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"God's Bankers,' by Gerald Posner
Ask a devout, theologically literate Roman Catholic to describe the
institution of the church, and you’re likely to be told that it was
founded by Jesus Christ at the moment he gave his disciple Peter the
“keys to the kingdom of heaven” and vowed that “whatever you bind on
earth will be bound in heaven.” This made Peter the head of the
universal church, empowered to administer the sacraments, spread the
Gospel, save souls and forgive sins until Christ’s return, as well as
to pronounce with infallible authority on matters of Christian faith
All of these and many other well-known acts of complicity with the
ways of the world are touched on in Gerald Posner’s new book, but its
main subject is a somewhat more arcane form of corruption. “God’s
Bankers” provides an exhaustive history of financial machinations at
the center of the church in Rome, from the final decades of the 19th
century down to Pope Francis’ sincere but as yet inconclusive efforts
to reform the church’s labyrinthine bureaucracy (the Curia) and the
Vatican Bank (named Istituto per le Opere di Religione, or Institute
for the Works of Religion, also known as the I.O.R.).
Posner does an impressive job of explaining how Nogara guided the
church through the economic minefields of the Depression, World War II
and the immediate postwar years using a combination of shrewdly
diversified investments and morally suspect (and to this day still
murky) financial deals. (Pope Pius XII founded the Vatican Bank in
1942 at Nogara’s suggestion.)
From there Posner weaves an extraordinarily intricate tale of
intrigue, corruption and organized criminality — much of it familiar
to journalists who cover the Vatican, though not widely known among
more casual church watchers — from Pius XII down to Benedict XVI.
These were years when the Vatican moved beyond the last vestiges of
feudal restraint to become “a savvy international holding company with
its own central bank” and a “maze of offshore holding companies” that
were used as sprawling money-laundering operations for the Mafia and
lucrative slush funds for Italian politicians.
Its an extraordinary and gripping Tale.
Saudi Arabia Said to Target First Dollar Bond After Fed Meeting
Saudi Arabia is planning to sell its first international bond in early
October as the country seeks to plug a budget deficit estimated at
about $80 billion this year, according to people with knowledge of the
The government may hold a roadshow for potential investors in the last
week of September and sell at least $10 billion of bonds early the
following month, the people said, asking not to be identified as the
information is private. The timing and size of the deal may change
depending on market conditions, they said, with one person saying the
kingdom wouldn’t be concerned by a potential U.S. interest rate
increase next month.
CDS for the kingdom have quadrupled over the last two years from about
40 basis points to about 160 basis points.
Saudi Arabia’s Ministry of Finance declined to comment.
@Uber's losses in the first half of 2016 totaled at least $1.27 billion. @Business
Bookings grew tremendously from the first quarter of this year to the
second, from above $3.8 billion to more than $5 billion. Net revenue,
under generally accepted accounting principles, grew about 18 percent,
from about $960 million in the first quarter to about $1.1 billion in
Uber also told investors during the call that it was changing how it
calculates UberPool's contribution to revenue in the second quarter,
which had the effect of increasing revenue.
Uber's losses and revenue have generally grown in lockstep as the
company's global ambitions have expanded. Uber has lost money quarter
after quarter. In 2015, Uber lost at least $2 billion before interest,
taxes, depreciation and amortization. Uber, which is seven years old,
has lost at least $4 billion in the history of the company.
Zimbabwe's priests tell Mugabe to go @theafricareport
Zimbabwe's prominent Christian leaders have joined a growing chorus of
influential voices calling for the impeachment of President Robert
Mugabe, warning that the country could slide into "total collapse" if
he continues to rule.
Five church-based groups issued a joint statement urging the
government to acknowledge that the country needs an "extraordinary
collective response to rescue [it] from total collapse".
South Africa's Zuma says has confidence in finance minister, can't intervene in probe @ReutersAfrica
South African President Jacob Zuma said on Thursday he has full
confidence in Finance Minister Pravin Gordhan, who is under police
investigation over a suspected spy unit at the tax service.
Zuma said he could not intervene in the investigations despite the
negative impact the probe has caused on the economy, according to a
statement released by the presidency.
The rand, which had tumbled since Tuesday in response to the
investigation, extended gains to 1.3 percent after Zuma's statement.
Kenya to cap interest rates on bank loans FT
The Kenyan president, Uhuru Kenyatta, has defied opposition from the
central bank and industry and signed legislation that imposes limits
on bank lending and deposit rates in east Africa’s largest economy.
The Kenya Bankers Association criticised the “arbitrary” move and
analysts described it as “populist” and “retrograde”. They warned it
would threaten Kenya’s reputation as a regional free market financial
centre and adversely affect the country’s sovereign bond prices.
Patrick Njoroge, the Central Bank of Kenya governor, had publicly
opposed the bill saying it would discourage banks from lending but he
has been a strong advocate of banks reducing lending costs.
Under the new law lending rates will be capped at four percentage
points above the central bank’s benchmark rate, which is 10.5 per
cent, while deposit rates must be at least 70 per cent of the
benchmark rate. Some banks are charging above 18 per cent for loans
while deposit rates are often below 5 per cent.
Mr Kenyatta said he assented to the bill because after the previous
two occasions parliament passed similar legislation, the “banks failed
to live up to their promises” to introduce measures to curb the rates.
“Despite having one of the most efficient and effective financial
markets, Kenya has one of the highest returns-on-equity for banks in
the African continent,” he said. “Banks need to do more to reduce the
cost of credit and ensure that the benefits of the vibrant financial
sector are also felt by their customers.”
Earlier this month, the KBA said its members would cut their lending
rates by 100 basis points in an attempt to discourage the president
from signing the bill. They also offered to pool $300m to offer
cheaper loans to small and medium-sized enterprises.
It said after the president signed the bill “We do not feel that an
arbitrary rate cap is in the best interests of the majority of people
and businesses that this law seeks to support.
“The reality is that there is little evidence from other countries
that such interventions have helped the majority of citizens, and in a
number of countries such laws have been reversed to promote financial
The bill has proved extremely popular with the public and businesses,
many of which struggle to secure affordable financing.
Aly-Khan Satchu, an investment analyst in Nairobi, said he thought Mr
Kenyatta was not willing to “stick his head above the parapet on this
less than a year before the next [presidential] election”.
“There’s going to be market collateral damage,” he said. “The Eurobond
yield will rise, the stock exchange will be hit and there will be
credit rationing. The banks are likely to just buy Treasury bills
instead of lending, as they have been already. Why lend to customers
when the rates are capped when you can lend to the government where
the rates are not capped?”
Olamipo Ogunsanya, of Renaissance Capital, said average net interest
margins could decline up to 430 basis points from the 11.4 per cent
they averaged in June 2016.
Kenya's Biggest Bank Faults State Borrowing for High Rates @business
Kenya’s biggest bank said the government can do more to help reduce
high lending rates by being clearer about its borrowing plans, after
President Uhuru Kenyatta signed into law a bill capping the cost of
Poor planning by state departments means the state often rushes to the
market to raise financing when its coffers are already empty, pushing
up yields on Treasury bills, one of the key determinants of interest
rates, KCB Group Ltd. Chief Executive Officer Joshua Oigara said.
Kenyatta on Wednesday approved legislation capping rates and setting
minimum payments on deposits, saying he sympathized with Kenyans
frustrated by the cost of credit and poor savings rates.
“The government needs to do more in terms of being predictable on
their coming to market,” Oigara, 40, said in an interview on Thursday
at his office in the capital, Nairobi.
The law signed by Kenyatta, a quarter of a century after the country
eliminated interest-rate limits, requires lenders to peg credit costs
at 400 basis points above the benchmark central bank rate. The law
also compels financial institutions to pay interest of a minimum of 70
percent of the so-called CBR on deposits. Treasury Secretary Henry
Rotich said last week that lenders make “too much” from interest
Banks extended loans at a weighted average of 18 percent in June,
according to the most recent statistics from the central bank. That
compares with a benchmark Central Bank Rate of 10.5 percent and a
Kenya Banks’ Reference Rate, used as a base lending rate by the
industry, of 8.9 percent.
Yields on 182-day T-bills rose 16 basis points to 11.18 percent at an
auction on Wednesday after surging to a record 22.3 percent in October
as the government sought to plug gaps in its budget.
“The government is being too big a big borrower and they have really
been driving interest rates,” Aly Khan Satchu, the chief executive
officer of Rich Management, a Nairobi-based adviser to companies and
wealthy individuals, said in a phone interview. “In October last year,
what set the interest rates was that the government came in and
borrowed 1-year money at more than 20 percent and repriced the entire
curve and we are dealing with the aftermath of that.”
Kenyan banks hold 55 percent of the government’s 1.8 trillion-shilling
($17.8 million) of debt, according to central bank data.
Kenyatta, who will seek a second term in elections next year, said in
a statement that despite having one of the most efficient financial
markets, the country has one of the highest returns-on-equity in
Africa. KCB had a return on equity of 25 percent in 2015, while Equity
Group Holdings Ltd., the nation’s largest bank by market value, had an
ROE of 25.46 percent, compared with average ratios of 19.4 for South
African lenders, according to data compiled by Bloomberg.
“I do acknowledge that interest rates must come down,” Oigara said.
“But this has to be done in a progressive manner taking into account
all the elements that contribute towards high interest rates so that
it is a sustainable solution.”
KCB’s shares plunged 9.9 percent on Thursday, the biggest decline in
13 years, to 29.50 shillings, the lowest level in almost four years.
Oigara said the drop was “an over-reaction.”
“I would say that’s a very extreme reaction largely by international
investors, they are very nervous,” he said. Those nerves might be
calmed once the central bank provides clarification next week on how
the new law will be implemented, Oigara said.
Bamburi Cement reports H116 PAT -5.968% here
Par Value: 5/-
Closing Price: 165.00
Total Shares Issued: 362959275.00
Market Capitalization: 59,888,280,375
The largest cement manufacturing company in the region.
H1 Turnover 19.111b vs. 19.321b -1.087%
H1 Operating costs [14.962b] vs. [15.289b] -2.139%
H1 Operating profits 4.149b vs. 4.032b +2.902%
H1 Investment income 218m vs. 154m +45.558%
H1 Profit before tax 4.272b vs. 4.502b -5.109%
H1 Profit for the period 2.899b vs. 3.083b -5.968%
EPS 7.15 vs. 7.77 -7.97%
Equity attributable to owners of the company 26.597b vs. 26.889b -1.086%
Cash and cash equivalents at the end of the period 10.456b vs. 11.443b -8.625%
H1 Turnover was 19.1b versus 19.3b following a slow growth in the
individual home builder segment in Kenya...lagging construction
activity ...together with slightly reduced volumes into INLAND Africa
Turnover was positively impacted by vibrant infrastructure and
contractor segments across the region
The Group has approved Phase 1 of a capacity expansion Project on both
Kenya and Uganda, which will increase cement capacity by 1.7mt at a
cost of 8.3b
Interim Dividend 6/= a share
Aggressive Capacity Expansion Plan