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Macro Thoughts

Home Thoughts

Nairobi is very seasonal. The Weather and we are now all set to enter
the cold period which was described so beautifully by Karen Blixen

P.196

The early morning Air of the African highlands is of such a tangible
coldness and freshness that time after time the same fancy there comes
back to you: you are not on Earth but in dark deep waters, going ahead
along the bottom of the Sea. It is not even certain that you are
moving at all: the flows of chilliness against your Face may be the
deep-sea currents, and your car, like some sluggish electric Fish, may
be sitting steadily upon the bottom of the Sea, staring in front of
her with the glaring Eyes of her Lamps, and letting the submarine life
pass by here. The Stars are so large because they are not real stars
but reflections, shimmering upon the surface of the Water. Alongside
your path on the sea-bottom, live things, darker than their
surroundings, keep on appearing, jumping up and sweeping into the long
grass, as crabs and beach-fleas will make their way into the sand. The
Lights get clearer, and, about sunrise, the sea-bottom lifts itself
towards the surface, a new created Island. Whirls of smells drift
quickly past you, fresh rank smells of the olive-bushes, the brine
scent of burnt grass, a sudden quelling smell of decay.

And there is that intensely hot period just before the Rains come when
makes me think of Spinal Tap and someone is turning it up to 11.

Spinal Tap - "These go to eleven...." @YouTube
https://www.youtube.com/watch?v=4xgx4k83zzc

Then of course, in Nairobi, there is a monthly Traffic Cycle which is
correlated to Pay Day. The moment everyone gets paid at the end of the
month, The Roads teem and suddenly its taking an hour where it took 30
minutes with serious Tail Risks of complete 3 hour+ type debacles.
Then as the month moves forward, The Roads start to thin out. Just
before Pay Day, You can fly around this City.

PRESIDENT Jacob Zuma has confirmed his withdrawal from this week’s
European Union (EU)-Africa summit in Brussels, accusing the EU of
treating Africans as subjects and wanting to decide who from Africa
should be allowed to attend.

"I think that time must pass wherein we are looked (on) as subjects,
we are told who must come, who must not come.... It is wrong and
causes this unnecessary unpleasantness," the president told the SABC
on Sunday while campaigning in the Western Cape for the May 7 national
elections.

"I thought the AU (African Union) and EU are equal organisations
representing two continents, but there is not a single one of them who
must decide for others," Mr Zuma said.

The Department of International Relations and Co-operation said on
Sunday that Mr Zuma would not participate in the April 2-3 summit and
that International Relations and Co-operation Minister Maite
Nkoana-Mashabane would lead South Africa’s delegation. Trade and
Industry Minister Rob Davies will also participate.

On Monday, the EU’s ambassador in South Africa, Roeland van de Geer,
said the organisation was surprised and disappointed, adding that Mr
Zuma had confirmed his participation in a letter on March 25.

"I think ... his attendance would have increased the quality of the
summit," Mr van de Geer said, adding that the EU expected at least 26
of the bloc’s 28 heads of state and government to be at the summit.

South Africa and Zimbabwe leaders say they will not attend 4th EU-Africa Summit
http://www.globalresearch.ca/several-african-states-boycott-the-eu-summit-in-belgium/5376073

“You have to consider that the EU-Africa Summit is the meeting between
the European Union and African continent. I want to be very clear on
that, it is not the AU-European Union meeting. Participation is not
guided by the membership of the African Union.”

The EU envoy continued by pointing out that “This event is the highest
incidence of political dialogue between the European Union and Africa
and the intention of the European Union is to make it possible to talk
to all who are relevant to the subject of the event, investing in
people, prosperity and peace and be able to talk very frankly with
them and to have progress in these partnerships between the European
Union and this region. That is why Egypt has been invited despite the
fact that it has been suspended from the African Union.”

"Until today, March 30, President Bashir has not received an
invitation to the summit," the Ministry of Foreign Affairs said in a
statement.
https://za.news.yahoo.com/eu-seeks-divide-africa-sudan-says-bashir-denied-183137982.html

The summit on Wednesday and Thursday will gather representatives of 90
nations from both continents, including 65 heads of state and
government.

"The invitation of this summit to the African leaders was selective
and in doing this the European Union is trying to divide the African
Union," the Sudanese statement said.

"We would like to confirm that the last conversation in the transcript
between the air traffic controller and the cockpit is at 01:19
(Malaysian Time) and is "goodnight Malaysian three seven zero," the
Department of Civil Aviation said in a statement.

This shadow of a Royal New Zealand Air Force P3 Orion aircraft is
seen on low cloud cover while it searches for missing Malaysia
Airlines flight MH370, over the Indian Ocean. Photograph: Rob
Griffith/AFP/Getty Images
http://www.theguardian.com/world/2014/apr/01/mh370-new-account-of-last-words-from-cockpit-live-updates

DON DeLillo in his book, Cosmopolis, says: “Everything is barely
weeks. Everything is days. We have minutes to live.” And cer- tainly,
the 21st century is a world hurtling at a dizzying velocity.

Where once we were far away on the frontier of our world with less
than 15,000 landlines with which to connect to each other, today
millions of mobile phones connect us all to the world. This has
happened over the last decade. The mobile phone in my view has
flattened the world and has precipitated rapid convergence of
expectations world-wide.
In some instances, and particularly in the Middle East and North
Africa, we saw these expectations simply explode and then get
throttled. I call it ‘throttling’, others might characterise it as a
‘repression’. You can throttle only for so long but then history shows
that when the ‘tipping point’ arrives, everything simply gets blown
away.

Gil Scott-Heron famously announced: “The Revolution Will Not Be
Televised” in his poem and song from 1970.

However, I recall the Iranian revolution of 1978/79 which was
televised and which I watched unfold on my TV screen. More than 30
years later, the US is still grappling with the Iranian theocracy and
the consequences of that revolution. Interestingly, there is a school
of thought that the kingdom is now as brittle as the ‘Peacock Throne’.
It is this sense which might be informing the pivot (after a fashion)
to Tehran. The counter-revolutionary forces cannot keep a lid on
things for a meaningful time. It is a pressure cooker.

Euro 1.3776
Dollar Index 80.11 Federal Reserve Chair Janet Yellen said the world’s
biggest economy will need stimulus “for some time.”
Japan Yen 103.26 soft
Swiss Franc 0.8846
Pound 1.6662
Aussie 0.9260 Australia’s dollar gained as much as 0.4 percent to
93.04 U.S. cents, the highest since Nov. 21, before trading little
changed -
India Rupee 60.125
South Korea Won 1059.84
Brazil Real 2.2722
Egypt Pound 6.9660
South Africa Rand 10.5948

The dollar fell 0.8 percent in the past three months against a basket
of nine other developed-nation currencies tracked by Bloomberg
Correlation-Weighted Indexes. The euro declined 0.7 percent, while the
yen gained 1.2 percent and the Aussie surged 3.9 percent.

Dollar Index 3 Month Chart INO 80.11
http://quotes.ino.com/charting/index.html?s=NYBOT_DX&v=d3&t=c&a=50&w=1

“Yellen signaled that, while the Fed will continue tapering, they are
not in a hurry to raise rates, and that was seen by the market as
dovish.”
http://www.bloomberg.com/news/2014-04-01/dollar-holds-drop-on-fed-stimulus-bets-before-manufacturing-data.html

Conclusions

Yellen talked the Dollar down but interestingly not by very much.
Higher Beta from Sterling, India Rupee, South Africa Rand has pushed
the Dollar back quite vigorously lately.

Euro versus the Dollar 3 Month Chart 1.3776
http://quotes.ino.com/charting/index.html?s=FOREX_EURUSD&v=d3&t=c&a=50&w=1

Euro zone inflation drops to lowest since 2009
http://www.reuters.com/article/2014/03/31/us-eurozone-inflation-idUSBREA2U0F320140331

Euro zone inflation hit its lowest level since November 2009 in March,
a shock drop that raises expectations the European Central Bank will
take radical action to stop the threat of deflation in the currency
bloc.

Annual consumer inflation in the 18 countries sharing the euro was 0.5
percent in March, with the pace of price rises cooling from February's
0.7 percent reading, the EU's statistics office Eurostat said on
Monday.

Dollar Yen 3 Month Chart INO 103.26
http://quotes.ino.com/charting/index.html?s=FOREX_USDJPY&v=d3&t=c&a=50&w=1

The yen remained lower against the dollar after Bank of Japan data
showed the Tankan index for sentiment among large manufacturers in the
nation rose to 17 in the first quarter from 16 in the previous period.
That compares with an advance to 19 forecast by analysts polled by
Bloomberg News before the release.

“The Tankan was weak,” said Kengo Suzuki, chief currency strategist at
Mizuho Securities Co. in Tokyo. “Some investors buying the dollar
against the yen may take profits as it climbed above 103 in the past
few days.”

The S&P Agriculture Index of eight commodities climbed 6 percent since
the start of March.
http://www.bloomberg.com/news/2014-03-30/grain-bulls-proved-right-with-best-rally-since-2010-commodities.html

The S&P GSCI Spot Index of 24 raw materials including energy and
metals was little changed, for an annual advance of 2.7 percent. The
MSCI All-Country World index of equities slipped 0.2 percent this
month, the Bloomberg Dollar Index was little changed and the Bloomberg
Treasury Bond Index dropped 0.3 percent.

Combined net-bullish positions across 11 agricultural products climbed
more than fivefold in the first quarter, U.S. Commodity Futures
Trading Commission data show. As of March 25, investors held 1.06
million contracts, the most since February 2011. Wheat holdings are
the most bullish in 16 months, and coffee bets are the highest in six
years.

Wheat traded in Chicago is poised for the biggest quarterly gain since
September 2012. Cold, dry weather has reduced the outlook for winter
crops in the U.S., the top exporter, just as a rail backlog delays
supplies from Canada. Fields in Germany had 49 percent less rainfall
than average in the past 180 days, according to World Ag Weather.

Wheat July 2014 3 month Chart 701.5
http://quotes.ino.com/charting/index.html?s=CBOT_W.N14&t=c&a=50&w=1&v=d3

Gold 3 Month Chart INO 1284.43 [more than $100.00 below its 2014 High]
http://quotes.ino.com/charting/index.html?s=FOREX_XAUUSDO&t=c&a=50&w=1&v=d3

Crude Oil 3 Month Chart INO 101.37 [A Big Sell above $100.00]
http://quotes.ino.com/charting/index.html?s=NYMEX_CL.K14.E&v=d3&t=c&a=50&w=1

Emerging Markets

Frontier Markets

The first comprises Peru, the Philippines, Indonesia, Colombia and Sri
Lanka, which it named the PPICS.

They had “strong potential confirmed by a sound business environment,”
Coface said.

The second group comprises Kenya, Tanzania, Zambia, Bangladesh and Ethiopia.

But these countries are marked by “very difficult or extremely
difficult business environments which could hamper their growth
prospects,” Coface said.

However, the head of country risk at Coface, Julien Marcilly, said
that in 2001 “the quality of governance in Brazil, China, India and
Russia was comparable to that of Kenya, Tanzania, Zambia, Bangladesh
and Ethiopia today.”

But the 10 “new emerging countries” currently accounted for only 11
per cent of the world population whereas the Brics had accounted for
43 per cent of the population in 2001.

The total gross domestic product of the new 10 was only 70 per cent of
the output of the Brics in 2001, and they had a current account
deficit of about 6 per cent of GDP whereas the Brics had run a surplus
on average.

On a positive note, the new 10 had inflation which was about 2.8
percentage points lower than Brics’ inflation in 2001, and their
public debt was about 40 per cent of output compared with 54 per cent
for the Brics at that time.

The eruption of fighting in South Sudan brought East Africa's
political crises into sharp focus at a time of optimism about the
region's economic take-off. Undaunted, analysts point to
fast-improving transport links and new oil and gas discoveries.

Four leaders dominate the East African diplomatic chess-board, its
diplomacy, its soldiering and its business interests. With new
railways and road networks, together with new pipelines and electric
power grids, they are forging political alliances that will allow them
to reshape the region.

At international gatherings such as the African Union summit in Addis
Ababa, the four gravitate towards each other: Ethiopia's Hailemariam
Desalegn, Kenya's Uhuru Kenyatta, Rwanda's Paul Kagame and Uganda's
Yoweri Museveni.

We have refused to be a proxy for foreign powers in this conflict.
It's a major shift in our regional diplomatic orientation

Differing in age and political experience, they argue about many
details but there is a critical point of consensus. If East Africa is
to grasp the economic opportunities now available, there must be a
determined effort to integrate its markets and economies, even if that
means making concessions and compromises in the short term.

All four run interventionist foreign policies – Ethiopia, Kenya and
Uganda sent troops into Somalia, while Rwandan and Ugandan troops have
been both invited to and expelled from the Democratic Republic of
Congo.

They all favour a statist hand on the economic tiller, but they are
all building up business classes on whose political loyalty they can
rely. All have supported Kenyatta in his attempts to avoid prosecution
at the International Criminal Court.

Economic growth and breaking away from dependence on Western markets
are common imperatives. None of them enthuse about democracy,
particularly in its Western, liberal variants.

Their shared political credo is a kind of pragmatic authoritarianism.
Like China's Deng Xiaoping, they do not care whether the cat is black
or white as long as it catches mice. Above all, these leaders'
solidarity is informed by a common economic interest.

As Gabriel Negatu, regional director of the African Development Bank,
points out: "East Africa is the most promising regional bloc. [It] has
registered between 5 and 6% growth annually for the past decade. We
estimate that regional gross domestic product will expand 18-fold by
the middle of the century, from $185bn in 2010 to $3.5trn by 2050.
This era is comparable to the period immediately after independence."

This economic promise is based on the depth and scale of integration,
says Negatu. If Ethiopia is drawn into the East African Community
(EAC), there could be a single market of more than 200 million people.
Regional competition and transport links are incentives.

Although Uganda discovered oil in Bunyoro in 2006, production was
delayed by disputes with oil companies over the size of a planned
local refinery and pipeline routes. Following Kenya's discovery of oil
in Turkana in 2010, Kampala has speeded up its plans and signed a
pipeline deal with Nairobi.

On 5 February, Uganda signed an agreement worth more than $8bn with
the China National Offshore Oil Company, France's Total and Ireland's
Tullow to build a refinery at Lake Albert, an export pipeline to
Kenya's coast and an oil-fired power station. Such investment depends
critically on integration.

"Assuming the reform agenda progresses – a moderate level of customs
harmonisation and deepening of a regional trade integration – this
would have a tremendous effect on regional growth," says Angus Downie,
a research analyst with the Lomé-based Ecobank.

What you are seeing today, regardless of the differences, is a strong
consensus within the region to sort out our own issues

By 2020, two mammoth railway projects are due for completion: firstly
the Dar es Salaam-Isaka-Kigali route; and secondly the
Mombasa-Nairobi-Kigali route. The railways are two of the largest
attempts at regional transformation for a century.

They are both critically dependent on China's state-owned banks and
construction companies. Through a combination of grants, loans and
tied aid agreements, China is almost single- handedly reshaping the
region.

"Look, even if you had four, five or six World Banks, there is no way
they would have sunk in this kind of capital to individual projects in
one region. There is not a bank or an international bond issue that
would commit these kinds of resources to single-issue projects. It is
just too risky," says a Nairobi-based economic analyst.

But the political economy is another matter: the rush for growth is
sharpening inequalities and political discontent. "Not only the rate
of growth matters, but also the quality. Governments need to ensure
that it is shared across the board," says Negatu.

A recent report by the Society for International Development sounds
alarm bells: "The trouble in East Africa is that the speed of change
is overwhelming the capacity of the industrial and service sectors to
provide the jobs and alternative livelihood opportunities."

Elsewhere, it says: "A formal wage-paying job is a privilege for a
tiny minority of East Africa. Just 1.6% of Uganda's, 4% of Burundi's,
5% of Tanzania's and 6% of Kenya's working populations are formally
employed."

Without adept political management, the prospect of economies
expanding quickly but without a commensurate increase in jobs would
worsen inequalities and social tensions. Fast-growing cities such as
Nairobi and Kampala are drawing in migrants from across the region,
but very few formal jobs are available.

Instead, the shanty towns expand inexorably, housing disenchanted new
arrivals who feel cut off from the new economy. Providing them with
basic state services and jobs will test the ingenuity of governments.

For governments tempted to ignore the new underclass, South Sudan
serves as a cautionary tale. An abiding weakness of governments in
East Africa is their ethnocentrism: their tendency to favour crassly
their ethnic support bases in the allocation of public sector jobs,
appointments, commercial opportunities and government tenders South
Sudan's crisis may have been exacerbated by its weak institutions, but
the best illustration of this was the government's failure to rein in
cronyism, corruption and ethnic rivalries in the state sector. In
South Sudan, these weaknesses caused a war. In other countries in the
region, they produce bad elections and policy-making, and hold back
burgeoning economies.

The explosion of fighting in South Sudan in December 2013 has produced
much soul searching and ad hoc diplomacy. Every supporter of Africa's
newest state believed they had a right to admonish and advise the two
war- ring sides, much to the irritation of East Africa's leaders.

"People say that South Sudan is a failed state. I disagree. South
Sudan is a state that never was," says Mabior Garang de Mabior, son of
Sudan People's Liberation Movement founder John Garang and a member of
former vice-president Riek Machar's negotiating team.

"The first republic of South Sudan is dead. We should now begin
considering how to constitute the second republic," he argues.

Beyond clashes between the supporters of Riek and President Salva
Kiir, South Sudan's crisis is testing the solidity of regional
diplomacy. The biggest danger is that the national conflict could
escalate and draw in countries from the region. Immediately
problematic was the continued presence of Uganda's troops, with their
avowed mission to shore up Salva's government. The January ceasefire
agreement contained a clause about withdrawal of foreign troops, but
its ambiguity has allowed Juba and Kampala to ignore it. How the
Ugandan troops issue is handled will determine the direction and
duration of the crisis, according to officials at the
Intergovernmental Authority on Development (IGAD), the eight-member
regional development and security body.

President Museveni mounted a robust defence of the role of Uganda's
troops in South Sudan in January, finding a justification in the
region's interlocking linguistic, ethnic, political and economic
relationships.

At a meeting in Angola of the International Conference on the Great
Lakes Region, Museveni described the region's problems as ideological
and organisational but criticised politicians for lacking discipline:
"The manipulation of tribes and religions is a pseudo ideology – is a
false ideology – not reflecting the interests of the people but hose
of the opportunists and parasites spurred on by foreign interests."

Arguing for the interdependence of the region, he continued: "With the
conflicts in eastern [Democratic Republic of ] Congo and South Sudan,
the food prices in Uganda have collapsed to the detriment of the
farmers that were getting used to the higher prices because of the
bigger demand in the region."

However, Uganda's neighbours worry about the risks of the South Sudan
conflict spreading and undermining regional integration.

"If violence continues and escalates, we don't want proxy militias
acting on behalf of individual countries. That's our main fear at the
moment," says a Kenyan diplomat in Nairobi who requested anonymity. He
refers to the risk that Khartoum's Islamist regime might exploit the
South Sudan crisis for its own ends. It was that risk that partly
motivated Kampala's intervention.
The individual power plays within the region are a threat to the East
African integration project.

Last year, Tanzania's President Jakaya Kikwete urged dialogue between
Kagame and the rebels in the Forces Démocratiques de Libération du
Rwanda, precipitating a cold war within the EAC.

Frustrated by Tanzania's hesitancy to fast-track regional integration,
Rwanda, Uganda and Kenya formed a 'coalition of the willing' that
briefly threatened to break up the EAC. Uganda's intervention in South
Sudan and Ethiopia's increasing impatience with Museveni's
intransigence on troop withdrawal are exposing similar fault lines.
Of proxies and brokers

"A split within IGAD is problematic. Kenya is desperately holding on
to an honest broker position. We have refused to be a proxy for
foreign powers in this conflict. It's a major shift in our regional
diplomatic orientation," says the Kenyan diplomat, who is eager to
shake off his country's role as a Western client state.

Museveni has been strengthened by Uganda's intervention and its close
relations with the factions of the ruling Sudan People's Liberation
Army according to an analyst in Kampala, who adds: "Meles [Zenawi] is
gone; Gaddafi and Mubarak are gone; Obasanjo and Mbeki are gone. When
Museveni now looks across the political landscape he only sees one
potentate... himself."
Other diplomats argue that Uganda's speedy intervention prevented much
worse bloodletting in South Sudan: "If Museveni had not gone in when
he did, it would be Salva in the bush right now. That was the
difference."

Is the region, after a decade of peace and relative stability, staring
at a possible return to a chaotic past? It is not an easy question to
answer, says Martin Kimani, Kenya's ambassador to the United Nations
in Nairobi and the government's point man in the South Sudan crisis.

"This crisis actually gives South Sudan the opportunity to rebuild
itself in its own image," says Kimani. The crisis also represents the
end of the road for the West's state-building project in the South
financed by billions of aid dollars.

A successful resolution of the crisis would be a victory for regional diplomacy.

"What you are seeing today, regardless of the differences, is a strong
consensus within the region to sort out our own issues. There is no
leader in the region that has proclaimed any support for a violent
takeover in Juba. That is a major achievement," says Kimani. ●

Professor Felipe Fernández-Armesto explains why ‘The precocity of the
Indian Ocean as a zone of long-range navigation and cultural exchange
is one of the glaring facts of history’, made possible by the
‘reversible escalator’ of the monsoon.’

I have no doubt that the Indian Ocean is set to regain its glory days.
China’s dependence on imported crude oil is increasing and the US’
interestingly is decreasing. I am also certain the Eastern Seaboard of
Africa from Mozambique through Somalia is the last Great Energy Prize
in the c21st.  Therefore, the control of the Indian Ocean becomes kind
of decisive and with control China can be shut down quite quickly. A
Sine qua non of President Barack Obama’s pivot to Asia is US/NATO
Power Projection over the Indian Ocean.

The acquisition comes as a first for former Barclay's boss Diamond,
who was ousted from Barclays last year when the bank was fined $450
million for alleged manipulation of the Libor interbank lending rate.

Atlas Mara, Diamond's London-listed shell company, said it would
acquire BancABC's shares in excess of 50.1 percent of total shares
outstanding for $0.82 per share or the equivalent in Atlas Mara
shares.

The company also said it intends to make a public share-for-share
takeover offer for ADC at an exchange ratio of 1.25 times Atlas Mara
shares per ADC share.

Atlas Mara said it expects to fund the acquisition via proceeds of its
previously completed IPO and the issuance of shares.

Diamond raised $325 million by Atlas Mara's London Stock Exchange
listing in December, with Africa-focused billionaire entrepreneur
Ashish Thakkar.

Atlas Mara is formed of Atlas Merchant Capital LLC, set up by Diamond
in New York, and Ashish Thakkar's Mara Group Holdings Limited.

BancABC has been providing financial services in Botswana, Mozambique,
Tanzania, Zambia and Zimbabwe since the last 58 years. ADC is also an
Africa-focused banking group with an indirect 47.1 percent stake in
BancABC.

South Africa posted its third trade surplus in four months in February
as a weaker rand stoked exports and curtailed imports.
http://www.bloomberg.com/news/2014-03-31/south-africa-posts-1-7-billion-rand-trade-surplus-in-february.html

The trade balance switched to a surplus of 1.72 billion rand ($162
million), compared with a deficit of 17.1 billion rand in January, the
Pretoria-based South African Revenue Service said in an e-mailed
statement today. The median estimate of 10 economists surveyed by
Bloomberg was for a deficit of 3.5 billion rand.

The rand plunged 19 percent against the dollar last year and a further
5.7 percent in January, boosting the competitiveness of the nation’s
exports and raising import costs. The rand has rebounded 4.9 percent
against the U.S. currency since the beginning of last month.

“We are noticing early signs that the economy is rebalancing, albeit
slowly, from consumption to production,” Gina Schoeman, an economist
at Citigroup Inc. in Johannesburg, said in an e-mailed note to clients
before the data was released.

South Africa's President Zuma says he didn't request upgrade to his
private residence, asks why he should pay for it
http://www.bbc.com/news/world-africa-26822703#TWEET1086652

"They did this without telling me - why should I pay for something I
did not ask for," he was shown saying in isiXhosa on local private
television ANN7.

South Africa All Share Bloomberg +4.32% 2014
http://www.bloomberg.com/quote/JALSH:IND

Dollar versus Rand 3 Month Chart INO 10.549 [might rally sharply to 10.00]
http://quotes.ino.com/charting/index.html?s=FOREX_USDZAR&t=c&a=50&w=1&v=d3

Egypt Pound versus The Dollar 3 Month Chart INO 6.9654
http://quotes.ino.com/charting/index.html?s=FOREX_USDEGP&v=d3&t=c&a=50&w=1

Egypt EGX30 Bloomberg +15.87% 2014 [-8.1937% since 25th March]
http://www.bloomberg.com/quote/CASE:IND

7,805.03 -287.35 -3.55%

Nigeria All Share Bloomberg -5.15% 2014
http://www.bloomberg.com/quote/NGSEINDX:IND

Ghana Stock Exchange Composite Index Bloomberg +11.36% 2014
http://www.bloomberg.com/quote/GGSECI:IND

Italy's Eni (ENI.MI) has hired Bank of America Merrill Lynch (BAML)
(BAC.N) to advise on the sale of a stake of about 15 percent in its
Mozambique gas field which could raise up to $5 billion, several
sources familiar with the matter said.
http://www.reuters.com/article/2014/03/31/us-eni-mozambique-idUSBREA2U11F20140331

The oil and gas firm needs partners to share the huge investment
required to develop the large Mozambique project. It sold 20 percent
of its Mozambique offshore gas acreage to China's CNPC last year in a
deal worth around $4.2 billion.

Eni and BAML declined to comment.

Asian investors are again expected to dominate the process as they are
cash-rich and keen to secure resources. They are also comfortable
investing in projects that they do not operate, unlike most of their
Western peers, bankers said. Eni operates the Area 4 in Mozambique's
northern Rovuma basin.

Bankers see China's CNOOC as the most likely buyer because it is keen
to build up a liquefied natural gas (LNG) business.

"It should go to the Chinese since they're the only ones with the fire
power ... Going by exclusion, if CNPC bought the last stake I presume
this time it could be Sinopec or CNOOC," said one banker.

While the global rate of software piracy stands at around 42 percent,
in Africa it is closer to 80 percent, according to the Business
Software Alliance (BSA). The highest rate of piracy is in Zimbabwe,
where 92 percent of software is being used illegally.
http://www.zdnet.com/with-a-piracy-rate-of-80-percent-can-the-tech-world-convince-africa-to-buy-legitimate-software-7000027876/

The Chamber considers that, within the following framework, a fixed
period adjoumment of approximately six months is appropriate

Nonetheless, the Chamber reiterates its view that it is now incumbent
on the Kenyan Govemment to take the necessary actions - through
relevant office

Monday’s Eastleigh attack also follows the one that took place in
Mombasa a fortnight ago in which six people were killed and scores
injured after gunmen opened fire at worshippers at a church in Likoni.
http://www.nation.co.ke/news/six-killed-in-Nairobi-terror-attack/-/1056/2264906/-/13re7ox/-/index.html

Six people were killed and dozens others seriously injured in blasts
in Nairobi’s Eastleigh estate Monday evening.

Most of those injured in the three explosions, were taken to Mother
and Child Hospital, Guru Nanak Hospital and Kenyatta National
Hospital, where 20 of the injured were admitted.

The attacks occurred at Sheraton Cafe and The New Kwa Muzairua Super
Grill Centre along Eastleigh’s 11th Street at around 7.30pm. The two
cafes are barely 300 metres apart.

According to the owner of Sheraton Cafe, Mr Patrick Gakuyu, people
were watching the evening news when he heard two explosions followed
by complete darkness.

He said when he tried to flee from the scene, he discovered that the
door had been locked from outside.

“When I finally managed to get outside, I saw six bodies,” he said. Mr
Gakuyu said he suspect the explosions were caused by grenades thrown
into the cafe.

A Toyota truck seized in Mombasa with six bombs is believed to be one
of the three “dirty bomb” vehicles.

The bombs, which were safely detonated, had enough power to bring down
a multi-storey building and cause massive civilian casualties.

Both Kenyan and FBI agents are racing against time to locate and
disable the bomb vehicles, also known as Vehicle Borne Improvised
Explosive Devices.

Kenya last Tuesday restricted all refugees to two camps after a
weekend attack on a church near Mombasa.

The Australian government has issued a travel advisory, warning its
citizens of possible terrorist attacks in Kenya.

“There is a serious and ongoing risk of large scale acts of terrorism
in Nairobi and Mombasa. We advise Australians to avoid unnecessary
visits to public places in Nairobi and Mombasa at this time,” the
advisory said in part.

A statement posted on the High Commission’s website indicated that in
light of the current security environment, the level of advice for
Nairobi and Mombasa has been increased.

“We now advise Australians to reconsider their need to travel to
Nairobi and Mombasa due to high threat of terrorist attack and high
level of crime. We also continue to strongly advise Australians not to
travel to border regions with Somalia, Ethiopia and South Sudan,
because of the extremely dangerous security situation,” the statement
added.

Conclusions

The Frequency and Intensity have spiked. As I have previously stated
asymmetric risks remain potent and have gained Potency.

A Kenyan police official says two men arrested with a car bomb on
Kenya’s coast nearly three weeks ago were in contact with plotters of
the September terrorist attack on a Nairobi mall that killed at least
67 people.

The official, who spoke on condition of anonymity because he is not
authorized to speak with the media, said Monday the vehicle targeting
a shopping mall in Mombasa was packed with 173 kilograms (381 pounds)
of explosives. The official said the two men, arrested March 11, had
spoken on the phone with militants in Somalia connected to the
Westgate Mall attack.

Par Value:                  5/-
Closing Price:           90.00
Total Shares Issued:          495275000.00
Market Capitalization:        44,574,750,000
EPS:             2.74
PE:                 32.846

FY through 31st December 2013 versus FY 2012
FY Revenue 14.179208b versus 11.400569b +24%
FY Profit before Tax 2.000060b versus 1.790296b +12%
FY Profit after Tax 1.348803b versus 1.245638b +8.00%
FY Earnings Per Share 2.74 versus 2.51 +9.1633%
FY Dividend 60 cents a share versus 50cents +20%

Company Commentary
despite some weakness in Kenya's construction sector during 2013
Cement Sales increased 31% Cement Division is 86% of group's Turnover
The Dar-es-Salam plant manufactured cement using imported clinker. The
profit margins are expected to improve after the Tanga clinker plant
becomes operational in the 2nd half of the year.
Group Net Debt 14.7b

Conclusions

Some Margin compression. Expect margin expansion when the Tanga
Clinker plant becomes operational.
There is a significant Capacity Expansion in Play.
ARM's share exhibits very low beta and this is a consequence of
outstanding execution.

Africa Railways, a core subsidiary of leading regional investment
company Citadel Capital, has acquired an additional 34% stake in the
national rail operator of Kenya and Uganda. The transaction, which was
executed yesterday, brings Africa Railways’ total ownership of RVR to
85%, up from 51%, following the acquisition of the entire equity stake
held by TransCentury Limited (“TransCentury”) a Nairobi-listed
infrastructure company.

TransCentury Limited share price data and Earnings here
http://www.rich.co.ke/rcdata/company.php?i=NTg%3D

Par Value:
Closing Price:           28.00
Total Shares Issued:          273950000 .00
Market Capitalization:        7,670,600,000
EPS:             1.66
PE:                 16.867

H1 Earnings through June 30th 2013 versus June 30th 2012
H1 Turnover 7.084507b versus 7.064010b +2.9016%
H1 Profit from Operating Activities 1.027327b versus 0.996954b +3.0465%
Net Finance Costs [437.472m] versus [432.815m]
H1 PBT 589.855m versus 564.139m
H1 PAT 380.62m versus 326.089m +16.725%
H1 EPS 0.89 versus 0.30 +196.66%

The total take-home for the UK Inc represents more than half or 55.1
per cent of the entire Sh34.8 billion paid as dividends by the 15
NSE-listed firms with considerable British interest, according to
research @BD_Africa
http://www.businessdailyafrica.com/Corporate-News/British-firms-reap-Sh19bn-dividend-from-Kenya-units-/-/539550/2264760/-/88iiurz/-/index.html

Vodafone Group raked in a total of Sh7.3 billion in dividends and
M-Pesa royalty fees from listed telecommunications firm Safaricom in
the year to March 2013, topping the list of London-based conglomerates
that have been minting multi-million pounds from Kenya.

The British multinational telecommunications company is the largest
shareholder at Safaricom with a 40 per cent stake.

It earned Sh4.9 billion in dividends after Safaricom’s payout was
increased to Sh0.31 per share from Sh0.22 a piece in 2012.

Vodafone Sales and Services Ltd (VSSL) owns proprietary rights to the
M-Pesa platform and earns royalties accrued from the use of the mobile
money transfer solution.

The fee is calculated at the rate of 11 per cent of total M-Pesa
revenue, making the mobile innovation a cash cow for Vodafone Plc.
Vodafone pocketed Sh2.4 billion from the Sh21.8 billion revenue that
Safaricom generated from M-Pesa in the year to March 2013.

The dividend windfall season will also earn Standard Chartered Plc
Sh3.3 billion from the Kenyan unit, up from the Sh2.8 billion it made
in 2012.

The London-based bank owns 73.89 per cent of StanChart Kenya and is a
beneficiary of the lender’s increased dividend payout of Sh14.50 per
share in the year to December 2013 from Sh12.50 a year earlier.

Barclays Bank Plc will rake in Sh2.6 billion for the year ended
December 2013 from its Kenyan subsidiary.

The London Stock Exchange-listed lender is the majority owner of
Barclays Bank of Kenya with a 68.5 per cent stake.

Barclays Plc saw its dividend earnings from Nairobi drop by a third
from Sh3.7 billion in 2012 after the Kenyan unit recorded a dip in net
profit.

Barclays Kenya cut dividend payout by a third to Sh0.70 last year from
Sh1.00 in 2012 after the lender announced a 12.7 per cent drop in
full-year profit, weakened by high costs and a one-off staff
restructuring cost of Sh788 million.

British American Tobacco Plc earned Sh2.2 billion in dividends from
BAT Kenya where the multinational has a 60 per cent stake.

BAT Kenya’s policy of paying out 100 per cent of earnings as dividends
has been a boon to the LSE-listed cigarette maker which earned Sh1.9
billion in 2012.

The tobacco firm paid Sh37 per share dividend for the year ended
December 2013, which translates to a payout of Sh3.7 billion —
equivalent to total net profit — going by the company’s total issued
shares of 100 million.

London-headquartered spirits company Diageo is toasting to the
performance of East African Breweries Limited where it has earned
Sh2.1 billion in dividends for the year ended June 2013.

Diageo, the world’s largest producer of spirits, has a 50.03 per cent
stake in EABL and had gulped Sh3.4 billion in earnings from the Kenyan
subsidiary in 2012.

The Kenyan brewer cut its dividend pay to Sh5.50 per share last year
from the Sh8.75 paid out in 2012.

London-based private equity firm Helios EB Investors with a 24.45
stake in Equity Bank will reap the sixth-largest dividend haul from
Kenya’s stock market.

Helios’ take-home from Equity Bank is Sh1.3 billion for the year ended
December 2013 after the lender raised its pay-out by a fifth to
Sh1.50.

The UK-based PE fund in 2007 invested Sh11 billion to acquire a 24.99
stake in Equity Bank and became the largest shareholder in Kenya’s
second-most profitable bank.

Helios has earned a total of Sh4.7 billion in dividends since 2008,
underlining the attractive returns for foreign PE firms seeking a
piece of growth markets like Kenya.

The stake is now worth Sh28.7 billion, effectively meaning Helios’
investment has grown nearly three-fold in the last six years.

British investors have significant interest in five out of the seven
agricultural companies listed on the NSE, continuing the colonial
trend where UK firms owned large tracts of tea and coffee estates.

Williamson Tea, Kapchorua Tea, Kakuzi, Limuru Tea and Rea Vipingo have
British interests which saw their owners reap millions of shillings in
dividends last year.

The Williamson family of Britain has a 51.46 per cent majority stake
at Williamson Tea and a further 23.96 per cent shareholding in
Kapchorua Tea through their investment vehicle Ngong Tea Holdings.

The British family earned Sh40.7 million in dividends after both
Williamson Tea and Kapchorua Tea declared a Sh7.50 dividend per share
last year.

The investment is significant considering that Williamson Tea owns
5,274 acres of tea estate in the Rift Valley while Kapchorua holds
about 1,656 acres — valued at billions of shillings at current market
prices.

Conclusions

If one of your criteria is Dividend Payout then these companies
represent an optimal choice.

Kenya Shilling versus The Dollar Live ForexPros 86.35
http://j.mp/5jDOot

Nairobi All Share Bloomberg +5.298% 2014 [0.7586% off a Record High
from 26th March]
http://www.BLOOMBERG.COM/quote/NSEASI:IND

143.89 -0.49 -0.34%
144.99 is a Record High

Nairobi ^NSE20 Bloomberg +2.15% 2014
http://j.mp/ajuMHJ

4,945.78 -26.67 -0.54%

The Nairobi All Share edged 0.13 of a point loer to close at 143.76.
The All Share is +5.203% in 2014 and 0.84% below a record high from last month.

Equity Turnover of 501.73m was dominated by EABL which traded 54.62% of volume.
Kenya Orchards surged 53.33%.
CIC insurance set a lifetime high and is +42.0168% in 2014.
Kenya Airways surged 4%.

Kenya Orchards which has not traded for eternity reported FY 2013
Earnings where FY Profit before Tax expanded +27.57% to 966,022.00 but
reported a 886% expansion in FY Profit after Tax to 2.415340m versus
244,957.00 previously. Kenya Orchards received a Tax Credit of
1.449318m in 2013 versus a Tax charge of 512,244.00 in FY 2012, which
was entirely responsible for the PAT Acceleration. Kenya Orchards
rallied +53.33% to close at 4.60 and was trading at an Intra Day high
of 5.00 +66.67% at the Finish. Kenya Orchards is a Minnow at the
Exchange and at todays closing price has $ Market Cap of $687,203.00.
It might present an inexpensive Reverse Takeover Opportunity for
someone looking for a listing via an existing Vehicle.

Safaricom closed unchanged at 12.35 and traded 1.795m shares worth
22.180m. Safaricom is +13.82% in 2014 and within 1.59% of an All time
Record High set earlier this Year. It is entirely unlikely that
Safaricom will open M-Pesa [a condition precedent set by the CAK re
the Essar Purchase]. This is a personal View.

Kenya Airways surged 4%. Kenya Airways receives its 1st Dreamliner
imminently and I believe this will mark the moment when Investors
appreciate the Fleet modernisation program is properly underway.  This
will be a twin sided advantage via better fuel efficiency and lower
maintenance costs. Kenya airways has rallied sharply over the last 6
months and will head towards 14.5.

Kenya Commercial Bank closed unchanged at 46.00 and traded 595,400
shares. Kenya Commercial was Bid for Size at 46.00 and the price is
well underpinned here.
Equity Bank eased 0.79% to close at 31.50 and traded 708,100 shares.
Equity Bank is +2.43% in 2014.

CIC Insurance was the 2nd biggest Gainer at the Exchange and rallied
5.63% to close at 8.45 and traded 635,100 shares.
BRITAM EA traded 2nd at the Exchange and closed unchanged at 18.25
with 2.415m shares worth 44.073m. BRITAM EA is +20.46% in 2014 and
trades on a 13.036 Trailing PE Ratio after reporting a 12.274%
Acceleration in FY Profit before Tax.

EABL eased 0.74% to close at 267.00 and traded heavy volume of 880,900
shares worth 236.066m and some 54.62% of the volume traded at the
Exchange during todays session. EABL whilst -7.93% in 2014, has
rebounded 21.91% since closing at a 52 week low in February. The
Senator scenario is a Known Known and I expect EABL to head back to
290.00 and an unchanged Level for 2014.

I attended the ARM Cement Full Year Earnings Release yesterday at the
Capital Club. ARM Cement reported a 24% acceleration in FY Turnover to
14.179208b, a 12% acceleration in FY Profit before Tax and a 20%
increase in the Dividend Pay Out to 60 cents a share. ARM reported a
31% expansion in Cement Sales which now accounts for 86% of the
group's turnover.  There was some spread compression as the
Dar-Es-Salaam Plant manufactured cement using imported clinker. This
created some spread compression which is reversed when the Tanga
clinker plant becomes operational. ARM shaved off 0.555% to close at
89.50 and traded 121,300 shares. The share has exhibited a lot of
Alpha versus the Benchmark Indices over 1,2 and 5 years.