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Satchu's Rich Wrap-Up
Friday 14th of March 2014

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0930-1500 KENYA TIME
Normal Board - The Whole shebang
Prompt Board Next day settlement
Expert Board All you need re an Individual stock.

The Latest Daily PodCast can be found here on the Front Page of the site

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#Mindspeak with Charles Ireland CEO EABL @TuskerLager #twendekazi @YouTube RICH TV

@HomecomingRev  Join us on Sat 15th or Sun 16th March 2014 at Olympia

It was Angel Jones @angel1jones, the Founder of @HomecomingRev who
came and found me in my Office one afternoon.

Her Tagline on Twitter ''Ex-advertising chick. A Yippie (Yuppie + Hippie)''

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The Clash - London Calling @YouTube

I used to transit through Waterloo practically my entire working Life in London

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The Kinks Waterloo Sunset

I went around the Banks yesterday. Of course, My Mother loved Nasim
Devji [CEO Diamond Trust] and I always remind Nasim of that and there
I am in a serious Meeting and I just want to lean over and give her a
Hug but Nasim knows that.

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The View from Nasim Devji's Office

I thank John Staley and Dr. James Mwangi of Equity Bank for the time.

And I thank Kitili Mbathi and his Team at Standard Bank as well.

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A Sea of Clouds above Nairobi 35,000 Feet 27 days ago

The Storm last night was biblical and something out of the Old
Testament and a little sexy. I start thinking I might be Heathcliff
and want to break down doors.

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Search for Malaysian plane may extend to Indian Ocean: U.S. #MH370 Reuters
Law & Politics

Expanding the search area to the Indian Ocean would be consistent with
the theory that the Boeing 777 may have detoured to the west about an
hour after take-off from the Malaysian capital Kuala Lumpur en route
to Beijing.

"It's my understanding that based on some new information that's not
necessarily conclusive - but new information - an additional search
area may be opened in the Indian Ocean," White House spokesman Jay
Carney told reporters in Washington.

Satellites picked up faint electronic pulses from the aircraft after
it went missing on Saturday, but the signals gave no information about
where the jet was heading and little else about its fate, two sources
close to the investigation said on Thursday.

But the "pings" indicated its maintenance troubleshooting systems were
switched on and ready to communicate with satellites, showing the
aircraft was at least capable of communicating after losing touch with
air traffic controllers.

The system transmits such pings about once an hour, according to the
sources, who said five or six were heard. However, the pings alone are
not proof that the plane was in the air or on the ground, the sources

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Putin's Ukraine Ambition Unimpeded by West as Crimea Looms
Law & Politics

Western leaders are counting on the threat of wide-ranging sanctions
to make Vladimir Putin pause for breath after swallowing Crimea. If
they can't, the Russian president may opt to move deeper into Ukraine.

Putin has yet to blink after sending in Russian troops to seize
control of the Crimean peninsula last month, triggering the worst
confrontation since the Cold War. Even as the U.S. and European
governments step up their threats of punitive action, pro-Russian
protests that are happening in the east of Ukraine, including deadly
clashes last night, give him the pretext for further incursions.

"I wouldn't rule out a Russian military operation in eastern Ukraine,
though it's not on the agenda at the moment," Fyodor Lukyanov, head of
the Moscow-based Council on Foreign and Defense Policy, said by phone
March 12. "If the Ukrainian authorities repress these protests, Russia
will respond."

Putin has to balance the risk of getting drawn into a protracted
standoff and Iran-style isolation with his goal of sabotaging the
West's plans to draw Ukraine into its orbit. The next flashpoint is in
two days, when the majority-Russian Crimea region holds a referendum
on seceding from Ukraine, a ballot that President Barack Obama and
Chancellor Angela Merkel have warned has no international legitimacy.

Ukraine's interim government, which took power after the overthrow of
Moscow-backed President Viktor Yanukovych, said on March 12 that
Russian forces were massing on the country's eastern border. Acting
Prime Minister Arseniy Yatsenyuk warned the same day after meeting
Obama in Washington that Putin may move beyond Crimea, even as far as
the capital Kiev.

The U.S. delivered a dozen F-16 warplanes to Ukraine's neighbor Poland
this week after deploying six F-15s last week to Lithuania. Six
Russian fighter jets and three transport planes arrived in Ukraine's
northern neighbor, Belarus, for joint drills, the Defense Ministry
there said.


As I said Crimea is a Fait Accompli.

"If there is no sign of any capacity to be able to move forward and
resolve this issue, there will be a very serious series of steps on
Monday in Europe and here with respect to the options that are
available to us," U.S. Secretary of State John Kerry told a Senate
panel in Washington yesterday


German Chancellor Angela Merkel said Russia is risking "massive"
political and economic damage.

Controlling the Lens: The Media War Being Fought Over Ukraine Between
the Western Bloc and Russia


read more

Nick Turse, American Proxy Wars in Africa
Law & Politics

As for the axe being taken to the Pentagon budget, it turns out, at
worst, to be a penknife.

As Michael Klare recently explained, that pivot is, at heart, a naval
strategy (consonant with those 11 carriers) of ensuring ongoing
control over the crucial energy sea lanes in the Persian Gulf, the
Indian Ocean, and the East and South China Seas through which China is
going to have to import staggering amounts of liquid energy in the
coming decades.

Finally, on a planet still impressively heavily garrisoned by
Washington, hardly noticed by anyone and rarely written about, the
U.S. military has for years been quietly moving into Africa in a
distinctly below-the-radar fashion.

Washington's Back-to-the-Future Military Policies in Africa  America's
New Model for Expeditionary Warfare  By Nick Turse

Lion Forward Teams? Echo Casemate? Juniper Micron?

You could be forgiven if this jumble of words looks like nonsense to
you.  It isn't.  It's the language of the U.S. military's simmering
African interventions; the patois that goes with a set of missions
carried out in countries most Americans couldn't locate on a map; the
argot of conflicts now primarily fought by proxies and a former
colonial power on a continent that the U.S. military views as a hotbed
of instability and that hawkish pundits increasingly see as a growth
area for future armed interventions.      Since 9/11, the U.S.
military has been making inroads in Africa, building alliances,
facilities, and a sophisticated logistics network.  Despite repeated
assurances by U.S. Africa Command (AFRICOM) that military activities
on the continent were minuscule, a 2013 investigation by TomDispatch
exposed surprisingly large and expanding U.S. operations -- including
recent military involvement with no fewer than 49 of 54 nations on the
continent.  Washington's goal continues to be building these nations
into stable partners with robust, capable militaries, as well as
creating regional bulwarks favorable to its strategic interests in
Africa.  Yet over the last years, the results have often confounded
the planning -- with American operations serving as a catalyst for

A U.S.-backed uprising in Libya, for instance, helped spawn hundreds
of militias that have increasingly caused chaos in that country,
leading to repeated attacks on Western interests and the killing of
the U.S. ambassador and three other Americans. Tunisia has become ever
more destabilized, according to a top U.S. commander in the region.
Kenya and Algeria were hit by spectacular, large-scale terrorist
attacks that left Americans dead or wounded.  South Sudan, a fledgling
nation Washington recently midwifed into being that has been slipping
into civil war, now has more than 870,000 displaced persons, is facing
an imminent hunger crisis, and has recently been the site of mass
atrocities, including rapes and killings. Meanwhile, the U.S.-backed
military of Mali was repeatedly defeated by insurgent forces after
managing to overthrow the elected government, and the U.S.-supported
forces of the Central African Republic (CAR) failed to stop a ragtag
rebel group from ousting the president.

In an effort to staunch the bleeding in those two countries, the U.S.
has been developing a back-to-the-future military policy in Africa --
making common cause with one of the continent's former European
colonial powers in a set of wars that seem to be spreading, not
staunching violence and instability in the region.

After establishing a trading post in present-day Senegal in 1659,
France gradually undertook a conquest of West Africa that, by the
early twentieth century, left it with a vast colonial domain
encompassing present-day Burkina Faso, Benin, Chad, Guinea, Ivory
Coast, Mali, Niger, and Senegal, among other places.  In the process,
the French used Foreign Legionnaires from Algeria, Goumiers from
Morocco, and Tirailleurs from Senegal, among other African troops, to
bolster its ranks.  Today, the U.S. is pioneering a
twenty-first-century brand of expeditionary warfare that involves
backing both France and the armies of its former colonial charges as
Washington tries to accomplish its policy aims in Africa with a
limited expenditure of blood and treasure.

In a recent op-ed for the Washington Post, President Barack Obama and
French President François Hollande outlined their efforts in glowing

"In Mali, French and African Union forces -- with U.S. logistical and
information support -- have pushed back al-Qaeda-linked insurgents,
allowing the people of Mali to pursue a democratic future. Across the
Sahel, we are partnering with countries to prevent al-Qaeda from
gaining new footholds. In the Central African Republic, French and
African Union soldiers -- backed by American airlift and support --
are working to stem violence and create space for dialogue,
reconciliation, and swift progress to transitional elections."

Operation Juniper Micron

After 9/11, through programs like the Pan-Sahel Initiative and the
Trans-Saharan Counterterrorism Partnership, the U.S. has pumped
hundreds of millions of dollars into training and arming the
militaries of Mali, Niger, Chad, Mauritania, Nigeria, Senegal,
Morocco, Algeria, and Tunisia in order to promote "stability."  In
2013, Captain J. Dane Thorleifson, the outgoing commander of an elite,
quick-response force known as Naval Special Warfare Unit 10, described
such efforts as training "proxy" forces in order to build "critical
host nation security capacity; enabling, advising, and assisting our
African CT [counterterror] partner forces so they can swiftly counter
and destroy al-Shabab, AQIM [Al-Qaeda in the Islamic Maghreb], and
Boko Haram."  In other words, the U.S. military is in the business of
training African armies as the primary tactical forces combatting
local Islamic militant groups.

The first returns on Washington's new and developing form of "light
footprint" warfare in Africa have hardly been stellar.  After U.S. and
French forces helped to topple Libyan dictator Muammar Gaddafi in
2011, neighboring Mali went from bulwark to basket case.  Nomadic
Tuareg fighters looted the weapons stores of the Gaddafi regime they
had previously served, crossed the border, and began taking over
northern Mali.  This, in turn, prompted a U.S.-trained officer -- a
product of the Pan-Sahel Initiative -- to stage a military coup in the
Malian capital, Bamako, and oust the democratically elected president
of that country.  Soon after, the Tuareg rebels were muscled aside by
heavily-armed Islamist rebels from the homegrown Ansar al-Dine
movement as well as al-Qaeda in the Islamic Maghreb, Libya's Ansar
al-Shariah, and Nigeria's Boko Haram, who instituted a harsh brand of
Shariah law, creating a humanitarian crisis that caused widespread
suffering and sent refugees streaming from their homes.

In January 2013, former colonial power France launched a military
intervention, code-named Operation Serval, to push back and defeat the
Islamists.  At its peak, 4,500 French troops were fighting alongside
West African forces, known as the African-led International Support
Mission in Mali (AFISMA), later subsumed into a U.N.-mandated
Multidimensional Integrated Stabilization Mission in Mali (MINUSMA).
The AFISMA force, as detailed in an official U.S. Army Africa briefing
on training missions obtained by TomDispatch, reads like a who's who
of American proxy forces in West Africa: Niger, Guinea, Burkina Faso,
Côte d'Ivoire, Togo, Senegal, Benin, Liberia, Chad, Nigeria, Gambia,
Ghana, and Sierra Leone.

Under the moniker Juniper Micron, the U.S. military supported France's
effort, airlifting its soldiers and materiel into Mali, flying
refueling missions in support of its airpower, and providing
"intelligence, surveillance, and reconnaissance" (ISR) through drone
operations out of Base Aerienne 101 at Diori Hamani International
Airport in Niamey, the capital of neighboring Niger.  The U.S. Army
Africa AFISMA document also makes reference to the deployment to Chad
of an ISR liaison team with communications support.  Despite repeated
pledges that it would put no boots on the ground in troubled Mali, in
the spring of 2013, the Pentagon sent a small contingent to the U.S.
Embassy in Bamako and others to support French and MINUSMA troops.

After issuing five media releases between January and March of 2013
about efforts to aid the military mission in Mali, AFRICOM simply
stopped talking about it.  With rare exceptions, media coverage of the
operation also dried up.  In June, at a joint press conference with
President Obama, Senegal's President Macky Sall did let slip that the
U.S. was providing "almost all the food and fuel used by MINUSMA" as
well as "intervening to assist us with the logistics after the French

A January 2014 Stars and Stripes article mentioned that the U.S. air
refueling mission supporting the French, run from a U.S. airbase in
Spain, had already "distributed 15.6 million gallons of fuel, logging
more than 3,400 flying hours" and that the effort would continue.  In
February, according to military reports, elements of the Air Force's
351st Expeditionary Refueling Squadron delivered their one millionth
pound of fuel to French fighter aircraft conducting operations over
Mali.  A December 2013 briefing document obtained by TomDispatch also
mentions 181 U.S. troops, the majority of them Air Force personnel,
supporting Operation Juniper Micron.

Eager to learn where things stood today, I asked AFRICOM spokesman
Benjamin Benson about the operation.  "We're continuing to support and
enable the French and international partners to confront AQIM and its
affiliates in Mali," he told me.  He then mentioned four key current
mission sets being carried out by U.S. forces: information-sharing,
intelligence and reconnaissance, planning and liaison teams, and
aerial refueling and the airlifting of allied African troops.

U.S. Army Africa documents obtained by TomDispatch offer further
detail about Operation Juniper Micron, including the use of Lion
Forward Teams in support of that mission.  I asked Benson for
information about these small detachments that aided the French effort
from Chad and from within Mali itself.  "I don't have anything on
that," was all he would say.  A separate briefing slide, produced for
an Army official last year, noted that the U.S. military provided
support for the French mission from Rota and Moron, Spain; Ramstein,
Germany; Sigonella, Italy; Kidal and Bamako, Mali; Niamey, Niger;
Ouagadougou, Burkina Faso; and N'Djamena, Chad.  Benson refused to
offer information about specific activities conducted from these
locations, preferring to speak about air operations from unspecified
locations and only in generalities.

Official military documents obtained by TomDispatch detail several
U.S. missions in support of proxy forces from the Multidimensional
Integrated Stabilization Mission in Mali, including a scheduled eight
weeks of pre-deployment training for troops from Niger in the summer
of 2013, five weeks for Chadian forces in the autumn, and eight weeks
in the autumn as well for Guinean soldiers, who would be sent into the
Malian war zone.  I asked Benson about plans for the training of
African forces designated for MINUSMA in 2014.  "In terms of the
future on that... I don't know," was all he would say.

Another official briefing slide produced by U.S. Army Africa notes,
however, that from January through March 2014, the U.S. planned to
send scores of trainers to prepare 1,400 Chadian troops for missions
in Mali.  Over the same months, other U.S. personnel were to team up
with French military trainers to ready an 850-man Guinean infantry
force for similar service.  Requests for further information from the
French military about this and other missions were unanswered before
this article went to press.

Last spring, despite years of U.S. assistance, including support from
Special Operations forces advisors, the Central African Republic's
military was swiftly defeated and the country's president was ousted
by Seleka, a mostly Muslim rebel group.  Months of violence followed,
with Seleka forces involved in widespread looting, rape, and murder.
The result was growing sectarian clashes between the country's Muslim
and Christian communities and the rise of Christian "anti-balaka"
militias.  ("Balaka" means machete in the local Sango language.)
These militias have, in turn, engaged in an orgy of atrocities and
ethnic cleansing directed against Muslims.

In December, backed by a United Nations Security Council resolution
and in a bid to restore order, France sent troops into its former
colony to bolster peacekeepers from the African-led International
Support Mission in the Central African Republic (MISCA).  As with the
Mali mission, the U.S. joined the effort, pledging up to $60 million
in military aid, pouring money into a trust fund for MISCA, and
providing airlift services, as well as training African forces for
deployment in the country.

Dubbed Echo Casemate, the operation -- staged out of Burundi and
Uganda -- saw the U.S. military airlift hundreds of Burundian troops,
tons of equipment, and more than a dozen military vehicles into that
strife-torn land in just the first five days of the operation,
according to an AFRICOM media release.  In January, at France's
request, the U.S. began airlifting a Rwandan mechanized battalion and
1,000 tons of their gear in from that country's capital, Kigali, via a
staging area in Entebbe, Uganda (where the U.S. maintains a
"cooperative security location" and from which U.S. contractors had
previously flown secret surveillance missions).  The most recent
airlift effort took place on February 6th, according to Benson.  While
he said that no other flights are currently scheduled, he confirmed
that Echo Casemate remains an ongoing operation.

Asked about U.S. training efforts, Benson was guarded.  "I don't have
that off the top of my head," he told me.  "We do training with a lot
of different countries in Africa."  He offered little detail about the
size and scope of the U.S. effort, but a December 2013 briefing
document obtained by TomDispatch mentions 84 U.S. personnel, the
majority of them based in Burundi, supporting Operation Echo Casemate.
The New York Times recently reported that the U.S. "refrained from
putting American boots on the ground" in the Central African Republic,
but the document clearly indicates that a Lion Forward Team of Army
personnel was indeed sent there.

Another U.S. Army Africa document produced late last year noted that
the U.S. provided military support for the French mission in that
country from facilities in Germany, Italy, Uganda, Burundi, and the
Central African Repubilc itself. It mentions plans to detail liaison
officers to the MISCA mission and the Centre de planification et de
conduite des opérations (the Joint Operations, Planning, and Command
and Control Center) in Paris.

As U.S. personnel deploy to Europe as part of Washington's African
wars, additional European troops are heading for Africa.  Last month,
another of the continent's former colonial powers, Germany, announced
that some of its troops would be sent to Mali as part of a
Franco-German brigade under the aegis of the European Union (EU) and
would also aid in supporting an EU "peacekeeping mission" in the
Central African Republic.  Already, a host of other former imperial
powers on the continent -- including Belgium, Italy, the Netherlands,
Portugal, Spain, and the United Kingdom -- are part of a European
Union training mission to school the Malian military.  In January,
France announced that it was reorganizing its roughly 3,000 troops in
Africa's Sahel region to reinforce a logistical base in Abidjan, the
capital of Côte d'Ivoire, transform N'Djamena, Chad, into a hub for
French fighter jets, concentrate special operations forces in Burkina
Faso, and run drone missions out of Niamey, Niger (already a U.S. hub
for such missions).

Operations by French and African forces, bolstered by the U.S.
military, beat back the Islamic militants in Mali and allowed
presidential elections to be held.  At the same time, the intervention
caused a veritable terror diaspora that helped lead to attacks in
Algeria, Niger, and Libya, without resolving Mali's underlying

Writing in the most recent issue of the CTC Sentinel, the official
publication of the Combating Terrorism Center at West Point, analyst
Bruce Whitehouse points out that the Malian government has yet to
reassert its authority in the north of the country, reform its armed
forces, tackle graft, or strengthen the rule of law:  "Until major
progress is made in each of these areas, little can be done to reduce
the threat of terrorism...  the underlying causes of Mali's 2012
instability -- disaffection in the north, a fractured military, and
systemic corruption -- have yet to be fully addressed by the Malian
government and its international partners."

The situation may be even worse in the Central African Republic.
"When France sent troops to halt violence between Christians and
Muslims in Central African Republic," John Irish and Daniel Flynn of
Reuters recently reported, "commanders named the mission Sangaris
after a local butterfly to reflect its short life.  Three months
later, it is clear they badly miscalculated."  Instead, violence has
escalated, more than one million people have been displaced, tens of
thousands have been killed, looting has occurred on a massive scale,
and last month U.S. Director of National Intelligence James Clapper
informed Congress that "much of the country has devolved into

It is also quickly becoming a regional arms-smuggling hot spot.  With
millions of weapons reportedly unaccounted for as a result of the
pillaging of government armories, it's feared that weaponry will find
its way into other continental crisis zones, including Nigeria, Libya,
and the Democratic Republic of Congo.

In addition, the coalition operation there has failed to prevent what,
after a visit to the largely lawless capital city of Bangui last
month, the United Nations High Commissioner for Refugees Antonio
Guterres called "ethnic-religious cleansing."  Amnesty International
found much the same.  "Once vibrant Muslim communities in towns and
cities throughout the country have been completely destroyed as all
Muslim members have either been killed or driven away. Those few left
behind live in fear that they will be attacked by anti-balaka groups
in their towns or on the roads," the human rights group reported.
"While an African Union peacekeeping force, the African-led
International Support Mission to the Central African Republic (MISCA),
supported by French troops, has been deployed in the country since
early December 2013, they have failed to adequately protect civilians
and prevent the current ethnic cleansing from taking place."

"We're not involved with the fighting in Mali," AFRICOM spokesman
Benjamin Benson told me, emphasizing that the U.S. military was not
engaged in combat there.  But Washington is increasingly involved in
the growing wars for West and Central Africa.  And just about every
move it has made in the region thus far has helped spread conflict and
chaos, while contributing to African destabilization.  Worse yet, no
end to this process appears to be in sight.  Despite building up the
manpower of its African proxies and being backed by the U.S.
military's logistical might, France had not completed its mission in
Mali and will be keeping troops there to conduct counterrorism
operations for the foreseeable future.

Similarly, the French have also been forced to send reinforcements
into the Central African Republic (and the U.N. has called for still
more troops), while Chadian MISCA forces have been repeatedly accused
of attacking civilians.  In a sign that the U.S.-backed French
military mission to Africa could spread, the Nigerian government is
now requesting French troops to help it halt increasingly deadly
attacks by Boko Haram militants who have gained strength and weaponry
in the wake of the unrest in Libya, Mali, and the Central African
Republic (and have reportedly also spread into Niger, Chad, and
Cameroon).  On top of this, Clapper recently reported that Chad,
Niger, Mali, and Mauritania were endangered by their support of the
French-led effort in Mali and at risk of increased terror attacks "as

Still, this seems to have changed little for the director of national
intelligence.  "Leveraging and partnering with the French is a way to
go," he told Congress last month. "They have insight and understanding
and, importantly, a willingness to use the forces they have there

France has indeed exhibited a longstanding willingness to use military
force in Africa, but what "insight and understanding" its officials
gleaned from this experience is an open question.  One hundred and
sixteen years after it completed its conquest of what was then French
Sudan, France's forces are again fighting and dying on the same fields
of battle, though today the country is called Mali.  Again and again
during the early 20th century, France launched military expeditions,
including during the 1928-1931 Kongo-Wara rebellion, against
indigenous peoples in French Equatorial Africa.  Today, France's
soldiers are being killed on the same ground in what's now known as
the Central African Republic.  And it looks as if they may be slogging
on in these nations, in partnership with the U.S. military, for years
to come, with no evident ability to achieve lasting results.

A new type of expeditionary warfare is underway in Africa, but there's
little to suggest that America's backing of a former colonial power
will ultimately yield the long-term successes that years of support
for local proxies could not.  So far, the U.S. has been willing to let
European and African forces do the fighting, but if these
interventions drag on and the violence continues to leap from country
to country as yet more militant groups morph and multiply, the risk
only rises of Washington wading ever deeper into post-colonial wars
with an eerily colonial look.  "Leveraging and partnering with the
French" is the current way to go, according to Washington.  Just where
it's going is the real question.


The US' Hard Power Insertion across Africa is compelling and allows
the US to tilt the Pitch.

read more

ALY-KHAN SATCHU Wrote: (your comment)
Law & Politics

Taking a broader Sweep, it is clear that the United States and
@USAfricaCommand has carved out a much more forward Position on the
African Continent. In some respects, @BarackObama 's Pivot to Asia
detours through Africa. China has made a Parabolic Advance across the
African Continent and one of the 'desired' Side Effects of staunching
the 'Al-Qaeda' Advance is that it also counters the Chinese Advance
via The Insertion of US Hard Power. The US cannot challenge China's
Extreme Dollar Diplomacy but it can insert Hard Power with which it
can tilt the African Pitch.

Now returning to Africa and although @USAfricaCommand was set up under
a Previous President's Watch, I think the Penny dropped [re China's
extraordinary Surge in Africa] only quite recently or in the last 24

Zbigniew Brzezinski [whom I admire and I believe is a Foreign Policy
Eminence Grise and has @BarackObama's Ear] once said that '' the three
grand imperatives of imperial geostrategy are to prevent collusion and
maintain security dependence among the vassals, to keep tributaries
pliant and protected, and to keep the barbarians from coming

I think the interesting Point is how Africa has now become Front and
Centre of the Geopolitical Global Puzzle and the Collision between US
Hard Power and China's Soft Power

A Sine qua non of President Barack Obama's pivot to Asia is US/NATO
Power Projection over the Indian Ocean. 19-AUG-2013 @UKenyatta
rebalances towards China


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Currency Markets at a Glance WSJ
World Currencies

Euro 1.3852 While the exchange rate isn't a policy target for the ECB,
Draghi said in Vienna yesterday that the currency's level is becoming
"increasingly relevant in our assessment of price stability."
Dollar Index 79.67
Japan Yen 101.66 The yen rose 0.2 percent to 101.65 per dollar as of
7:11 a.m. in London. It's set for a 1.6 percent weekly gain, the
biggest since the five days through Jan. 24
Swiss Franc 0.8760
Pound 1.6614
Aussie 0.9006 Goldman Sachs cut its 12-month forecast for the Aussie
to 80 cents from 85, and the six-month estimate to 82 from 88.
India Rupee 61.495
South Korea Won 1072.54
Brazil Real 2.3641
Egypt Pound 6.9645
South Africa Rand 10.8174

The MSCI Asia Pacific Index of shares has declined 3.7 percent this
week, set for the biggest decline since May 2012. The MSCI World Index
of developed equities has fallen 2.2 percent since March 7.

The Aussie has risen 0.4 percent this year, according to Bloomberg
Correlation-Weighted Indexes that track 10 developed currencies. The
yen has gained 3.2 percent, while the euro has added 0.2 percent. The
dollar has lost 0.7 percent.

Dollar Index 3 Month Chart INO 79.67


Euro versus the Dollar 3 Month Chart 1.3852


Dollar Yen 3 Month Chart INO 101.66


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Commodity Markets at a Glance WSJ

Gold 3 Month Chart INO 1370.57 [6 month highs]


Bullion for immediate delivery rose as much as 0.5 percent to
$1,376.64 an ounce, the highest level since Sept. 10, and was at
$1,370.85 at 2:39 p.m. in Singapore, up for a fourth day. The metal is
heading for a sixth weekly increase, the longest run since August
2011, as assets in the largest exchange-traded product expanded to the
highest level this year.

Gold advanced 14 percent this year.

Crude Oil 3 Month Chart INO 97.83 [Above 100.00 was a Short Selling
Opportunity par excellence]


read more

Coffee 3 Month Chart INO 205.95 +86% 2014

Futures in New York jumped 86 percent this year to $2.0595 a pound. By
May, they may reach $3, the highest since 2011, said Judy Ganes-Chase,
an industry consultant in Panama City, Panama, who has been analyzing
the market for three decades.

"There's very low price-elasticity-of-demand for coffee," said Paul
Christopher, the St. Louis-based chief international strategist at
Wells Fargo Advisors, which manages $1.4 trillion. "Would people who
like coffee regularly substitute tea, or soda, if prices rise? The
answer is 'No.'"

Americans drink one of every four cups globally, 9.5 percent more than
No. 2 Brazil and two and a half times the amount consumed in Germany,
ICO data show. About 32 percent of U.S. demand is outside the home, in
restaurants including McDonald's Corp. (MCD), coffee shops including
Tim Hortons Inc. (THI), and at work, up from 21 percent in 2004,
StudyLogic estimates.

read more

Copper 1 Year Chart [44 month lows]

The metal, trading near a 44-month low on the London Metal Exchange,
fell 5.5 percent this week, the most since April. Copper has dropped
13 percent this year. Futures on the Shanghai Futures Exchange headed
for the biggest weekly decline since since September 2011 and traded
near the lowest since July 2009.

read more

Pakistan's rupee jumped 3.8 percent this week, its biggest five-day advance since 2000, as a rebound in the nation's foreign reserves won confidence.
Emerging Markets

The rupee led gains among global exchange rates in the past five days
after Finance Minister Ishaq Dar said March 12 said the nation's
currency stockpile have climbed to $9.52 billion following
international contributions of about $1.5 billion to the Pakistan
Development Fund, from $8.3 billion at the end of 2013. The local
currency strengthened amid optimism inflows from a planned global bond
offering, an auction of third-generation mobile-phone licenses and an
International Monetary Fund loan will further improve external

The rupee advanced 5.5 percent this month to 99.45 per dollar and
touched 97.7870, the strongest level since June, on March 12,
according to data compiled by Bloomberg. It retreated 0.6 percent
today. The currency appreciated 5.9 percent so far this year after
slumping 7.8 percent in 2013.

Foreign-exchange reserves, which had declined by a record $6.7 billion
in 2013, will rise to about $16 billion by December, Finance Minister
Dar said in a statement on Feb. 13. In September, the IMF approved a
$6.6 billion loan for the country to bolster an economy suffering from
power shortages and a Taliban insurgency.

Pakistan's economy is on course to achieve the official target of 4.4
percent expansion in the year ending June 30, Dar said at a March 12
press conference in Islamabad, after the prior period's 3.6 percent
growth. The budget deficit in the last eight months narrowed to 3.1
percent of gross domestic product, Dar said, from 4.1 percent a year

Frontier Markets

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China slowdown clouds sub-Saharan Africa outlook FT Subscriber

In a world of shrinking liquidity, sub-Sahara African governments are
finding little room to manoeuvre in stimulating their cooling
economies as investors and ratings agencies take a much harder line on
state excesses. With growth prospects improving in developed markets
and questions being raised about the fate of emerging markets -
especially with growing evidence of a bigger than expected Chinese
slowdown - investors have started to write off large swathes of the
developing world. While it would be folly to use a broad brush, growth
estimated at 4.6 per cent in the region last year was the second
slowest pace since the start of the century (see chart). This year,
Capital Economics estimates a slight uptick to 5 per cent growth for
the region which, although still well below the trend line of the
previous decade, would still make Sub-Saharan Africa one of the
world's fastest growing regions this year.

There are, however, more clouds on the horizon. China's slowing
economy, which is depressing demand for a series of ores, minerals and
other commodities that Africa produces, could weigh more heavily in
months to come. Copper prices have plunged over 14 per cent (see
chart) over the past year as the world's second-biggest economy looks
to break away from its dependence on fixed investment and rebalance
toward consumer spending. Zambia and the Democratic Republic of Congo
vie for the title as Africa's biggest producer of the metal, a key
component in infrastructure projects.
Other industrial commodities such as platinum - mostly mined in South
Africa and Zimbabwe - have also remained in depressed territory, with
the metal over 34 per cent off its all time high reached in March

Even as the outlook for copper, platinum and other commodity revenues
deteriorates, several sub-Saharan economies are constrained in their
ability to use fiscal means to offset the slowing resource sector by
fiscal means. Budget deficits are most pronounced in Zambia, Ghana and
Kenya (see chart), analysts said.

"Everybody is trying to be careful about spending," says Xhanti Payi,
a Johannesburg-based country risk manager at Standard Bank.

Although most sub-Saharan African countries have nowhere near the debt
levels that triggered the Eurozone crisis, the reduced liquidity in
global markets because of the US Federal Reserve's decision to reduce
its monthly bond purchases is contributing to a sense of investor
caution. At the high end of the spectrum, Ghana has a debt to gross
domestic product (GDP) ratio of 55 per cent, which compares favourably
with Italy, whose debt is sitting at 132.6 per cent to GDP, and
Germany's 81 per cent ratio. Nigeria, Africa's most populous country,
has a debt to GDP ratio of 19.9 per cent, while South Africa, the
region's biggest economy, has a debt to GDP ratio of 39.9 per cent.
From an investor's perspective, real concern is reserved for those
countries that run not only a high budget deficit but also a high
current account deficit in addition to significant levels of domestic
debt. In this regard, Ghana looks most exposed, followed by South
Africa (see chart).

Zambia has a fiscal deficit - when a government's total expenditures
exceeds revenue - of 8.5 per cent of gross domestic product (GDP).
However, its current account deficit - which indicates that the
country is a net borrower from the world - is at the relatively modest
level of 3 per cent of GDP.

Ghana has a fiscal deficit of 10.9 per cent and current account
deficit of 13 per cent of GDP. South Africa, the continent's biggest
economy, has a fiscal deficit of 4 per cent and current account
deficit over 5.1 per cent to GDP.

"(Some) Governments are constrained," Payi said.

Such vulnerabilities have weighed on the currencies of several African
nations, which has triggered rising inflation across the region. Of
the 24 African currencies tracked against the US dollar by Bloomberg
data, only three - Somali Shilling, Malawian Kwacha and Djiboutian
Franc - have strengthened this year.

The Ghana Cedi has been the worst performer against the US dollar,
weakening 8.4 per cent, the Zambian Kwacha has seen its value fall 7.4
per cent and the Mozambique New Metical has depreciated 6.3 per cent.

Weaker currencies have seen central bankers in Zambia, Ghana and South
Africa- whose currency has recovered some of its losses from earlier
in the year to trade just under 4 per cent lower for the year -
increasing interest rates.

Due to rising interest rates, Capital Economics sees growth over the
next two years at "below the average of the past decade."

With the exception of the South African consumer, higher borrowing
costs aren't as damaging to the African consumer as they are to a
European consumer as credit markets are not as well developed.

Capital expects the South African Reserve Bank to hike rates by a
further 150-basis points in the current tightening cycle to 7 per
cent. Earlier this week, South Africa's main business confidence index
fell by two points in the first quarter of the year, signalling that
60% of survey respondents assessed the prevailing business conditions
as unsatisfactory. Consumer confidence levels are already depressed.

Should business and consumer confidence remain under pressure in the
coming quarters, Investec said in a note it would "exacerbate the
existing downside risks to growth, which include prolonged work
disruptions and a weaker than expected recovery in the global

Against this backdrop, Investec says the country's central bank may
keep monetary policy accommodative, expecting only one further
interest rate hike in July this year.

While the South African economy is more directly exposed to higher
borrowing costs, along with the rest of the continent, its consumers
are likely to come under pressure from falling wage growth and higher

Ghanaian public sector workers have become used to high double digit
wage increases and in 2012 - when presidential polls took place -
wages rose 80 per cent in attempts to move workers to higher base.
These increases fed into consumer spending but this year, Payi said,
public sector workers may struggle to win even a 5 per cent pay

While economic conditions are set to constrain growth in sub Saharan
Africa, politics has also served as a debilitating factor. While
headline GDP growth in Nigeria is likely to remain impressive over
coming years, Capital Economics warns of political developments that
may muddy its prospects.

Earmarked as a stand-out performer in the region by economists is
Kenya, whose economy emerged largely intact from what was expected to
be contentious polls last year. Over the coming years, the country is
seen growing at 5 per cent annually.

Growth will be supported in large part by strong domestic demand,
Capital Economics said, with interest rates down over a 1,000 basis
points over the past 18 months. "Given that Kenya is not a major
commodities producer, its terms of trade should also improve as global
commodity prices fall."

Another potential standout performers in the region is Angola, which
despite its strong trade links with China, Capital Economics thinks
should continue to perform well over the next few years. Angola along
with Nigeria is a major producer of oil, "for which we expect demand
from China to hold up relatively well," the think-tank said.
The smaller economies of Namibia and Botswana were also singled out as
strong performers in the coming years.

Sub Sahara GDP Chart via @FT

Copper Price Plunge via @FT

SSA Budget deficits as a % of GDP @FT

SSA Current Account Deficits



Aly-Khan Satchu | March 13 8:51am | Permalink

The Achilles Heel is that SSA Governments have expanded their
recurrent Expenditures having projected a Rising Tide of Revenues.
Single Club Players like Zambia [Copper] and those who gorged on
recurrent expenditure like Ghana look like a Train wreck just waiting
to happen. The medium Term is bright but near term we are in very
choppy waters. And recall that even the most churlish recognise that
China floated a lot of SSA Boats. We all know what happens when the
Tide goes out. Aly-khan Satchu Nairobi

China slowdown worries mineral-rich Africa (1:59) @Reuters

An economic machine - that's slowing down. China's GDP growth slowed
in the second quarter to 7.5% year-on-year. Beijing expects the
economy to grow by the same rate in 2013 - impressive anywhere else in
the world, but China's slowest pace in 23 years. The impact will also
be felt thousands of miles away in Africa, as China is the continent's
biggest trading partner. Economic analyst Aly Khan Satchu says the
effects may be even worse than expected. SOUNDBITE: Aly Khan Satchu,
CEO at Rich Management, saying (English): "It is going to hit Africa
quite hard, in particular those countries that have got a very deep
trade relationship with China and they are not difficult to spot...
like Angola, Zambia with the copper."

China overtook the US as Africa's largest trading partner in 2009.
Trade rose from $10bn in 2000 to $210bn last year. via @FT


South Africa All Share Bloomberg +1.90% 2014


Dollar versus Rand 3 Month Chart INO 10.82230


Egypt Pound versus The Dollar 3 Month Chart INO 6.9645


Egypt EGX30 Bloomberg +20.08% 2014 [Fresh more than 5 Year High]


Nigeria All Share Bloomberg -6.53% 2014



Ghana Stock Exchange Composite Index Bloomberg +11.70% 2014


Is Ethiopia Ready for Fast Food and Name-Brand Soap?


Ethiopia is a largely agricultural nation of 94 million people that
endures frequent droughts and famine, with a per-capita income of a
bit more than $100 per month. Is it ready for Heineken beer and KFC
chicken outlets?

The companies behind these global brands think it may be.
Amsterdam-based Heineken (HEIA:NA) is scheduled to open a $127 million
brewery in mid-2014 on the outskirts of Ethiopia's capital, Addis
Ababa. Unilever (UN), the British-Dutch consumer-products giant,
announced plans this month to open a factory near Addis Ababa that's
expected to produce detergents such as Omo. Louisville-based Yum!
Brands (YUM), which owns KFC, is also considering a move into

As Africa's second-most-populous country, behind Nigeria, "Ethiopia is
the one that stands out," Bruce Layzell, Yum's general manager for new
African markets, told Bloomberg News. "We don't want to go to a
country where we can only build four or five restaurants," he said.
"We want to go in and build 50, 100. Our business is the scale game."
Besides the size of its population, what attracts multinational
consumer groups to Ethiopia is robust economic growth, averaging 9.3
percent over the past four years, according to the International
Monetary Fund.

Unilever says it's trying to emulate its success in Vietnam, where
over the past 20 years it has invested some $300 million and enjoyed
average annual sales growth of more than 10 percent from brands that
include Lipton tea and Dove soap. As in Vietnam, "we've taken a
long-term investment decision in Ethiopia," Dougie Brew, Unilever's
head of corporate affairs for Africa, told Bloomberg. Unilever plans
to develop a "comprehensive consumer-goods manufacturing business," he
said, as well as a network of Ethiopian suppliers and distributors.

Heineken made its first big move into Ethiopia in 2011, when it
acquired two state-owned brewers, Harar and Bedele, for $160 million.
The new brewery scheduled to open this summer will produce Harar and
Bedele as well as Heineken, according to local press reports quoting
company officials.

Even if they can afford beer and soap, do Ethiopians really have
enough disposable income to dine out regularly? Yum's Layall admits
the company is "nowhere near pushing the go button" for KFC in
Ethiopia. "It's still at that explore stage, to find the right
partner, to see if the business model will work."

But the company has reasons to be optimistic: It already operates in
more than a dozen sub-Saharan African countries, including at least
two, Malawi and Zimbabwe, that are even poorer than Ethiopia.

Known in Portuguese as palanca negra gigante, the animal is found
only in Angola and it is the country's national symbol.


But its numbers have plummeted after decades of war and poaching.
From the thousands that existed in 1975, fewer than 100 giant sable
antelopes are left, according to the International Union for
Conservation of Nature (IUCN). The species is on the IUCN Red List of
threatened species as "critically endangered", one position before it
is considered vanished and deemed "extinct in the wild".

read more

Kenya Trotting ahead The Economist
Kenyan Economy

AS THE sun goes down over Nairobi, a new rich set of T-shirt-wearing
Kenyans, most of them black and in their 30s, roar with laughter as
they quaff whiskies and smoke giant cigars in the Capital Club, the
country's latest temple to Mammon. A year's membership, a beautiful
waitress proudly purrs, is "a million shillings"--about $10,000. Your
correspondent watches English football on one of four large television
screens, alongside a wall of faux-Masai shields, while waiting for his
would-be host, the spokesman of President Uhuru Kenyatta. Alas, the
spokesman fails to turn up; it is a Saturday evening, but the
president is apparently too busy to spare him. Mr Kenyatta, one of
Kenya's richest oligarchs, who next month will complete his first year
in office, is reportedly fond of similar ritzy watering-holes.

Barely a mile away from the Capital Club, the acrid fumes of charcoal
fires in Kibera, a notorious slum, mingle with the stench of sewage
running down the muddy alleys where perhaps 800,000 Nairobians live in
hugger-mugger squalor. The government, says May Achieng, who runs a
church-linked school there, provides "absolutely nothing" in the way
of services. Manual workers lucky enough to have a job in the
metropolis can earn 200-300 shillings ($2-3) a day. Domestic and gang
violence are rife. Armed police have a station at the entrance to
Kibera, but generally keep out of the slum. Visitors are warned to
watch out for robbers and "flying toilet"--bags of excrement chucked
out of houses at night. Politicians, says Mrs Achieng, turn up only at
election time, "or if there is a fire or some kind of disaster".

These two Kenyas exist cheek by jowl, both of them, in their way,
equally dynamic. Half a century after independence from Britain, rich
and poor are both locked into a system of patronage and tribe, all
competing for advancement, whether for modest jobs in the civil
service or for huge bribes to fix contracts for grand infrastructure
projects. In the aftermath of a disputed election in 2007, Kibera,
whose districts are unofficially divided along tribal lines, was
affected as bloodily as anywhere. "One community chopped off the
sexual organs of another community," says Mrs Achieng, a Luo, whose
leader, Raila Odinga, was reckoned by independent observers to have
been cheated of victory. Defeated again last year, in a fairer though
still flawed poll, he remains the opposition's head.

If this system is to hold, several requirements must be met in the
years to come. The weather, notoriously variable, must be clement
enough to satisfy the more than half of Kenyans who still live on the
land. At the time of independence, in 1963, the countryside barely
sustained a population of 8m; that has now swollen to 45m. Law and
order must continue more or less to prevail, even while the police, in
the words of a security analyst, "are corrupt from top to bottom".
Terrorism, especially a recent wave of it perpetrated by recalcitrant
Somalis and sundry Islamist extremists, must be contained. The balance
of power, already skewed, must not tilt too far in favour of one
tribe. And the economy must grow fast enough to spread the largesse of
patronage, leaving enough to trickle down even to the masses in the
likes of Kibera.

None of this can be assured. And yet, polarised and unequal as Kenya
is, its progress punctuated by electoral violence and spasms of ethnic
tension, the country has for the most part muddled valiantly ahead.

It remains the economic and political hub of wider east Africa,
drawing a quarter of a billion people into its orbit. The stock- and
housing markets are booming, prices in parts of Nairobi rising
sevenfold since 2009. The economy grew by 5% last year and is likely
to do just as well this.

Diplomats seeking to solve crises in Somalia, South Sudan and the
Great Lakes region encompassing Rwanda and eastern Congo are based in
Nairobi, which also hosts a plethora of UN regional headquarters. Some
international companies are shifting their African headquarters from
South Africa to Kenya, the fifth-biggest economy south of the Sahara.
Kenya Airways is among the best in Africa.

The country is also bidding to become a hub of IT. Its M-Pesa
mobile-telephonic banking system, from which more than half of Kenya's
people benefit, has proved a global model. The country has one of the
highest rates of Facebook membership in Africa; more than half a
million Kenyans are on Twitter. In the Kilimani suburb of Nairobi, a
thriving outfit called the iHub, led by a red-bearded American called
Erik Hersman, serves a burgeoning community of innovators, technology
investors and researchers, spurred on by Google and Microsoft, among
other companies.

Hopes have been rising that discoveries of oil in remote Turkana
county, in the north-west, may soon be matched by an offshore gas
bonanza. This could give a boost to the much-delayed Lamu Port and
Lamu-Southern Sudan-Ethiopia Transport Corridor, known as LAPSSET,
which would include a railway, fibre-optic cable and pipeline, even if
its proposed connection to South Sudan (now in the throes of civil
war) and Ethiopia is uncertain.

At last Kenya is seriously trying to improve its dreadful transport
links, with help from China. Nairobi's traffic is still in a perpetual
jam, but work on a ring road is under way and there are plans to build
a new railway line from Mombasa to Nairobi, besides revamping the one
that goes on to Uganda. A trans-Africa highway should eventually run
from Mombasa through Kenya and Uganda and even across Congo to the

Against this hopeful backdrop, grave worries persist. The attack by
Somali extremists on Nairobi's Westgate shopping centre in September,
which left at least 69 people dead, has shaken confidence in the
police and armed forces, who looted the place afterwards. Gross
overreaction by the police against suspected Islamist extremists on
the coast, involving extrajudicial killings, has served only to
recruit more people to the extremists' cause. Another attack on a
prominent target is all too likely--and could drive away foreign
investment. Several close shaves since December include a bomb that
failed to detonate near the British Airways check-in counter at
Nairobi's main airport, ludicrously shrugged off by the interior
minister as "an exploding light-bulb".

This year has witnessed a sharp rise in violent crime, already at
epidemic levels. The police are frequently suspected of complicity.
Big companies rely on private-security firms, of which there are at
least 200 in Nairobi alone. Their staff are far better paid and
equipped than the police, though they are not allowed to be armed.

President Kenyatta is considered so rich that he has no need to
feather his nest, thanks to the wealth amassed by his family during
and after the presidency of his father, Jomo, who ran the show from
1963 until his death in 1978. Mr Kenyatta has spoken out against
corruption and docked his own pay by one-fifth. But nobody thinks that
graft is being seriously tackled. The railway contracts, awarded
following closed bidding, and an extravagant scheme to provide schools
with computers are dogged by accusations of graft.

The creation of 47 counties, as a result of a new constitution
endorsed in 2010, has added a new layer of corruption and taxation.
Moreover, the two houses of parliament, the county governors and the
courts (under an admirably independent chief justice, Willy Mutunga)
are paralysed by a dispute over whose powers and decisions should

As for the president, he has been woefully distracted by his
indictment by the International Criminal Court (ICC) at The Hague for
allegedly orchestrating violence after the election in early 2008. He
has used every conceivable ruse to ensure that his case ends in
acquittal or is dropped altogether, an outcome considered increasingly
likely. The Standard, a Kenyan newspaper, reported on February 24th
that nearly half of the witnesses enlisted by the prosecution had been

Mr Kenyatta has stirred up Kenyans and fellow African leaders against
the ICC, badly damaging relations with allies in Europe and America.
If the case fizzles out, they may be repaired. But much of Mr
Kenyatta's first year in office has been wasted on this issue. In any
case, there is a growing perception that he lacks grip. He failed to
sack any senior figures in the wake of the Westgate fiasco. Despite
his declarations against corruption, he has instigated no
investigations over the railway contracts and other dodgy-sounding

And Kenya remains split along tribal lines (see table). Mr Kenyatta's
fellow Kikuyu, the largest and richest group, are perceived by members
of other tribes to be "eating"--as the Kenyan metaphor goes--more than
their fair share of the cake. William Ruto, the vice-president, who
heads the Kalenjin group that ruled the roost under a previous
president, Daniel arap Moi, is said to be unhappy. He, too, has been
indicted by the ICC. Should the case against the president fail but
the one against Mr Ruto drag on, the coalition would wobble and could
fall. Mr Kenyatta is said to be lining up Mr Moi's son Gideon as a
possible replacement.

"Kenya is very polarised," says John Githongo, a veteran
anti-corruption campaigner who in 2002 was entrusted with cleaning up
government but had soon to flee abroad for his life. "It is a country
no longer at ease with itself." The "coalition of the accused", as he
has mockingly called it, may not last. "The Kalenjin will never trust
the Kikuyu," says a banker friend of Mr Kenyatta. "No matter what the
ICC says, Kikuyus in their hearts believe Ruto orchestrated the
violence against them. But for the sake of the government's survival,
they're not saying it too loudly."

Campaigners for democracy and openness are worried that Mr Kenyatta
and his friends are trying to impede them, much as the government has
plainly done its best to hamstring the ICC's investigation. Bills are
being put forward in Parliament to curb the buoyant media and to limit
foreign funding for NGOs. On March 7th one of Kenya's liveliest
anti-establishment campaigners, Boniface Mwangi, was beaten up by
police. "There's a danger we are sliding back to the ways of the Moi
era," says another disconsolate pro-democracy activist.

Nonetheless, in its usual inequitable and patchy manner, Kenya is
powering ahead. The vitality and reach of social media make it
impossible for Mr Kenyatta to acquire the sort of powers Mr Moi
exercised in what was then a one-party state. But he is finding it
hard to keep Kenya both dynamic and harmonious. A year into office, he
still has to prove that he is the right sort of leader. If the ICC
case is put to one side, he will have no excuses.


Aly-Khan Satchu1 min ago

I think you have summed it up just right. Lots of Promise a potential
Break-Out Moment as long as it does not get sacrificed on the Altar of
the Government's recurrent expenditure. And I absolutely agree, it is
the President's Charm and Manner and an instinctive sense amongst
Kenyans that his Motives are in the right place, which has got us
here. Like Yourself, I think the President has now to walk the Talk.
It is extraordinary that not one Official has been fired. Its just
peculiar. You begin to look a little helpless when not one fellow gets
fired after Westgate and a string of other issues. Aly-Khan Satchu

Kenya likely to start marketing Eurobond later this month-IMF


NAIROBI, March 13 (Reuters) - Kenya plans to begin marketing its debut
Eurobond at the end of this month, and investor interest in the issue
appears strong, the International Monetary Fund said on Thursday.

Kenya expects to borrow up to $2 billion from international markets to
refinance an existing syndicated loan of $600 million and to fund the
construction of infrastructure projects.

"It is still the objective of the Kenyan authorities to conduct a
roadshow, most likely towards the end of March or in April 2014,"
Ragnar Gundmundsson, the IMF's resident representative in Kenya, told
Reuters in an interview.

There were indications of considerable interest in the issue, he said,
in spite of market volatility set off when the United States decided
to wind down its economic stimulus.

"The yields for countries like Kenya are still likely to be
attractive, especially when you compare with the cost of borrowing on
the domestic market," Gundmundsson said.

The IMF expects the Kenyan economy, east Africa's largest, to expand
by 5.5-6 percent this year, compared with an estimated 5.1 percent in
2013. Good weather and increased lending to the private sector are
expected to boost growth.

Credit to the private sector is growing 20 percent a year, the central
bank said, up from about 10 percent in 2012, after Kenya's central
bank raised rates to combat inflation.

"This rate of growth in credit to the private sector is compatible
with a pick-up in economic activities without creating undue
inflationary pressure," Gundmundsson said.

The central bank is likely to maintain a cautious monetary stance
until towards the end of the year, when inflation is projected to fall
to its 5 percent target, from 6.86 percent last month.

"If they do see that the downward inflation trends are confirmed, then
they may consider some relaxation of the monetary policy stance," he
said, adding that the central bank will also bear in mind the credit
growth rate.

The IMF expects Kenya's current account deficit to narrow to 7.7
percent of GDP by June 2015, the end of the next fiscal year, from 8.3
percent this fiscal year. Gundmundsson credited government efforts to
better capture data related to the current account, such as foreign
investment and export of services.

Kenya is also rebasing its gross domestic product to take into account
emerging sectors like oil and gas, which is likely to lead to an
increase in estimates of the economy's size. The exercise will be
completed by the end of May this year.

However, rising public-sector wages threaten to crowd out spending on
development, set at a minimum of 30 percent of the revenues per year.
Kenya spends 54 percent of annual revenues on wages, against a global
benchmark of about 35 percent. Salaries are expected to jump to 64
percent of annual revenues in the next three years.

"It is clearly not sustainable if the government wants to create
sufficient space to finance development priorities," Gundmundsson

And of course, there is our big Wembley stadium moment with the
eurobond, which is now imminent January 20 2014


I incline to the view that the Kenya government should slot the
Eurobond market the full $2bn. This eurobond issue will release the
pressure cooker that is the domestic bond and interest rate markets--we
should see a good rally in interest rates. Hopefully, the banks will
go for some volume and not just spread and the economy can get juiced
a little on lower interest rates.

04-NOV-2013 :: Kenya joins Africa's Eurobond League


WE have notified JPMorgan and invited them to discuss a letter of
mandate, which is essentially a contract, to be the lead manager of
the sovereign bond," The Cabinet Secretary National Treasury said on
October 23.

This will be Kenya's inaugural sovereign dollar Eurobond and the issue
size is likely to be $2b and therefore, the biggest Eurobond issue by
a sub Saharan issuer [the government needs to repay a $600m syndicated
loan and therefore a $2b issue will equate to $1.4b of new money].
Given that the Eurobond is set to be denominated in US dollars and the
maturity set at 10 years, our first port of call needs to be the [on
the run] US 10-year bond, which is essentially the reference price.
The US 10 year bond yield was last trading at a yield of 2.622 per
cent. The US 10 year yield touched a low of 1.692 per cent early May
[and that was the most optimal moment in 2013 for issuers] and in
early September the yield touched three per cent [and that was the
least optimal moment for issuers in 2013].

There are currently nine sovereign issuers in sub Saharan Africa and
they include the likes of South Africa, Nigeria and the newest kid on
the block [at least, until we get there] Rwanda. Rwanda sold their
Eurobond in late April when the US 10-year was at historic lows close
to 1.692 per cent and when folks take a broader sweep, they will no
doubt be hugely impressed by the timing of President Kagame's Rwanda,
an erstwhile neophyte in the global capital markets.

Traders and investors all watch the credit spread. The credit spread
is the difference between the yield of the issuer and the equivalent
US bond. For example, Rwanda's Eurobond carried a coupon of 6.625 per
cent and was sold at a yield of 6.875 per cent. Rwanda sold bonds at a
credit spread of 6.875 per cent-1.70 per cent = 5.175 per cent. The
correct terminology would be that Rwanda was sold at 517.5 basis
points over the US.

I recall being in a conversation at the IMF/government of Kenya
conference with an advisor to the Central Bank who asked me;

"Aly-Khan what was the yield on the Rwanda Bond?" I said, "6.875 per cent."

"Well, we cannot sell ours above that!"

And I replied; "Actually, the coupon and the yield of our bond will
depend on the yield of the US bond pertaining at the time and the key
point is the credit spread."

The response was that this was all irrelevant and we had to issue a
bond with a yield less than Rwanda's. As I have grown older, when I
hear this kind of argument, I think of Lao Tzu who said;

"Men are born soft and supple; dead they are stiff and hard. Plants
are born tender and pliant; dead, they are brittle and dry. Thus
whoever is stiff and inflex- ible is a disciple of death. Whoever is
soft and yielding is a disciple of life. The hard and stiff will be
broken. The soft and supple will prevail."

So the key metric to watch is the credit spread. That is a market
driven measure and it is dynamic. Bond holders take no prisoners.
Once, we issue our Eurobond, we have essentially given the
international markets a vehicle to price Kenya's credit spread on a
daily and a real time basis. I am exaggerating a little but not much.
The global markets will be poring over every single utterance on a
real time basis and that spread about which I spoke will start moving
around. And if the markets feel for example that we do not hold sacred
the sanctity of contracts, our spread will start moving.

Prime Minister Tony Blair gave talking points every morning to his
cabinet and no minister was permitted to stray from those points. We
will surely need a similar process because when you sell $2b of bonds
to international investors that bond holder constituency immediately
becomes primus inter pares and that you can take to the bank.

Kenya Shilling versus The Dollar Live ForexPros 86.459


Nairobi All Share Bloomberg  +5.74% 2014 [0.193% below a Record
Closing High set 24th January 2014]


144.29 +1.98 +1.39%

03-MAR-2014 Corporate Earnings above Expectations @NSEKenya Poised Higher


Nairobi ^NSE20 Bloomberg +0.71% 2014


Every Listed Share can be interrogated here


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

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