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Satchu's Rich Wrap-Up
 
 
Thursday 17th of October 2013
 
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 am at the Mining Business and Investment Conference 2013 today

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The shutdown has been "very cavalier, very damaging to the US" financial analyst @alykhansatchu tells #BBCNewsday @bbcworldservice SoundCloud
Africa


With Thanks to #BBCNewsday for taking my thoughts on Debt ceiling
@Barackobama and the #Tea Party
http://www.twitpic.com/dhnl7w

Inside Story : Where are Africa's leaders? @AJEnglish @JaneDutton
https://www.youtube.com/watch?v=bv7CW440yWU&feature=youtube_gdata_player

To discuss this, Inside Story, with presenter Jane Dutton, is joined
by guests: Denis Kodhe, a commentator on African governance and
politics; Ayo Johnson, an award-winning journalist on African
development; and Aly-Khan Satchu, the CEO of Rich Management in
Nairobi.

Macro Thoughts

Warren Buffett came up with the best quote of the crisis:
“Creditworthiness is like virginity. It can be preserved but not
restored very easily.”
http://www.newyorker.com/online/blogs/johncassidy/2013/10/ten-takeaways-from-the-great-gop-cave-in.html

Home Thoughts

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U.N. Declares War on al-Shabab Colum Lynch
Law & Politics


A U.N.-backed African military force in Somalia must launch a new
military offensive against al-Shabab's insurgents if it is to stem the
spread of terrorism in East Africa and ensure the survival of
Somalia's struggling government, U.N. Secretary-General Ban Ki-moon
warned the U.N. Security Council.

Ban appealed for a temporary military surge of thousands of additional
African troops into Somalia in order to deal a decisive military
defeat to al-Shabab. The offensive would aim to deprive the Islamist
militant group of the ability to freely recruit new followers and
secure the taxes and investments necessary to underwrite its terrorist
operations from Mogadishu to Nairobi, Kenya, where the group recently
carried out a brazen attack against civilians at the upscale Westgate
mall.

Citing the threat posed by a reinvigorated al-Shabab, Ban appealed to
the 15-nation Security Council in a letter to provide financial and
military support to the African Union Mission in Somalia (AMISOM),
along with attack helicopters and other advanced logistical and
intelligence equipment to help take the fight to al-Shabab strongholds
in rural southern Somalia.

"The deterioration in the security situation threatens to undermine
the fragile Somali political process," he wrote in the letter, which
has not yet been made public. "In order to regain momentum and avoid
further reversals, there is an urgent need to resume and strengthen
the military campaign against Al Shabab."

On June 19, al-Shabab mounted a bloody attack against the United
Nations' humanitarian aid compound in downtown Mogadishu, killing
eight U.N. employees. The attack, as well as the threat of further
violence, "has significantly curtailed the mobility of U.N. staff in
Mogadishu and hampers delivery of critical U.N. programs in support of
the federal government," according to a confidential report by the
joint U.N.-African Union mission. The report was circulated to U.N.
Security Council members along with Ban's letter this week.

The joint U.N.-AU report paints a grim picture of the security
situation in Somalia. The military gains of the past two years, it
states, are now "at a serious risk of being reversed." Al-Shabab's
army "is estimated in the thousands and is increasing through forced
recruitment." If it is not stopped, the report warns," al-Shabab is
likely to expand its targets beyond Somalia."

The report, which was partially endorsed by Ban, cites "the need to
immediately resume the military campaign against Al Shabab" in order
to counter the group's increasingly sophisticated use of asymmetric
warfare tactics and to curtail its ability to infiltrate urban centers
like Mogadishu and Kismayo at will. It proposes that African forces
shift from a largely defensive strategy to "an offensive posture
necessary for the clearing and holding of additional key rural areas
and strategic economic avenues."

"The idea behind the recommendation of the joint mission is to defeat
Al Shabab in their major rural hideouts and making it as costly as
possible for them to exist and easier for the SNA [Somali National
Army] to dislodge elements that melt into the population, forcing an
eventual total defeat," the report states. "AMISOM is structured as a
conventional fighting force deployed over four sectors in south
central Somalia. The forces are holding ground already cleared from Al
Shabab, but are unable to expand their operations as they are
overstretched, lack force enablers such as combat engineering, signal,
logistics and port security capabilities, as well as the critical
force multiplier, particularly military helicopters."

In his letter to the council, Ban asked for countries outside the
region to supply military helicopters to the effort, saying it was
"not realistic" to mount a successful offensive against al-Shabab
without them.

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Helicopter Traffic over #Westgate
Law & Politics


#Westgate from @CNBCAfrica 's #Nairobi Bureau on the 19th Floor
http://www.twitpic.com/deneco

US Builds Up Bases in Italy for African Ops
http://www.military.com/daily-news/2013/10/16/us-builds-up-bases-in-italy-for-african-ops.html?comp=700001075741&rank=4

 The U.S. deployment of 200 Marines to a naval base in Sicily for
possible operations in Libya, a short hop across the Mediterranean,
underlines how the Americans have been building a network of bases in
Italy as launch pads for military interventions in Africa and the
Mideast.

"Both the number and complexity of U.S. military operations in Africa
will continue to grow in the medium term," observed Oxford Analytica.

"Given the relatively high impact contribution they make to
Washington's strategic goals, such military operations will also
increasingly encroach on domains traditionally associated with
development and diplomacy.

"However, they will also increasingly commit the United States to an
'intervention-led' foreign policy in Africa."

Conclusions

The US Hard Power Insertion into Africa is embarked on a parabolic Growth Curve.

AU and the ICC – How They Voted
http://thinkafricapress.com/legal/au-and-icc-how-they-voted

On one side, Ethiopia, Ghana, Kenya, Malawi, Nigeria, Rwanda, South
Africa, Sudan, Tanzania, Uganda and Zimbabwe as well as Algeria, which
is not a member of the ICC, allegedly called for the AU to leave the
Rome Statute.

However, on the other side, Burkina Faso, the Ivory Coast, the Gambia
(the country from which the ICC’s Chief Prosecutor Fatou Bensouda
hails), Mali, Senegal and Botswana are believed to have voted against
such an action.

President @BarackObama will meet with Iraq's Prime Minister Nuri
al-Maliki at the White House on November 1, the White House said on
Wednesday.

http://www.reuters.com/article/2013/10/16/us-usa-obama-iraq-idUSBRE99F0YO20131016

"The visit will highlight the importance of the U.S.-Iraq relationship
under the U.S.-Iraq Strategic Framework Agreement (SFA)," the White
House said in a statement.

During the Nov. 1 meeting, Obama "looks forward to discussing with
Prime Minister Maliki efforts to enhance cooperation in the fields
covered under the SFA, and to coordinating on a range of regional
issues," said the statement.

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Currency Markets at a Glance WSJ
World Currencies


Euro 1.3627
Dollar Index 79.99
Japan Yen 97.97
Swiss Franc 0.9042
Pound 1.6069
Aussie 0.9593
India Rupee 61.315
South Korea Won 1063.80
Brazil Real 2.1810
Egypt Pound 6.8836
South Africa Rand 9.8392

The dollar has dropped 0.7 percent in the past month, according to
Bloomberg Correlation Weighted Indexes, which track 10
developed-country currencies. The euro gained 0.9 percent, while the
yen is little changed.

Euro versus the Dollar 3 Month Chart 1.3627
http://quotes.ino.com/charting/index.html?s=FOREX_EURUSD&v=d3&t=c&a=50&w=1

Dollar Index 3 Month Chart INO 79.99
http://quotes.ino.com/charting/index.html?s=NYBOT_DX&v=d3&t=c&a=50&w=1

Dollar Yen 3 Month Chart INO 97.97
http://quotes.ino.com/charting/index.html?s=FOREX_USDJPY&v=d3&t=c&a=50&w=1

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Somalia piracy is back, says UK intel firm
Africa


Last Friday, 296,919dwt Hong Kong-flagged crude carrier MV Island
Splendor came under attack 230nm off the Somali coast, when pirates in
two skiffs opened fire on onboard private maritime security personnel.

According to Dryad, the attack, which represented the first on a large
merchant vessel since April, was followed by a second, 270 nautical
miles further East, four days later. Dryad has since concluded that
the two attacks were undertaken by the same pirate gang or “Pirate
Action Group” (PAG).

“Despite the pressure applied by coalition forces and the assessed
depletion of pirate resources, there was a likelihood that we would
see a break out of a PAG into the sea lanes and that the hijack and
ransom of a single large merchant vessel would be all it would take to
feed the infrastructure of the Somali pirate criminal enterprise,”
said Ian Millen, intelligence director at Dryad. “Following Monday’s
report, it would appear that the attack on two vessels in the space of
four days confirms that the Somali pirate business model is not yet
broken.”

Scanning the Horizon for Pirates on the San Marco Operation Ocean
Shield @NATO_MARCOM

http://www.twitpic.com/cog02n

Angola Inks $1Bln Arms Deals With Russia – Paper
http://en.ria.ru/military_news/20131016/184180992/Angola-Inks-1Bln-Arms-Deals-With-Russia--Paper.html

Russia’s state arms export monopoly has signed a $1 billion deal
package with Angola to deliver military equipment, build an ammunition
plant and provide maintenance services, Vedomosti business daily
reported Wednesday.

Rosoboronexport will supply 18 Su-30K fighter jets to the southern
African nation, the daily said, citing sources at the arms exports
company and the Russian military.

Angolan President Jose Eduardo dos Santos has lashed out at Portugal
for probing the finances of Angolan officials

http://ewn.co.za/2013/10/16/The-Africa-Report-16-October-2

Angolan President Jose Eduardo dos Santos has lashed out at Portugal
for probing the finances of Angolan officials.

The Portuguese government has been looking into Angolan officials’
finances and have reported finding of numerous acts of corruption at
state level.

Dos Santos has hit back at the Portuguese saying they are encouraging
the perception that a rich African is corrupt.

The Angolan president said the country’s ties with Portugal were now
under strain.

Despite dos Santos’s claim that he and his officials are not guilty of
these allegations, Transparency International, the global NGO that
monitors corporates and governments, ranks Angola as one of the most
corrupt in the world.

It is alleged that out of every $5 made from oil production in Angola,
at least $1 lands in the pockets of the dos Santos family.

South Africa All Share Bloomberg +16.53% 2013

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

Dollar versus Rand 6 Month Chart INO 9.8474
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 6.8926
http://quotes.ino.com/charting/index.html?s=FOREX_USDEGP&v=d3&t=c&a=50&w=1

Egypt EGX30 Bloomberg +12.16% [33 month Highs]
http://www.bloomberg.com/quote/CASE:IND

Nigeria All Share Bloomberg +36.00% 2013
http://www.bloomberg.com/quote/NGSEINDX:IND

Ghana Stock Exchange Composite Index Bloomberg +74.73% 2013

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

Exotic animal skins make up almost 10 percent of the total revenue
from handbag sales for luxury brands, at least double their share a
few years ago, Ortelli estimates.

http://www.bloomberg.com/news/2013-10-16/crocodiles-bites-show-why-your-birkin-bag-is-so-expensive.html

As demand from the world’s elite surges for the skins, luxury-goods
companies from LVMH Louis Vuitton Moet Hennessy SA to Gucci-owner
Kering SA are making acquisitions to secure supply of the beasts,
whose habits can make simply collecting their eggs a matter of life
and death. Raising the reptiles from hatchling to arm candy without
scratches from other crocs is another major challenge.

“Louis Vuitton, Prada, Gucci are trying to elevate the level of
perceived exclusivity of their brands, and exotic-skin products really
help in this,” said Mario Ortelli, an analyst at Sanford C. Bernstein
in London. After LVMH’s purchase of a farm this year and Kering’s of a
tannery, “I expect they will continue to make selective acquisitions.”

Exotic animal skins make up almost 10 percent of the total revenue
from handbag sales for luxury brands, at least double their share a
few years ago, Ortelli estimates.

The incentive for luxury-goods companies, many of whom are wrestling
with sluggish demand for their most widely available goods, is clear:
crocodile handbags can sell for 30 times more than their bovine
counterparts. The luxury accessories market was worth 57 billion euros
($77 billion) last year, according to Bain & Co.

While salt-water porosus crocodiles found in Australia are the
trickiest -- with enough skin produced for about 25,000 bags a year --
no crocodile is easy or cheap to raise, and it takes years to breed
them.

“If I’d known how hard this business was before I’d got into it, I may
not be here today,” said Stefan van As, a former investment banker and
owner of South Africa’s Le Croc crocodile breeding farm and tannery,
which sends about 5,000 Nile crocodile skins to Europe each year.

To begin with, cow leather comes from animals raised for beef, and
their hides are a byproduct. Though some people consider crocodile
meat a delicacy -- and growers like van As feed it back to the animals
-- it’s the skins that pay the bills for crocodile farmers.

While cows can ruminate for hours on their own in a meadow, from the
moment an 80-gram African Nile crocodile hatchling snaps its way out
of the egg, van As has to provide a calm environment.

Their pens are cleaned daily and the animals require a strict feeding
routine. Only the same few handlers are allowed to approach them. They
dine mostly on chicken and selected oils to improve their skin. That
all promotes growth, reduces stress and helps keep the crocs’ mighty
jaws off each other.

Making life easier for the crocodiles also helps their handlers. While
the Nile crocodile isn’t as large, territorial or aggressive as the
porosus, it’s hardly friendly.

They grow to about 5 meters (16 feet) in length and weigh up to 700
kilograms (1,543 pounds). And they will eat almost any prey that ends
up in the water. One of van As’s farmer colleagues was killed by a
crocodile after falling in the water.

Keeping the animals happy and yourself alive isn’t enough to sell to
the biggest luxury companies. The likes of Kering and LVMH only use
the top 10 percent of crocodile skins.

To keep the belly in good condition, the slaughter, skinning and parts
of the tanning process at Le Croc are done by hand. For slaughter, the
animals are checked and stunned twice before being killed by a cut at
the nape of the neck and a pithing of the brain. The skins Le Croc
supplies to customers are then tanned or dyed on site.

“It’s complicated to buy exotic skins,” said Jean Cassegrain, chief
executive officer of luxury house Longchamp. “The supply is very
limited.”

To be sure of it, LVMH in February purchased an Australian crocodile
farm for A$2.6 million ($2.5 million) while Kering bought tannery
France Croco a month later. Kering declined to comment beyond the
statement announcing that acquisition, while LVMH didn’t immediately
return requests for comment.

In the end, it’s all worth it to such companies and Hermes
International SCA, whose waiting lists for its famous Birkin bags can
be years-long. An average handbag can be crafted from as few as two
skins, for which van As gets up to $600 each. The bags? For those who
can’t wait to buy a new one, they’re available used on e-Bay from
$39,000 to $150,000.

“There are women who don’t care about money that love the beautiful
things,” said Gianluca Brozzetti, CEO of fashion house Cavalli.
“Demand for crocodile and alligator is large because I think it is one
of the trends that never ends. It is a classic.”

While Hermes International ScA may keep its supply of Birkin bags
low to maintain exclusivity, there’s another reason for the price tag:
a good quality skin is just hard to get. Photographer: Timothy A.
Clary/AFP via Getty Images

http://www.bloomberg.com/news/2013-10-16/crocodiles-bites-show-why-your-birkin-bag-is-so-expensive.html

Elephants have a mysterious and "tangible energy" according to
South African photographer Greg Du Toit.

http://www.bbc.co.uk/news/science-environment-24534106

Now after a 10 year quest, his portrayal of this "energy" has been
captured in an award-winning photo.

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

Drought followed by brain: How climate change spurred evolution of
human intelligence

http://www.independent.co.uk/news/science/drought-followed-by-brain-how-climate-change-spurred-evolution-of-human-intelligence-8884863.html

Humans evolved their very large brains in response to the dramatic
shifts in the climate of East Africa, the cradle of humanity where
man's ancestors are thought to have originated about two million years
ago, a study has suggested.

Scientists have matched exceptionally wet periods and very dry periods
in the East African Rift Valley to sudden spurts in the evolution of
the hominid ancestors of Homo sapiens, which resulted in the evolution
of the modern human brain.

Academics have long argued about what led to the unusually large brain
of humans with its capacity for language, abstract thought and
consciousness. The latest theory suggests it was triggered by the need
to adapt to dramatic changes in the local environment of early man.

“It seems modern humans were born from climate change, as they had to
deal with rapid switching from famine to feast - and back again -
which drove the appearance of new species with bigger brains and also
pushed them out of East Africa into Eurasia and South Africa,” said
Professor Mark Maslin of University College London, the co-author of
the study published in the on-line journal Plos-One.

read more


Kenyan retailer Naivas says talks with Wal-Mart unit are off
Kenyan Economy


Wal-Mart's (WMT.N) push for a foothold in east Africa hit a hurdle
after Kenyan retailer Naivas said on Wednesday it was no longer
selling a controlling stake to the U.S. company's South African
subsidiary, Massmart. (MSMJ.J)

Naivas chairman Simon Mukuha had said in August they were looking to
sell a majority stake, 50 percent plus one share, to Massmart, to
bring in fresh blood and ideas.

"We are fattening our cow. As and when we are ready we will do that
(sell) but as it is now we are not," Gilbert Mwangi, the
administration manager at Naivas, told Reuters.

"They (talks with Massmart) are off. We are not selling now."

The chief executive of Massmart, which has failed to keep up with
South African rival Shoprite's (SHPJ.J) aggressive sub-Saharan
expansion, said the company was still keen on entering Kenya.

"We are not rethinking our investment decision in Kenya. We are still
looking for a partner and we are still opening our first Game store,
possibly by the end of next year," Grant Pattison told Reuters on
Tuesday at a conference in Johannesburg, referring to one of its
brands.

Massmart runs 29 stores in 11 African countries outside South Africa
which contribute about 8 percent of its total sales. It has said all
but 10 to 15 stores to be opened over the next three years would be in
South Africa.

read more


Kenya Shilling versus The Dollar Live ForexPros 84.949
Kenyan Economy


Nairobi All Share Bloomberg  +37.961% 2013
http://www.BLOOMBERG.COM/quote/NSEASI:IND

Nairobi All Share is +37.961% Year to Date and has corrected 2.043%
since reaching an All Time High on the 8th of October.

Nairobi ^NSE20 Bloomberg +19.11% 2013
http://j.mp/ajuMHJ

The NSE20 is +19.11% in 2013 and 107.44 points below its 2013 and
Multi Year High reached on April 2nd.

Every Listed Share can be interrogated here
http://www.rich.co.ke/rcdata/nsestocks.php

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by Aly Khan Satchu (www.rich.co.ke)
 
 
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October 2013
 
 
 
 
 
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