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Satchu's Rich Wrap-Up
 
 
Wednesday 04th of May 2016
 
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Africa

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Macro Thoughts

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"If this material works well, I'm going to use it at Goldman Sachs next year. Earn me some serious Tubmans" @TheStarkenya
Africa


President Obama in his last White House correspondents dinner said:
“If this material works well, I’m going to use it at Goldman Sachs
next year. Earn me some serious Tubmans”.

Earning Tubmans in the markets is always a 24-hour job.

Of course. Earning ''serious Tubmans'' is not going to be an issue for
the President when he leaves Office.

Earning Tubmans in the markets is always a 24 hour Job and one where
we cannot leave the screen for even a moment.

read more




David Yarrow ‏@David_Yarrow In the wild, Rhino's unique facial features are not well documented for obvious reasons of human safety.
Africa


“The beautiful is always bizarre.” ― Charles Baudelaire

“There are women who inspire you with the desire to conquer them and
to take your pleasure of them; but this one fills you only with the
desire to die slowly beneath her gaze.” ― Charles Baudelaire

“Extract the eternal from the ephemeral.” ― Charles Baudelaire

“I should like the fields tinged with red, the rivers yellow and the
trees painted blue. Nature has no imagination.” ― Charles Baudelaire

read more


"It's been some unbelievable day, and evening and year," @realdonaldTrump said in his victory appearance
Law & Politics


"Never have been through anything like this, but it’s a beautiful
thing to watch and a beautiful thing to behold, and we’re going to
make America great again.”

Conclusions

In the 1990s, I once spent the evening with Donald Trump at Tramp
http://www.tramp.co.uk I was with Cosima Von Bulow and Lin Ftsu'Tsong
Menuhin.

As I said, he is one ''Terrorist'' At

read more




The Calm Before the Coming Global Storm by PEPE ESCOBAR
Law & Politics


Major turbulence seems to be the name of the game in 2016. Yet the
current turbulence may be interpreted as the calm before the next,
devastating geopolitical/financial storm. Let’s review the current
state of play via the dilemmas afflicting the House of Saud, the EU
and BRICS members Russia, Brazil and China.

That does not mean that the House of Saud will win back the trust of
both the US and Russia. Deep sources keep confirming that as far as
Washington and Moscow are concerned, the House of Saud is expendable.
Both are really energy independent (should the US want to be).
Powerful Washington factions blatantly accuse Riyadh of “terror” –
well, it’s way more complicated – while Moscow regards the House of
Saud as following US orders to destroy Russia in an oil price war.

Ailing – on the way to dementia – King Salman and young Warrior Prince
Mohammed would be finished if those famous 28 pages about 9/11 were
released and the Saudi connection is incontrovertible. What next?
Regime change. A CIA coup. A “trusted” Saudi military CIA asset
elevated to power.

What’s left for the House of Saud is to play for time. High up in
Riyadh the feeling is that relations with Washington won’t improve
while Obama is president; the next president – whether Hillary or The
Donald – will be a much better deal. So Plan A for now is to keep
posing as essential to Washington in the “war on terra”; that means
King Salman falling back on Mohammed bin Nayef, the Crown Prince, way
more adept at it than the Warrior Prince, the conductor of the
disastrous war on Yemen.

In parallel, Turkey’s Sultan Erdogan keeps advancing his play to take
over oil in Iraqi Kurdistan, eventually diverting the whole supply to
make Turkey energy independent – and thus a regional superpower.
Moreover, in Pipelineistan terms, Erdogan absolutely also needs the
Qatar gas pipeline through Saudi Arabia and Syria to gain energy
independence from Russia. That also happens to be a major US goal. And
that also portends perennial trouble for the Syria peace process.

Erdogan already has the German superpower at his feet in the shape of
a groveling, begging Chancellor Merkel. Were Turkey on its way to
become an energy power, Merkel would prostrate herself on that Ankara
palace golden ground non-stop. The CIA intimates as much, when it
analyzes how Turkey will keep “expanding its influence” in Iraq
through the militias they support, at the expense of Iraq’s security
and political unity.

Russia, Brazil and Hybrid War

Russia’s largest commodity exchange is actively courting international
oil traders to join its emerging futures market. The goals are crystal
clear; to disconnect the price-setting mechanism from the Brent oil
benchmark and, crucially, to move away from the petrodollar. That also
happens to be a key condition imposed by Beijing to the House of Saud
for continuing to buy their oil.

Sophisticated Hybrid War-derived techniques may have been deployed
full blast against Russia and Brazil. But against China, everything
fizzles.

Yet all this is just the calm before the storm. The Empire is already
striking back. There’s serious blood on the tracks ahead.

read more




Currency Markets at a Glance WSJ
World Currencies


Euro 1.1492
Dollar Index 93.12
Japan Yen 106.86
Swiss Franc 0.9558
Pound 1.4549
Aussie 0.7500
India Rupee 66.545
South Korea Won 1154.58
Brazil Real 3.5602
Egypt Pound 8.8839
South Africa Rand 14.6841

The yen has moved a whopping 13% since the BOJ adopted negative
rates. 13% higher though, not lower.

https://twitter.com/ReutersJamie/status/727437633908006912?s=03

January 11th 2016 one of my conviction trades for 2016 is to buy the
yen against just about everything.

http://www.rich.co.ke/media/docs/038NSX1101.pdf

Dollar Index 3 Month Chart INO 93.12 [Back above 93.00 - NB]

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

Euro versus the Dollar 5 day Chart 1.1492 [1.1450 is the Key Level]

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

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Oil stable after two-day decline on stall in global growth
Law & Politics


International Brent crude futures LCOc1 were trading at $44.95 per
barrel at 12.45 a.m. ET, down 2 cents from their last settlement.

U.S. West Texas Intermediate (WTI) futures were up 7 cents at $43.72 a barrel.

This followed two trading sessions in which Brent fell nearly 7
percent and WTI nearly 5 percent from end-April levels, with crude
pulled down by rising output from the Middle East and renewed signs of
economic slowdown in Asia.

"Asia's big markets continue to disappoint: Japan sank further, China
relapsed, and India slipped," said Frederic Neumann of HSBC in Hong
Kong, adding that exports were "stuck below the waterline" and "local
demand looks wobbly, too."

In the United States, the economy is also stuttering.

"Year-on-year factory orders dropped for a 16th straight month," said
the U.S.-based Schork Report. "The U.S. is set for sub-3 percent
growth for a record 11th year," it said.

In oil production, U.S. output has fallen from a peak of over 9.6
million barrels per day (bpd) in summer last year to just over 8.9
million bpd currently. That, traders said, has helped lift oil prices
away from decade lows under $30 per barrel touched earlier this year.

read more



This Is the Most Remote and Magical Hotel on Earth @business
Frontier Markets


Newfoundland’s Fogo Island Inn offers a different kind of island getaway.

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SUB-SAHARAN AFRICA Time for a Policy Reset IMF
Africa


Executive Summary
Economic activity in sub-Saharan Africa has weakened markedly, but, as
usual, with a large variation in country circumstances. Growth for the
region as a whole fell to 31⁄2 percent in 2015, the lowest level in
some 15 years, and is set to decelerate further this year to 3
percent—well below the 5 to 7 percent range experienced over the past
decade.
•  e sharp decline in commodity prices has put severe strains on many
of the largest sub-Saharan African economies. Oil exporters, which
include Angola and Nigeria, continue to face di cult economic con-
ditions (with growth for oil exporters as a whole forecast to slow
further to 21⁄4 percent this year from
6 percent in 2014), but so do non-energy-commodity exporters, such as
Ghana, South Africa, and Zambia. Meanwhile, Guinea, Liberia, and
Sierra Leone are only gradually recovering from the Ebola epidemic,
and several southern and eastern African countries, including
Ethiopia, Malawi, and Zimbabwe, are su ering from a severe drought.
• At the same time, many other countries continue to register robust
growth. Most oil importers are generally faring better, with growth in
excess of 5 percent and even higher in countries such as
Côte d’Ivoire, Kenya, and Senegal. In most of these countries, growth
is being supported by ongoing infrastructure investment e orts and
strong private consumption.  e decline in oil prices has also helped
these countries, though the windfall has tended to be smaller than
expected, as exposure to the decline in other commodity prices and
currency depreciations have partly o set the gains in many of them.
Although this overall markedly weaker picture begs the question as to
whether the region’s recent growth momentum has stalled, our view is
that medium-term growth prospects remain favorable. Clearly, with the
advent of a far less supportive external environment, the immediate
outlook for many sub-Saharan African countries remains di cult and
clouded by downside risks. But beyond these current challenges, the
underlying drivers of growth that have been in play domestically in
the region over the past decade or so—most importantly, the much
improved business environment—generally continue to be in place, and
favorable demographics are poised to support these drivers over the
coming decades.
However, to realize this potential, a substantial policy reset is
critical in many cases.
• To date, the policy response among most commodity exporters to the
historically large terms-of-trade shock has generally been behind the
curve. A year and a half into the shock, and with  scal and foreign
reserves running low and  nancing constrained, a robust and prompt
policy response is needed urgently to prevent a disorderly adjustment.
For countries outside monetary unions, exchange rate  exibility,
coupled with supportive monetary and  scal policies, should be the
rst line of defence.

Conclusions

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08-FEB-2016 Meanwhile Nigeria, the biggest economy in SSA, will surely contract in 2016 @TheStarKenya
Africa


The curve of history [from Soros skinning the Bank of England in 1992,
to the Mexican peso crisis in 1994, to the Thai baht crisis in 1998
and many more too numerous to men- tion] confirm that maintaining an
artificial foreign exchange rate is a fool’s errand and eventually
carries the risk that the breakdown spirals out of control and can
become seriously disorderly.

read more



South Africa All Share Bloomberg +2.40% 2016
Africa


51,912.11 -1,045.21 -1.97%

South Africa’s rand weakened by the most in nine weeks against the dollar

http://www.bloomberg.com/news/articles/2016-05-03/rand-falls-most-in-a-month-as-emerging-market-currencies-weaken

The rand fell as much as 2.5 percent, the most on a closing basis
since Feb. 26 and the worst performance among 31 emerging market and
developed nation currencies tracked by Bloomberg.

Dollar versus Rand 6 Month Chart INO 14.6841

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

Egypt EGX30 Bloomberg -3.11% yesterday +7.50% 2016

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

7,531.59 -241.64 -3.11%

Nigeria All Share Bloomberg +3.2% yesterday -9.69% 2016

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

25,865.50 +803.09 +3.20%

Ghana Stock Exchange Composite Index Bloomberg -8.34% 2016

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

read more


.@realDonaldTrump in South Sudan @nickturse
Africa


There’s a fever-dream, schizophrenic quality to the war in South
Sudan.  The conflict began in an orgy of violence, then ebbed, only to
flare again and again.  As the war has ground on, new groups have
emerged, and alliances have formed while others broke down.
Commanders switch sides, militias change allegiances.

read more



Embassy cable: Juba 'more dangerous than ever'
Africa


The militarization of Juba by the South Sudanese government and rebel
SPLM-IO has made the capital more dangerous than any time since the
signing of the 2005 Comprehensive Peace Agreement, according to a
leaked cable from the Kenyan Embassy in South Sudan.

read more



Kenya's economy grew by 5.6 percent last year, slightly faster than the year before
Kenyan Economy


The agricultural sector, which contributes nearly a quarter of Kenya's
economic output, also grew 5.6 percent in 2015 from 3.5 percent the
previous year, the director general of the Kenya National Bureau of
Statistics, told a news briefing.

"This was partly influenced by abundant rainfall characterised by the
el Nino weather phenomenon," Zachary Mwangi said.

Despite expansion in some other sectors, tourism continued to suffer
from worries about security after a spate of attacks in the past two
years or more by Islamist militants, he said.

Visitors dropped 12.6 percent to 1.18 million during the year while
earnings edged down 2.9 percent to 84.6 billion shillings ($837.6
million).

The balance of trade improved, but still recorded a deficit of 997
billion shillings in 2015 from 1.081 trillion shillings the previous
year. Exports in the period rose 8.2 percent and imports decreased by
2.5 percent, the director general said.

The decline in imports was driven by the drop in prices of oil, which
makes up the bulk of Kenyan imports.

read more




The Kenyan shilling strengthened to its highest level in nine months on Tuesday
Kenyan Economy


AT 1040 GMT, commercial banks posted the shilling at 100.80/90, up
from 101.05/15 at the close of Friday

read more



Kenya Shilling versus The Dollar Live ForexPros 100.698
Kenyan Economy


Nairobi All Share Bloomberg +0.53% 2016

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

146.47 -0.46 -0.31%

Nairobi ^NSE20 Bloomberg -0.45% 2016

http://j.mp/ajuMHJ

4,022.61 +13.35 +0.33%

read more


ARM Cements reports FY Loss after Tax 2.89b 2015 Earnings here
Kenyan Economy


Par Value:                  5/-
Closing Price:           36.75
Total Shares Issued:          495275000.00
Market Capitalization:        18,201,356,250
EPS:            -5.84
PE:

A mineral extraction and processing company which manufactures lime,
cement and other industrial fertilisers.

FY Revenue 14.735935b vs. 13.743185b +7.224%
FY [Loss]/ profit before tax [3.539156b] vs. 2.018133b -275.368%
FY [Loss]/ profit after tax [2.890841b] vs. 1.493393b -293.575%
FY Other comprehensive income for the year net of income tax
10.612967b vs. 0.000847b
FY Total comprehensive income for the year 7.722126b vs. 1.494240b +416.793%
EPS [5.84] vs. 3.01 -294.020%
Dividend – vs. 0.60
Total assets 51.936664b vs. 36.912580b +40.702%
Cash & cash equivalents at the end of the period [3.382783b] vs.
[2.735632b] +23.656%

Company Commentary

EBITDA margin grew from 23% to 26%
unrealised Exchange Loss 0f 3.7b
Co. has agreed a $140m Equity Investment from CDC Group
Co. to apply $110m to Debt reduction
demand for Cement in East Africa increased by more than 10% last year

Conclusions

CDC Group have a smart trade. They can bring cheaper Funding to the
business, in the first place.

read more


Trans-Century reports FY Loss after Tax 2.422b 2015 Earnings here
Kenyan Economy


Par Value:
Closing Price:           4.70
Total Shares Issued:          280284476.00
Market Capitalization:        1,317,337,037
EPS:             -7.09
PE:

FY Revenue 11.790227b vs. 10.249593b +15.031%
FY Cost of sales [9.259631b] vs. [7.668666b] +20.746%
FY Gross profit 2.530596b vs. 2.580927b -1.950%
FY Operating expenses [2.499253b] vs. [2.582795b] -3.235%
FY Loss on sale of investment – vs. [1.035015b]
FY Results from operating profit [1.047349b] vs. [1.404597b] -25.434%
FY Forex losses [1.117495b] vs. [0.184351b] +506.178%
FY Net Finance costs [1.908724b] vs. [0.709605b] +168.984%
FY Loss before income tax [2.956073b] vs. [2.114202b] +39.820%
FY Loss for the year [2.422574b] vs. [2.277929b] +6.350%
Basic EPS [7.09] vs. [8.53] -16.882%
Total equity attributable to equity holders of the company 1.464293b
vs. 3.558722b -58.853%
Cash & cash equivalents at the end of the year [402.711m] vs.
[454.760m] -11.445%

Company Commentary


Group grew revenues by +15%
We experienced strong performance in our Engineering Division +9.00%
growth in Revenue
Power Division revenues declined 30%
''We benefited from improved local utility order book coming towards
the end of the year which is a bright spot in our continuing effort to
get more government business to go to local manufacturers ''

Group's overall performance was also negatively impacted by

1. Foreign Exchange Losses due to sharp depreciation of regional
currencies against the USD
2. Low Sales in our export markets due to unfavourable political
environment prevailing in the region
3. Impairment of receivables in line with a more conservative
financial management policy
4. Increased depreciation due to capital expenditure

Post Balance Sheet Events - Settlement with Bond-Holders

settlement agreement with convertible bondholders, the result of which
was to reduce the convertible bond debt to $40m
As part of that reduction, the group will write back the principal and
interest charges amounting to $19.4m in 2016

The outlook is positive for our core businesses.

Conclusions


Results signal a core Business that remains intact.

read more




 
 
N.S.E Today


The Kenya Shilling was last trading at 100.598 versus the Dollar which
is a 9 month High.
The Nairobi All Share eased -0.75 points to close at 145.72.
The Nairobi NSE20 Index fell back below the 4,000 level to close at 3989.71.
Equity turnover clocked 511.418m.



N.S.E Equities - Commercial & Services


Safaricom will report Full Year Earnings a week today and these
results will set the tone for the Nairobi indices. I expect an
Earnings Surprise to the Upside. Safaricom ticked -0.29% easier to
close at 16.90 and traded 8.721m shares.

Nation Media
was up-ticked +2.35% to close at 174.00 on low volume of
1,500 shares.

The Kenya Bureau of Statistics reported that Total Visitors to Kenya
dropped 12.6 percent to 1.18 million 2015 and this lead TPS Serena a
whopping -6.52% lower to close at a Multi-year closing low of 21.50 on
better than normal volume of 50,300 shares



N.S.E Equities - Finance & Investment

I&M firmed +0.9% to close at 112.00 and traded 299,600 shares. I&M is
+12.00% in 2016 and last we heard was processing the acquisition of
Giro Bank.
Kenya Commercial Bank retreated -4.819% to close at 39.50 and traded
1.707m shares. This looks like a fumble and KCB will pop back towards
42.00 in short order.
Equity Bank was the most actively traded share at the Exchange and
closed unchanged at 40.00 with a chunky block of 5.074m shares worth
202.96m changing hands. Equity Bank is unchanged in 2016.

NIC Bank firmed +1.35% to close 37.50 and NIC released Q1 2016 after
the closing Bell. NIC Bank reported a +28.699% acceleration in Q1
Total operating income which clocked 4.092282b  Q1 Profit after tax
and exceptional items was behind -0.308%. at 990.789m. NIC Bank
increased its Loan loss provision to [1.315115b] vs. [0.421167b]
previously.



N.S.E Equities - Industrial & Allied


Crown Paints rallied +6.79% to close at 55.00 making that a 10% 2
session gain since releasing FY Earnings.



by Aly Khan Satchu (www.rich.co.ke)
 
 
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May 2016
 
 
 
 
 
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