Jihadists in Burkina Faso renew fears of instability in West Africa



France remains the main stabilizer and military force in West Africa thanks to its seasoned Special Forces, experimented soldiers and colonial history.

Despite a decade-long unabated engagement against terrorism – currently Operation Barkhane – in an area (the Sahel) that’s seven times larger than France, military officials noticed lately a scattered resurgence of the jihadist offensive especially aimed at destabilizing local governments and spreading fear among the population.

On December 17, 2018, President Emmanuel Macron and his Burkina Faso counterpart Roch Marc Christian Kaboré, while meeting in Paris, stressed on the fact that no additional French troops would be deployed in the country which is a member of the antiterrorist G5 Sahel group with Chad, Mauritania, Mali and Niger.

In the meantime however, Defense Minister Florence Parly and her Burkinabe counterpart Jean-Claude Bouda signed an intergovernmental agreement with a view to strengthening bilateral cooperation, including the delivery of 34 military vehicles by June 2019.

13 days before that, France had shown its willingness for more involvement after conducting an air strike against jihadist operatives who were attacking gendarmes at Inata, north of Burkina Faso. On December 28, 2018, a similar attack took place near the Malian border in Loroni, 250 kilometers north-east of Ouagadougou that left 10 gendarmes dead in an ambush, raising fears of increased jihadists’ operational capabilities and therefore greater potential of instability for West Africa as a whole.

“Average GDP growth in West Africa stalled in 2016, after several strong years, to 0.5 percent. It rebounded in 2017 to 2.5 percent, and was projected to rise to 3.8 percent in 2018 and 3.9 percent in 2019,” wrote the African Development Bank Group (AFDB) in its West Africa Economic Outlook 2018.

Such a growth dynamic could be at risk since the jihadist threat is increasingly developing outside the Sahel and spilling over into nearby countries, especially Ivory Coast and Burkina Faso.

Senegal-based researcher Bakary Sambe recently cited by the Washington Post pointed out “there are worries that West Africans are underestimating the threat” and the killing of ten gendarmes has come as a reminder of the growing challenge posed by jihadists to the Economic Community of West African States (ECOWAS).

Lately, utilities proved more resilient than industrials, financials



In 2000, Berkshire Hathaway (BRK) entered into a new industry when it invested $1.7 billion to acquire MidAmerican Energy (MEC), an electric utility based in Iowa with operations in the United States and the United Kingdom. “Though there are many regulatory constraints in the utility industry, it’s possible that we will make additional commitments in the field. If we do, the amounts involved could be large,” said at the time BRK’s CEO and Omaha-based legendary investor Warren Buffett.

Mostly considered a low risk investment though capital-intensive, the utility sector encompasses stocks from electric, water, gas and power providers. Despite some continuous uncertainty over the cost of infrastructure and raw materials, utility stocks are widely seen as reliable as bonds but more rewarding since they pay a dividend yield of 3.5 percent, clearly above the yield of the S&P 500 at 2.11 percent and the U.S. 10-year Treasury note at 2.7 percent as of December 28, 2018.

Since the market’s recent entry into bear territory, consulting firm Cyceon noticed that the utility sector has shown more resilience so far than most other sectors including health care, financials and industrials.

Indeed, utility companies like Connecticut Water Service (CTWS), Atmos Energy (ATO), Northwest Natural Gas (NWN) are respectively down 4.05 percent, 7.46 percent and 12.86 percent from their historical highs*. In the meantime, industrial company ABM Industries Inc. (ABM), financial company Eaton Vance Corp. (EV) and health care distributor Cardinal Health (CAH) are respectively down 30.92 percent, 40.38 percent and 50.65 percent from their historical highs.

Multi-utilities companies however might be a bit more scattered than their specialized counterparts, for instance MDU Resources (MDU) is 34.20 percent away from its top, contrasting with Vectren Corp. (VVC) which is just 0.18% away. All the companies cited above belong either to the dividend aristocrats category or to the dividend champions category meaning that they are all longstanding companies with stable dividend distribution and growth policy.

* Most of historical highs here have been considered since 2007.

Saudi Aramco wants to lead in energy’s digital transformation



Saudi Arabia wants to diversify its economy beyond its giant oil industry and therefore seeks to exert more financial clout with a view to taking an active – and lucrative – part in what Riyadh sees as the Fourth Industrial Revolution.

Earlier this month, Abdulkareem Al-Ghamdi, Saudi Aramco Vice President for Power Systems, underlined the “clear connection” between robotics, artificial intelligence (AI), nanotechnology apps, computing and the internet of things (IoT). Citing the construction of the smart digital control center (iPower) in Dhahran, Al-Ghamdi emphasized the company’s commitment to Vision 2030 by “leading digital transformation in the energy industry.”

Along with several “strategic partnerships” with institutions and colleges focused on digital developments and innovations, Saudi Aramco deepened its business ties with US-based Raytheon Company (RTN) by establishing a joint venture company with its Saudi Arabia-based subsidiary.

“Demand for cybersecurity services is expected to grow as companies move further into the digital space and embrace technologies such as IoT and big data. The partnership with Raytheon will help strengthen cybersecurity and enhance its infrastructure in Saudi Arabia and the broader region,” said Saudi Aramco Senior Vice President of Finance, Strategy & Development Khalid H. Al-Dabbagh on December 14, 2018.