18th February 2018
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Satchu's Rich Wrap-Up
Friday 16th of February 2018

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0930-1500 KENYA TIME
Normal Board - The Whole shebang
Prompt Board Next day settlement
Expert Board All you need re an Individual stock.

The Latest Daily PodCast can be found here on the Front Page of the site


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Elephants Tsavo West @finchhattons You hear them first Video

I recall reading  The Emperor by Ryszard Kapuściński and in that book
Kapuściński recounts the tale of Lulu, Haile Selassie’s lap dog


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That book also speaks to how the cushion bearer [The Emperor was very short and therefore had to perched on cushions so as not to be beneath his subjects]

That book also speaks to how the cushion bearer [The Emperor was very
short and therefore had to perched on cushions so as not to be beneath
his subjects] became an all-powerful figure at the Imperial Court.

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Hailemariam Desalegn has submitted a resignation letter to his party during an emergency meeting of the ruling Ethiopian People's Democratic Front @kevinjunta29
Law & Politics

Hailemariam Desalegn, who served as #Ethiopia’s Prime Minister since
2012, has submitted a resignation letter to his party during an
emergency meeting of the ruling Ethiopian People’s Democratic Front

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POLITICS IN Ethiopia usually happens behind closed doors and is about as exciting as watching injera (a tasty Ethiopian bread) rise @TheEconomist
Law & Politics

POLITICS IN Ethiopia usually happens behind closed doors and is about
as exciting as watching injera (a tasty Ethiopian bread) rise. Change,
when it happens, however, arrives like a bolt from the blue.

At the start of this year the ruling Ethiopian People’s Revolutionary
Democratic Front (EPRDF) stunned observers with an announcement that
it would release and pardon many of the thousands of political
prisoners it holds. But when it seemed that the government was
dragging its feet, strikes and protests broke out this week across
Oromia and Amhara, the country’s most populous and mutinous regions.
The government responded by releasing some prominent journalists and
opposition members including Bekele Gerba, an Oromo politician who had
been sentenced to an additional six months in prison just days
earlier. Then on February 15th came the sudden resignation of
Hailemariam Desalegn, the beleaguered prime minister and chairman of
the EPRDF, who said he was stepping down because of the “unrest and
political crisis [that] have led to the loss of lives” and that he
wished to be “part of the solution”.

His departure has opened up a succession struggle within the coalition
that has governed Ethiopia since it first seized power as a ragtag
band of rebels in 1991. The EPRDF is a coalition of four
ethnically-based parties that has long been dominated by the Tigrayan
People’s Liberation Front (TPLF) which represents Tigrayans, who make
up about 6% of the population. But the TPLF’s power is weakening. The
Oromo People’s Democratic Organisation, which represents the largest
ethnic group in the ruling coalition, was seen for years as a puppet
of the TPLF. But under Lemma Megersa, its charismatic new leader, it
has rebranded itself as a quasi-opposition party. It now wants to take
the helm, backed by a belief among Oromos that it is their turn to
have one of their own in charge. “The next leader must be an Oromo,”
says Seyoum Teshome, an academic and blogger. “There is no doubt about

Hailemariam says he will stay in office until a successor is found.
Whoever it is will face powerful headwinds. The new prime minister
will need to satisfy the still unfulfilled demands of protesters, who
want more democracy and to shake off what many see as domination by
the TPLF, while preventing the break-up of the fragile ruling
coalition. And he may face opposition from hardliners in the military
and intelligence services, which have real clout in Ethiopian politics
and are still dominated by Tigrayans. “Any meaningful change still
depends on how these political developments reach the security
apparatus,” says Hallelujah Lulie of Amani Africa, a consultancy based
in the capital, Addis Ababa. “The deep state is still intact.”

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17 OCT 16 :: The government was able to also point at the trajectory of its growth and say look at the parabola of our GDP.
Law & Politics

However, as Maplecroft said ‘’Ethiopia’s reputation for stability has
been shattered by an escalating series of protests in Oromia and
Amhara regions.

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Saudi Crown prince arrived in Japan with 10 plain loads of staff, furniture & luxury goods for personal use @ZaidZamanHamid
Law & Politics

Japanese Emperor met him in this empty room, with simplest settings,
giving a message to MBS that greatness lies in knowledge & higher
values not in ugly display of wealth

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China continues construction of military infrastructure in the Spratly archipelago
Law & Politics

China continues construction of military infrastructure in the Spratly
archipelago. The greatest activity for the construction of military
installations was conducted on the Fiery Cross reef. The area in which
the work was performed, amounted to 110 thousand square meters.

American analytical center of the Asia Maritime Transparency
Initiative at the end of last year reported that the greatest activity
for the construction of military installations was conducted on the
Fiery Cross reef. The area in which the work was performed, amounted
to 110 thousand square meters.

It is reported that “the three largest artificial Islands built
runways, hangars, aircraft, radar stations and satellite
communications, underground storage for ammunition, barracks, etc.”

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China has established control over the South China Sea. It has created artificial Islands and then militarised those artificial islands across the South China Sea
Law & Politics

Apart from a few half-hearted and timid FONOPs [freedom of navigation
operations], China has established control over the South China Sea.
It has created artificial Islands and then militarised those
artificial islands across the South China Sea

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Spectator editorial on International Criminal Court. (ICC) - @afneil
Law & Politics

Spectator editorial on International Criminal Court. (ICC) — “the
wheels of justice at the ICC turn so slowly that it has pioneered a
variation on the death penalty: proceedings drag on so long that
defendants have a habit of dying before a verdict can be reached.”

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Currency Markets at a Glance WSJ
World Currencies

Euro 1.2538
Dollar Index 88.40
Japan Yen 105.90
Swiss Franc 0.9203
Pound 1.4128
Aussie 0.7984
India Rupee 63.965
South Korea Won 1062.72
Brazil Real 3.2279
Egypt Pound 17.6460
South Africa Rand 11.6055

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Net foreign selling of treasuries totaled nearly $16bn in Dec @Schuldensuehner
International Trade

Net foreign selling of treasuries totaled nearly $16bn in Dec but
despite rising tensions, #China isn't backing down. China's holdings
rose to 1.18tn, largest increase since 2010. Among those foreigners
selling most treasuries, report shows Japan (-22.6bn), Turkey

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#Bitcoin jumps >$10k @Schuldensuehner 9.875.00 Last
World Currencies

#Bitcoin jumps >$10k as Andreessen Horowitz's Rampell makes bullsih
case for Bitcoin at GS Tech Conference

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Gold 6 month INO 1358.50

U.S. crude #oil futures settle at $61.17/bbl. ⬆️$0.66. +1.09%. #CME
#NYMEX #CL_J7 #OOTT @Lee_Saks


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Emerging Divergence in Bonds @business
Emerging Markets

As the threat of U.S. inflation rises and benchmark Treasury yields
approach 3 percent, 10-year emerging-market bond yields are offering
investors the widest spread since at least 2010 over their
developed-market counterparts. That’s because the recent global rout
triggered an increase in yields in developing-nation debt, while
inflation has remained benign, based on the average of 10 emerging
markets compiled by Bloomberg.

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Bishops in Tanzania denounce government for suppressing freedoms Catholic News Agency

The bishops of Tanzania spoke out this week against the suppression of
several constitutional freedoms within the country, saying the
government is becoming responsible for threatening national unity.

“The activities of political parties, such as public gatherings,
demonstrations, marches, debates inside premises, which are the right
of every citizen, are suspended until the next elections,” read a Feb.
11 pastoral letter signed by the Conference of Catholic Bishops of
Tanzania, according to Africa News.

“Political activities are prohibited by the instrumentalization of the
police,” the letter continued, denouncing the government’s
interference with national laws and the freedom of expression.

Political tensions within Tanzania have been rising with upcoming by-elections.

“Media are closed or temporarily suspended, thus restricting the right
of citizens, to be informed, freedom of opinion and the right to
privacy and expression,” the bishops said.

“If we allow this climate to continue, let us not be surprised to find
ourselves in more serious conflicts that will destroy the foundations
of peace and national unity.”

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The inside story of how Cyril Ramaphosa toppled Jacob Zuma and won South Africa's presidency

Late on the evening of Feb. 4, Cyril Ramaphosa and the five other top
leaders of South Africa’s ruling party went to President Jacob Zuma’s
Cape Dutch colonial-style residence in the capital, Pretoria. They
shared a dinner of chicken, rice, oxtail and salad.

The message was less pleasant: It was time for the 75-year-old leader
to go. Zuma, in power since 2009, dug in his heels.

“President Zuma basically said to us: ‘I’m not going anywhere, I’m not
convinced by you guys, I’m not going to resign,”’ Paul Mashatile, the
African National Congress’ treasurer-general, told mining executives
in Cape Town on Feb. 6. “We tried to persuade him, we spent a lot of
time. At the end we said that’s fine.”

It began on Dec. 16, when more than 4,000 delegates descended on the
Nasrec conference center in Soweto near Johannesburg for the ANC’s
national conference. Zuma’s term as party leader was up and a new
chief had to be chosen. With prosecutors circling to indict him on
graft charges related to an arms deal in the 1990s, Zuma needed to
ensure he had his successor’s protection.

Party tradition dictated that the top job should go to Ramaphosa, 65,
its deputy leader. He’d won international acclaim when he steered
talks that ended apartheid and produced South Africa’s first
democratic constitution, and had served as the country’s deputy
president since 2014.

Instead, Zuma backed Nkosazana Dlamini-Zuma, his ex-wife and the
mother of four of his more than 20 children. His confident demeanor in
the lead-up to the gathering indicated that he thought she had the
contest in the bag.

What Zuma hadn’t counted on was three court rulings that disqualified
about 100 of his allies from voting. Or on a decision by David Mabuza,
a key power broker in the eastern Mpumalanga province, to switch
allegiances shortly before the election. When Ramaphosa was declared
the winner of the ANC presidency on Dec. 18 with 52 percent of the
vote, Zuma sat stony-faced, pursed his lips and didn’t applaud.

That was a turning point for South Africa. Ramaphosa became
increasingly assertive over the next few weeks. He oversaw the
appointment of a new board at the state power utility, which had been
at the center of graft allegations implicating Zuma’s allies, wooed
investors at the World Economic Forum in Davos and poured cold water
on the president’s plans to build new nuclear power plants.

“He is the kind of character that does not just want to be classified
among the top 10 or top five,” Motlatsi said. “Cyril always wants to
be number one.”

Even before Davos, Zuma’s power had ebbed, when members of the party’s
National Executive Committee (NEC) gathered at the Saint George hotel
near Pretoria on Jan. 19. The talks dragged on late into the night
before it was agreed that he must leave office and the party’s top six
leaders must manage his exit, according to six senior party officials
who spoke on condition of anonymity. Ace Magashule, the ANC’s
secretary-general and a close Zuma ally, insisted the next day that no
decision had been taken on the president’s future.

Zuma flew to Ethiopia to attend an African Union summit on Jan. 26,
where he spoke out against corruption. He returned home on Jan. 30 and
the ANC’s top leaders tried to meet with him that evening. He kept
them waiting for five days before agreeing to the dinner at his
residence, according to ANC official Mashatile. His account of the
negotiations was taped and leaked to the media.

But faced with the inevitability that Parliament would vote him out if
he didn’t go voluntarily, Zuma announced his resignation in a
televised address later that night.

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South Africa's Bonds Are Getting More Love Than Mexico's @business

“That is a first in emerging markets,” said Daniel Moreno, head of
global emerging-market debt at Mirabaud Asset Management. “South
Africa has always been the underdog that you would definitely avoid
and Mexico was a darling of emerging-market investors for more than
two decades. And now the pre-conceived argumentation in these two
countries has completely turned upside down.”

While the yield on South Africa’s 2023 rand-denominated bonds fell 17
basis points to a 2015 low, the rate on Mexico’s local-currency
securities due 2022 has been rising amid concerns over trade with the
U.S. and election risks. Meanwhile, the Mexican central bank has
boosted borrowing costs to stem inflation and support the peso.

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18-DEC-2017 :: If Ramaphosa succeeds in wresting the Leadership of the ANC, South African Asset prices will enter the sweetest of sweet spots

If Ramaphosa succeeds in wresting the Leadership of the ANC, South
African Asset prices will enter the sweetest of sweet spots. Global
Investors will surely buy the Rand by the bucketload and we could see
a further meaningful rally in the order of 10% towards 12.00 versus
the Dollar.

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South African stocks surge after Zuma steps down @ReutersAfrica

By 0845 GMT, the benchmark JSE Top-40 index rose 3.7 percent while the
broader All-share index gained 3.5 percent, as markets in Africa’s
most sophisticated economy gained ground in the wake of Zuma’s

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South Africa All Share Bloomberg +0.05% 2018

Dollar versus Rand 6 Month Chart INO 11.6055


Jacob Zuma, the Guptas and the selling of South Africa @FT


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Egypt cut interest rates for the first time since floating the currency at the end of 2016

Egypt cut interest rates for the first time since floating the
currency at the end of 2016, starting a widely-anticipated easing
cycle after record-high borrowing costs helped curb inflation and
attract $20 billion into local-currency debt.

The monetary policy committee led by Governor Tarek Amer lowered the
overnight deposit rate by 100 basis points to 17.75 percent. A cut was
predicted by six out of nine economists in a Bloomberg survey. The
overnight lending rate was also reduced by 100 basis points to 18.75

The central bank had raised borrowing costs by 700 basis points after
it abandoned currency restrictions as it sought to control inflation
and stabilize the pound. The measures helped secure a $12 billion
International Monetary Fund loan, ease a crippling dollar shortage and
unleash a deluge of foreign inflows into Egypt’s high-yielding debt.

The decision comes amid concerns over the impact of rising U.S.
interest rates on emerging markets. But with inflation easing for a
sixth month in January to 17.1 percent from a peak of 33 percent, the
cut “does a great job of balancing global risks with domestic
realities,” said Matthew Graves, who helps manage $442 billion at
California-based Western Asset.

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East Africa's Albertine Rift needs protection now, scientists say

The Albertine Rift in East Africa is home to more than 500 species of
plants and animals found nowhere else on the planet.
Created by the stretching apart of tectonic plates, the unique
ecosystems of the Albertine Rift are also under threat from
encroaching human population and climate change.
A new report details a plan to protect the landscapes that make up the
Rift at a cost of around $21 million per year — a bargain rate,
scientists argue, given the number of threatened species that could be

The equatorial ecosystems of the Albertine Rift are packed with plants
and animals found nowhere else on Earth. Formed as tectonic plates in
eastern Africa have slowly pulled away from each other for millions of
years, the unique habitats in this epicenter of biodiversity have
rapidly come under threat in recent decades from conflict, poverty and
a booming human population.

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Kenya, marketing new Eurobonds, angered by @MoodysInvSvc's downgrade @ReutersAfrica
Kenyan Economy

NAIROBI (Reuters) - Kenya has questioned a decision by credit ratings
agency Moody’s to downgrade the East African country’s debt at a time
when senior officials are travelling abroad to market new dollar

Moody’s downgraded Kenya’s rating to “B2” from “B1” on Tuesday and
assigned a “Stable” outlook. It cited concerns about a gaping fiscal
deficit for the downgrade.

Its action came as the finance minister, Henry Rotich, leads a
roadshow abroad for new Eurobonds to raise a minimum of $1.5 billion.

Moody’s said it expected Kenya’s government debt to increase as
officials raise spending, while struggling to boost revenue and trying
to cope with higher interest rate payments.

Kenya’s total debt has risen to about 50 percent of GDP since 2013, as
it borrowed locally and abroad to build new infrastructure projects
like a modern rail line from Nairobi to the port of Mombasa.

Geoffrey Mwau, director general for budget, economic and fiscal
affairs at the Treasury, said Moody’s had not taken account of Kenya’s
positive economic fundamentals, with growth expected to rebound to 5.8
percent this year.

He said the fiscal deficit, which peaked at 8.9 percent of GDP in the
2016/17 (July-June) year, was set to fall to 7 percent at the end of
this fiscal year, and to less than 5 percent in three years.

“This shows you how serious we are,” he said.

Investors have however expressed scepticism at the plan and said the
government will likely have to pay a premium for the new issues.

Kenya’s 2019 issue is trading with a yield of 3.717 percent and the
2024 bond has a yield of 6.651 percent.

“Compared to their secondary market curve ... I would think they need
to offer at least 40 to 50 basis points,” said Sergey Dergachev,
senior portfolio manager at Union Investment in Frankfurt.

Memories of last year’s bitter presidential election contest, which
ended with President Uhuru Kenyatta securing a second term, could also
affect pricing of the issue.

Kenyatta’s rival, opposition leader Raila Odinga, has accused the
government of failing to account for $2 billion raised in the
country’s debut issues in 2014.

“I would price a decent room for risk,” said Regis Chatellier,
director, emerging markets sovereign credit strategy at Societe
Generale in London.

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BAT reports FY 17 PAT -21.209% Earnings here
Kenyan Economy

Par Value:                  10/-
Closing Price:           785.00
Total Shares Issued:          100000000.00
Market Capitalization:        78,500,000,000
EPS:             33.36
PE:               23.53

FY Gross revenue 34.468b vs. 36.676b -6.020%
FY Excise duty and VAT [15.794b] vs. [16.826b] -6.133%
FY Net revenue 18.674b vs. 19.850b -5.924%
FY Cost of operations 5.753b vs. 6.544b -12.087%
FY Reorganisation costs [392m] vs. [338m] +15.976%
FY Finance costs [494m] vs. [295m] +67.458%
FY PBT 4.867b vs. 5.911b -17.662%
FY PAT 3.336b vs. 4.234b -21.209%
FY Dividend 2.600b vs. 4.300b -39.535%
FY Net fair value on currency hedges 7m vs. -
FY Basic and diluted EPS 33.36 vs. 42.34 -21.209%
Dividend per share 26 vs. 43 -39.535%
Shareholders funds 7.840b vs. 8.797b -10.879%
Net cash from operations 4.713b vs. 5.162b -8.698%
Cash and cash equivalents at the end of the year [1.653b] vs. [1.687b] -2.015%

Company Commentary

Company navigated an unexpectedly difficult trading environment in
Kenya and across our export markets to deliver a solid set of results
in challenging circumstances.
Gross revenue decreased by 6% driven by lower domestic volumes and
weaker product mix due to the continued impact of excise-led price
increases in 2015 and extended uncertainty during the election period.
decrease in domestic market was partially offset by recovery in export
volumes and revenues following additional pricing and distribution
expansion initiatives implemented during the year, and marginal price
increases in contract manufacture due to inflation.
an unexpected 87% increase in the cost of tax stamps announced in
April 2017 as part of the excise Act 2017 as a result operating margin
reduced by 2.2pp to 30.8%
Company reorganisation cost 392m in H2
Finance costs increased to 494m principally due to higher borrowing in H1 2017
Final Dividend 22/= a share Total 26.00


''an unexpectedly difficult trading environment in Kenya''
Headline Revenue -5.924% translates into FY EPS downshift -21.209%
They have reduced their dividend Pay-Out Ratio.

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"Our products are very much lifestyle products. Consumption is tightly tied to global GDP. The current environment is consistent and predictable." ~ Tim Carstens
Kenyan Economy

"The future for Kwale, on the basis of reserve, is 5 years.
@BaseTitanium has been granted a significant area of exploration
tenure, to continue provide more benefits and stimulus to the Kenyan
economy." ~ Tim Carstens

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by Aly Khan Satchu (www.rich.co.ke)
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February 2018

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