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Satchu's Rich Wrap-Up
Friday 25th of April 2014

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The New set of risks are Geopolitical risks

Macro Thoughts

Home Thoughts

With Security and Terrorism on my mind, I found an old copy of

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The Secret Agent Joseph Conrad

The novel deals broadly with the notions of anarchism, espionage, and
terrorism.[2] It portrays anarchist or revolutionary groups before
many of the social uprisings of the twentieth century. However, it
also deals with exploitation, particularly with regard to Verloc's
relationship with his brother-in-law Stevie.

Because of its terrorist theme, The Secret Agent was noted as "one of
the three works of literature most cited in the American media" around
two weeks after 11 September 2001.

“Wherever you are is the entry point”
― Kabir

“If you don't break your ropes while you're alive, do you think ghosts
will do it after?”
― Kabir

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Obama Affirms US Backing for Japan in any Conflict with China
Law & Politics

Obama declared: “The policy of the United States is clear—the Senkaku
islands are administered by Japan and therefore fall within the scope
of Article 5 of the US-Japan Treaty of Mutual Cooperation and
Security. And we oppose any unilateral attempts to undermine Japan’s
administration of these islands.”

While US officials have made similar statements previously, Obama’s
unequivocal backing for Japan in any war with China will only further
fuel the tense situation surrounding the islets, and harden Abe’s
refusal to even concede that a territorial dispute exists. At the same
time as he has deliberately stoked up a confrontation with Russia over
Ukraine, Obama is giving the green light to the right-wing Abe
government in Japan to take a more belligerent stance against China.

Obama’s comments to the Yomuiri Shimbun make clear that his “pivot to
Asia” is broadly targeted against China. While paying lip service to
“engagement with China,” he pointedly warned that “both our nations
have to resist the danger of slipping into conflict.” He also
reassured Tokyo that “our engagement with China does not and will not
come at the expense of Japan or any other ally.”

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02-DEC-2013 The Pivot to Asia bares its Fangs
Law & Politics

PRESIDENT Barack Obama’s pivot to Asia bared its fangs last week.

China had declared an Air Defense Identification Zone in an area that
included those rocky Islands which are called the Senkakus by the
Japanese and Diaoyu by the Chinese. The US responded to the
declaration of the ADIZ by flying 2 B-52s directly into it and that
message is kind of incontestable.

The US probably feels it holds a decisive hard power advantage at this
moment and given that the trajectory is one of gradual erosion of that
decisive advantage leads me to the view that this pivot to Asia has a
logic and momentum of its own. Therefore, I see the US being
increasingly determined to press its advantage.

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Ukraine crisis: Putin warns of 'consequences' after five pro-Russian militants are killed in Sloviansk
Law & Politics

The Russian President gave his warning during a televised meeting with
regional media on Thursday, where he said: "If the regime in Kiev has
begun using the army against the population inside the country, then
this is undoubtedly a very serious crime.''


I did not expect a twin pronged US Approach. i.e taking the Pivot to
Russia/Ukraine and China/Asia at the same time.

US Secretary of State John Kerry has accused Russia of "distraction,
deception and destabilisation" in eastern Ukraine.


No side is winning. Hopes of building a new country from scratch are
drowning in blood.


Aly-Khan Satchu0 mins ago
If there ever was a justification for the R2P Rule, this is it.
Aly-Khan Satchu

Prime ministerial candidate Narendra Modi prays in front of a
statue of former politician Madan Mohan Malviya during a rally in
Varanasi. (AFP photo)


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Currency Markets at a Glance WSJ
World Currencies

Euro 1.3832
Dollar Index 79.77
Japan Yen 102.36 Tokyo’s consumer prices rose 2.7 percent in April
from a year earlier, the biggest jump since 1992, pumped up by a
sales-tax increase and a year of unprecedented stimulus from the Bank
of Japan.
Swiss Franc 0.8818
Pound 1.6806 The pound rose 0.1 percent to $1.6805 after appreciating
to $1.6842 on April 17, the strongest level since November 2009
Aussie 0.9275
India Rupee 61.125 The currency fell 1.4 percent this week to 61.13
per dollar as of 9:56 a.m. in Mumbai, according to prices from local
banks compiled by Bloomberg. That’s the fourth straight weekly loss
for the rupee and the steepest since Jan. 24.
South Korea Won 1039.85
Brazil Real 2.2118
Egypt Pound 6.9956
South Africa Rand 10.6219

China’s Purchasing Managers’ Index for manufacturing was 48.3 in
April, compared with 48 in March, according to a preliminary reading
published by HSBC Holdings Plc and Markit Economics this week. A
figure below 50 signals a contraction.

Dollar Index 3 Month Chart INO 79.77 [needs to cross 80.50 to get going]


Euro versus the Dollar 3 Month Chart 1.3832 [Draghi is keeping a
lid on the Euro]


Mario Draghi said the European Central Bank might start broad-based
asset purchases if the inflation outlook worsens as he prepares the
ground for one of the most radical policies in the ECB’s history.

“The objective here would not be to defend the current stance, but
rather to increase meaningfully the degree of monetary accommodation,”
the ECB president said in a speech in Amsterdam today. “The Governing
Council is committed –- unanimously –- to using both unconventional
and conventional instruments to deal effectively with the risks of a
too-prolonged period of low inflation.”

Inflation in the 18-nation currency bloc slowed to 0.5 percent last
month, the weakest pace in more than four years and well below the
ECB’s goal of just under 2 percent. While that prompted Draghi to say
on April 3 that policy makers are willing to use unconventional
measures including asset purchases if needed, he also said the figure
was depressed by temporary factors such as lower energy and food
prices and the timing of Easter. This month’s data is due on April 30.

“While inflation will remain low for a prolonged period, we see it
gradually rising back to 2 percent,” Draghi said today. “The delay is
largely explained by the impairments in the transmission mechanism
that lengthen the lag between our accommodative policy stance and
price developments.”

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DEPT. OF AVIATION GAME OF THRONES How airlines woo the one per cent. BY DAVID OWEN
International Trade

On some of Singapore Airlines’ A380s, a couple travelling in first can
combine two “suites” to create an enclosed private room with a double
bed and sliding doors. On some flights on Emirates, first-class
passengers who make a mess of the treats in their personal minibar can
tidy up with a shower before they land.

The modern aircraft-seating industry is highly specialized. The number
of manufacturers is small, in part because creating new seats is so
complex that moving from conception to installation takes years and
entails large financial risks. It also poses unique design challenges,
since a premium-class seat has to create an impression of opulence in
what is actually a noisy and potentially nausea-inducing metal tube
filled with strangers. If you checked into a luxury hotel and were
taken to a room the size of a first-class airplane cabin, and told
that you’d be sharing it with eleven people you didn’t know, all of
whom would be sleeping within a few feet of your own skinny bed, you
wouldn’t be thrilled, especially if you were paying twenty thousand
dollars for the experience.

 Singapore’s attendants were made famous by the airline’s
early-seventies motto, “Singapore Girl, you’re a great way to fly,”
and they still wear batik sarong kebayas designed in 1968 by Pierre

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Commodity Markets at a Glance WSJ

Gold 1 Year Chart INO 1291.77 [I see a move towards 1250]


Crude Oil 1 Year Chart INO 101.98 [Toppy but not nose-bleed Territory]


Coffee futures surged about 92 percent this year as of April 23, the
most among the 24 raw materials in the S&P GSCI Spot Index.


Volatility on the futures for the beans surged to the highest since
2000 this week, according to Bloomberg-compiled data. Due to the price
swings, coffee futures are “a bad bad boy,” Citigroup’s Smith said.
The fluctuations are “more than what most people can handle,” he said.

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A view into the dining room at El Celler de Can Roca, which has broken as much gastronomic ground as Ferran Adrià's El Bulli.

'When Ferran stopped being so visible,' says Joan, 'it was our moment
to shine.' Photography by Nacho Alegre for WSJ. Magazine

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The IMF forecasts economic growth of 5.5 percent for sub-Saharan Africa this year, up from 4.9 percent last year.

That is slightly more optimistic than the World Bank, which projects
sub-Saharan Africa's output will grow 5.2 percent this year, partly
driven by rising household spending.

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Regional Economic Outlook Sub-Saharan Africa April 2014 @IMFNews

Economic growth in sub-Saharan Africa is projected to pick up from 4.9
percent in 2013 to about 51⁄2 percent this year.

This acceleration reflects improved prospects in a large number of
countries in the region, including most oil exporters and several
low-income countries and fragile states. Economic activity in the
region continues to be underpinned by large investments in
infrastructure and mining and maturing investments.

This solid near-term outlook is nonetheless subject to downside risks.
External factors pose by far the more potent threats to the region as
a whole, but domestic risks are more significant in some countries.

• Growth in emerging markets could prove less supportive. The high
growth that many countries in sub-Saharan Africa have enjoyed in
recent years has been supported by strong growth in the largest
emerging market economies. Should growth in these countries—and
particularly in China—slow much more than currently envisaged, the
implications for the region could be significant. Many countries in
the region would be certain to face lower export demand. The outlook
for some commodity prices—particularly, copper and iron ore—would
likely also be grim, with adverse implications for further mining
investment for these commodities. Beyond all this, tighter financial
conditions in China could also reduce the appetite of Chinese
companies for investing abroad.
• Tighter global financial conditions. The highly accommodative
monetary policies of advanced economies in the wake of the global
financial crisis have prompted high inflows of capital into the
region’s emerging and frontier markets in recent years. As these
policies are rolled back, the region faces less favorable financing
conditions and a slowdown, or even reversal, of private capital flows.
• Rising fiscal imbalances in some countries. In 2009-10, many
countries in sub-Saharan Africa used available fiscal space to counter
the impact of the global financial crisis on their econo- mies. But
four years after the crisis, fiscal policy in the region has remained
on an expansionary footing despite growth having reverted to precrisis
levels in most cases. Particularly vulnerable are those countries that
have relied heavily on portfolio inflows to finance their high fiscal
and/ or current account deficits.
• Security conditions remain difficult in some areas. The ongoing
conflicts in the Central African Republic and South Sudan are exacting
a heavy toll in those countries and threatening spill- over effects on
some neighboring countries. Other countries in the Sahel belt also
face terror threats, with adverse implications for stability and
pursuit of development objectives.

Particularly in countries with heightened reliance on portfolio flows
to finance elevated fiscal and external current account deficits,
there is need for policies focused on preserv- ing stability, if
progress toward long-term development objectives is not to be

lower emerging market growth would be certain to adversely impact
export demand and commodity prices, while disorderly market conditions
as unconventional monetary policies are unwound could trigger markedly
higher financing costs. Beyond these latent external headwinds, more
home-grown risks are also threatening growth prospects in several
countries in the region. In a few cases policy missteps, such as large
fiscal imbalances, threaten to undermine the hard-won macroeconomic
gains of recent years that have supported growth. More problematic
still, in a number of countries conflict is exacting a heavy toll,
most acutely so in the Central African Republic and South Sudan.
Against this background, the challenge for policy remains the steady
pursuit of development objectives while promptly addressing emerging
sources of macroeconomic vulnerability.

Growth is projected to accelerate to about 51⁄2 percent in 2014,
reflecting improved prospects in a large number of countries,
including most oil exporters and several low-income countries and
fragile states. In Nigeria, growth is expected to accelerate as
production picks up after recent supply disruptions have been
addressed. Elsewhere, growth accelerations are underpinned by
improvement in the domestic political and security situation (Mali),
large investments in infrastructure and mining (the Democratic
Republic of the Congo, Liberia), and maturing investments (Mozambique,
Niger). Economic activity in South Africa is also expected to improve
modestly, reflecting stronger demand in its advanced country trading

One-third of non-oil exports of the region now go to the BRICs
(Brazil, Russia, India, China), compared with less than 10 percent a
decade ago. Apart from the direct demand channel, growth in the BRICs,
notably China, has fueled growth in sub-Saharan Africa through high
commodity prices and investment inflows.

In addition, important home-grown risks arise from fiscal
vulnerabilities in a number of countries such as Ghana and Zambia, and
from possible spillovers associated with increased political
instability and a worsening security situation in the Central African
Republic and South Sudan.

The main downside risk to this generally positive baseline scenario is
the risk that growth in emerging markets might slow much more abruptly
than currently envisaged.

Countries in the region that were affected the most in the May 2013
and January 2014 emerging market turmoil were those with large
imbalances (Ghana, Zambia) and/or other sources of domestic policy
uncertainty (Nigeria, South Africa).

 A major contribution to growth derived from buoyant public and
private investment in mining activities, infrastructure for transport
and communication, and energy production.1 These investments were
accompanied by a general expansion in trade, communications, and other
services, and several countries benefited also from improved
agricultural production. External demand provided a relatively weaker
contribution to growth in the region

Compared with the levels observed in 2013, iron ore and coal will have
the largest downward adjustments, whereas cocoa and coffee prices will
be higher (Figures 1.3 and 1.4).

Sovereign spreads and market interest rates rose (Figure 1.8), with
the largest increases in Ghana and Zambia reflecting fiscal
sustainability concerns of their own; but stock market valua- tions
continued to increase in various countries (Ghana, Kenya, Rwanda,
Zambia, the West African Economic and Monetary Union). International
credit agencies downgraded the ratings of Ghana, Zambia, and, lately,
Uganda, but the outlook for Rwanda was revised to positive, and
Senegal was revised to stable.

Volatility was more pronounced in countries that had weak fiscal and
external positions, suggesting investors discriminated depending on
the soundness of policies and other fundamentals. Compared with
emerging markets outside of the region, sub- Saharan Africa’s emerging
and frontier markets that showed higher fiscal and current account
deficits were generally more affected (Figure 1.9). The South African
rand fell about 13 percent against the U.S. dollar between May 2013
and June 2013 and maintained a downward trend in the context of
persistent economic slack and current account deficits, and lackluster
growth prospects. The Ghanaian cedi fell by about 15 percent during
2013 (and more rapidly after May), in line with concerns about low
external reserves and the slower-than- expected fiscal adjustment.
Fiscal concerns were also reflected in the depreciation of the Zambian
kwacha (7 percent); the Rwandan franc depreciated by about 7 percent
in the face of a current account deficit of about 7 percent of GDP. In
Nigeria, the authorities were able to defend the naira by using
reserves accumulated earlier, although the naira came under pressure
in February 2014 because of policy uncertainty. Currencies weakened
again in January 2014, following a renewed bout of volatility in
global financial markets.

The largest reductions in government expenditure-to- GDP ratios have
taken place in Chad among oil exporters; Botswana among middle-income
coun- tries; Sierra Leone in the low-income group;10 and Burundi and
São Tomé and Príncipe among fragile nations.

In contrast, primary spending has increased in the other 27 countries.
In most cases, this reflects higher capital expenditure, particularly
among oil exporters (except Equatorial Guinea and Chad to a lesser
extent). However, compensation of employees has increased notably in
some countries, in many cases exceeding capital expenditure growth
(Malawi, Mozambique, Namibia). In other countries (Madagascar, Malawi,
Namibia, Zimbabwe), capital expenditure has in fact declined. Finally,
other primary expenditures also rose rapidly in a number of countries,
especially oil exporters and some middle-income countries (Namibia,
Swaziland).12 Worth noting is that revenue-to-GDP ratios increased in
about half of the countries in sub-Saharan Africa in 2010–13.

Countries that have depended on favorable international capital flows
to finance expanded fiscal and/or current account deficits, such as
Ghana and Zambia, are particularly vulnerable to the changing
international environment. In Ghana, the increase in primary spending
in 2010–13 resulted primarily from a rise in the payroll as a result
of a new salary structure, as well as higher capital spending (Figure
1.17).13 Similarly, in Zambia, a significant loosening of fiscal
policy took place in 2010–13, mainly as a result of overspending on
recurrent items, primarily subsidies and wages, the latter of which
rose by about 45 percent in 2013 (Figure 1.17). This has resulted in
lower credit ratings by international agencies, and may have
significant adverse implications for these countries’ debt

Growth in sub-Saharan Africa is projected to accelerate further, to
about 5 1⁄2 percent in 2014 and 2015

The average current account deficit for the region widened from 2.6
percent  of GDP in 2012 to 3.5 percent of GDP in 2013.

Home-grown risks are increasing...
1. Fiscal vulnerabilities have increased in a number of countries,
notably in Ghana and Zambia.
2. Deteriorating security situation. The sharp increase in political
instability and the deterio- rating security situation in the Central
African Republic and South Sudan are causes for concern.
3. Softening growth in emerging markets. This risk is particularly
important for natural- resource exporters (including South Africa),
which could suffer from weakening commodity prices and slowing demand,
especially for low- value commodities.
4. Monetary normalization and eventual tightening in the United States
and other advanced economies. The reversal of capital flows as a
result of tightening global monetary conditions is a source of
downside risks for the region, especially for frontier market
countries with weak fundamentals.

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South Africa All Share Bloomberg +7.28% 2014

South Africa's headline producer inflation accelerated to 8.2 percent
year-on-year in March.

The Reserve Bank warned that the country’s current account deficit,
while shrinking, presents a marked risk to the stability of the
country's financial system.

Dollar versus Rand 3 Month Chart INO 10.625


Egypt Pound versus The Dollar 3 Month Chart INO 6.9957


Egypt EGX30 Bloomberg +23.56% in 2014 Africa's Best in 2014


8,294.88 25.86 0.31%

Nigeria All Share Bloomberg -3.16% 2014 [+5.049% since 19th March]


The Nigerian Stock Exchange All-Share (NGSEINDX) Index has gained 5.1
percent since sinking 10 percent in the first 11 weeks of the year,
part of the worst quarterly drop since 2011. The Nigerian gauge is
trading at 11 times future earnings, compared with 15 for South
Africa’s FTSE/JSE Africa All-Share Index (JALSH) and Ghana’s equities
benchmark and 12 times for the Nairobi Securities Exchange All-Share
Index. Nigerian stocks are trading at their biggest discount to their
Kenyan peers in a month after falling to the cheapest levels in almost
14 months against South African securities on March 31.

The naira gained 0.3 percent to 161.07 per dollar by 5 p.m. in Lagos
yesterday, paring losses this year to 0.5 percent.

Goldman Sachs Group Inc. doubts the central bank can keep warding off
a devaluation. The “fast dwindling of foreign-exchange reserves” shows
that “the question is no longer whether the naira will devalue but,
instead, when and by how much,” JF Ruhashyankiko and Mark Ozerov,
analysts at Goldman Sachs, said in a note on April 9. They see the
currency at 195 against the greenback in the next 12 months.

Ghana Stock Exchange Composite Index Bloomberg +6.59% 2014 [has fallen
6.172% since Feb 14th record high]


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The open question is whether, Ghana is in the cockpit or whether the markets will simply elbow the Government aside 24-MAR-2014

Ghana’s Eurobond has a 9 per cent handle and sentiment has soured so
much, it is entirely feasible that Ghana might print a double digit
yield. Ghana is a near perfect harbinger of what can go wrong when you
front load your recurrent expenditure in the expectation that revenues
are a rising tide. The open question is whether, Ghana is in the
cockpit or whether the markets will simply elbow the Government aside.

I met Mr. Francesco Confuorti a while back in Nairobi and he is a very
mercurial Fellow as you will gather from his answers to my Questions.
Mr. Confuorti's Advantage Financial is hosting a conference in Milan
May 12th. Details are on the Front Page of http://www.rich.co.ke

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Mr. Francesco Confuorti

Francesco Confuorti President and CEO of Advantage Financial,
President and CEO of Advantage GFC, President of GFC Advisers,
Chairman of Advantage SICAV.
He started his career on Wall Street working for E.F. Hutton & Co.
Francesco Confuorti became Director of the International Dept. of
Oppenheimer & Co., and CEO and Director of Oppenheimer Italy.
He founded and held the position of President of Banca Advantage
Investments & Gestioni in Milan. In 1993, he founded Advantage in New
York, which has also operated in Luxembourg since 1996.

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From Questions for Confuorti

1.      Mr. Confuorti, can you please first introduce your organization and
yourself to us?

Advantage Financial is an independent investment company set up by a
group of bankers with lengthy experience within financial markets. We
service institutions, corporations and private clients, providing
comprehensive solutions that span asset and risk management,
consultancy, trading and investment banking.
Advantage Financial was founded to bring to the European markets an
idea previously developed in 1993 on Wall Street by Advantage GFC,
when a group of bankers decided to offer their professionalism,
enthusiasm, market know-how and new methods to clients in corporate,
institutional and private banking.
I am used to saying that Advantage Financial is founded on two key
pillars, Minds at Work and Knowledge of Choices, because the world
changes and so does our ability to compete. Minds at Work involves
building customized strategies with clear objectives for the
customers. Knowledge of Choices means to intervene with nimble and
efficient solutions to create value over time.

2.      Your business spans continents. What is informing the move to
Africa and East Africa in particular?

Advantage Financial provides a full range of integrated services for
businesses working in international markets, from the identification
of target foreign areas and markets, to the definition of entry
strategies, to the involvement of the entire business organization in
conducting the operating activities associated with
Africa, and East Africa in particular, is the fastest-growing economy
of the 2010-2020 decade and is undergoing a major industrial
revolution. Of the 11 fastest-growing economies of the decade 10 are
predicted to be in Africa, and seven of them are in East Africa.

3.      Tell us about your conference in May in Milan? The Roster of Guests?

Global Perspectives is the annual event on international economics and
finance held by Advantage Financial in Milan, with international
keynote speakers including economists, professionals and civil
servants. The forum is now in its sixth edition and it will include 3
panels. The first panel addresses the global economics outlook with a
special focus on the USA and the Eurozone. The second and the third
panel will focus on the North and East Africa economic outlook and the
international commerce and trade perspectives, opportunities and
challenges in the region. Speakers include international economists as
Charles Calomiris, author of the best-seller “Fragile by Design” as
well as representatives of the African Development Bank, FMI, and
political and financial institutions of Kenya, Egypt and Lebanon.
Henry Rotich and Davis Chirchir, respectively Treasury Cabinet
Secretary and Energy Cabinet Secretary of Kenya, will attend the
forum, as well as Peter Mwangi (Nairobi Securities Exchange), Carole
Kariuki (KEPSA) and Mohammed Kamel Amr, former Minister of Foreign
Affairs of Egypt.

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A car exploded outside the Pangani police station in Kenya's capital Nairobi on April 23, 2014, killing four people. TIME
Kenyan Economy

The two officers stopped a car for a traffic violation and escorted
the vehicle to a police station in the Pangani district of Nairobi
where it exploded, killing the two occupants and the police officers.

“I mourn the loss of the the two gallant officers who’ve died in their
line of duty as they were defending and protecting our beloved
country,” David Kimayo, the Inspector General of Kenya’s national
police, wrote on his Twitter account.

He stressed that the vehicle could have caused “huge damage” had it
exploded somewhere else.

Kimayo suggested that terrorists were responsible and said “I fully
declare war” on terrorism.

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Kenya's Worst Enemy Nairobi's Losing Battle Against Militant Islam Foreign Affairs Subscriber
Kenyan Economy

Over the past several months, the Somali military, in cooperation with
local, regional, and international forces, has managed to put the
Islamist militant group al Shabaab on the run. Nearly every week,
there is a new report of another Somali town winning its liberation.
Officials in Mogadishu have aimed to completely annihilate the group,
and they predict that soon the al Qaeda –affiliated organization will
no longer have any significant presence in their country.

But if al Shabaab is losing its foothold in Somalia, it is working
assiduously to gain another one next door. Kenya is on its way to
becoming the world’s next hotbed of extremism as a result of al
Shabaab’s active and growing presence there. And so far, the Kenyan
government has been its own worst enemy in attempting to reverse this

Al Shabaab’s membership is still primarily Somali, but the group has
long wanted to export its ideology to Kenya and establish a physical
presence there because of the country's geographic proximity and
growing susceptibility of its Muslim population to radical thought.
Since 2012, al Shabaab militants have been aggressively producing
propaganda videos, social media campaigns, and slick e-magazines in
English and Swahili, Kenya’s primary languages. Al Shabaab is also
using its social media expertise to win new sympathizers; militants
present their own hardships in Somalia as analogous to the plight of
marginalized Muslims in Kenya.

The strategy seems to be working. Hundreds, if not thousands, of
Kenyans have been recruited by al Shabaab over the years. The group's
efforts have taken on a greater sense of urgency since its operational
space in Somalia has been shrinking. Sectarian and terrorist incidents
in Kenya are now on the rise. Attacks on Christians are commonplace,
and disquieting incidents, such as a thwarted car bomb plot in Mombasa
in March, are likely precursors of far worse things to come.

Kenyan government's policies and actions have clearly aided al
Shabaab’s recruitment efforts. Muslims make up only around ten percent
of Kenya’s population, and the group has a legitimate reason to feel
disenfranchised. For years, Kenyan authorities have used ethnic
Somalis as a scapegoat, blaming them for virtually any
terrorism-related incident or unsolved crime. Earlier this month, for
instance, in response to a spate of terrorism incidents in Nairobi,
Kenyan forces indiscriminately arrested an estimated 4,000 Muslims,
mostly ethnic Somalis. This type of finger-pointing has seeped into
Kenya’s public consciousness; it has been a core reason for the
country’s endemic ethnic profiling, and fuel for many violent riots
against the embattled group.

The Kenyan police have earned a reputation for corruption,
incompetence, and brutality, in particular against Muslims. This has
created fertile ground for further appeals from radical Islamists to
ethnic Kenyans. In the coastal city of Mombasa, for instance, which
has become the epicenter of Kenya’s home-grown radicalization problem,
the police have a reputation for throwing due process out when it
suits them. Over the last year and a half, a number of firebrand
Islamic clerics have been gunned down in high-profile drive-by
shootings, but the police have never conducted serious investigations
into the incidents. That has led many Muslims to assume that the
police either tacitly approved or covertly supported the killings.
Ever since, violent protests against security forces have shaken
Mombasa. Things got much worse this February when officers stormed the
city’s restive Mussa mosque, citing evidence that a “jihad convention”
was underway. Hundreds of worshippers, several of whom were under the
age of 12, were dragged into the streets, beaten with batons in full
view of the public, and hauled away to prison. Not surprisingly,
protests erupted once again. This dynamic has played right into the
hands of al Shabaab.

Militants have also taken advantage of the central government’s
inability to control its border with Somalia. A Kenyan parliamentary
report released in January went so far as to say that al Shabaab had
overtaken the northeastern border town of Mandera, with security
forces essentially ceding control of the area to the militant group.
According to a National Intelligence Service report leaked last
October, al Shabaab also controls two-thirds of Garissa County, which
the group’s top operatives have declared as their preferred base of
operations. This has proved to be a strategic location; it has allowed
al Shabaab to target the half million Somali refugees sandwiched
between Garissa and the Somalia border as potential recruits. These
refugees, who fled Somalia’s civil war, have been languishing in a
state of perpetual uncertainty in dismal refugee campus for years or
even decades.

The Kenyan government’s hard-line response to these recruitment
efforts has proved self-defeating. The refugees had previously been
permitted to work in neighboring towns, but on March 25, following a
series of sectarian attacks attributed to al Shabaab sympathizers,
Kenya’s interior ministry demanded that all refugees stay permanently
in the camps and threatened to force the Somalis back to their
homeland. It is common knowledge that some Somali refugees do
sympathize with al Shabaab, but the experience of being scapegoated by
the Kenyan government has won even more converts to the cause. Al
Shabaab has been able to depict the government as eager to inflict
more suffering on the already disadvantaged.

Al Shabaab is slowly creating a lawless border region in Kenya, akin
to the Taliban-held land in Pakistan. Regional and international
officials are clearly worried. On March 24, UN envoy to Somalia
Nicholas Kay warned that al Shabaab may be looking to move to Kenya as
a result of the AMISOM offensive. One day later, Kenyan President
Uhuru Kenyatta formally asked Washington for help in monitoring and
securing its border with Somalia, and U.S. ambassador to Kenya Robert
Godec confirmed the indefinite deployment of FBI agents to Kenya to
assist in terrorism-related matters.

The Kenyan government, unlike its Pakistani counterpart, does not
support the militants, nor does it have any interest in their
survival. In this case, the creation of an extremist safe haven will
depend largely on the degree of support from local populations. And
since Nairobi seems bent on pursuing short-sighted policies that push
its Muslim citizenry into the arms of the extremists, that possibility
is turning into a reality.

Although it might be necessary for Kenya to use force against the most
extreme elements of these groups, recent history testifies that force
alone does not convince or compel radicalized individuals to abandon
violence. Absent a fair and conciliatory political environment, the
disadvantaged will remain susceptible to extremist ideologies, and
radicals will remain a permanent fixture in the region, growing ever
more separated from the idea of borders and national identity.

PAUL HIDALGO is an analyst of politics and extremism in the Horn of Africa.


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#Westgate from @CNBCAfrica #Nairobi Bureau on the 19th Floor
Kenyan Economy

"The car was stopped at a checkpoint. The policemen had suspicions
about the car, so they decided to take the suspects to the police
station. They got into the car with them, another patrol car followed
them. That's when they arrived at the police station that they blew
the car," said Mwenda Njoka, an interior ministry official.


This comment by the leader of Nigeria’s Boko Haram Islamists Abubakar
Shekau caught my attention


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Ecobank records 238pc profit jump after capital boost
Kenyan Economy

The bank’s after-tax profit hit Sh27 million, up from Sh8 million in
the same period last year.

“We have significantly grown our balance sheet, revenues and branch
network and it is only rational that we ratchet up our human resource
capacity in readiness for growth,” said Mr Ehouman Kassi, Ecobank
Kenya managing director.

Ecobank Group injected Sh2.1 billion ($25 million) as additional
capital into Ecobank Kenya in June 2013 to accelerate growth.

The bank has been on an expansion strategy and has increased its
branch network to 29 in Kenya.

Mr Kassi said the expansion could see an additional 21 new branches.

Ecobank Kenya recently acquired Iroko Securities, giving it a foothold
in investment banking.

Kenya Shilling versus The Dollar Live ForexPros 86.852 last


Nairobi All Share Bloomberg +9.732% 2014 and at a Record High


149.95 +1.49 +1.00%

Nairobi ^NSE20 Bloomberg -0.06% 2014


4,923.71 +19.05 +0.39%

Every Listed Share can be interrogated here


Kenya Orchards is the best performing stock at the Securities Exchange in 2014

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Kenya Orchards share price data +120.00% in 2014
Kenyan Economy

Market Capitalization 85,140,000 [just under $1m]

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Home Afrika reports FY 2013 Earnings per share -28.571% Earnings here
Kenyan Economy

Par Value:
Closing Price:           4.55
Total Shares Issued:          405255320.00
Market Capitalization:        1,843,911,706
EPS:             0.05
PE:                 0.000

FY Earnings through 31st December 2013 versus through 31st December 2012
FY Revenue 650.577657m versus 348.586170m
Cost of Sales [261.692754m] versus [246.660053m]
Gross Profit 388.884903m versus 101.926117m
Other Operating Income 107.565148m versus 363.648963m
Selling and Distribution [63.784282m] versus [45.038163m]
FY Admin Expenses [212.222659m] versus [107.716190m]
FY Operating Profit 193.338309m versus 292.561017m
FY Profit before Tax 183.464609m versus 234.559043m
FY PAT 80.629957m versus 108.110361m
FY EPS 0.05 versus 0.07
No Dividend
Fair Value Gains on investment property during 2013 amounted to 100.8m
versus 358.6m in 2012

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N.S.E Today

Africa Equity indices have been in a broad based Up Swing in April
with the Nigeria All Share +5.049% since the middle of March, South
Africa's All Share has been setting All Time Highs, Egypt is the best
performing Africa Index in 2014 and +23.56%.
Interestingly and in line with the IMF's latest Sub Saharan African
Outlook issued yesterday at the Serena Nairobi, Ghana has been
swimming against the rising tide as is -6.172% over the last 8 weeks.
The IMF characterised Ghana and Zambia as ''particularly vulnerable to
the changing international environment''
Investors are differentiating within SSA to a degree they were not in 2012/2013.
The IMF also flagged ''security'' as a concern and both Nigeria and
Kenya have seemingly hurdled ''security'' issues [Boko Haram and Al
Shebaab] to push higher.
The Nairobi All Share firmed 0.34% to set a record All Time High of 150.46.
The All Share has rallied sharply in April and is +10.106% in 2014.
The Nairobi NSE20 Index which has been lagging the All Share by more
than 900 basis points rallied 33.07 to close at 4956.78.
Equity Turnover was real brisk and topped a Billion shillings at 1.205b.
The Big Caps like Safaricom +20.27% in 2014, EABL +11.32% in April,
the Banks COOP and CFC Stanbic at records, KCB within 0.5% of a
record, Equity Bank +14.173% in April and the Insurance Segment have
been hard charging in 2014.

N.S.E Equities - Agricultural

Eaagads rallied 6.603% to close at 28.25 and traded 21,100 shares.
Eaagads whilst +18.947% in 2014 has lagged a 92% Rally in Coffee
Futures over the same period and is set to play some catch up.
Williamson Tea rallied 8.98% to close at 279.00 and was overdue a
bounce as it had gotten oversold on odd lots.

N.S.E Equities - Commercial & Services

Safaricom had closed at a record All Time High of 13.20 on 4 out of
the last 8 Trading sessions. Today it shaved off 1.14% to close at
13.05 and traded muscular volume of 28.500m shares worth 373.203m.
Safaricom traded 30.945% of a high octane session at the Bourse.
Corrections such as todays will be shallow and short lived ahead of a
move to my Price Target of 13.50 ahead of the Release of the Full Year
Earnings. Safaricom is +20.27% and has been a Key Precipitator of the
All Share's surge to record Highs in April and in 2014.

TPS Serena rebounded 3.846% to close at 40.50 and traded 15,200
shares. This is an egregious Price and TPS Serena is trading at a
meaningful discount to NAV, which is unjustified.

Marshalls was the biggest loser at the Exchange retreating 9.5% to
close at 9.05. Marshalls has retreated 24.58% in 2014.

N.S.E Equities - Finance & Investment

COOP Bank rallied 2.247% to close at 22.75 and set a Fresh All Time
High as it has done each session this week. COOP Bank traded 3.085m
shares. COOP Bank is +28.16% this year.
Kenya Commercial Bank firmed 1.02% to close at 49.75 and traded 2nd at
the Exchange with 3.602m shares worth 179.297m changing hands. Kenya
Commercial Bank has rallied +7.567% in 2014 and in a very linear
fashion and now sits 0.5% below a record closing High of 50.00 set
last year. It is predictable and predicted that it will slice through
50.00 and set fresh all time highs as early as next week.
Equity Bank rallied a further 2.112% to close at 36.25 and was trading
at session highs of 36.75 +3.52% at the Finale. Equity Bank traded
2.497m shares worth 90.973m and there were Buyers were twice the
volume traded during the session, at the Closing Bell. Equity Bank has
surged 14.173% in April and bold moves in the Telecom Space and better
than estimated Q1 Earnings drove the acceleration higher seen this
week. Equity Bank is +17.188% in 2014.
CFC Stanbic rallied +4.201% to close at a more than 60 month High of
124.00 and traded 115,900 shares. CFC Stanbic is +42.52% in 2014.
Standard Chartered 2.922% to close at 317.00 and was trading at
session highs of 320.00 +3.9% at the Finish. Standard Chartered traded
significantly above the moving average volume of 179,100 shares worth
Diamond Trust Bank ticked 0.43% lower to close at 230.00 and traded
101,500 shares. DTB is +19.79% in 2014 and conducting a lite-sized 1
for 10 held Rights Issue.

Kenya Re eased 1.21% to close at 20.25 on good volume of 2.744m shares
worth 56.228m. Kenya Re is +30.645% in 2014 and the Earnings Release
is imminent.
CIC Insurance ticked 0.51% firmer to close at 9.75. CIC Insurance has
ramped 63.86% higher in 2014.
Liberty Kenya rallied 3.78% to close at 19.20 and traded 119,400
shares. Liberty Kenya is +27.57% in 2014.

Centum rallied 2.614% to close at 39.25 and traded 526,900 shares.
Centum is +18.939% in 2014 and that follows a triple

N.S.E Equities - Industrial & Allied

EABL eased 1.01% to close at 293.00 and traded 462,900 shares worth
135.771m. EABL has now rallied +11.32% in April in what was a real
muscular bull move. The Weak Longs got flushed out on the 18th of
February 2014 when EABL closed at a 52 week Low. EABL has rallied
+33.78% since the 18th of February.

KenolKobil has seen a big uptick in trading this week and today was no
exception. KenolKobil closed unchanged at 8.95 and traded 5.075m
shares worth 45.491m.
Total Kenya rallied 3.092% to close at 25.00.

Mumias Sugar rebounded +3.22% to close at 3.20 and traded 2.262m
shares with 38 Buyers for every 12 Sellers at the close.

by Aly Khan Satchu (www.rich.co.ke)
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April 2014

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