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Satchu's Rich Wrap-Up
 
 
Thursday 22nd of August 2019
 
Afternoon,
Africa

Register and its all Free.

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

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There's a setup for a short squeeze in yields to 2.05% / pullback in bonds, especially with Jackson Hole coming. [Trading Sell]
Africa


10yr yield weekly RSI is most oversold since the 2016/2015 spikes and
price at support of a longterm channel.

Home Thoughts

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'Leopard son vs Hyena, who will win?' taken by Lisa King in aid of The Sheldrick Wildlife Trust @GreatestMara
Africa


“A mother leopard killed an impala & 6 hyenas chased her away from the
kill as she was dragging it to the tree. The leopard's son decided he
was going to get some  no matter what!” - ’Leopard son vs Hyena, who
will win?’ taken by Lisa King in aid of The Sheldrick Wildlife Trust

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...like he's the King of Israel. They love him like he is the second coming of God...But American Jews don't know him or like him. @realDonaldTrump
Law & Politics


They don’t even know what they’re doing or saying anymore. It makes no
sense! But that’s OK, if he keeps doing what he’s doing, he’s good
for.....

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Donald Trump just said, "I am the chosen one." @JYSexton
Law & Politics


Make no mistake. His push to forward the narrative that he’s a messiah
isn’t an accident. It’s a strategy for 2020 and an escalation in
vilifying his opponents. This is beyond dangerous in a way that’s hard
to overstate.

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Sometimes It Isn't the Economy, Stupid @bopinion
Law & Politics


Across the world, a misapprehension about politics seems to unite the
authoritarian right and the neo-socialist left.
And it is one that has long been associated with centrists, ever since
Bill Clinton rode a pithy aphorism to the White House in 1992: It’s
the economy, stupid.
Last week, the Hong Kong government put forward a stimulus package
that, in spite of denials, was clearly designed to address the
economic grievances officials see as the root cause of weeks of street
protests.
Students will receive an annual subsidy of HK$2,500 (around $320),
while a onetime HK$2,000 handout will help households pay their
electricity bills. Taxes were cut. Low-income tenants in public
housing will have their rents forgiven for a month.
In India, Prime Minister Narendra Modi and his backers also seem to
think that money can soothe decades-long resentments in the troubled
state of Jammu and Kashmir.
After unilaterally stripping the state of its limited autonomy and
breaking it up into two territories ruled directly from New Delhi,
Modi took to the ramparts of the Red Fort last week to promise
investment and infrastructure that would bring the region peace,
growth and prosperity.
But poverty isn’t the primary force behind unrest in either place. It
isn’t the economy, stupid -- whether in Hong Kong, Kashmir, Ohio or
the British Midlands. The deeper issue is identity.
Protesters in both Kashmir and Hong Kong are worried about losing what
little autonomy they’ve enjoyed until now. They see distant central
governments encroaching upon (limited) freedoms that they have long
taken for granted.
For the people of Hong Kong, increasing political interference by the
mainland meshes with the disproportionate economic and cultural power
of the People’s Republic in such a way that threats to their political
autonomy and their cultural identity have become indistinguishable.
Kashmir is an even starker example of this. Although the state’s
former autonomy had been rendered almost meaningless over time, its
removal means that the residents of the Kashmir Valley must now admit
their absolute lack of control over their political destiny.
Combine that with widespread fears that their cultural identity will
be erased now that restraints on migration from outside the state have
been removed, and you have a toxic recipe for unrest.
I’m not sure how much money it would take to reconcile people in these
positions to their loss. But I’m fairly certain it is unaffordable.
Ordinary Hong Kongers certainly resent the way the city’s economy is
structured to favor the rich.
But they see economic injustice as a problem of identity and
representation -- and rightly so. It’s because they have no real voice
in their government that oligarchs favored by Beijing can continue to
spend money on vanity infrastructure projects such as high-speed rail
instead of affordable housing.
Nor would further subsidies from New Delhi to Kashmir help. The Valley
may be under-performing, but it is still doing pretty well by Indian
standards, at least in terms of economic outcomes.
Most of the north Indian states that voted overwhelmingly for Modi’s
party are, in fact, poorer and less developed. Kashmiri unemployment
is lower than the national average.
Surely Modi of all people should understand that young Kashmiris
aren’t on the streets throwing stones because they’re angry about
being left behind economically.
He won this year’s general election in spite of a stalling economy
precisely because he outplayed the opposition on identity politics.
His genius was to instill in his voters, especially upper-caste Hindu
men, the sense of empowerment he is stripping from Kashmiris.
It’s worth pointing out that these are global trends. In the 2016
Brexit referendum, Remainers’ warnings about the economic costs of
exiting the European Union proved far weaker than Leavers’ appeals to
English identity.
In the U.S., the Democratic Party still seems convinced that economic
appeals to the white working-class voters who delivered the Midwest to
Donald Trump will work. The truth is that these voters were probably
less angry that the U.S. economy wasn’t working for them, than that it
wasn’t working for them alone.
In this third decade of the 21st century, politicians everywhere need
to recognize that illusions about economic palliatives or class
solidarity are just that -- illusions.

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China on Wednesday blasted a huge planned US arms shipment to self-ruled Taiwan and threatened to sanction firms involved in the sale of F-16 fighter jets. @France24_en
Law & Politics


The US State Department on Tuesday approved the transfer of 66
Lockheed Martin-built F-16 fighter jets to Taiwan in a US$8 billion
deal, following another huge military hardware sale agreed just last
month.
The deals come as ties between Washington and Beijing are already
strained by a punitive multi-billion dollar trade war.
"China will take all necessary measures to safeguard our interests
including imposing sanctions on the US companies participating in this
arms sale to Taiwan," foreign ministry spokesman Geng Shuang told a
news briefing.
The sale "is a serious interference in our internal affairs and
undermines our sovereignty and security interests", he said.
China views Taiwan as part of its territory and has vowed to one day
seize it, by force if necessary.

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19-AUG-2019 :: The Frontier from Xinjiang to Kashmir, from Gaza to Crimea from Hong Kong to Taiwan are c21st flash points.
Law & Politics


Of course, there are many other Frontiers, the Mediterranean Sea, the
Sahara desert, Islands because of the EEZ’s they control.

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@Twitter Helps China Push Agenda Abroad Despite Ban in Mainland @business
Law & Politics


Twitter Inc. removed hundreds of accounts linked to the Chinese
government this week meant to undermine the legitimacy of Hong Kong
protests. It also said it would no longer allow state media to
purchase ads on its platform.
What Twitter didn’t mention in its series of blog posts this week was
the increasing number of Chinese officials, diplomats, media, and
government agencies using the social media service to push Beijing’s
political agenda abroad.
Twitter employees actually help some of these people get their
messages across, a practice that hasn’t been previously reported. The
company provides certain officials with support, like verifying their
accounts and training them on how to amplify messages, including with
the use of hashtags.
This is despite a ban on Twitter in China, which means most people on
the mainland can’t use the service or see opposing views from abroad.
Still, in the last few days, an account belonging to the Chinese
ambassador to Panama took to Twitter to share videos painting Hong
Kong protesters as vigilantes.
He also responded to Panamanian users’ tweets about the
demonstrations, which began in opposition to a bill allowing
extraditions to China.
China’s ambassador to the U.S. tweeted that “radical protesters” were
eroding the rule of law embraced by the #silentmajority of Hong
Kongers.
The Chinese Mission to the United Nations’ Twitter account asked
protesters to “stop the violence, for a better #Hong Kong,” while
social media accounts of Chinese embassies in Manila, India and the
Maldives shared articles from China’s state media blaming Westerners
for disrupting the city.
“Separatists in Hong Kong kept in close contact with foreign
elements,” one story says above a photo of U.S. Vice President Mike
Pence.
“We know China is adept at controlling domestic information, but now
they are trying to use Western platforms like Twitter to control the
narrative on the international stage,” said Jacob Wallis, a senior
analyst at the Australian Strategic Policy Institute’s International
Cyber Policy Centre.
It’s unclear if any of these diplomats were set up on the service by
Twitter, but the state-backed attempt to discredit Hong Kong
protesters continues to reach millions of global Twitter users. In
many cases, the Chinese officials are promoting views similar to those
in 936 accounts Twitter banned on Monday.
The practice of supporting Chinese officials who use Twitter to spread
the Communist Party agenda highlights how difficult it is for the
social media company to balance its commitment to root out
disinformation and to allow the expression of varying opinions.
It also raises concerns around why Twitter is helping Beijing make its
case to a global audience when the service is banned in China, where
dissenting voices are prohibited and officials sometimes detain users
accessing the platform through virtual private networks.
Twitter’s recent effort to curtail China’s government-directed
misinformation campaigns, which provoked outrage from state media,
seems at odds with continuing to welcome pro-Beijing accounts that
attack Hong Kong protesters, said Walli
“There’s a clear tension for Twitter here having seen that Beijing is
willing to use the platform in deceptive and manipulative ways, whilst
desiring to use the platform for state diplomacy,” Wallis said.
The tweets are part of a broader campaign by China to reshape the
narrative over Hong Kong, particularly in Western nations more
sympathetic to the democratic aspirations of protesters.
China this week also sent a 43-page letter to senior editors at
foreign news outlets, including the Wall Street Journal, Reuters and
Bloomberg.
Twitter says it works with public officials and politicians around the
world, not just in China, and that everyone deserves a voice in the
public discourse, as long as they follow its rules and policies.
The company has used the same argument to defend hosting tweets by
U.S. President Donald Trump, which some users have questioned.
Twitter has said it aims to “advance global, public conversation” and
that public figures “play a critical role in that conversation because
of their out-sized impact on our society,“ in a blog post last year.
On Monday, Twitter said in a blog post that it would stop accepting
advertising from state-controlled media: “Any affected accounts will
be free to continue to use Twitter to engage in public conversation,
just not our advertising products.”
Twitter’s embrace of Chinese officials on the platform also highlights
how some American tech companies try to make inroads in the enormous
market, despite government restrictions on their services.
Facebook Inc. founder Mark Zuckerberg, for example, has repeatedly
expressed a desire to enter China. Twitter oversees the China business
from offices in Hong Kong and Singapore.
Like Google, Facebook and other sites blocked in China, Twitter sells
advertising to Chinese companies like Huawei Technologies Co. and
Xiaomi Corp. that are trying to reach overseas users.
Before Twitter’s policy change this week, it had also sold ad space to
Chinese state media companies that used them to push the narrative
that Hong Kong protests were orchestrated by foreign forces and angry
mobs unrepresentative of the city’s majority. Facebook didn’t
immediately respond to requests for comment.
YouTube, part of Alphabet Inc., doesn’t have a specific policy that
bars state-funded media, but the company’s ad policies require
government-funded channels to be labeled as such.
This week, state media including the Global Times published videos
about the Hong Kong demonstrations, including an interview with a
police officer who said he was “critically injured by violent
protesters.”
The company didn’t immediately respond to requests for comment on the matter.
Both Twitter and Facebook have established programs to make sure
public figures around the world sign up for their sites and understand
how to use them effectively. The idea is that people who have a
following — athletes, actors or singers — will create interest for
their other users in the website.
For years, the work has extended to politics, with the social networks
signing up and training political figures. For example, Facebook has
embedded staff with or trained Trump; Philippines President Rodrigo
Duterte, known for encouraging extrajudicial killings; and Germany’s
anti-immigrant Alternative for Germany party (AfD) in how to most
effectively use the platform, Bloomberg News has reported.
Twitter and Facebook have implemented terms of service that ban
certain practices, including bot accounts that appear to be real
people and promote misinformation. But government officials and state
media still have wide latitude to say what they want.
“If Trump is going to use Twitter to deliver his message to the
Chinese government, then it makes perfect sense China should be using
this medium to send signals back,” said Samm Sacks, cybersecurity
policy and China digital economy fellow at think tank New America.
 “But then we get into this coordinated state misinformation domain
and it raises problematic questions around what is propaganda and what
is misinformation.”

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17-SEP-2012 "One of the defining bifurcations of the future will be the conflict between information masters and information victims."
Law & Politics


Information warfare will not be couched in rationale of geopolitics,
the author suggests, but will be "spawned" - like any Hollywood drama
- out of raw emotions. "Hatred, jealousy, and greed - emotions, rather
than strategy - will set the terms of [information warfare] struggles"

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A no-deal Brexit looks "increasingly inevitable" with the U.K. entering a shallow recession next year, according to economists at @Barclays PLC @economics
International Trade


@Barclays Says No-Deal Brexit, BOE Rate Cuts Now Its Base Case
Disruption to the economy will likely be gradual at first, but a drop
in the pound as low as $1.09 would fuel inflation, causing a slowdown
to take hold within months, they said.
“Delivering Brexit without an extension beyond Oct. 31 is seen by ⁦
@10DowningStreet as a political imperative in order to prevent a
breakup of the Conservative Party and pave the way for its future
electoral victory,” ⁦ @Barclays economists

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Currency Markets at a Glance WSJ
World Currencies


Euro 1.1103
Dollar Index 98.225
Japan Yen 106.39
Swiss Franc 0.9820
Pound 1.2143
Aussie 0.6765
India Rupee 71.75
South Korea Won 1206.69
Brazil Real 4.0259
Egypt Pound 16.598
South Africa Rand 15.215

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#Sudan's newly appointed PM Abdalla Hamdok has been sworn in. In his first presser after taking oath, the PM said the immediate focus of the transitional Govt would be ending civil wars. #@hiba_morgan
Africa


#Sudan’s newly appointed PM Abdalla Hamdok has been sworn in. In his
first presser after taking oath, the PM said the immediate focus of
the transitional Govt would be ending civil wars. The SRF just hours
before renewed their rejection to the agreement.
#السودان_الاتفاق_السياسي

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10-JUN-2019 :: The "zeitgeist" of the Revolution in Khartoum was intoxicating.
Africa


The ‘’zeitgeist’’ of the Revolution in Khartoum was intoxicating. As I
watched events unfold it felt like Sudan was a portal into a whole new
normal.

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How Smaller States are Choosing Sides in the Indian Ocean @defenseone
Africa


From Sri Lanka to Kenya, governments try to balance major-power
influence — except in arms purchases.

As India and China have intensified their geopolitical interest in the
Indian Ocean, the region’s smaller states have aimed to balance their
political relations with these major powers. But in at least one realm
of engagement, countries have resisted balancing their relations.
Since 2015, the island countries of Mauritius, Seychelles, and Sri
Lanka have procured military equipment only from India, while the
coastal countries of Bangladesh, Djibouti, Kenya, Myanmar, Pakistan,
and Tanzania have bought solely from China.  This timeframe is
significant because it was in January 2015 that the U.S and India
issued and unprecedented Joint Strategic Vision for the Asia-Pacific
and Indian Ocean Region. This was shortly after followed by Prime
Minister Narendra Modi’s own announcement of India’s “Security and
Growth for All in the Region,” or SAGAR, program  a multifaceted
effort to engage politically, diplomatically, economically and on
security matters with Indian Ocean island states.
The strategic significance of the area’s island states — notably Sri
Lanka, Mauritius, Maldives and the Seychelles — arises primarily from
their proximity to key international sea lanes. China, India, Japan,
and the United States each have some cooperative but otherwise mostly
competing interests and projects in these states, largely for capacity
building. Yet these states do have agency and their own agendas,
influenced by domestic factors, in their relations with the major
powers.
Under Prime Minister Modi, India has engaged more substantively with
each of these states on defense and security. At the same time, China,
under the banner of the Maritime Silk Road and the wider Belt and Road
Initiative, has substantially increased its involvement in Sri Lanka,
Maldives, and the Seychelles; Mauritius is also set to join the
initiative. And as China increases its naval activities in the region,
Japan, Britain, and the United States are also increasing their
relationships with the smaller states. All this adds potential points
of contention between those major powers, with commensurate prospects
of spilling into the regional states.
Sri Lanka’s dealings illustrate how the smaller states are working to
balance influence and investment by regional powers. China is the
major investor in the $1.4 billion Colombo Port City project. Beijing
also designed the December 2017 debt-for-equity swap — China calls it
a public-private partnership investment — in which Sri Lanka handed
over a controlling stake in the southern port of Hambantota and 15,000
acres of surrounding land to China on a 99-year-long lease in return
for $1.1 billion in debt relief. But Sri Lanka has also accepted
infrastructural investment from other sources. In January 2018, India
provided more than $45 million to build a commercial port in the
northern harbour at Kankesanthurai, and now is offering some $2
billion to develop the port, oil terminals, and refinery at
Trincomalee in northeastern Sri Lanka. As well, on 28 May, India,
Japan and Sri Lanka agreed to develop the second foreign-operated
container terminal at Colombo port as a joint venture.
And yet neither Sri Lanka nor its small neighbors have so finely
balanced their arms imports, according to the Military Balance+
database produced by the International Institute for Strategic
Studies, or IISS. This sole-sourcing represents a change for Sri
Lanka, which bought Chinese arms during its civil war that ended in
2009, and for Seychelles, which bought from China two light transport
aircraft in 2011 and a patrol boat in 2014.
The range and quantity of these purchases also varies. India’s
regional customers have procured solely maritime-security-focused
equipment, including donated boats. Mauritius bought 12 coastal patrol
craft and patrol boats; Seychelles, one maritime patrol aircraft; and
Sri Lanka, three offshore patrol ships and ocean-going patrol craft.
But Chinese arms sales to the region include a wider selection of air
and land as well as maritime security equipment. Pakistan is the
biggest customer, having bought 610 main battle tanks and 100 JF-17
fighter ground-attack aircraft. Other sales include Bangladesh’s
purchase of 47 main battle tanks and armored recovery vehicles;
Kenya’s 30 light forces vehicles; and Tanzania’s 24 light tanks.
Each of these defense contracts depends on India and China’s capacity
to deliver equipment to the smaller states, as well as the willingness
and financial capacity of each of the smaller states to procure from
the two powers. China has a more extensive defense industrial base,
suggesting a greater capacity to efficiently meet its delivery
obligations. Meanwhile, the Indian government is working to strengthen
its own industrial base via the “Make in India” policy, yet many
equipment projects have experienced delays and cost overruns.
This state of either-or defense procurement has now come to an end. On
8 July, Sri Lanka received a donated Chinese frigate, and that may
encourage its neighbors to become more ecumenical in their own
purchases. And it may augur a new phase of bolder strategic initiative
from Indian Ocean countries in their own abilities to balance
major-power influences — and a new arena of competition for those
powers themselves.

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The EGX 30 Index has gained more than 7% so far this month, making it the world's best performing major gauge of those tracked by @business
Africa


The EGX 30 Index has gained more than 7% so far this month, making it
the world’s best performing major gauge of those tracked by Bloomberg.
That’s in stark contrast to declines in peers, with the MSCI Emerging
Markets Index falling 5% month-to-date on the back of a more general
risk-off sentiment.
Optimism for lower rates has been just one of the reasons that the
Cairo bourse has been insulated from tensions gripping markets in most
other parts of the world.
Egypt’s lowest inflation in four years and a successful trading debut
for the country’s first initial public offering of 2019 have also
aided sentiment.
A decision from the nation’s Monetary Policy Committee is due
Thursday, with the benchmark overnight deposit rate expected to be cut
by at least 100 basis points to 14.75%, according to 10 of 12 analysts
surveyed by Bloomberg.
The other two see no change in borrowing costs.

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@AlsisiOfficial [and I for one disagree with him on many things particularly with his "incarceration" strategy] made bold moves when it came to the Economy.
Africa


Egypt devalued its currency early, took a brutal punch in the solar
plexus but is now reaping the dividend from its bolder economic policy

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18-FEB-2019 :: We dream of a new politics That will renew the world
Africa


Last week President Cyril Ramaphosa closed a speech quoting Ben Okri
We dream of a new politics
That will renew the world
Under their weary suspicious gaze. There’s always a new way,
A better way that’s not been tried before.

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Two Congolese companies announced last week the discovery of an oil field in Oyo, Republic of Congo, estimated at 359 million barrels @africareport @jeune_afrique
Africa


The discovery of the onshore deposit in the Delta de la Cuvette,
announced on Saturday, 10 August by two local oil companies, African
Society for Petroleum Research and Distribution (SARPD-Oil) and
Petroleum Exploration & Production Africa (PEPA), has created a stir,
but for the moment there is little precise information available.
Francis Perrin, Senior Research Fellow at IRIS (Paris), specialist on
energy issues, and associate researcher at the Moroccan think tank
Policy Center for the New South, however, warned these figures should
be treated with caution. He said the announcement might be a way to
attract the attention of major oil companies to Congo to increase
further exploration of its subsoil.
If proven correct, it would almost triple the daily oil production of
the Republic of Congo (currently about 350,000 barrels per day).

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Jumia Technologies AG has identified improper transactions at the Africa-focused online retailer's Nigeria business that amounted to as much as 4% of first-quarter sales. @JohnHBowker @business
Africa


Jumia Technologies AG has identified improper transactions at the
Africa-focused online retailer’s Nigeria business that amounted to as
much as 4% of first-quarter sales.
While the Berlin-based company says it’s taking measures to cut out
instances of wrongdong, the findings backed up warnings made by
short-sellers Citron in a report three months ago, which brought an
abrupt end to a share-price rally following Jumia’s initial public
offering in New York the previous month.
Jumia found cases where “improper orders were placed and subsequently
canceled,” the company said in a statement on Wednesday.
These included deals made through a team of independent Nigerian sales
consultants called J-Force.
The transactions in question amounted to 2% of 2018 gross merchandise
volume -- a term for sales used in online retailing -- rising to 4% in
the first quarter of 2019.
J-Force allows the company to interact directly with customers but
“requires constant improvement,” Jumia co-founder and Chief Executive
Officer Sacha Poignonnec said in a conference call.
The retailer -- sometimes dubbed Africa’s Amazon -- has operations in
14 countries and is seeking to take advantage of rising incomes and
better technology on the continent.
In advertising for candidates to join J-Force, Jumia promises the
opportunity to “earn unlimited income” while having “complete freedom
and control over your activities.”
Nigeria is ranked 144th on a list of 180 countries on the Corruption
Perceptions Index, compiled by Transparency International.
The report of dubious sales practices comes after Citron called Jumia
“an obvious fraud,” wiping out early gains from the IPO.
The stock shed another 14% to $12.73 as of 12:39 p.m. in New York,
dropping below the $14.50 listing price.
Jumia said second-quarter operating losses widened by 60% to 66.7
million euros ($74 million), mainly due to an increase in costs
related to the vesting of share options following the IPO.
The company’s target for profitability is late 2022, and the cash
raised through the listing should take Jumia “close” to that,
Poignonnec said.
The “business model has severe vulnerabilities,” Tellimer Markets Inc
analysts led by Nirgunan Tiruchelvam said in a note following the
results. “The business is intensely cashflow negative and we have
concerns about its viability.”

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Microlending Goes Digital, Bringing Debt Stress to the Masses @business @malingha
Africa


With no bank account to his name, J. Barasa still found a lender to
finance his passion for gambling on soccer. All it took was a few
clicks on his phone and his willingness to pay annual interest of more
than 150%.
The 32-year-old Nairobi taxi driver represents the new frontier in the
market for mobile money, the universe where banking is done over the
phone. Its proliferation is making it easier than ever to borrow,
marrying convenience to need and creating a level of stress that only
crushing debt can produce.
In Kenya, Africa’s financial-technology pioneer, there are now more
people keeping money on their phones than in banks. Almost one-fifth
of mobile-banking borrowers there defaulted last year – like Barasa,
who has failed to pay three separate loans. He’s hoping friends and
family will help to repay 22,000 shillings ($213).
“Mobile loans are easy to get and addictive,” said Barasa, who asked
that his given name not be published. “I need a fresh start but can’t
see it.”
Microlending was once nothing but a good news story. Muhammad Yunus
won the Nobel Peace Prize in 2006 -- a year before the introduction of
the iPhone -- for pioneering the concept in Bangladesh: loans of as
little as $10 to mostly women entrepreneurs too poor to tap banks.
Along the way, Kenya established a goal of providing universal access
to financial services, a promise made easier amid the smartphone
revolution.
Sub-Saharan Africa has proven the most fertile ground for microlending
through mobile devices. In 2018, there were 395.7 million mobile-money
accounts in the region, or almost half of the world total; the $26.8
billion handled represents two-thirds of the total transactions,
according to GSMA, which represents 750 mobile operators around the
world.
Asia is the closest competitor, with such transactions equivalent to
about 7% of its economy compared with about 10% in sub-Saharan Africa,
according to World Bank data. In the rest of the world, it’s less than
2%.
In Kenya, with more than 50 mobile lenders offering loans ranging from
$10 to $400, officials are trying to get their arms around a business
that took off after a 2016 law capping interest rates to reduce
borrowing costs.
Banks instead invested more in government debt and tightened their
standards, sending small unsecured borrowers to mobile lenders.
Mobile-money operators “shouldn’t be lending out money in the order of
magnitude that it’s out of control,” said Christophe Meunier, a senior
partner at Delta Partners Group, an advisory firm for technology and
media companies.
“They should have an incentive to control lending through the platform.”
By far, the dominant force is M-Pesa, the payments platform of
Vodafone Plc’s Safaricom unit. Begun more than a decade ago, M-Pesa
became a revolutionary service now used by more than 22 million for
transferring money and buying everything from groceries to shopping on
the Alibaba e-commerce site.
An overdraft facility, called Fuliza, recorded transactions of 29
billion shillings in three months after its introduction in November.
M for mobile and Pesa for money in Swahili, M-Pesa provides a digital
wallet on Safaricom phones.
The services “have opened up access for millions of Kenyans over the
last five years,” a Safaricom spokesman said, adding almost half of
bank accounts are mobile based.
The option to deposit and borrow can be activated within the M-Pesa
wallet, sending you to M-Shwari, a mobile-banking venture between
Commercial Bank of Africa and Safaricom. KCB Group Plc, Kenya’s
biggest lender, also joined Safaricom to start a second lending
service in the M-Pesa wallet.
Spokesmen at CBA and KCB didn’t immediately respond to an email
request for comment.
M-Shwari charges 7.5% of the amount borrowed per month. That compares
with annual commercial bank lending rates of about 13.2%. Defaulters
have their savings frozen and are reported to the credit reference
bureau.
There are also finance companies like Alphabet Inc.-backed Tala, which
raises money from investors. Tala, whose biggest market is Kenya, has
disbursed $750 million in loans of between $10 and $300 in the last
five years, says its East Africa growth manager, Ivan Mbowa.
Its customers borrow from 21 to 30 days and are charged as much as 15%
-- a rate that reflects non-traditional credit checks, such as
information mined on social media and dining and shopping patterns.
The expansion in consumer debt has an inevitable dark side. While
yotal lending by banks grew 5% to 2.5 trillion shillings in the year
ending June 2018, non-performing loans climbed 27% to 298 billion
shillings, according to the central bank.
Two-thirds of Kenyan borrowers are in debt stress -- those caught in a
debt spiral or those who have to sell an asset or reduce food spending
to repay loans -- according to FSD Kenya, a Bill & Melinda Gates
Foundation-backed financial-inclusion advocate.
“My worry in Kenya is that the borrowing middle classes may also find
themselves in a cycle of escalating debt,” says Amrik Heyer, head of
research at FSD.
For the vulnerable, including young or poor people, “who may borrow to
survive, digital credit is in danger of destroying the very market
that feeds it.”
It’s not as bad as it looks, says Tala’s Mbowa. “Our charges should be
looked at as total cost of borrowing, and not annualized,” he said in
an interview from his office on a sixth-floor in Nairobi. Some Tala
loans are repaid within days.
Authorities are most concerned about unregulated finance companies,
giving them more leeway both in pricing and collection practices. Some
lenders aggressively dun debtors, calling their friends and relatives
to compel them to pay.
They are loan sharks on “steroids,” central bank Governor Patrick
Njoroge said in May when he started being vocal on the necessity to
supervise digital microlenders. “There has to be proper regulation.”

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@Coopbankenya reports HY 2019 earnings EPS +4.098% Coop is -17.13% YTD
Africa


Par Value:                  1/-
Closing Price:           11.85
Total Shares Issued:          5867179554.00
Market Capitalization:        69,526,077,715
EPS:             2.18
PE:                 5.436

Cooperative Bank of Kenya HY 2019 results through 30th June 2019 vs.
30th June 2018
HY Investment securities held at amortised costs Kenya Govt 63.795154b
vs. 51.716232b +23.356%
HY Loans and advances to customers (net) 257.563635b vs. 251.110256b +2.570%
HY Total Assets 429.591235bvs.398.426995b +7.822%
HY Customer deposits 323.599694bvs.296.964959b +8.969%
HY Total shareholders funds 71.006297b vs. 68.018281b +4.393%
HY Total interest income 20.425448b vs. 20.779695b -1.705%
HY Total interest expenses [6.171680b] vs. [5.965784b] +3.451%
HY Net interest income/ [loss] 14.253768b vs. 14.057154b +1.399%
HY Fees and commissions on loans and advances 1.069094b vs. 802.720m +33.184%
HY Other fees and commissions 6.005175b vs. 4.321378b +38.964%
HY FX Trading income 952.441m vs. 1.222313b -22.079%
HY Total non interest income 8.751509b vs. 6.995115b +25.109%
HY Total operating income 23.005277b vs. 21.809026b +5.485%
HY Loan loss provision [1.181163b] vs. [1.093122b] +8.054%
HY Total other operating expenses [12.595406b] vs. [11.974515b] +5.185%
HY Profit/ [Loss] before tax and exceptional items 10.409871b vs.
9.834512b +5.850%
HY Profit/ [Loss] before tax 10.436607b vs. 9.834512b +6.122%
HY Profit/ [Loss] after tax and exceptional items 7.469480b vs.
7.140160b +4.612%
Basic and diluted EPS 1.27 vs. 1.22 +4.098%
Total NPL and Advances 25.728533b vs. 27.354007b -5.942%
Net NPL 14.859476b vs. 19.465718b -23.663%

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.@nicbankkenya reports H1 2019 EPS -0.355% NIC is +0.72% YTD
Africa


NIC Group PLC H1 2019 results through 30th June 2019 vs. 30th June 2018
H1 Kenya Government securities held to maturity 20.497752b vs.
19.647208b +4.329%
H1 Kenya Government securities available for sale 36.792273b vs.
33.582849b +9.557%
H1 Loans and advances to customers (net) 118.503822b vs. 114.972494b +3.071%
H1 Total assets 214.139606b vs. 200.950664b +6.563%
H1 Customer deposits 152.304452b vs. 147.088189b +3.546%
H1 Total shareholders funds 37.408564b vs. 32.219634b +16.105%
H1 Total interest income 9.656171b vs. 9.569480b +0.906%
H1 Total interest expense [4.125224b] vs. [4.436059b] -7.007%
H1 Net interest income 5.530947b vs. 5.133421b +7.744%
H1 Total operating income 8.195404b vs. 7.283371b +12.522%
H1 Loan loss provision [1.443010b] vs. [1.113751b] +29.563%
H1 Total operating expenses [5.234862b] vs. [4.435607b] +18.019%
H1 Profit before tax and exceptional items 2.705325 vs. 2.847764b -5.002%
H1 Profit after tax and exceptional items 1.903152b vs. 1.986673b -4.204%
Basic and diluted EPS 2.81 vs. 2.82 -0.355%
Interim dividend 0.25 vs.
Total NPL and advances 15.186745b vs. 14.552724b +4.357%
Net NPL and Advances 10.069771b vs. 7.728669b +30.291%
Liquidity ratio 50.38% vs. 48.75% +1.630%

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.@SanlamKenya reports H1 2019 EPS +141.690% Sanlam is -20.45% YTD
Africa


Par Value:                  5/-
Closing Price:           17.50
Total Shares Issued:          144000000.00
Market Capitalization:        2,520,000,000
EPS:             -14.01
PE:                 -1.249

H1 Gross written premium income 3.654964b vs. 3.110722b +17.496%
H1 Net earned premium 2.757911b vs. 2.494578b +10.556%
H1 Investment and other income 1.923259b vs. 41.370m +4,548.922%
H1 Total income 4.681170b vs. 2.535948b +84.593%
H1 Net claims and policyholder benefits [1.991741b] vs. [2.447956b] -18.637%
H1 Operating and other expenses [1.560990b] vs. [1.781524b] -12.379%
H1 Finance costs [191.360m] vs. [77.311m] +147.520%
H1 Total expenditure [3.744091b] vs. [4.306791b] -13.065%
H1 Profit/ [Loss] before tax 937.079m vs. [1.770843b] +153.030%
H1 Profit/ [Loss] after tax 639.675m vs. [1.531415b] +141.770%
H1 EPS (Basic & diluted) 4.44 vs. [10.65] +141.690%
Cash and cash equivalents at end of year 1.670882b vs. 2.679107b -37.633%

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@CrownPaintsPLC reports H1 2019 results EPS -28.070%
Africa


Par Value:                  5/-
Closing Price:           81.75
Total Shares Issued:          71181000.00
Market Capitalization:        5,819,046,750
EPS:             2.58
PE:                 31.686

Crown Paints Kenya PLC H1 2019 results through 30th June 2019 vs. 30th June 2018
H1 Revenue 4.373146b vs. 3.877955b +12.769%
H1 Profit before tax 106.419m vs. 90.353m +17.781%
H1 Tax Expense [77.171m] vs. [49.652m] +55.424%
H1 Profit for the year 29.248m vs. 40.701m -28.139%
H1 Basic and diluted EPS 0.41 vs. 0.57 -28.070%
Cash and cash equivalents at the end of the year 183.381m
Total Assets 4.470366b
Equity 1.056108b

NOTES TO INTERIM FINANCIAL STATEMENTS
The same accounting policies and methods of computation are followed
in the interim statements as compared to the most recent annual
financial statements.

BUSINESS COMMENTARY
Group revenue has increased by 13% compared to the same period in 2018.
Profit before tax increased by 18% compared to corresponding period of 2018.

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@NationMediaGrp share price data
Africa


Par Value:                  2.50/-
Closing Price:           40.65
Total Shares Issued:          188542286.00
Market Capitalization:        7,664,243,926
EPS:             5.9
PE:                 6.890

Nation Media Group Limited FY through 31st December 2018 vs. 31st December 2017
FY Revenue 9.6606b vs. 10.6249b -9.076%
FY Profit before tax 1.6340b vs. 1.9546b -16.402%
FY Other comprehensive income/ [ loss] [60.8m] vs. 40.1m -251.621%
FY Total comprehensive income for the year 1.0567b vs. 1.3509b -21.778%
FY Equity 7.8776b vs. 8.1663b -3.535%
Cash and cash equivalents at the end of period 867.1m vs. 1.6926b -48.771%
EPS 5.9 vs. 6.9 -14.493%
Total dividend per share 5.00 vs. 10.0 -50.000%

Conclusions

Its a Top Quality Franchise but we have seen a more than 5 year
decline in Turnover, EPS and the Dividend Pay Out is at a decade low.
The Trend speaks to a perfect storm of the Switch to Digital [However,
In Africa we have not seen the switch to paid digital subscription
unlike the New York Times and the Washington Post and the FT, for
example]. So there has been a big macro gale force wind and Print has
been in the firing line and the Daily Nation was always the Cash Cow.
The violence of Dr. Kiboros comments speaks to a deep level of
unhappiness about the local conditions which have been adversarial for
quite a time [counterintuitively that absolutely informs us that they
have been meeting their watchdog role] The Share Price has retreated
dramatically over time and at todays valuation the business is worth
$115.18m which is clearly too low. The dividend is the equivalent of
8.09% which is in fact juicy. I would have thought this is a share
worth looking at more closely particularly on any reverses. Of course,
the question is about the PIVOT. It is after all a Schumpeter level
moment in this industry. And can the pivot lead to a rebound across
all the metrics. I would say Yes eventually.

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by Aly Khan Satchu (www.rich.co.ke)
 
 
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August 2019
 
 
 
 
 
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