’t one of the favorites to win the 2018 World Cup but it has certainly won the title of best kit among fans. First revealed back in February, the kit sold out in minutes with fans eager to shell out $90 for a shirt. Are kit deals lucrative for a country’s football federation?
Why This Matters: Three million people pre-ordered Nigeria replica jerseys, according to the Nigeria Football Federation. Nike (NKE +/-%) UK said in a tweet it currently had no plans to restock the merchandise. This decision by the company has fueled the market for counterfeit jerseys. Most sales came from the Nigerian diaspora, soccer fans who’ve adopted the country as their World Cup team.
The Nigeria Football Federation (NFF) entered into a three and half year partnership with Nike to make the kits back in 2015. The deal was worth $3.75 million and came with a $500,000 bonus if the "Super Eagles" qualified for the 2018 World Cup in Russia, according to Goal.com. The NFF complained about how counterfeiters can potentially ruin such lucrative deals.
If you missed out on getting a kit like many folks out there, Nike plans to put out one more item. The sportswear giant is set to release the “Nigeria Stadium Tech Hip Pack,” with a similar black and green floral all-over print pattern later this month. Read More
CBx Vibe: “Major Bag Alert” DJ Khaled feat. Migos
JP Morgan (JPM -0.25%) has received inquiries from at least six African companies which want to look into an initial public offering on the London Stock Exchange (LSE). The largest IPO on the LSE this year was by African oil marketer Vivo Energy (VVO:LN -1.82%). The company secured a $2.65 billion valuation after raising $734 million on the LSE. Does the prospect of more African companies listing in London signal the global significance of the continent’s private sector?
Why This Matters: It’s not often you hear about Africa-based companies operating on a global scale as publicly listed entities. Nearly a decade ago the Boston Consulting Group issued a report predicting several companies were going to expand their reach beyond Africa and compete on the global stage.
Last year three companies with Africa operations listed shares on the LSE. This increased interest is evidence of the continued growth of Africa’s private sector. Companies are building strong management teams and reaching a scale which makes going public in the West a realistic option.
McKinsey & Company research shows there are at least 400 African companies with revenue exceeding $1 billion. As they continue their growth path perhaps we’ll see even more countries look into going public on the LSE.
Situational Awareness: African companies considering going public in London is a strong indicator of the opportunity it presents. Investors probably should exercise patience as it pertains to when companies will actually list. For example, the Dangote Group which is one of the largest conglomerates in Africa has been considering a dual listing on the LSE since 2012. Read More
CBx Vibe: “Change” J. Cole
The global cocoa market dependence on West Africa is continuing with Ivory Coast, the world’s biggest producer leading the way. However, prices for the highly sought after commodity are set thousands of miles away in New York and London. Is it time for African cocoa growers to unite like oil producers have, in order to have more control over global pricing?
Why This Matters: The cocoa market can be extremely volatile. In late 2016, cocoa futures plunged 27% in a six-week period. In December 2017, New York prices fell to 10-year lows after a year of pressure from record supply out of Ivory Coast.
There has been a major turnaround in 2018 causing prices to surge up about 25% this year. Ivory Coast and Ghana grow about 60% of the world’s cocoa and want to regulate global supply and grab more of the profit. Cocoa differs from oil though in several ways including, output can’t be curbed overnight as trees keep producing. Not to mention traders know cocoa can’t be stored forever, especially in hot West Africa.
A major hurdle for the two countries to overcome is how they operate. Ivory Coast and Ghana have vastly different marketing systems for their cocoa, which means attempts to unite them will most likely require that one or the other change. Also, the governments compete against each other to sell their crops before the season starts, this makes sharing of crucial market information tricky. Read More