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Tuesday 01st of July 2014

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Macro Thoughts

Home Thoughts

Out Of Africa Karen Blixen



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.

read more


''This place is a dream.
Only a sleeper considers it real.

Then death comes like dawn,
and you wake up laughing
at what you thought was your grief.

A man goes to sleep in the town
where he has always lived, and he dreams he's living
in another town.

In the dream, he doesn't remember
the town he's sleeping in his bed in. He believes
the reality of the dream town.

The world is that kind of sleep.

The dust of many crumbled cities
settles over us like a forgetful doze,
but we are older than those cities.

We began
as a mineral. We emerged into plant life
and into animal state, and then into being human,
and always we have forgotten our former states,
except in early spring when we slightly recall
being green again.
That's how a young person turns
toward a teacher. That's how a baby leans
toward the breast, without knowing the secret
of its desire, yet turning instinctively.

Humankind is being led along an evolving course,
through this migration of intelligences,
and though we seem to be sleeping,
there is an inner wakefulness
that directs the dream,

and that will eventually startle us back
to the truth of who we are."
-- Rumi, The Essential Rumi

read more

30-JUN-2014 Tourism's contribution to Kenya cannot be ignored

The President not too long ago said; "Tourism has been greatly
affected by these terror activities. The industry which contributes 10
per cent to the GDP is virtually on its knees."

Tourism is our third biggest source of foreign exchange after inward
remittances and agriculture and earned $1.02 billion last year or
about 12 per cent of gross domestic product. Mike Macharia, the CEO of
the Kenya Association of Hotels and Caterers has estimated that
tourism gives direct employment to half a million Kenyans and supports
ten times that number, if family members and indirect employment are
taken into account.

A tsunami of travel advisories after a string of attacks culminating
in the Mpeketoni incident have simply cra- tered coastal tourism. It
is clear that the government is unhappy with the advisories and this
is seen in a report carried in the Telegraph last week where it was
alleged that;

''Sources said Nairobi was delaying clearance for troops from second
Battalion, The Parachute Regiment, to fly into the country, in what
diplo- mats believe is a rebuke for Britain tightening travel advice
to the East African nation.''

Regarding our reaction to travel advisories, I think we need to stop
reacting as if its all a conspiracy. Its patently not. These countries
all have a duty of care towards their citizens and you can just
imagine how countries are going to react if their citizens get caught
up in the crossfire in the current circum- stances. Heads will roll so
fast its not even funny.

We exist in a 24-hour always on world and silly comments that a
million Chinese tourists are set to come to our rescue are just that;
silly. Inward Chinese tourists are less than 40,000 annually and just
like the buyers of our Eurobond where China did not feature versus a
66 per cent uplift from North America, we need to deal with the
situation as we find it. The longer we fail to deal with the situation
as it is, the deeper the crater will turn out to be.

Interestingly, when the Mpeketoni occurred, there was a lot of debate
on social media about the fact that Mpeketoni was not Lamu and how
tourists should recognise that lack of proximity. These comments might
make us feel better momentarily but to any- one making a decision
about where they will take their holiday, proximity is irrelevant, the
point is Mpeketoni is in Kenya. We need to get real and real quick.

The World Bank's senior economist for Kenya got real last week, when
they downshifted their GDP projec- tions for Kenya to 4.7 per cent
from 5.3 per cent previously and cited the ''spate of terrorist
attacks in Kenya is affecting both tourism revenues and investment.''

The situation is perilous and its unlikely to recover this year or
next. This week I attended the book launch of ''Wings of Kenya'' a
photographic book about birds by Lorenzo Barelli, His Excellency
Jacques Pitteloud and Samuel Mugo.

The book launch was advertised as a ''New Travel Advisory! Come to
Kenya for Birding!''

Over the weekend I attended the 15th annual Safaricom Marathon which
is organised by Tusk Trust and supported by Safaricom and is held in
Lewa Downs. The fundraising event hosted more than 1,000 runners and
the marathon has developed into one of the country's major sporting
events with a reputation for being one of the ten 'must do' marathons
in the world. The impact of the event has been huge and since its
inception the event has raised over $4.2 million. Both our birds and
the Lewa Marathon are hugely successful niche tourism events which
resonate globally.

In these trying times, we need to leverage these type of attractions
because it is these which are able to hurdle the interference and
noise. The commoditised part of our tourism industry will naturally
race to the bottom. It always does in these type of circumstances. The
niche component of our tourism is where the juice is and has enormous
summoning power.

read more

The United States has increased its military presence in Iraq, ordering 300 more troops to Iraq, the Pentagon announced Monday @CNN
Law & Politics

The new troops, 200 of whom arrived Sunday and Monday, will provide
security for the U.S. Embassy, the Baghdad airport and other
facilities in Iraq, Pentagon spokesman Rear Adm. John Kirby said.

The deployment includes "a detachment of helicopters and unmanned
aerial vehicles, which will bolster airfield and travel route
security," Kirby said in a written statement.

The airport is in western Baghdad about 12 miles (20 kilometers) by
helicopter from the embassy in the capital's fortified Green Zone.

The 300 troops are in addition to 300 U.S. advisers who will help
train Iraq's security forces. They will bring the total of American
forces in Iraq to about 800 troops.

read more

No Good Iraq Options for Obama as Russia, Iran Jump In
Law & Politics

As Russia and Iran step in to bolster the government in Baghdad, U.S.
President Barack Obama has no good options to help defeat the al-Qaeda
splinter group that's proclaimed an Islamic caliphate in Iraq and

The White House has offered limited military assistance to Shiite
Prime Minister Nouri al-Maliki and is pushing for a coalition
government to unite Iraqis as Sunni fighters from the Islamic State in
Iraq and the Levant and their allies pose what Secretary of State John
Kerry calls "an existential threat" to Iraq.

While it's in the U.S. interest to prevent one of the largest Arab
states -- the second-biggest crude oil producer in OPEC that's
bordered by Syria and Iran -- from falling into the hands of the Sunni
militants, it's not clear what Obama can do to vanquish a militant
group that may control 10,000 fighters and $2 billion in assets.

Iran has deployed hundreds of troops from its elite Islamic
Revolutionary Guard Corps to reinforce its Shiite ally, and Russia
last week delivered the first Sukhoi fighter jet to Maliki the day
after vowing that it won't stand by while Iraq collapses.

Last week, the Pentagon delivered 100 new laser-guided Hellfire
missiles to Iraq, part of a batch of 500 announced in January. Other
pending U.S. arms sales include F-16 jet fighters and AH-64 Apache
attack helicopters.

 it's instructive to recall that 165,000 well-trained U.S. forces
supported by snipers, heavy bombers and everything in between, and by
coalition forces and hundreds of thousands of Iraqi troops and police,
had to fight hard to defeat ISIL's predecessor, al-Qaeda in Iraq,
during the 2007 surge of more than 20,000 additional U.S. forces in

A single U.S. battalion combat team dropped well over 500,000 pounds
of bombs one morning during an offensive south of Baghdad, the former
commander said, and if ISIL and its partners become as entrenched as
AQI and its associates were by 2007, much more than air power will be

"The government and Iraqi forces are in no position to retake
territory," said the Rand Corp.'s Robinson. "The most the government
can really do right now is hold the line."

read more

"Listen to your caliph and obey him. Support your state, which grows every day,'' Mr Adnani said.
Law & Politics

The Islamic State of its new caliph, Abu Bakr al-Baghdadi, has many
enemies but it will not go down easily

read more

In addition ISIS [now IS] also controls the PR wars Asia Times
Law & Politics

Here we have trademark Empire of Chaos "revenge" against Baghdad,
Tehran and - why not - Moscow (after all Russian president Vladimir
Putin offered full support to al-Maliki to fight the jihadis.) Iraq
duly merges with Ukraine. And as for payback redux, it's - almost -
all spelled out

Because from Northern Africa and across the Middle East to the
Caucasus and all the way to Western China, the name of the (burning)
game is to keep Dr Zbig Brzezinski's "Eurasian Balkans" ever simmering
in a funeral pyre

This grim tapestry of conflict signals a revival of great power
rivalry and interstate conflict that existing multilateral bodies like
@UN are profoundly ill-equipped to manage


Musil and meta-Musil: The inevitable World War I By Spengler


The West wasn't pregnant in August 1914, only constipated.

Rather than give birth to the future, it emptied its bowels of rancor.
No disaster in world history was more predictable or longer in
preparation. Robert Musil's great novel The Man Without Qualities
depicts Vienna's elite in the months before the war, pursuing petty
concerns unaware that their world was about to disappear. It is the
great European anti-novel because its self-referential premise - the
protagonists do not know what every reader knows - forbids an ending.
There are no right choices because nothing can prevent this bubble of
a world from popping. After Musil - meta-Musil, so to speak - comes
the great evacuation. The novel is considered a masterpiece in the
German-speaking world. Few Americans know it, and fewer of these can
make sense of it.

As the hundredth anniversary of World War I approaches, we will hear
endless variations on a lament for Western Civilization. All of them
go more or less as follows: At the height of its prosperity,
scientific discovery, and artistic achievement the nations of Europe
inexplicably plunged into a mutual slaughter that prepared the ground
for the greater slaughter of 1939-1945. That is simply wrong. Europe
had done this sort of thing twice before, first in the Thirty Years
War of 1618-1648 and again in the Napoleonic Wars of 1797-1814.

"Much has been saved," wrote one soldier of the Great War, J R R
Tolkien, but "much must now pass away." Despite Hans Johst, European
culture will not pass away: just as stewardship of classical Greek
culture passed into the hands of Europeans, European art - at least
its music - will pass into the hands of Asians.

North Korea's official News Agency released a pic showing leader
Kim Jong-Un observing a tactical rocket launch by the Korean People's
Army. Photograph: KNS/AFP/Getty Images


FAR away in distant lands lies the Hermit Kingdom. This land is ruled
by The House of Kim and its capital is Pyongyang. 29-11-2010


The first and 'Eternal' President was Kim Il-sung and his successor
Kim Jong-il whose designated successor is Kim Jung-un.

They all have had tiny little hands like the Elves in the Elves and
the Shoemaker.

read more

Currency Markets at a Glance WSJ
World Currencies

"It's been more of the same overnight with further U.S. dollar
weakness, with gains in the GBP, EUR, JPY, AUD, and the NZD triggered
more by momentum and market 'stops' than any economy fundamental news"


Euro 1.3688  the euro hit a six-week high near $1.3700 EUR=
Dollar Index 79.82  fell as far as 79.759, a low not seen since May 9
Japan Yen 101.44 not far off a 6 week High of 101.23.
Swiss Franc 0.8873
Pound 1.7106  touched $1.7113, the highest level since October 2008.
It advanced 2.7 percent in the quarter.
Aussie 0.9417 The Aussie last traded at $0.9432 AUD=D4, having
oscillated around the 94 cent mark for three weeks now. Resistance at
the recent high of $0.9445 and its 2014 peak of $0.9461 were capping
the currency.
India Rupee 60.175 The country got 92.4 millimeters (3.6 inches) of
rain last month, or 43 percent less than the average between 1951 and
2000, the India Meteorological Department said
South Korea Won 1012.00
Brazil Real 2.2144
Egypt Pound 7.1503
South Africa Rand 10.6249

Dollar Index 3 Month Chart INO 79.82


The dollar index .DXY fell as far as 79.759, a low not seen since May
9, ending a woeful month for dollar bulls that saw it slump from a
four-month peak of 81.020. In June, the index fell 0.7 percent.

Euro versus the Dollar 3 Month Chart 1.3688


Data on Monday showed euro zone inflation stayed at 0.5 percent in
June, far below the ECB's medium-term target of just below 2 percent.
Private sector loans fell 2.0 percent.

read more

Commodity Markets at a Glance WSJ

Raw-Material Resurgence Following Record Exit From Funds


About $5.9 billion was added to raw materials investments this year,
compared with a record $50 billion withdrawn in 2013, Citigroup Inc.
estimates. Assets under management of about $360 billion at the end of
last year rose to $365 billion through May and probably increased
again in June, the bank said yesterday.

While Citigroup and Goldman Sachs Group Inc. forecast in January that
prices would fall or remain steady this year, Middle East unrest and
pledges by central banks to keep interest rates low sent gold up 11
percent and boosted oil to a nine-month high. Lack of rain in Brazil
lifted coffee 58 percent, helping commodities record the best first
half since 2008.

"We've seen increasing allocations from asset managers this year and
some new fund interest come into commodities," Aakash Doshi, a
Citigroup Global Markets vice president in New York, said in a phone
interview June 24. "We're starting off a lower baseline, and we've
seen geopolitics and weather really come to the fore this year."

The Bloomberg Commodity Index of 22 raw materials rose 7.1 percent in
the first half. The gauge outperformed the MSCI All-Country World
Index of equities, which added 4.9 percent, with dividends reinvested,
and the Bloomberg Dollar Spot Index, which fell 1.6 percent against 10
major currencies. The Bloomberg U.S. Treasury Bond Index rose 3.3

Commodities are already trading independently, with coffee and nickel,
up 37 percent, among this year's best performers and cotton and
copper, down 13 percent and 4.6 percent, among the worst.

Prices may continue to be driven by weather, including El Nino
patterns that can affect conditions through the warming of the Pacific
Ocean. El Nino can cut monsoon rains needed for Indian sugar, bring
drying winds to West African cocoa areas, reduce rainfall on
Indonesian palm oil plantations and spur deluges on Brazilian coffee
crops. It can also make North America mild and wet, which may benefit
harvests and cut prices, Goldman says.

With the United Nations' World Meteorological Organization giving a 60
percent chance of El Nino by late August, there are already signs of
ample supply. Global corn inventories may rise to a 15-year high by
the end of next season as U.S. corn and soybean harvests reach
records, the U.S. Department of Agriculture estimates.

Gold 1 Year Chart INO 1327.09 [$1,332.33, the highest level since March 24]


Bullion for immediate delivery was at $1,326.99 an ounce at 12:28 p.m.
in Singapore from $1,327.33 yesterday, when the metal capped a second
quarterly advance, according to Bloomberg generic pricing. Earlier,
bullion rose as much as 0.4 percent to $1,332.33, the highest level
since March 24.

Crude Oil 1 Month Chart INO 105.66


'Meyer Lemon,' comprising frozen lemon custard served inside
hollowed-out citrus fruit. Photography by Katherine Wolkoff for WSJ.


read more

The DFM General Index (DFMGI) lost 4.4 percent to 3,942.82 at the close, bringing its monthly loss to 22 percent, the most since November 2008.
Emerging Markets

It entered a bear market last week after the shares plunged 20 percent
from their peak in May. Emaar Properties PJSC (EMAAR), the developer
with the biggest weighting on the measure, decreased 3.7 percent.
Arabtec Holding Co. (ARTC), the United Arab Emirates' largest listed
contractor, fell 10 percent, the most allowed in a day.

The U.A.E.'s central bank on June 8 warned that the country's real
estate market may be overheating, spurring the stocks' first quarterly
retreat since the three months ended June 2012. A restructuring at
Arabtec stoked concern the market's property-led gains in the past two
years were overdone.

"Property and construction stocks are at the forefront of the market,
and in a down draft they take a hit," Hisham Khairy, the Dubai-based
head of institutional trade at Mena Corp. Financial Services LLC, said
by phone. "It looks like the correction is not fully done and we are
heading lower again. The next support level is 3,800."

None of the regularly traded stocks in Dubai's 30-member benchmark
gauge were trading above their 50-day moving average price yesterday
for the first time since June 2012, according to data compiled by

Dubai's main index has now entered a bear market eight times since
2008, when the global financial crisis tightened lending, data
compiled by Bloomberg show. The month's loss cut the benchmark index's
estimated price-earnings ratio to 13.4, from a peak of more than 19 in
May. That compares with a ratio of 11 for the MSCI Emerging Markets
Index, according to data compiled by Bloomberg.

Qatar's shares have slipped 16 percent in June, the biggest monthly
decline since January 2009. The country's right to host the 2022
soccer World Cup may be at risk as a FIFA panel looking into the
awarding of the tournament issues its findings into the possibility of
corruption in July.

read more

Sudan is marking 25 years since President Omar al-Bashir came to power in a military backed takeover. @AJELive

BNP fine cheers Sudan human rights campaigners FT Subscriber


On the day the International Criminal Court issued a warrant for Sudan
president Omar al-Bashir's arrest for genocide in 2009, human rights
lawyer Ali Agab fled the country. Security forces first closed down
his organisation; then they came looking for him.

Today, as BNP Paribas pays a record $8.9bn penalty for conducting
business with Sudan and other countries subject to sanctions, he is

"I am so happy to know about this fine," says Mr Agab, now living in
asylum in the UK.

"It's very harmful and sad to know that those people who are enjoying
democracy are using all means to support a regime like this and commit
international crime," he adds: "I think it will have an impact on
Sudan because it plays a deterrent to other governments in Europe that
are still supporting Sudan."

Mr Bashir was indicted by the International Criminal Court for war
crimes and crimes against humanity dating back to 2003, but he first
came to power in Khartoum in an Islamist-backed coup in 1989.

The US levied sanctions in 1997 over Sudan's support for terrorism and
human rights abuses, initiating a trade embargo and freeze on
government assets. Sudan hosted Osama bin Laden in the early 1990s
before it expelled him, and has since co-operated with the US from
time to time by sharing intelligence about subsequent Islamist jihadi
threats in the wake of September 11.

But in the course of Sudan's 10-year oil boom throughout the first
decade of this century, experts estimate its petrodollars amounted to
$80bn for the country and its backers. Much of this was directed to
Khartoum's fearsome security apparatus, which today sucks up as much
as 80 per cent of spending.

"This oil money, gained illegally, allowed the regime to stay in power
and to commit more crimes against its own people, to kill its own
people," says Mr Agab.

Mr Bashir today fights a war on three fronts and human rights group
Waging Peace says he continues to prosecute the world's
longest-running genocide, in Darfur.

"There is extraordinary bombing with complete impunity, there's no
other country that is indiscriminately killing its own civilians with
air power [for so long and without intervention]," says Olivia Warham,
director of Waging Peace, adding that a Darfur hospital was bombed
only this year.

"The level of torture and intimidation, lack of freedom of expression,
lack of political space has been consistently high throughout the last
decade. [Mr Bashir] has been doing all of this with the world turning
a blind eye; financed by people who are breaking sanctions. The oil
money helped to sustain his regime throughout all that time."

Ms Warham congratulated the US for following through on its commitment
to sanctions with political will, saying many other countries
including the UK rely only on the occasional tough word to little

Campaigners say the US, UK and others should also ban exports from
Sudan of both gold and gum Arabic, which continue to help keep afloat
the ailing economy - and a regime facing political, diplomatic and
economic pressure.

Still in power, Mr Bashir is one of Africa's longest ruling leaders.
Last year, his forces shot dead more than 200 people on the streets of
Khartoum, the first time the state's brutality was exposed so
explicitly to a shocked capital more used to hearing of wars in the

But his ability to mete out heavy food and fuel subsidies and keep
patronage networks in cash, funded mostly by crude oil exports, helps
him avert economic catastrophe and further cracks to his regime.

read more

China to Re-Open Embassy in Somalia Closed in '91

China is re-opening its embassy in Somalia some 23 years after
evacuating its diplomats as the East African nation plunged into civil

Foreign Ministry spokesman Hong Lei said Monday the decision came
after Somalia established its first government and parliament in 21
years. He said Beijing would send a delegation to Somalia on Tuesday.

Hong told reporters: "Somalia has entered a new stage of its peace
process," which "brings a new opportunity for the development of
China-Somalia relations."

Chinese diplomats left Somalia in January 1991 after a longtime
dictator was overthrown and warlords turned on each other, plunging
the country into chaos.

The United States announced in June it would appoint an ambassador to
Somalia but said it had no immediate plans to re-open its embassy.

read more

Eritrea, a nation of 6 million is the least connected country on earth, according to data compiled by (ITU)

For the past six years, Reporters Without Borders has ranked Eritrea
the world's worst in terms of press freedom. During the Arab Spring,
Kidane and other activists began using radio signals to broadcast news
into Eritrea. Libyan President Muammar "Qaddafi was one of Eritrea's
most loyal supporters, and [the government] still hasn't reported on
his death," she says.

On Africa's east coast, bordered by Sudan, Djibouti, and Ethiopia--from
which it declared independence in 1993--Eritrea.

 But only 1 percent of Eritrea's population have a landline, according
to ITU data, and only 5.6 percent have a mobile phone--the lowest share
in the world. In North Korea, 4.7 percent of people have a landline,
and 9.7 percent have a cell phone, not counting phones capable of
making international calls that have been smuggled in from China.

Today, fewer than 1 percent of Eritreans go online, according to ITU.
The Internet is available in a handful of places, including Asmara,
the capital--but it's almost always via dial-up and requires Zen-like
patience. "Even after waiting half an hour, you might not get to the
page you want," says Salem Solomon, an Eritrean-American journalist
who attended college and worked as a reporter in Asmara. "Connectivity
is very, very, very, very bad." Eritrea was the last country in Africa
to get a V-SAT (very small aperture terminal) connection linking it to
the World Wide Web and remains one of the continent's only two coastal
nations without fiber-optic connections. There are only 146 fixed-line
broadband subscriptions in the entire country. A handful of residents
get dial-up connections at home for about $200 per month, says Tes
Meharenna, who runs the diaspora site asmarino.com.

read more

South Africa All Share Bloomberg +10.137% 2014

50,945.26 +319.89 +0.63%

Dollar versus Rand 6 Month Chart INO 10.6264


Egypt Pound versus The Dollar 3 Month Chart INO


Egypt EGX30 Bloomberg +20.3479% 2014


8,162.20 +91.44 +1.13%

Egypt President Abdel Fattah al-Sisi talks to Ethiopian Prime Minister
Hailemariam Desalegn as they arrive to attend the 23rd African Union
Summit (AUS) in Malabo June 26, 2014. (Photo: Reuters)



al-Sisi has been on a very intense Diplomatic Outreach since being elected.

Two Egyptian police officers were killed on Monday while trying to
defuse makeshift bombs planted near Cairo's presidential palace


read more

"I pledge before God, before their families and before their pure souls, a just and swift retribution by the state," El-Sisi said in a televised speech.

Earlier, he lashed out against what he called "black terrorism still
attempting to cripple the will of Egyptians and their hopes and
aspirations -- a cowardly terrorism that has no religion or nation."

read more

Nigeria All Share Bloomberg +2.789% 2014 [Fresh 12 month Highs]

42,482.49 +294.85 +0.70%

One Nigerian's Changing Diet Unveils a 170-Million-Strong Market Bloomberg


Rachel Amos remembers growing up in Lagos on a diet of mashed unripe
bananas and a homemade pudding of maize, sugar and water. In her eyes,
buying food in grocery stores was only something rich people did.

Amos, now a 24-year-old tailor, has moved into the ranks of
supermarket patrons. She has turned away from buying from street
vendors, choosing instead to shop for items like Nestle SA-made cereal
and Unilever's Close Up toothpaste at a Spar International outlet near
the shantytown she lives in.

"Supermarkets are better," Amos said as her two-year-old daughter Joy
wheeled a shopping cart through Spar's aisles. "They sell original
things, it's neater and there are no flies."

It's people like Amos, whose saga captures the potential for growth in
Nigerians' purchasing power, that are prompting foreign investors to
look past the militant attacks in the African nation's northern region
and pile into consumer-focused stocks. In Nigeria, they see semblances
of the consumer boom that swept through Brazil, China and India over
the past decade: an underdeveloped country home to a population of
about 170 million that is consistently posting annual economic growth
above 6 percent.

While Nigerian stocks overall are cheap relative to regional peers,
consumer shares have been bid up to lofty levels by international
buyers including Silk Invest Ltd. and Tundra Fonder AB.

Unilever's Nigerian unit, which sells Lipton tea and Knorr bouillon
cubes, trades at more than twice the price-to-earnings ratio of its
Rotterdam-based holding company after doubling in market value in the
past three years. Lagos-based Nestle Nigeria Plc (NESTLE) trades at an
87 percent premium to its Swiss parent, the world's biggest food
company, after almost tripling in value in the past three years.

Heineken NV's Nigerian Breweries Plc gained 97 percent over that
period while Cadbury Nigeria Plc is up almost threefold. Those rallies
compare with a 70 percent advance in the Nigeria Stock Exchange's
benchmark index.

"The premium is here to stay," Anton Schaad, a money manager at St.
Galler Kantonalbank AG, which oversees $48 billion, said by e-mail
from St. Gallen, Switzerland yesterday. "I don't really fear a crash."

While food companies are fairly valued, investors should look into
telecommunications, banks and cement makers, according to Zin Bekkali,
chief executive officer of Silk Invest in London, which manages $500
million. Nestle Nigeria, Nigerian Breweries and Guaranty Trust Bank
Plc (GUARANTY) are among the top 10 holdings in Silk's African Lions
fund, with Nigeria accounting for 23 percent of its investments,
according to the fund's website.

"We still very much believe in the consumer theme in Africa," Bekkali
said in an e-mailed response to questions on June 20.

Lagos is among five African cities -- including Johannesburg and Cairo
-- that will each have more than $25 billion a year in consumer
spending by 2020, equivalent to Mumbai and New Delhi, according to a
2010 McKinsey & Co. report.

Nigeria's gross domestic product per capita has tripled over the past
decade, buoyed in part by a surge in oil proceeds that account for 70
percent of government revenue. Still, the most recent poverty survey
by the Nigerian statistics agency, published in 2012, shows that 61
percent of Nigerians were living on less than a dollar a day in 2010,
up from 52 percent in 2004.

Nigeria, which overtook South Africa as the continent's largest
economy this year after rebasing its data, is battling an Islamist
insurgency in its northern states. Boko Haram has bombed markets and
government buildings and in April kidnapped more than 200 schoolgirls
in a bid to introduce Shariah law over the whole country, which is
split between Christians and Muslims.

For consumer companies, it's not just the attacks that undermine their
businesses as they face limited power supply that drives up costs and
bad roads, which hamper distribution. Unilever posted a 42 percent
slide in first-quarter net income, while at Nestle Nigeria, full-year
earnings rose 6 percent to 22.3 billion naira ($137 million).

Across all of Africa, the middle class is estimated at 350 million
people, or more than the number of people living in the U.S.,
according to the African Development Bank.

The definition of consumers should be broadened beyond the middle
class to include everyone living above the poverty line, which is
growing at a faster pace, Silk's Bekkali said. He estimates that over
the next 15 years, the number of Africans living above the poverty
line will grow by about 500 million.

"The consumer is a longer-term story and an important ingredient in my
portfolio," Mathias Althoff, a money manager at Tundra Fonder, which
oversees the equivalent of $180 million, said in an e-mail yesterday
from Stockholm. Nigerian banks are trading at attractive valuations as
more people move into cities and open accounts, while the
opportunities for food companies "are big, especially in Nigeria,
where the population is so big," he said.

Amos, who lives in a wood house she built herself, is anxious for more
products to line store shelves as companies including Cape Town-based
Shoprite Holdings Ltd. (SHP), Africa's largest retailer, expand in
Nigeria. She would like to see cheaper meat, more vegetables and less
expensive clothes for her child and she's looking forward to the day
she can afford a few extras. She has her eye on a television.

"When I make more money," Amos said, "I'll be buying those things I
think I can't afford."

Ghana Stock Exchange Composite Index Bloomberg +10.629% 2014


2,373.38 +20.93 +0.89%

UAE-based Rotana Hotel Management Corporation is focusing on expanding
its portfolio in Africa


Mostly we are looking at Africa - Angola, Mozambique, Tanzania."

More than 110 large, medium-sized and small hotel units are currently
being built in Angola, adding 8,652 rooms to the current total,
indicate figures from the Ministry of Hotels and Tourism.


read more

@eombok · 8m #Kenya's economy grew 4.1% in first quarter 2014 vs 5.2% in same quarter of 2013.
Kenyan Economy

Aly-Khan Satchu @alykhansatchu  8m Dear @eombok What was the number
on a sequential basis i.e versus Q4 2013

@eombok  6m @alykhansatchu The number is 0.7% in 1Q vs 0.9% in 4Q

Kenya to miss full year growth target of 5.8 per cent


Data released by the Kenya National Bureau of Statistics Monday night
showed that growth in the labour intensive agriculture was 2.7 per
cent, down from 6.8 per cent last year.

"A major factor that constrained economic growth during the quarter
was the erratic weather pattern that resulted in depressed
agricultural output," KNBS said.

Although hotels and restaurants improved from last year's contraction
of 12.8 per cent, the fragile sector's growth was negative three per

"The deceleration in growth of the hotel industry was largely due to
insecurity concerns coupled with negative travel advisories by some
key tourist source countries," the KNBS states.

Transport, trade, manufacturing, wholesale and retail trade, mining
and electricity showed positive growth trends. Manufacturing sector
recorded a higher overall growth of five per cent during the period to
March compared to 2.5 per cent last year.

Transport and communication sector expanded by six per cent compared
to a growth of 5.6 per cent in 2013 while electricity and water
production grew by 4.4 per cent compared against a contraction of 0.8
per cent in 2013.

"There was a substantial decrease in hydro generation of electricity
which was matched by a significant increase in thermal generation and,
therefore, impacted negatively on the growth of the sector. However,
generation of geothermal power expanded rapidly and, therefore, more
than compensated for the decline in hydro generation," the report

Suppressed external demand during the review period saw export of
vegetables contract by 20.3 per cent in 2014 to 16,600 tonnes while
that of fruits increased by 18.5 per cent to reach 9,200 tonnes over
the same period.

Quantities of cut flower exported declined marginally over the review period.


Predicted and predictable.

read more

In a note to the (CMA), Britam an insurance firm Monday said it wanted to buy out Equity's 24.76 per cent stake in HF
Kenyan Economy

The bank's stake of 57,270,000 ordinary shares in the mortgage lender
is currently valued at about Sh2.4 billion and the takeover is
expected to give Britam more power in running the affairs of Housing

Britam, through its wholly-owned subsidiary British-American Insurance
Company, is already a significant shareholder in the company and on
completion of the proposed acquisition of Equity Bank's stake, will
control approximately 46.08 per cent of the issued share capital of
the mortgage lender.

Last month, Britam issued a Sh5 billion corporate bond to raise funds
for investments in real estate and private equity among other
businesses across East Africa. Analysts now say Britam may use part of
the bond proceeds to fund the purchase of Equity's stake from Housing

read more

Equity Bank share price data here +49.593% in 2014 and at a Record High
Kenyan Economy

Par Value:                  0.50/-
Closing Price:           46.00
Total Shares Issued:          3702777020.00
Market Capitalization:        170,327,742,920
EPS:             3.59
PE:                 12.813

read more

Housing Finance share price data here +35.71% 2014
Kenyan Economy

Par Value:                  5/-
Closing Price:           42.75
Total Shares Issued:          235750000.00
Market Capitalization:        10,078,312,500
EPS:             4.31
PE:                 9.919

read more

BRITAM EA share price data here +31.353% 2014
Kenyan Economy

Closing Price:           19.90
Total Shares Issued:          1891460000.00
Market Capitalization:        37,640,054,000
EPS:             1.4
PE:                 14.214

read more

An Interview with @KenyaAirways CEO Alex Mbugua re 2013 Earnings @YouTube
Kenyan Economy

First ever oil discovery off Kenya's coast, says Pancontinental Oil and Gas -


"The Sunbird-1 oil is the historic first ever oil discovery offshore
in Kenya," said Barry Rushworth, the Chief Executive Officer of Pan

"Furthermore it is the only offshore oil column ever reported seaward
of the eastern coastal margin of the African continent from South
Africa to the North West tip of Somalia. We believe that this is a
play-opening discovery in Kenya's Lamu Basin."

According to Pan-Continental Oil and Gas, the Sunbird-1 oil well which
is in the southern Kenyan coast has "intersected an oil column".

"The gross oil column is assessed to be 14metres thick beneath a gross
gas column of 29.6m in a reefal limestone reservoir in the Sunbird
Miocene Pinnacle reef in area L10A," reads a communiqué released by
Pan Continental Oil and Gas.

I am also certain the Eastern Seaboard of Africa from Mozambique
through Somalia is the last Great Energy Prize in the c21st August
19th 2013


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.

read more

al-Faisal told @BBCPanorama about Lewthwaite that he arranged her marriage to Kenyan because he "knew her taste".
Kenyan Economy

Lewthwaite, who is charged with plotting a bombing campaign across
Kenya at Christmas 2011, was so close to her new family that she fled
to their house the night Kenyan police broke up her terror cell.

Her husband was a Kenyan named Fahmi Jamal Salim, with whom she is
thought to have the two youngest of her four children. Salim's sister
is Nassim divorced Mr Dheere a year before his death.

Lewthwaite met her future husband in South Africa in 2008, where they
were introduced to each other by Abdullah al-Faisal, a radical Muslim
hate preacher who had previously been imprisoned for four years at
Long Lartin prison on Worcestershire.

Lewthwaite had previously visited him while he was still in jail,
despite the authorities apparently being aware of their respective

Mr al-Faisal told a BBC Panorama documentary about Lewthwaite, due to
air on Wednesday, that he arranged her marriage to the Kenyan because
he "knew her taste".

She wanted a "young man of a different race, preferably the black
race, who was very handsome and very strong in the Muslim faith", Mr
al-Faisal told the BBC.

The couple are believed to have lived in South Africa at last until
early 2008, where Salim ran a medical supply business in the Brixton
area of Johannesburg. Lewthwaite occasionally used it as her postal

Both Lewthwaite and Salim travelled to Kenya on faked South African
passports during 2011, hers in the name Natalie Faye Webb and his
believed to be in the name Mark or Marc Costa.

Kenya's National Intelligence Service named both of them as members of
a terror cell that planned to bomb the parliament in Nairobi, the
United Nations headquarters in the city, and an Ethiopian restaurant
popular with Somali politicians.

Hotels near their bomb factory popular with Western tourists were also
understood to be targets.

Lewthwaite was the cell's "logistician", detectives said. Another of
the cell's alleged members is Jermaine Grant, from east London, who is
on trial in Kenya over the plots.

The cell's leader was Abdulkadir Mohamed Abdulkadir "Ikrima", a Kenyan
al-Qaeda commander who was the target of a US Navy Seal Team Six raid
on Somalia in 2013, less than a month after the terror attack on
Nairobi's Westgate Shopping Centre.

Lewthwaite and Salim escaped as police closed in on them on December
19, 2011, after Grant is believed to have sent them both a text
message saying, "The lions are inside".

read more

Reflections on #Westgate, #Samanthalewthwaite The White Widow September 30th 2013
Kenyan Economy

That's the backgrounder. Now lets jump to Westgate. As I scanned the
Al-Shabaab tweets I recalled this one that @GGoodwin retweeted

"Westgate: 14hr standoff relayed in 1400 rounds of bullets & 140
charac- ters of vengeance & still ongoing. Gd morning Kenya!"

Another read ''Here are 2 of the Mujahideen inside #Westgate mall,
unruffled and strolling around the mall in such sangfroid manner.''

I kept thinking to myself 'sangfroid' is such an unusual word. It
means coolness of mind; calmness; composure a kind of cold bloodedness
under pressure. And therefore, I am putting Samantha Lewthwaite at the
scene and I think she live-tweeted from inside Westgate for an as yet
undeter- mined period. And I think she signalled her presence and is
probably seek- ing some kind of recognition.

read more

The White Widow: searching for Samantha - BBC1, 10.35, Wednesday 2nd July @Vimeo Trailer from @adam_wishart @Vimeo
Kenyan Economy

Samantha Lewthwaite is one of the world's most wanted terrorists. The
widow of Germaine Lindsay, one of the July 7 bombers, she claimed
ignorance of her husband's lethal intentions, saying she was a victim
too. But for the past three years, British, American and Kenyan
security services have been after the so-called `White Widow', who is
now on the run in Africa, charged with conspiracy to cause explosions.
How did this schoolgirl from a quiet Home Counties market town end up
as a friend and confidante of some of the top echelons of al-Qaeda?
Film-maker Adam Wishart has spent a year tracking down the real story
of Samantha Lewthwaite, revealing her path to radicalisation and the
hate preacher who inspired her.

read more

Kenya Shilling versus The Dollar Live ForexPros
Kenyan Economy

Nairobi All Share Bloomberg +10.0402% 2014


Nairobi ^NSE20 Bloomberg -0.8323% 2014 [+121 points since 17th June]


NSE20 Index rallied 1.055% and 51.03 points to close at 4885.04.
The NSE20 Index has rallied 121 points and 2.539% since closing at a 9
month low on the 17th June.
The NSE20 has posted a Sequence of 7 winning Sessions out of the last 9.

Every Listed Share can be interrogated here


read more

N.S.E Today

The Nairobi All Share rallied +1.1571% to close at 152.11.
The All Share is +11.313% in 2014 and is now within 0.366% of an All
Time High set on 12th May this Year.
The Nairobi NSE20 followed on yesterdays 1.055% Gain with a further
0.8356% push higher to close at 4925.86.
The Nairobi NSE20 has rebounded 251 points since 17th June.
Equity Turnover was 695.395m.
There were 29 Winners and 12 Loser at the securities Exchange which
confirms the direction remains higher at the Securities Exchange.
Equity Bank and  Kenya Commercial Bank set all time Closing Highs for
the 2nd consecutive session.
The Big Headline news was that BRITAM EA intends to acquire Equity
Bank's HFCK Stake.
All 3 Entities rallied sharply today.

N.S.E Equities - Commercial & Services

Safaricom was the most actively traded share and rallied +1.606% to
close at 12.65 and was trading session Highs of 13.00 +4.42% at the
Closing Bell. Safaricom traded 17.983m shares and has now emerged out
of a short Profit Taking Period.

TPS East Africa firmed 2.90% to close at 35.50 and traded 1,300
shares. TPS is trading on a Trailing PE of 10.29 and is inexpensive on
all measures.

N.S.E Equities - Finance & Investment

The Big Market moving News today was that BRITAM EA  said it wanted to
buy out Equity Bank's  24.76% stake in Housing Finance. Please see the
Announcements below

Equity Bank 01-JUL-2014 ::  Proposed sale of 57,270,000 ordinary
shares of Housing Finance Company of Kenya Ltd to British-American
Investments Company (Kenya) Ltd


BRITAM EA 01-JUL-2014 ::  Notice of intention to acquire 57,270,000
shares of Housing Finance Company of Kenya Ltd.


Equity Bank rallied +2.173% to close at a Fresh Life Time High of
47.00 and was in fact trading intra day session highs of 48.00 +4.35%
at the Finish Line. Equity Bank traded 764,000 shares worth 36.056m.
Equity Bank is +55.371% in 2014 in what has been a real steep rally
that was ignited by the Mobile Virtual Operator License Application.
In a report filed during the Trading session The @BD_Africa is
reporting that

''In a letter to regulators, Safaricom chief executive Bob Collymore
says Equity Bank should be prohibited from issuing thin SIM cards as
they could expose subscribers to financial fraud and intercepted

Housing Finance rallied +8.77% to close at a Fresh 2014 High of 46.50
and traded shares as high as 48.00 during the Session. HFCK is now
+47.619% in 2014.

BRITAM EA rallied +9.3% to close at 21.75 and traded shares as high as
24.00 +20.603% [which is an all time High Price Print] and traded
837,800 shares worth 18.228m.

Kenya Commercial Bank rallied +1.96% to close at 52.00 and an All Time
Closing High for the 2nd consecutive session. Kenya Commercial Bank
was trading at 53.00 +3.92% at the Finish Line and that is an All Time
High Price Print. Kenya Commercial Bank traded 2.561m shares worth
134.233m. KCB is +10.05% in 2014 and will reach 55.00 on this Up Move.
Barclays Bank turned +1.194% higher to close at 16.95 and traded
2.286m shares worth 38.751m. Barclays Bank has underperformed its Big
Cap Banking Peers and is -3.693% in 2014.

Diamond Trust was the biggest Faller at the Exchange today and closed
at 219.00 -8.75% and traded 18,200 shares. DTB Rights are currently
trading in the market but no trades were made today. I believe the
Rights Issue will be fully subscribed.

Kenya Re firmed 2.34% to close at 19.70 and traded 3.053m shares worth
60.144m. Kenya Re is +27.096% in 2014 and trades on the least
expensive PE of all the Insurance Companies. Kenya Re trades on a PE
of 4.592.

N.S.E Equities - Industrial & Allied

BAT Kenya followed on yesterdays +6.05% Rally with a further +4.46%
Gain to close at 678.00 and traded 7,300 shares. BAT is +13.00% in
2014 and +10.784% over two trading sessions. BAT is a Dividend paying
Stock [They have average a 99.8% Pay Out of Earnings Per Share over
the last 2 years] and hence its attraction increasing in a declining
interest rate environment.

East African Portland Cement was high ticked 8.5% to close at 83.00
and traded just 600 shares.

EABL was rallied +2.47% to close at 290.00 and traded 50,200 shares.
EABL had Buyers for 2,109% more shares than were available for Sale.
EABL will test its recent 12 month closing High of 301.00 in short

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

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