23rd October 2014
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Satchu's Rich Wrap-Up
 
 
Thursday 23rd of October 2014
 
Morning
Africa

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The Latest Daily PodCast can be found here on the Front Page of the site
http://www.rich.co.ke

I thank His Excellency Johan Borgstam for lunch yesterday. Always
erudite and inspecting the Live Stream.

read more



@SandaOjiambo What does sustainability mean for @RaoufMazou @bobcollymore @alykhansatchu ? #safaricomsustainability
Africa


Macro Thoughts

Home Thoughts

"There are eyes everywhere. No blind spot left. What shall we dream of
when everything becomes visible? We'll dream of being blind."
-- Paul Virilio

read more


The Great Gatsby; Symbols and Motifs: Eyes of T.J. Eckleburg
Africa


"Speed now illuminates reality whereas light once gave objects of the
world their shape." -- Paul Virilio

read more


Titled "Essence of Elephants", the work has earned him the overall title in this year's Wildlife Photographer of the Year competition.
Africa


Preparation and passion, he says, were key to achieving the winning
shot, taken from just over one metre away.

"There was one particular day when a baby elephant raced past right in
front of my camera and I was ready. I had to be prepared for that
moment," said Mr Du Toit.

He took the picture at a waterhole in Botswana's Northern Tuli Game
Reserve from a hide (a sunken freight container) that provided a
ground-level view. He had been going to the area five or six times a
year for 10 years.

"I chose elephants because I feel a very special energy and connection
when I'm around them," he told BBC News.

read more


Attack on parliament, killing of soldier stun Canada's capital
Law & Politics


A gunman attacked Canada's parliament on Wednesday, with shots fired
near where Prime Minister Stephen Harper was speaking, and a soldier
was killed at a nearby war memorial, stunning the Canadian capital.

The gunman in the parliament building was shot dead, and Harper was
safely removed. The killing of the Canadian soldier was the second
this week with a possible link to Islamic militants.

The shooting followed an attack on two soldiers in Quebec on Monday
carried out by a convert to Islam. U.S. officials said they had been
advised the dead gunman in Wednesday's shootings was also a Canadian
convert to Islam.

Canadian police were investigating a man named Michael Zehaf-Bibeau as
a possible suspect in Wednesday's attack, said a source familiar with
the matter. U.S. government sources said he was born Michael Joseph
Hall but later changed his name.

Conclusions

read more


The richest hunting ground for these new 21st century serial killers/terrorists is among the disaffected in the Western World
Law & Politics


IS and the likes of Al-Shabaab have proven accomplished and
frightening and frightful exponents of the 21st century digital
ecosystem. And what is so fascinating is that their media efforts all
point West. The richest hunting ground for these new 21st century
serial killers/terrorists is among the disaffected in the Western
World.

read more



06-OCT-2014 "In societies reduced to blur and glut, terror is the only meaningful act''
Law & Politics


"In societies reduced to blur and glut, terror is the only meaningful
act. There's too much everything, more things and messages and
meanings that we can use in ten thousand lifetimes...only the
terrorists stand outside. The culture hasn't figured out how to
assimilate him. It's confusing when they kill the innocent. But this
is precisely the language of being noticed, the only language the West
understands. The way they determine how we see them. The way they
dominate the rush of endless streaming images."

read more


A "panic-driven tele-reality" and resulting in an odd kind of "emotional synchronisation ... in which terror must be instantaneously felt by all ... on the scale of a global terrorism"
Law & Politics


Virilio is an impressive commentator on the conditioning power of the
mass media and the way in which every shattering event - from natural
catastrophes to the Columbia shuttle disaster and the attack on the
twin towers - gets world coverage and is put on a loop. Our minds are
literally besieged by these Weapons of Mass Communication (as he calls
them), creating a "panic-driven tele-reality" and resulting in an odd
kind of "emotional synchronisation ... in which terror must be
instantaneously felt by all ... on the scale of a global terrorism".
Virilio maintains that the global village has created hyperterrorism
as its "integral accident" (just as derailment is the integral
accident of a train). The Pentagon is eager to exploit the audiovisual
impact of real-time mass communication (remember Saddam's statue being
toppled?), but unfortunately so are the terrorists. The same impulse
drives contemporary art, says Virilio, and he often returns to
Stockhausen's incendiary remark that 9/11 was "the greatest work of
art ever".

read more



"The European Union would save itself by saving Ukraine," Soros said.
Law & Politics


George Soros has warned that Russia's expansionism poses an
existential threat to the EU and called for greater material support
for Ukraine.

The investor and philanthropist argues that Vladimir Putin's mix of
authoritarianism and aggressive nationalism represents an alternative
model to western liberal democracies, referring to the admiration for
the Russian president expressed by the Ukip leader Nigel Farage,
Marine Le Pen, president of France's Front National, and Hungary's
prime minister, Viktor Orbán.

"Europe is facing a challenge from Russia to its very existence.
Neither the European leaders nor their citizens are fully aware of
this challenge or know how best to deal with it," Soros writes in an
article published in the New York Review of Books.

Soros said the EU had become a dysfunctional relationship between
creditor and debtor nations, resulting in widespread resentment.
"Putin has established good relations with those agitating against
Europe," he said. "The failure of Europe as an experiment in
supranational government would make Russia a potent threat ... The
collapse of Ukraine would be a tremendous loss for Nato, the European
Union and the United States. A victorious Russia would become much
more influential within the EU and pose a potent threat to the Baltic
states with large ethnic Russian populations."

Soros calls for radically boosted western support of Ukraine with an
"immediate cash injection of at least $20bn with a promise of more
when needed" to help write off public debt, and help to reform the
country's energy sector to make it less dependent on Russia. By
assisting Ukrainian reformers, he argues that the EU would be
rediscovering its founding principles. "The European Union would save
itself by saving Ukraine," Soros said.

Conclusions


who took the Fight to whom? And who is parked up whom's backside? NATO
is parked right up against Russia.

Frankly I do not see Two simultaneous Pivots as feasible.

George Soros, says Putin has established good relations with those
agitating against Europe. Photograph: Stefan Zaklin/EPA

http://www.theguardian.com/world/2014/oct/23/george-soros-russia-threat-europe-vladimir-putin

read more



06-OCT-2014 Current World Affairs Fluid and Uncertain
Law & Politics


It was only very recently that I actually studied the assassination of
JFK. And what is indisputable is that geolocating Lee Harvey Oswald
and then studying the head action of the President confirms that
Oswald could not have killed him.

It made me think, who or whom can shoot a President stone cold dead
and spin a narrative so effectively for half a century?

Its a remarkable thing. Last week, President Obama ac- cepted the
resignation of the Secret Service director Julia Pierson after a
series of lapses. Just over two weeks ago a man named Omar J. Gonzalez
scaled the White House fence and managed to get deep into the
executive mansion before being captured. On September 16 an armed
security guard with a criminal record was allowed to get on an
elevator in Atlanta with Obama. The first signal in the noise, in my
opinion, is that these were not lapses but [very deliberate] messages
and that the president needs to exercise extreme caution.

read more



Currency Markets at a Glance WSJ
World Currencies


Euro 1.2667
Dollar Index 85.74
Japan Yen 107.52
Swiss Franc 0.9526
Pound 1.6012
Aussie 0.8789
India Rupee 61.17
South Korea Won 1056.34
Brazil Real 2.4878
Egypt Pound 7.1496
South Africa Rand 10.9444

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29-SEP-2014 A Small Window for Sharks as Dollar Rises
World Currencies


The point I am making is that the dollar has just started getting
going. There will be blood in the water. There is a small window if we
want to be the sharks.

read more





Crude Oil 5 day Chart INO 80.43 [headed as low as $50.00 a Barrel]
Commodities


It dropped $1.97 to $80.52 yesterday, the lowest close for a
front-month contract since June 28, 2012.

read more


13-OCT-2014 :: Who Kneecapped Prices in Global Oil Markets?
Commodities


Oil markets have been roiled with WTI (West Texas Intermediate crude
oil grade) touching $83.59 on Friday [the lowest since July 3, 2012]
before a short-covering rally took the price back to $85.11 a barrel.

I have followed the oil market for eternity and the recent price
action is best characterised as unprecedented and white-knuckle.

In fact, the oil market has always been very high beta and exhibits
magnified price reactions to the demand and supply dynamic. Where
markets are net short, price setting can be determined by the last
buyer who is paying up in a net supply deficit scenario and that's why
you see those big price spikes around futures expiry. However, this is
a binary thing. In a situation where there is a net surplus, the price
setter can be those last sales transacted at deep discounts.

The conditions [and I will explain them momentarily] are optimal for a
complete wash-out [a 'blow-off bottom' was more earthy description in
my time] down as far as $50 a barrel. Markets overshoot, crude oil
does it big time and any and every model needs to consider such a
price outcome.

The big game-changer has been US crude output which rose from 5.7
million barrels per day in 2011 to 8.4 million barrels in the second
quarter of 2014, a remarkable 47 per cent gain, and touched 8.88
million barrels a day last week, the most since March 1986, according
to the US Energy Information Administration.

In its monthly oil market report, OPEC said output increased by
402,000 barrels a day in September to 30.47 million, representing the
biggest monthly gain since November 2011.

Iran and Saudi Arabia are offering their oil at the deepest dis-
counts since 2008. Essentially, the global system is awash in oil and
the US has displaced a lot of imports and these displaced barrels are
being offered at fire sale prices.

President Obama and his administration is the answer to my question:
who kneecapped oil prices?

In fact, as long ago as 2011, Thomas Donilon, who was then a US
national security adviser, was signalling this and very clearly.

"America's new energy posture allows us to engage from a position of
greater strength. Increasing US energy supplies act as a cushion that
helps reduce our vulnerability to global supply disruptions and price
shocks. It also affords us a stronger hand in pursuing and
implementing our international security goals."

The US administration has turned price slasher and like in Alfred
Hitchcock's totemic movie "Pyscho", oil has been sliced up real good.
The US has flooded the oil market and the commodity is now a
geopolitical spear [Michael Klare and Tom Engelhardt].

It is the US that is the new price setter for the oil markets and this
is a deep and important geopolitical development. The new price levels
will have immediate and enormous geopolitical and financial knock-on
effects. It will place intolerable pressure on oil producers and
particularly those operating from a higher base price.

It is not too difficult to calculate who are the biggest losers in
this new price normal, and Vladimir Putin's Russia springs to mind
first. As I have previously mentioned, the pivot to Asia is in my view
a naval blockade strategy aimed at cutting off China from its imports
of crude oil. Between now and 2040, the EIA predicts US oil imports
will fall from 9.5 million barrels per day to 6.9 million, while
China's will rise from five million barrels per day to 14.2 million.

My point is that Barack Obama has taken control of the crude oil
cockpit; he is in charge of the airplane. He has control of all the
instruments and it has been a wild ride for the last few weeks, which
could get a whole lot wilder.

read more



Crude Oil 6 Month Chart INO 80.43 [IN BIG TROUBLE]
Commodities


Futures slid as much as 0.6 percent in New York, extending a 2.4
percent decline yesterday.

read more



Official WHO Ebola toll near 5,000 with true number nearer 15,000
Africa


At least 4,877 people have died in the world's worst recorded outbreak
of Ebola, and at least 9,936 cases of the disease had been recorded as
of Oct. 19, the World Health Organization (WHO) said on Wednesday, but
the true toll may be three times as much.

The WHO has said real numbers of cases are believed to be much higher
than reported: by a factor of 1.5 in Guinea, 2 in Sierra Leone and 2.5
in Liberia, while the death rate is thought to be about 70 percent of
all cases. That would suggest a toll of almost 15,000.

Liberia has been worst hit, with 4,665 recorded cases and 2,705
deaths, followed by Sierra Leone with 3,706 cases and 1,259 deaths.
Guinea, where the outbreak originated, has had 1,540 cases and 904
deaths.

On Friday the WHO put the toll about 300 lower with more than 745 fewer cases.

In the past week, transmission of the disease was most intense in the
capital cities of Monrovia and Freetown, while Guinea's capital
Conakry reported 18 confirmed cases, its second highest weekly total
since the outbreak began.

Conclusions


The Tail Risk is massively underestimated.

read more


Ebola Virus continues to gain velocity 25-AUG-2014
Africa


The Ebola Virus continues to gain velocity and the World Health
Organisation in their latest release dated August 22 announced that
the ''magnitude of the Ebola out- break....has been underestimated''
and of ''the existence of an invisible caseload of patients who are
not being detected by the surveillance system.'' WHO spoke of ''the
exist- ence of numerous "shadow-zones.''

read more


Viruses exhibit non-linear and exponential characteristics 18-AUG-2014
Africa


Malcolm Gladwell says "The tipping point is that magic moment when an
idea, trend, or social behaviour [read Ebola virus] crosses a
threshold, tips and spreads like wildfire."

read more




20-OCT-2014 Ebola Severity Lies in Speed of Infections [the escape velocity [vitesse de liberation]]
Africa


Virilio claims that as the 'last post-industrial resource,
acceleration exceeds accumulation...the escape velocity [vitesse de
liberation] becomes the equivalent of profit.'

Virilio believes that ''Acceleration and Speed'' are the defining
characteristics of our new World. So my first point about the Ebola
Virus is that it is not about the absolute number of Ebola Cases, it
is about its ''escape Velocity'' Viruses exhibit non-linear and
exponential characteristics. WHO recently predicted that  the number
of Ebola cases in three West African nations may jump to between 5,000
and 10,000 a week by Dec. 1 as the deadly viral infection spreads. My
Point is that we have not entered the Parabolic Phase yet when the
escape velocity is at its fastest and therefore, the comparison with
Malaria and Influenza might make a nice Infographic but its an
irrelevant comparison.

Another point to consider is the invisible case-load of Ebola cases
which are not being captured by the surveillance system. WHO
previously spoke of ''shadow-zones''. We have not received any data
since late September around the Ebola [differ- ent mutation] outbreak
in DR Congo. A friend in the DRC informs me Ebola deaths there are
over 500.

Furthermore, researchers have identified more than 300 new viral
mutations in the latest strain of Eb- ola. "It is a numbers game, the
more cases you have the more likely there are going to be mutations
that could change the virus in a significant way," said David Sanders,
a professor of biological sciences at Purdue Univer- sity who studies
Ebola. "The more it persists, the more likely we are going to be
thrown a curve."

The curve Sanders is speaking about is that Ebola, contrary to Centers
for Disease Control 'protocol' is in fact airborne. Or as, an article
posted by CIDRAP [The Center for Infectious Disease Research and
Policy at the University of Minnesota] defines it, "aerosolised."

Authorities insist that nurse Pham was wearing protective gear -
gloves, mask, apron and shield - when she treated Duncan. So how did
she contract the deadly virus? No one seems to really know. CDC
officials are blaming an error in hospital procedures, claiming that
it's a "breach of protocol", and yet, they still have no idea what
that breach was.

If that's the case, how do they know it was a breach to begin with?

The CIDRAP report says: ''We be- lieve there is scientific and
epidemiologic evidence that Ebola virus has the potential to be
transmitted via infectious aerosol particles both near and at a
distance from infected pa- tients, which means that healthcare workers
should be wearing respirators, not face masks.''

The non-linear and exponential rate of mutation of the Ebola Virus
gives the tail risk real bite.

Nassim Nicholas Taleb in his book Black Swan addresses the tail risk
and describes it as follows: the disproportionate role of
high-profile, hard-to-predict, and rare events that are beyond the
realm of normal expectations in history, science, finance, and
technology. The non-computability of the probability of the
consequential rare events using scientific methods (owing to the very
nature of small probabilities). The psychological biases make people
individually and collectively blind to uncertainty and unaware of the
massive role of the rare event in historical affairs. The rare event
or tail risk is that the Ebola has already or will mutate into a virus
that has the potential to be transmitted via infectious aerosol
particles both near and at a distance from infected patients.

read more



Nestle keeps West Africa plants open, ready to act if Ebola spreads: CEO
Africa


LAGOS DE MORENO Mexico (Reuters) - Nestle has no plans to close any of
its eight factories or curb output in cocoa and coffee-rich West and
Central Africa because of Ebola, but is ready to adapt if it spreads,
the Chief Executive of the world's largest food company said on
Wednesday.

Nestle's factories in the region including both Ghana and Ivory Coast
produce chocolate beverages, instant coffee, powdered milk, cereals
and bottled water, but the company has yet to suffer any supply or
transport disruptions due to Ebola in nearby Liberia, Sierra Leone and
Guinea.

"That could happen, but it hasn't happened yet," CEO Paul Bulcke told
Reuters. He was interviewed during a visit to the western state of
Jalisco, Mexico to inaugurate a dairy plant touted as the first of its
kind to cut fresh water consumption to zero, instead treating water
from milk it processes.

He said Nestle had no plans to shutter plants in West Africa.

"We're not there yet. I hope we never get there. Whatever happens,
we're going to have to adjust," he said.

West Africa is a top grower of cocoa and prices have increased on
fears the deadly Ebola virus could limit supplies.

Ebola has not reached Ivory Coast and Ghana where 60 percent of the
world's cocoa beans are produced. It has been contained in Nigeria and
Senegal, but is spreading toward Ivory Coast in Liberia and Guinea,
including in Guinea's Kankan district on a major trade route with
Mali. Kankan saw its first case in the past week.

"(Cocoa) prices are already going up," Bulcke said, adding that he
hoped they would not rise any higher.

Last week, Nestle toned down expectations for full-year sales after
slower third quarter growth showed the impact of softening demand in
Asia and falling prices in Europe.

read more



South Africa Cuts Growth Forecast to 1.4%, Worst Since Recession
Africa


South Africa's economic growth will probably slow to 1.4 percent this
year, the worst performance since the recession in 2009 after strikes
and power shortages curbed output.

The government cut its 2.7 percent forecast given in February and
predicted expansion of 2.5 percent next year and 2.8 percent in 2016,
the National Treasury said in its mid-term budget released in Cape
Town today.

The value of global private equity deals targeting Africa has more
than doubled (137%) in the first half of 2014 compared to the same
period last year, according to research by global law firm Freshfields
Bruckhaus Deringer.

http://www.businesswire.com/news/home/20141020005313/en/Global-PE-Players-Increasingly-Africa-Investment-Doubles#.VEi7FBbWH8v

 As global investors increase their exposure to Africa, they are
looking beyond South Africa, historically the destination of choice
for private equity investors. Between 2004 and 2009, 75% of their
investment was in South Africa. Between 2009 and H1 2013, this figure
was 10%.

More than four-fifths (84%) of the money global funds have invested in
West Africa since 2004 has come in the past two years. They are also
beginning to show significantly more interest in East African assets,
with 41% of their deals in the region since 2004 coming in the past
two years. Despite the conflicts that have scarred North Africa's
recent history, one-sixth of Africa's PE transactions over the past
decade have been made in the region.

South Africa All Share Bloomberg +3.23% 2014 [4,570 points below a
record high from earlier in the year]

http://www.bloomberg.com/quote/JALSH:IND

Dollar versus Rand 6 Month Chart INO 10.9544 [A trading Sell]

http://quotes.ino.com/charting/index.html?s=FOREX_USDZAR&v=d6&t=c&a=50&w=1

Egypt Pound versus The Dollar 3 Month Chart INO 7.1496

http://quotes.ino.com/charting/index.html?s=FOREX_USDEGP&v=d3&t=c&a=50&w=1

Egypt EGX30 Bloomberg +29.666% 2014 [- 1,107 points since Sep 30th
Multi Year High Close of 9,811]

http://www.bloomberg.com/quote/CASE:IND

Nigeria All Share Bloomberg -5.64% 2014 [+797 points since 17th October]

http://www.bloomberg.com/quote/NGSEINDX:IND

Ghana Stock Exchange Composite Index Bloomberg +3.543% 2014

http://www.bloomberg.com/quote/GGSECI:IND

read more


Kenya Power reports Full Year 2014 EPS +88.06% Earnings here
Kenyan Economy


Par Value:                  20/-
Closing Price:           15.00
Total Shares Issued:          1951467045.00
Market Capitalization:        29,272,005,675
EPS:             3.31
PE:                4.53

Full Year Earnings through 30th June 2014 versus 30th June 2013

Full Year Revenue 105.396b versus 88.909b +18.543%
Total Power Purchase Costs 72.640b versus 62.178b +16.825%
Full Year Gross Margin 32.756b versus 26.731b +22.539%
Full Year Transmission and Distribution Costs [22.683b] versus
[20.984b] +8.0966%
Full Year Finance Costs [4.009b] versus [2.495b] +60.68%
Full Year Profit before Tax 10.198b versus 6.570b +55.22%
Full Year Profit After Tax 6.456b versus 3.445b +87.40%
Full Year Total Comprehensive Income 7.446b versus 4.712b
Full Year Earnings Per share 3.31 versus 1.76 +88.06%
Full Year Dividend 50cents versus 0.

Company Commentary

The Rise is due ''increased sales, Tariff Review and enhanced system
efficiency''
electricity Sales grew +9.8% combined with increased average yield led
to +30.6% increase in Sales Revenue

Conclusions


Strong Results.
This is a cheap share.

Kenya Shilling versus The Dollar Live ForexPros 89.098 Last

http://j.mp/5jDOot

Nairobi All Share Bloomberg  +17.511% in 2014 [2.943% below a record
closing High reached last month]

http://www.BLOOMBERG.COM/quote/NSEASI:IND

Nairobi ^NSE20 Bloomberg [155 points below a more than 6 year closing
high reached last month]

http://j.mp/ajuMHJ

Every Listed Share can be interrogated here

http://www.rich.co.ke/rcdata/nsestocks.php

CMC gives up bid to recover billions in Jersey slush fund

http://www.businessdailyafrica.com/Corporate-News/CMC-gives-up-bid-to-recover-billions-in-Jersey-slush-fund/-/539550/2496132/-/5us0l9z/-/index.html

The new owners of motor dealer CMC Holdings have given up the fight to
recover billions of shillings that former directors allegedly siphoned
from the company and stashed in secret Jersey Island accounts.

Mr Mark Kass, the new chief executive of CMC, said the company is not
interested in pursuing the offshore accounts that were allegedly setup
by former directors and shareholders.

"We want to leave that legacy behind and progress with our vision for
the company. These things happened a long time ago and we frankly
don't know what exactly happened," he said.

Instead, he said, Dubai-based firm Al Futtaim - which wholly acquired
CMC Holdings in a Sh7.5 billion deal - will focus on expanding market
share and growing earnings.

The decision should come as a big relief to former long-serving
directors who were named as having benefited from the secret accounts.

They include Joshua Kulei, who served as private secretary to former
President Daniel Moi, former Attorney-General Charles Njonjo,
billionaire Jeremiah Kiereini, former CMC MD Martin Forster and CMC
founder (deceased) Jack Benzimra.

Al Futtaim's change of heart comes barely a year after CMC hired
investigators and lawyers to recover the funds allegedly stashed away
in foreign accounts by past directors.

A forensic audit by South African firm Webber Wentzel established that
the Jersey secret slush fund had received £8.6 million (Sh1.2 billion)
in commissions between 1977 and October 2013.

read more


The real-estate consultancy's Hass Property Index shows that the average sale prices increased by 3.1 per cent in the third quarter of 2014 against 1.5 per cent in the same quarter of 2013.
Kenyan Economy


The average price change for all types of middle and high-end houses
since the beginning of the year is 4.7 per cent against three per cent
in 2013.

read more



 
 
by Aly Khan Satchu (www.rich.co.ke)
 
 
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October 2014
 
 
 
 
RICH PODCASTS
08-apr-2011 ::  Rich Podcast 8th April 2011
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04-apr-2011 ::  Rich Podcast 4th April 2011
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