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Satchu's Rich Wrap-Up
Tuesday 25th of March 2014

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If you are tracking the NSE Do it via RICHLIVE and use Mozilla Firefox
as your Browser.
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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This is #Africa 's Century Amb Sec Gen @RSezibera

I am looking forward to hosting the Sec Gen of the EAC Dr. Richard
Sezibera at #Mindspeak @InterConNairobi this Saturday 29th March

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#Mindspeak is held at the InterContinental Nairobi

This Year alone we have had some real heavyweight and wonderful Guests
from Madam Christine @Lagarde the MD of the IMF, Dr. Titus Naikuni CEO
@KenyaAirways and Charles Ireland CEO EABL.

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#Mindspeak 2014 RICH TV

Macro Thoughts

Home Thoughts

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The same rainbow but in Muthaiga and a little earlier #Nairobi

"What's known as bleeding-edge technology," sez Lucas. "No proven use,
high risk, something only early-adoption addicts feel comfortable
with." -- Thomas Pynchon, Bleeding Edge

"Explosion without an objective," declared Miles Blundell, "is
politics in its purest form." -- Thomas Pynchon, Against the Day

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The View of Nairobi from the 8th Floor 62 days ago

"No matter how the official narrative of this turns out," it seemed to
Heidi, "these are the places we should be looking, not in newspapers
or television but at the margins, graffiti, uncontrolled utterances,
bad dreamers who sleep in public and scream in their sleep."  ---
Thomas Pynchon, Bleeding Edge

Aly-Khan Satchu's story - My Escape from the Gilded Box @Homecomingrev

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U.S. Marine Corps helicopters carrying US President Barack Obama land on the 'Museumplein' in front of the Rijksmuseum in Amsterdam, Netherlands, on March 24, 2014.
Law & Politics

World leaders suspended Russia from the G8 group of nations on Monday
but stopped short of a permanent expulsion


Russia's reaction was swift and scathing, with Foreign Minister Sergei
Lavrov saying the Kremlin does not "cling to this format" of the G8.
Moscow also imposed travel bans on 13 Canadian officials as the
tit-for-tat diplomacy over the Ukrainian crisis showed no sign of

Mr Obama's deputy security adviser, Ben Rhodes, said the White House
wanted a co-ordinated approach to any deeper economic sanctions, and
"would like to see a steady ratcheting-up of that pressure" following
Russia's annexation of Crimea earlier this month.

David Cameron said last week that Russia's permanent expulsion from
the G8 must be discussed, but the language of the statement made no
mention of expulsion or of any time-scale for the suspension.
Diplomats said they wanted to leave the door open for Russia. "The way
back in is clearly for Russia to change course," said a Downing Street
official. For now, however, "it is a group based on values, and Russia
is not currently espousing the values the rest of us stand by".

Mr Lavrov appeared unmoved. "If our Western partners believe the
format has exhausted itself, we don't cling to this format," he said.
"We don't believe it will be a big problem if it doesn't convene."


Its a Fait Accompli as it was a while back.

U.S. Deputy National Security Adviser Ben Rhodes said China "has
always put front and center this notion of sovereignty and territorial
integrity" in terms of its national security interests even as it
historically has allied with Russia on other issues.


The U.S. and China have made "incredible strides" in their
relationship, and resolving the South China Sea dispute in a
"constructive" way would strengthen ties throughout Asia, the U.S.
president told Xi. Xi said through an interpreter that China is
"firmly committed" to a "new model of international relations."


Thats the Point i was making to Dr. @HCCTurner that counterintuitively
Crimea is a serious geopolitical challenge for China.

A Series of Referenda on the Periphery would mean a much smaller China
as lot of folks peel off.

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Crimea Through a Game-Theory Lens NYT
Law & Politics

A Russian occupation of Crimea raises the specter of the Cold War, in
which the nuclear stalemate between the United States and the Soviet
Union devolved into regional disputes around the world.

While military and political frictions made the biggest headlines, the
Cold War couldn't be well understood without using economic theory --
specifically, game theory, which analyzes the strategic logic of
threats, credibility and conflict.

It's worth viewing the crisis in Ukraine through the prism of game
theory, too, as applied on several fronts:

NUCLEAR DETERRENCE From the standpoint of game theory as developed by
Thomas C. Schelling, a 2005 Nobel laureate in economic science, the
conflict can be seen as a case study in nuclear deterrence. That's
because, after the Soviet Union split into many pieces in the 1990s, a
newly independent Ukraine gave up its portion of the old Soviet
nuclear arsenal. In part, it did so in exchange for a memorandum
supporting its territorial integrity, signed by both Russia and the
United States.

Eliminating its nuclear weapons may have seemed a good deal for
Ukraine at the time, and it can be argued that the world became a
safer place. Yet if Ukraine were a nuclear power today, it would
surely have a far greater ability to deter Russian military action.

TIPPING POINTS Long before Malcolm Gladwell popularized the concept,
Mr. Schelling created an elegant model of tipping points in his
groundbreaking work "Micromotives and Macrobehavior." The theory
applies to war, as well as to marketing, neighborhood segregation and
other domestic issues. In this case, the idea of negotiated
settlements to political conflicts may be fraying, and the trouble in
Crimea may disturb it further, moving the world toward a very
dangerous tipping point.

In a recent blog post, Jay Ulfelder, a political scientist, noted that
for the last 25 years the world has seen less violent conflict than
might have been expected, given local conditions. Lately, though,
peaceful settlements have been harder to find. This change may just
reflect random noise in the data, but a more disturbing alternative is
that conflict is now more likely.

Why? The point from game theory is this: The more peacefully that
disputes are resolved, the more that peaceful resolution is expected.
That expectation, in turn, makes peace easier to achieve and maintain.
But the reverse is also true: As peaceful settlement becomes less
common, trust declines, international norms shift and conflict becomes
more likely. So there is an unfavorable tipping point.

In the formal terminology of game theory, there are "multiple
equilibria" (peaceful expectations versus expectations of conflict),
and each event in a conflict raises the risk that peaceful situations
can unravel. We've seen this periodically in history, as in the time
leading up to World War I. There is a significant possibility that we
are seeing a tipping point away from peaceful conflict resolution now.

"(W)e have every reason to assume that the infamous policy of
containment, led in the 18th, 19th and 20th centuries, continues


Western nations are "constantly trying to sweep us into a corner
because we have an independent position, because we maintain it, and
because we call things like they are and do not engage in hypocrisy."

"Everything has its limits," he added. "(I)n Ukraine, our Western
partners crossed the red line." They "act(ed) irresponsibly and

G7 leaders of the European council, Canada, France, the UK, the US,
Germany, Japan, Italy and the European commission. Photograph: Jerry


#MH370 Pedro Moura Pinheiro/Flickr


 "We have to assume beyond any reasonable doubt that #MH370 has been
lost and that none of those on board survived" Malaysia Airlines tells


Najib said: "With deep sadness and regret, according to this new data,
we must conclude flight MH370 ended in the Southern Indian Ocean."

UK experts told the Malaysia PM that satellite signals have shed more
light on MH370 flight path.

They concluded that MH370 flew along the southern corridor and that
its last location was in the South Indian Ocean, Najib Razak said.

Chinese police block off Malaysian embassy to prevent #MH370
families from talking to press


Flight MH370: Are airliners vulnerable to cyber-attack?


Malaysian Flight MH370 went down in the southern Indian Ocean,
authorities stated Monday, citing a new analysis of satellite data.
But nobody knows just what took it so far off course - including
whether a cyber-attack on the aircraft might have been responsible.

At a hacker conference last April in Amsterdam, Hugo Teso, a Spanish
cyber-security expert and commercial pilot, demonstrated how an
airliner could be hacked using a smart phone app he developed, dubbed

Indeed, securing new aircraft against cyber-attack is a question the
Federal Aviation Administration (FAA) and airplane manufacturers are
wrestling with in the newest fly-by-wire aircraft. These airplanes
rely on networked computers to send electronic signals to engines,
flaps, and other vital flight systems rather than through physical
hydraulic-mechanical linkages.

Evidence of this concern appeared in a "special conditions" ruling in
November, when the FAA ordered that Boeing 777 series airplanes would
have to meet a new requirement titled "Aircraft Electronic System
Security Protection From Unauthorized Internal Access."

The integrated computer networks of Boeing 777 series aircraft "may
enable the exploitation of network security vulnerabilities and
increased risks potentially resulting in unsafe conditions for the
airplanes and occupants," the new rule warns. "This potential
exploitation of security vulnerabilities may result in intentional or
unintentional destruction, disruption, degradation, or exploitation of
data and systems critical to the safety and maintenance of the

To prevent that, the rule orders steps that "ensure that the security
(i.e., confidentiality, integrity, and availability) of airplane
systems is not compromised by unauthorized wired or wireless
electronic connections between the airplane information services
domain, aircraft control domain, and the passenger entertainment

Carl Herberger, a former Air Force pilot and vice president at
Radware, an Israel-based cyber-security firm, says a cyber-attack on
the Malaysian flight was at least possible, citing the FAA rule as
evidence of that.

"It's very clear from this FAA release that cyber-security has not
been part of the scope of testing for airworthiness certification up
to this point," he says. "It's very notable, especially given what
happened with this 777 out of Malaysia. I'm not inferring [MH-370] was
a cyber-attack, but we have a vulnerability that can't be ignored."

While Teso, Haines and others say it is unlikely the Malaysia flight
was hit by a cyber-attack, others have suggested it is at least

"When the plane is air-side, you can insert a set of commands and
codes that may initiate, on signal, a set of processes," Sally
Leivesley, a former anti-terrorism adviser to the British government
told London's Sunday Express newspaper.

"What we are finding now is that it is possible with a mobile phone to
initiate a signal to a preset piece of malicious software, or malware,
in the computer that initiates a whole set of instructions," she
continued. "It is possible for hackers, be they part of organized
crime or with government backgrounds, to get into the main computer
network of the plane through the inflight, onboard entertainment

Her comments paralleled Teso's findings at the Amsterdam conference.
There he delivered "Aircraft Hacking: Practical Aero Series," a
presentation that included his PlaneSploit app. He said the app,
running on a smartphone, could inject messages into a flight deck
communications system and manipulate it.

In his presentation, Teso describes several onboard systems he
exploited in order to ultimately manipulate the "flight management
system," or FMS, that he had purchased for a few hundred dollars on

They included the Aircraft Communications Addressing and Reporting
System, or ACARS, which reports, among other things, details of engine
performance while in flight. It also includes the Automatic Dependent
Surveillance-Broadcast (ADS-B), the next-generation replacement for
today's aging air traffic control radar systems.

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Meanwhile, the Open Europe thinktank argues that Russia's importance to the City of London has been overstated.
International Trade

Analysis from Open Europe indicates that Russian investment in London
is worth £27bn, representing just 0.5% of total assets invested in
London. Only 1% of the UK's financial services are exported to Russia,
compared with 6% exported to Switzerland and 28% to the EU.

Around 70 Russian companies are listed on the London Stock Exchange,
but these account for only 4% of all listings. The thinktank said
severing credit lines for Russia's state-owned companies and banks
could be an effective way to put pressure on Moscow.

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Currency Markets At A Glance WSJ
World Currencies

Euro 1.3834
Dollar Index 79.96
Japan Yen 102.34
Swiss Franc 0.8812
Pound 1.6490
Aussie 0.9133 [decoupling from a previously near lockstep correlation
with China]
India Rupee 60.505
South Korea Won 1079.41
Brazil Real 2.3234
Egypt Pound 6.9628
South Africa Rand 10.8352

The euro rose 0.1 percent in the past three months, according to
Bloomberg Correlation Weighted Indexes that track 10 developed-nation
currencies. The dollar lost 1.1 percent, while the yen climbed 1.2
percent. The Aussie advanced 1.4 percent. The kiwi was the best
performer in the gauge, gaining 3.8 percent.

Dollar Index 3 Month Chart INO 79.96 [does not trade with Vigour or


Euro versus the Dollar 3 Month Chart 1.3834 [1.3380 STOP]


"The euro is resilient," said Toshiya Yamauchi, a senior analyst in
Tokyo at Ueda Harlow Ltd


The Ifo institute's business climate index, which is a measure of
sentiment in Germany and based on a survey of 7,000 executives, was
probably at 110.9 this month, according to the median estimate of
economists polled by Bloomberg News. The gauge rose to 111.3 in
February, the strongest reading since July 2011.

Australia Dollar 3 month Chart INO 0.913855 [Decoupling from
China] [2014 Highs]


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Commodity Markets at a Glance WSJ

Gold 3 Month Chart INO 1313.665 [Prices dropped to $1,308.06
yesterday, the lowest since Feb. 20]


Bullion for immediate delivery advanced as much as 0.6 percent to
$1,316.86 an ounce and was at $1,314.61 at 2:01 p.m. in Singapore.
Prices dropped to $1,308.06 yesterday, the lowest since Feb. 20

Crude Oil 3 Month Chart INO 99.50 [Anything above 100.00 will
prove a good sell]


WTI for May delivery dropped as much as 34 cents to $99.26 a barrel in
electronic trading on the New York Mercantile Exchange and was at
$99.45 at 3:05 p.m. Singapore time. The contract rose 14 cents to
$99.60 yesterday. The volume of all futures traded was about 57
percent below the 100-day average.

Coffee September 2014 INO [Looks like a Trading Buy]


Copper 3 Month Chart INO [Looking to resell a little higher]


How Japanese Single Malts Surpassed Scotland's Finest


My first sip of a great Japanese single-malt whisky was back in 2004,
when the 18-year-old Yamazaki was first introduced into the U.S. I
found its suave smoothness and elegance as sleek as a new Lexus. It
had the familiar spicy, caramel-and-honey notes of a luxury single
malt from Scotland but with its own exotic appeal from partial aging
in Japanese mizunara oak.

Since then, Japan has been quietly scooping up gold medals at world
whisky competitions, and in 2012, the 25-year-old Yamazaki beat out
300 of the world's single malts in an international blind tasting.
Now, Bloomberg Pursuits will report in its Spring 2014 issue, Japanese
whisky seems to have reached a tipping point. Half a dozen additional
brands have entered the U.S.; an all-Japanese-whisky bar, Mizuwari,
has opened in London; and prices of rare bottles have skyrocketed at
recent Hong Kong auctions.

And yet there are differences. The Japanese don't acquire whiskies
from other distilleries to make their distinctive blends, the way the
Scots do. Instead, each distillery creates its many in-house
variations using an array of copper pot stills and wooden barrels.

 The resulting whiskies are more floral, with softer, silkier
textures, than those from Scotland. At Nikka's Yoichi distillery, the
pot stills are heated by coal fires, as opposed to steam, which gives
their single malts richer, peatier flavors.

And the Yamazaki distillery's use of virgin mizunara barrels
contributes aromas of temple incense and sandalwood. Climate and
landscape are also key flavor influencers. Whiskies produced at higher
elevations, such as those at Suntory's Hakushu distillery in the
southern Japanese Alps, are notably clean and crisp, as are those from
the Fuji-Gotemba distillery, which uses snowmelt from Mt. Fuji.

Hakushu 12-year-old single malt This fresh, lightly smoky whisky from
Suntory's forest distillery-- inside a bird sanctuary 2,200 feet (670
meters) up in the southern Japanese Alps--has notes of green apple and
smoky autumn leaves. ($70)

Hibiki 21-year-old blended whisky This Suntory blend of more than 20
Yamazaki and Hakushu whiskies is perfumed, subtle and sweet, with just
the right touch of tartness. ($300)

Nikka Taketsuru Pure Malt 21-year-old This blended single malt, named
for Nikka's founder, is round and rich, with notes of exotic spices,
dried fruit, leather and cocoa and a finish that goes on and on.

Yamazaki 25-year-old single malt Judged best Japanese single malt in
Whisky Magazine's 2013 World Whiskies Awards, Suntory's flagship is
bright, smooth, complex and perfectly balanced, with a delicate taste
of honey, spiced peaches and coconut. ($1,600)

Yoichi 15-year-old single malt Bold, concentrated and sweet, this
Nikka whisky has notes of nuts, tobacco, bitter chocolate and smoke.

Buildings are seen reflected in a Hermes store window in Paris.


Hermes "has the benefit of excess demand, waiting lists" and fewer
stores than competitors, Luca Solca, an analyst at Exane BNP Paribas,
said in an e-mail.

Customers wait in line to enter an Hermes store, operated by
Hermes International SCA, in the Tsim Sha Tsui area of Hong Kong,


Emerging Markets

Frontier Markets

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24-MAR-2014 Mixed Performance continues to be witnessed in Africa's Markets

Africa is certainly the least linear of continents. Interestingly, the
two year 'Bull Market' in Africa that we witnessed in 2012 and 2013,
was broad based. Shares rallied from Johannesburg to Nairobi, from
Accra to Lagos. And the reason for this was that international
investors were the precipitators of that rally and their overarching
aim was to raise their allocation, to get some skin in the game. This
proved a rising tide and floated a lot of boats.

This year there has been a great deal more differentiation, more
nuance. Egypt is the stand-out in 2014 with the benchmark EGX30 at a
more than five-year high plus a blistering 25.29 per cent so far.
Egyptian markets had become very oversold and Saudi and GCC support
[ex Qatar] for Egypt has evidently tipped the scales. Ghana has posted
a +11.4 per cent return in 2014 but nearly all of that has been eroded
by the Cedi [Ghana Currency] in free fall. Ghana's Eurobond has a 9
per cent handle and sentiment has soured so much, it is entirely
feasible that Ghana might print a double digit yield. Ghana is a near
perfect harbinger of what can go wrong when you front load your
recurrent expenditure in the expectation that revenues are a rising
tide. The open question is whether, Ghana is in the cockpit or whether
the markets will simply elbow the Government aside.

The Zambia Kwacha was the worse performing currency in Africa in 2014
versus the dollar and had retreated 13 per cent through Friday
morning. The Kwacha [70 per cent of Zambia's revenues are received
from copper] had moved in near perfect lockstep with copper which had
retreated by nearly the exact same amount in 2014 i.e 13 per cent. The
Zambian authorities took some dramatic steps on Friday and scrapped
two laws restricting foreign-exchange trade, triggering the kwacha's
biggest gain against the dollar in 15 months. Both the Ghana and the
Zambia debacles are informing us that the markets once so benign are
now baring their fangs and how easy it is for policy makers to lose
control to the markets. Ghana and Zambia are a shot across a lot of
African bows. The drip drip of [bad] news out of Nigeria has seen the
stock market there retreat just under 8 per cent this year and the All
Share is at five month lows. The President might have won the
political battle with the Central Banker but the markets are entirely
dissuaded of the President's position.

The bright spot in the Africa currency complex is the Somali shilling.
The Somali shilling has appreciated against the US dollar by just
under 60 per cent since March last year, becoming the strongest among
global 175 currencies tracked by Bloomberg. Its surge has been so
pronounced that the second most robust currency over the same period -
the Icelandic Krona - could only manage a 10.2 per cent rise. That is
quite an extraordinary outcome.

Turning closer to home, the Kenya shilling has confounded [some]
expectations and remained stable at the 86.50 versus the dollar. The
shilling has been confounding expectations for a while now and let me
explain why. Firstly, I think inward remittances [The monetisation of
Kenyan Human Capital] are being undercounted big time. Fuel Prices
which represent the biggest risk to the shilling remain within
tolerance levels. In fact as long as crude oil prices do not spike
[and i expect prices to erode through 2014 on increased Iran and Iraq
supply], I expect the shilling to remain well behaved and in a tight
range. The Eurobond has been imminent for about six months now,

We have now had an opportunity to sight most company earnings. The All
Share is +6.25 per cent so far in 2014 and just 0.07 of a point off a
record set on January 24th this year. Safaricom closed at a life time
high Friday 0f 12.60 and is +16.129 per cent in 2014 following on a
triple digit percentage gain in 2013. Safaricom's market
capitalisation is a record 504.561b and $5.833b. I look for 13.50
ahead of the full year earnings release. Safaricom remains the Nairobi
Securities Exchange's bellwether stock. Co-op Bank set an all time
high last week after releasing its FY Earnings and announcing a one
for six held bonus issue. There is a bonus euphoria at the moment with
bonus announcement typically proving a catalyst for a 5 per cent-10
per cent rally. Kenya Airways [which is set to receive its 1st @Boeing
Dreamliner in April and is launching Jambo Jet] has rallied +14.41 per
cent over the last eight trading sessions and has further to go.
Investors can evidently see the earnings inflexion point. There is
plenty of rotation going on but I still remain of the view Nairobi
will make 2014 its third bull Year.

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U.S. Foreign Policy in Africa: Oil and Commandoes ALLGOV

When the U.S. military raided a renegade Libyan tanker on March 16 in
the Mediterranean Sea, the mission was successful by all accounts.
About 30 Navy Seals managed to storm the Morning Glory--which was
loaded with 234,000 stolen barrels of crude oil worth about $20
million-- and take control without anyone getting hurt. The fragile
interim government of Libya was delighted to get its oil back after
rebels in Cyrenaica tried selling it to the highest bidder. Aside from
going off without a hitch, the stealthy mission provided a rather
noticeable example of what American foreign policy in Africa is all
about these days: Special Forces and oil.

Africa has become a new strategic priority for Washington, which
historically has not put the continent high on its list of key
concerns. During the Cold War years of the 20th century, the entire
region of Africa was arguably never a top concern. Certain nations
were on the radar of policymakers, such as Egypt and its relationship
with Israel, or Libya and Muammar Gaddafi, or South Africa with
Apartheid and Soviet-backed movements in neighboring countries. But
the rest of Africa was often ignored by the White House, simply
because there wasn't a realpolitik reason to devote time or American
resources to nations like Niger, Burkina Faso, Burundi and dozens of

This disregard for most of the continent began to change around the
turn of the 21st century, partly because of the events of September
11, 1001, and concerns over terrorism movements in the Horn of Africa
and other hot spots.

But another, even more widespread development really got the attention
of U.S. officials, both those in elected offices and in corporate
boardrooms: Africa had oil. Lots and lots of oil.

Three countries in particular, Angola, Libya and Nigeria, have been
major oil producers for decades. The rest of the continent, though,
wasn't considered a player in the petroleum business.

That has changed dramatically in recent years. In fact, these days
it's not a matter of which countries are developing or exploring for
oil--but which ones aren't.

The U.S. Department of Energy has projected that African oil
production would soar 91% percent between 2002 and 2025. Currently,
Libya's and Nigeria's oil reserves, for example--at 39 billion and 36
billion barrels respectively--are each roughly twice the size of the
U.S. and China reserves. Of all crude oil imported to the U.S. in
2006, 22% came from Africa; nearly a third of China's oil imports
currently come from that continent. It has been projected that those
percentages will increase for both countries.

African oil is particularly desirable to refiners because it tends to
be high-quality with a low amount of sulfur, according to the Center
for Strategic and International Studies.

During the George W. Bush administration, U.S. oil imports from Africa
doubled in quantity, putting the continent on par with the Middle East
and its exports.

Not surprisingly perhaps, U.S. military involvement in Africa took an
unprecedented turn during the Bush years as oil became a key economic
issue. In 2006, the Department of Defense, for the first time in its
history, created a major new combatant command solely focused on the
continent: United States Africa Command (or AFRICOM).

AFRICOM oversees a regular and growing deployment of American military
personnel, primarily Special Ops units, all throughout the continent.

In fact, it's difficult to find an African country where the U.S.
hasn't put boots on the ground, whether it's those worn by Army
Rangers, Navy Seals or Force Recon Marines.

An investigation last year by TomDispatch.com revealed that the U.S.
military has become involved in no less than 49 African nations.

While the U.S. military commitment to Africa shows no signs of slowing
down, the importation of African oil did nosedive during the first
five years of the Obama administration. Figures from the Energy
Information Administration show that the U.S. slashed its purchases
from both big and small producers, from Nigeria to Equatorial Guinea.
In many cases, the reductions were as great as 50% to 70%.

Oil analysts attributed the shift in import strategy to the oil shale
boom happening in the U.S., where hydraulic fracturing has allowed a
substantial increase in domestic production that made African
petroleum less inviting.

But that shift may be coming to an end.

Reuters reported this month that American imports of West African
crude were recovering during the first quarter of 2014 following the
five-year downturn.

Regardless of how the rest of the year shapes up, the long-term
outlook for the oil-shale boom is not good, according to Maria van der
Hoeven, chief executive of the International Energy Agency.

She says the growth in oil shale production will level off and even
decrease by 2025, forcing the U.S. to once again return to buying more
foreign oil, whether it is from old sources like the Middle East or
new ones in Africa.


The US has a Hard Power Advantage with which to tilt the Africa Pitch
[and away from China].

Furthermore, given the Oil and Gas Bonanza on the Eastern Seaboard,
given that the Pivot to Asia is essentially a ''blockade China''
Strategy then I expect NATO to take a very forward position in the
Indian Ocean.

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Increased Somali Shebab threat in East Africa, UN envoy says @Yahoo

Addis Ababa (AFP) - The United Nations warned Monday of an increased
threat of attacks from Somalia's Al-Qaeda-linked Shebab as a major
offensive launched against them this month gathers pace.

"Coinciding with the offensive and even ahead of it, Al-Shebab have
become more active," UN envoy to Somalia, Nicholas Kay, told AFP.

"They feel threatened and endangered, and so they have carried out
significantly more terrorist attacks in Mogadishu in the last couple
of months."

UN-mandated African Union troops have been battling Shebab militants
in Somalia since 2007, but earlier this month launched a fresh
offensive, fighting alongside Somali government forces.

Kay said the operation is pushing the rebels out of key bases, which
could prompt them to stage attacks in Mogadishu, as well as other
countries in the region such as Uganda and Kenya.

Security sources report some Shebab members are fleeing to mountains
in northern Somalia's Puntland region, but some foreign fighters may
seek to cross to Yemen, or flee southwards into neighbouring Ethiopia
and Kenya.

"They're fleeing into the bigger cities, there are more of them
entering Mogadishu," Kay added.

"Some of them are looking to flee perhaps the country and are heading
to the remoter corners," he said, speaking after an AU peace and
security council meeting in the Ethiopian capital.

Shebab gunmen have largely fled ahead of the AU advance, only to later
stage guerrilla attacks.

But the Islamists have also vowed to retaliate against the
troop-contributing nations, with soldiers in the 21,000-strong force
coming from Burundi, Djibouti, Ethiopia, Kenya, Sierra Leone and

In Kenya, where the Shebab claimed responsibility for the massacre of
at least 67 people six months ago in Nairobi's Westgate mall, police
last week arrested two men driving a vehicle packed with explosives in
the port city of Mombasa.

Gunmen also killed six in an attack on a church near Mombasa on Sunday.

In Uganda, where the Shebab killed at least 76 people in the capital
Kampala in 2010, officials warned last week of Shebab plans to use
fuel tankers as bombs.

Kay said the size of the mission was sufficient for the time being,
but was in dire need of helicopters. The UN has authorised and funded
helicopters, but AU member states have failed to provide them.

"What is needed, and has been needed for a long time, are
helicopters," Kay said. "It is up to African Union member states to
come forward with transport and attack helicopters."


Asymmetric Risks remain potent.

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


Malawi Kicks-Off Campaigning for May 20 Elections


The Malawi Electoral Commission (MEC) has officially opened the
campaign season with a call for political parties to conduct clean and
peaceful campaigns in the run up to May 20 elections.

Political violence has begun even before the official campaigning started.

One incident occurred March 16 after a political rally for President
Joyce Banda in Thyolo. Supporters of the president's People's Party
(PP) and the opposition Democratic Progressive Party (DPP) were
involved in confrontations, leading to several deaths.

The Electoral Commission subsequently decided to open campaigning with
a warning to the 11 parties contesting the vote.

"Our message to the political parties is that they should adhere and
conduct political campaigns according to the Malawi electoral laws
that [among others] prohibit the use of abusive language, defamatory
language and violence," said Reverend Emanuel Chikwita Phiri, MEC's

South Africa All Share Bloomberg +2.32% 2014


Dollar versus Rand 3 Month Chart INO 10.8363


Egypt Pound versus The Dollar 3 Month Chart INO 6.9617


An Egyptian court sentenced 529 members of the outlawed Muslim
Brotherhood to death for murder and other offences on Monday, in a
sharp escalation of a crackdown on the movement that is likely to fuel


"The court has decided to sentence to death 529 defendants, and 16
were acquitted," defence lawyer Ahmed al-Sharif told Reuters. The
condemned men can appeal against the ruling.

State television reported the sentences without comment. A government
spokesman did not immediately respond to calls.

The Muslim Brotherhood, largely driven underground, responded by
calling for the "downfall of military rule" on its official website.

Egypt becomes battleground for Arab world


The Saudi monarchy has declared war on the Muslim Brotherhood, an
immensely popular Sunni Islamic movement with branches and businesses
throughout the world. Not only has the monarchy labeled the
Brotherhood a terrorist organization, but a photo chart of the major
terrorist groups offered by the Saudi press gives the Brotherhood top
billing. Not even al-Qaeda outshines the Brotherhood in the eyes of
the Saudi regime.

Perhaps the Saudi monarchy had little choice in the matter. The Muslim
Brotherhood swept to power in Egypt and Tunisia following the 2011
Arab Spring revolutions, and the Saudi monarchy openly worried that
its kingdom would be next. Such is the price of being rich, weak, and
unwilling to test the support of the masses in elections or a free

The Saudi monarchy's chosen battlefield for its war on the Muslim
Brotherhood is Egypt. It is difficult to argue with its choice. The
Brotherhood was founded in Egypt, its Supreme Guides have all been
Egyptian, and Egypt is the center of the Brotherhood's global
operations. Branches of the Brotherhood are guided by General
Secretaries from their respective regions, but key policy decisions
flow from Egypt.

The Saudis knew that attempts to destroy Brotherhood branches in the
region would be futile as long as the Brotherhood leadership ruled
from Egypt. Attacking Brotherhood branches would threaten the
stability of Jordan, Kuwait and other Saudi allies with deeply
entrenched Brotherhood movements. To crush the Brotherhood in Egypt,
by contrast, would be to sever its head and soul. The battle would
also transpire far from the Gulf and leave the Saudi monarchy, the
self-proclaimed protector of Islam without blood on its hands. In
fact, they could avoid fighting altogether by outsourcing the job to
the Egyptian generals.

Egypt EGX30 Bloomberg +24.78% 2014


Nigeria All Share Bloomberg -8.29% 2014


Ghana Stock Exchange Composite Index Bloomberg +11.34% 2014


Rwanda Reaches for New Economic Model New York Times


KIGALI, Rwanda -- On the 12th floor of the Kigali City Tower, a modern
blue-glass office building on the side of one of this capital's famous
hills, the latest endeavor in the effort to transform a tiny rural
economy into a financial and high-tech hub is trying to find its

A commodity exchange, with its dozen terminals and state-of-the-art
software provided by Nasdaq, held its first six auctions over the past
year -- a fledgling venture, but the kind that helps explain how a
nation with no oil, natural gas or other major natural resources has
managed to grow at such a rapid clip in recent years.

"The feeling was that it could serve the region and perhaps be a
springboard for the rest of Africa," said Paul Kukubo, the chief
executive of the commodity East Africa Exchange.

The swirl of potential, outsized ambitions and lingering problems like
yawning income divides is typical of the story of booming Africa,
which has caught the eye of foreign governments and corporations alike
as a rich frontier for business. The International Monetary Fund said
that economic growth in sub-Saharan Africa would average 6.1 percent
this year, compared with 3.7 percent worldwide.

Critics respond that those gaudy numbers spring mostly from the sale
of oil and gas reserves or valuable metals and minerals, and that the
gains have been divvied up between the offshore accounts of the
continent's plutocrats and foreign conglomerates.

Rwanda offers an alternative model, analysts say, a country where the
economy has grown an average of nearly 8 percent over the last four
years because of increased agricultural productivity, tourism and
government spending on infrastructure and housing. Despite having a
population of just around 12 million, the consulting firm A.T. Kearney
last week named Rwanda the most attractive African market for
retailers in its first ever African Retail Development Index.

"I can't imagine how they could have made better progress than they
have over the past 20 years," said Michael Lalor, lead partner at the
EY Africa Business Center in Johannesburg.

That 20-year starting point is not arbitrary, but the zero hour for a
country once consumed by violence.

"In terms of the economic model, I think it's a good example for the
rest of Africa," said Amadou Sy, senior fellow in the Africa Growth
Initiative at the Brookings Institution. "Everybody has a vision but
these guys have been successful. The record is there."

He said that Rwanda has outperformed most others in the region in
terms of indebtedness, inflation and growth. "The only downside I
see," he added, "I would really consult the political side."

Rwanda is heavily dependent on foreign assistance, which got slashed
after a United Nations report accused the country of fostering a
recent rebellion in neighboring Democratic Republic of Congo,
squeezing the budget. The World Bank warned last year that the aid
shock "clouds the economic outlook for Rwanda."

So now, more than ever, Rwanda is on the hunt for investors rather
than donors. Last April, it sold $400 million in bonds to investors
from around the globe, part of a record year for African bonds that
underscored how a continent once known for debt relief found a world
eager to take a stake in it.

The slowdown in China, tapering of bond buying by the Federal Reserve
in the United States and the flight of capital from emerging markets
have jeopardized some of the gains on the continent. But some analysts
say that Rwanda has held up better than many and has continued to make
tangible headway in living standards.

The nation has reduced the percentage of people living below the
poverty line from 59 percent to 45 percent between 2001 and 2011, with
the share of people living in extreme poverty falling faster. Life
expectancy, literacy, primary school enrollment and spending on health
care have all gained in recent years.

Beneath the heights of Kigali City Tower, the rusty corrugated iron
roofs on the ramshackle one- and two-story buildings below testify to
the challenge of Rwanda's goal: becoming a middle-income country.
Beyond the city limits, an estimated 90 percent of the population is
still employed in the country's terraced green hills, growing bananas,
sorghum, potatoes and other crops, much of it subsistence farming.

Rwanda hopes to turn itself into an information-technology hub for the
roughly 135 million people in the East African Community, a regional
common market. The nation has wired itself with well over 1,000 miles
of fiber optic cables, and last year the government signed a deal to
build a 4G network that would cover 95 percent of the country.

"The strategic vision behind this is a knowledge economy," said Jean
Philbert Nsengimana, the minister in charge of youth and information
technology. "That's where we want to go, shifting from an agrarian
base to a knowledge base, leapfrogging the industrial."

Rwanda faces stiff competition. Kenya has a thriving start-up scene
and offices for Google, Intel and Microsoft, not to mention a much
larger consumer market attracting foreign companies. But the smooth
roads and lack of violent crime make Kigali ever more appealing
compared with the gridlocked, more dangerous streets of Nairobi.

The Rwandan government famously banned plastic bags from the country
to cut down on pollution. Motorcycle taxi drivers wear numbered vests
and carry spare helmets for passengers without exception. As part of a
modernization drive, the government demolished tens of thousands of
huts with traditional grass-thatched roofs. To curb population growth,
it offered free vasectomies and is embarking on a wide-ranging
circumcision drive to reduce the number of HIV infections.

Elettra Pauletto, an analyst at Control Risks, a business-intelligence
consultancy in London, said that while the country's rigidly enforced
stability and efficiency can attract investment, it can be a
double-edged sword for those, including businesses, that run afoul of
it. The government took control of Kigali's Union Trade Center
shopping mall after its principal owner went into exile in South

"It is a very authoritarian political environment," said Ms. Pauletto.
"There can be a failure to respect the sanctity of contracts."

Human rights groups continue to assail the government for repressive
political policies. The country has been engaged in a high-profile
diplomatic dispute with South Africa over attacks on Rwandan
dissidents living there, including the murder in January of the
country's former spy chief, found strangled in a Johannesburg hotel

Meanwhile, nongovernmental organizations focused on development have
praised the country's economic reforms, with the World Bank giving it
high marks for the ease of doing business here, ranking Rwanda 32 out
of 189 worldwide. It also put Rwanda above the United States for the
simplicity of starting a new business.

"Getting started is really easy," said Clarisse Iribagiza, one of the
founders of a technology company called HeHe. She said it took them
one day to set up the company, for less than $40. Help from a
government official is available through social media.

"If I need to get in touch with a minister, it's so much easier than
when we started out," said Ms. Iribagiza, at a shared space called the
Office where she worked alongside other young entrepreneurs.
"Basically I've tweeted them and gotten feedback."

Like the commodities exchange, the Rwanda Stock Exchange, which opened
its doors in 2011, is still finding its footing. Pierre Celestin
Rwabukumba, 39, chief executive of the stock exchange and a former
stockbroker in New York, returned to Rwanda in 2004, working first at
the country's central bank.

"We started from blank paper nine years ago," he said of the stock
exchange. Three years after getting its start, only two domestic
companies, the brewer Bralirwa and Bank of Kigali, have had initial
public offerings. But Mr. Rwabukumba said the Rwandan share index rose
44 percent last year, a sign in his view that the exchange, like the
country itself, is headed in the right direction.

"We have order; we are straightforward, clear, clean -- it's a country
governed by law," said Mr. Rwabukumba, sitting in his second-floor
office in the Kigali City Tower.

A few floors up, Ara Nashera, 27, creative director at Zilencio
Creativo, was working on a crowd-funding platform like Kickstarter
called eNkunga, which seeks to harness the money exchanged via
cellphones in Africa. The technology may be new to Rwanda but the
concept is anything but.

"Community contributions are how people get a child to university, pay
for a wedding," said Mr. Nashera. The city sprawled out behind him,
with new office buildings springing up in the nascent downtown. "It's
the old way," he said, "made new."

read more

Standard Chartered reports FY PBT 2013 +15.565% Earnings here
Kenyan Economy

Par Value:                  5/-
Closing Price:           308.00
Total Shares Issued:          309159514.00
Market Capitalization:        95,221,130,312
EPS:             29.42
PE:                 10.469

Full Year Earnings through 31st December 2013 versus 12 months through
31st December 2012

FY Loans and Advances to Customers [net] 129.672004b versus
112.694523b +15.065%
FY Total Assets 220.391180b versus 195.352756b +12.817%
FY Customer Deposits 154.720011b versus 140.524846b
FY Total Interest Income 21.679714b versus 19.698321b
FY Total Interest Expenses 4.919382b versus 5.455870b
FY Interest Income 16.760331b versus 14.242451b
FY Total Non-Interest Income 7.067046b versus 6.771507b
FY Total Operating Income 23.827377b versus 21.013958b
FY Total other Operating Expenses 10.472412b versus 9.457767b
FY Profit before Tax 13.354965b versus 11.556191b +15.565%
FY Profit after Tax 9.262921b versus 8.069533b +14.7888%
FY Earnings Per Share 29.42 versus 26.60 +10.601%
FY Dividend 14.50 versus 12.50 +12.336%


Consider that at the H1 Earnings Release Profit before Tax was running
at +0.59% versus +15.565% at the Full Year Stage.
Strong Results and a possible Split in 2014.

H1 PBT 6.539013b versus 6.500450b +0.59%
H1 PAT 4.517100b versus 4.538868b -4.795%
[A Fair Value Gain of 1.783719b]
H1 EPS 14.61 versus 15.28 -4.384%

read more

Limuru Tea reports FY 2013 Earnings here
Kenyan Economy

Par Value:                  20/-
Closing Price:           620.00
Total Shares Issued:          1200000.00
Market Capitalization:        744,000,000
EPS:             84.86
PE:                 7.306

Full Year Earnings through 31st December 2013 versus through 31st December 2012

FY Total Revenues 104m versus 116m [9% drop in average prices in 2013]
[215/= per KG Black Tea versus 236/= in 2012]
FY Profit before Tax 41.556m versus 146.621m -72%
Biological Assets revaluation 13m versus 98m
Full Year Dividend 7.50 a share

Company commentary

Company produced 2,998,380 kgs of green leaf, which in turn was
manufactured into 689,265 kilograms of Black Tea.
+6% increase in black Tea volumes compared 2012.
Cost of Sales rose +9% [12% wage increase versus last year]


Very curious results Release missing all the Key Data Points.

Kapchorua Tea 24-MAR-2014 Profit warning announcement.


Kapchorua Tea share price data here


Par Value:                  5/-
Closing Price:           144.00
Total Shares Issued:          3910000.00
Market Capitalization:        563,040,000
EPS:             45.94
PE:                 3.135

Even after the FY Profits Warning [25% below Previous Year is the
Catalyst for the Warning] its an egregiously cheap share on a PE

Telkom Kenya CEO Mickael Ghossein. Relations between a French company
and the government appear headed for the rocks in the wake of a recent
announcement that the investor plans to ship out of the Kenyan market.


Kenya Shilling versus The Dollar Live ForexPros


Nairobi All Share Bloomberg [The @NSEKenya reported this Index as
closing at 149.63 +3.55% this is wrong]


Nairobi ^NSE20 Bloomberg +0.86% 2014


52-Week Range:  4,561.74 - 5,137.21

Every Listed Share can be interrogated here


Sunset Mombasa 86 days ago


Karen 'Out of Africa' gardens up for sale at Sh800 million


Difficult times have helped me to understand better than before, how
infinitely rich and beautiful life is in every way, and that so many
things that one goes worrying about are of no importance whatsoever.
Isak Dinesen


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 teh 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.

Karen Blixen


read more

N.S.E Today

The Nairobi All Share firmed 0.3188% to set a Fresh Life Time high of 144.73.
The Nairobi All Share has rallied +5.912% in 2014.
The Nairobi NSE20 Index firmed 13.03 points to close at 4974.05.
The NSE20 has closed above 5,000 for most of January this Year and
will regain that level imminently.
Equity Turnover was slow and lackadaisical at 390.917m

N.S.E Equities - Agricultural

The Agricultural Sector has been belying its sleepy reputation this
Year. The Catalyst was of course the Bidding war for Rea Vipingo and
the latest development in this regard, as per Bloomberg is that

''Vania Investment Pool, one of three companies seeking to acquire
Kenyan sisal producer REA Vipingo Plantations Ltd., plans to take
legal action after the regulator disqualified its offer, director
Dilesh Bid said.

VIP, had it's bid rejected yesterday by the Capital Markets Authority
because it was submitted after a Feb. 28 deadline, Bid said in a phone
interview yesterday from the capital, Nairobi. Antony Mwangi, a
spokesman for the authority, declined to comment when contacted by
phone and didn't immediately respond to e-mailed questions.

"We will seek legal redress for this injustice," Bid said. "CMA ruled
us out arguing that our bid was time barred."

VIP offered 80 shillings ($0.92) per share for REA Vipingo, according
to Bid. That trumped offers by Centum Investment Co., Kenya's biggest
publicly traded investment company, of 75 shillings a share, and 70
shillings by REA Vipingo's main shareholder, REA Trading Ltd''

The Point to note is that VIP's bid is at 80 shillings a share and Rea
Vipingo was trading at 27.50 a share when this Bidding War began. Its
an interesting lesson in Price Discovery and how price disequilibria
can become very entrenched.

Kapchorua Tea has issued a Full Year Profits Warning. A Full Year
Profits Warning Announcement is triggered where Management expects
Earnings to undershoot 25% versus the previous Year. However,
Kapchorua Tea already trades on a Trailing PE of 3.135. Therefore,
even assuming Earnings undershoot by 25%, it remains an egregious

Limuru Tea reported FY Earnings, well, after a fashion. The Report was
very poorly presented. The Gist of the Earnings Report being a 9%
decline in FY Revenues and a 72% decline in Full Year Profit before
Tax. The Real Juice in Limuru Tea is not the Tea Business its the Real
estate Business. Limuru Real estate is considerably more than $100,000
an acre. Limuru carries its
land Holdings at Cost on the balance sheet.

N.S.E Equities - Commercial & Services

Safaricom traded 2nd at the Exchange and closed unchanged at 12.35
[The Weighted Average was 12.39 signalling the Price is pointed
higher] and traded 3.438m shares worth 42.615m. In point of fact,
Safaricom was trading at 12.60 +2.02% session highs at the Closing
Bell. Safaricom is +13.824% in 2014 and will surely accelerate through
its record closing High of 12.60 set on Monday, in very short order.

Scangroup firmed +1.52% to close at 50.00 and traded 744,600 shares.
Volumes have picked up of late. ScanGroup is +3.62% in 2014. Sir
Martin Sorrell's WPP has a majority position in the the Stock.

N.S.E Equities - Finance & Investment

Standard Chartered Bank Kenya reported Full Year Earnings pre market
Opening. Standard Chartered a +15.565% Expansion in Full Year Profit
Before Tax. At the 1st Half Stage Standard Chartered reported a +0.59%
expansion so the Second half was brimming with Earnings Momentum.
StanChart reported a +14.7888% FY Profit after Tax Expansion and
raised the Full Year Dividend +12.336% to 14.50  which is worth 4.63%
of Yield and will underpin the Price. These were muscular results in
my opinion and I expect a decent Rally from here and a Split at some
point this year. Standard Chartered firmed 1.62% to close at 313.00
and was trading at 318.00 +3.25% at the Finale. Standard Chartered is
+2.96% in 2014 and has headroom.

Kenya Commercial Bank closed unchanged at 46.75 and traded 855,800
shares. KCB had Buyers at the Finish Line for 345% more shares than
were traded during the session, signalling the Price has a firm
footing at these Levels. Kenya Commercial Bank has posted a solid
+6.8571% Price Rally since releasing its Full Year Earnings for 2013.
Barclays Bank rebounded 1.538% to close at 16.50 and was trading at
16.80 +3.38% session highs at the Finish Line. Barclays Bank traded
Equity Bank closed unchanged at 32.00 and traded 985,800 shares.
Equity Bank has stabilised after a more than 8% retreat last week.

N.S.E Equities - Industrial & Allied

EABL was the most actively traded share at the Securities Exchange and
rallied 1.5% today to close at 270.00. in fact, EABL was trading intra
day Highs of 275.00 +3.38% at the closing Bell. EABL has rallied 3.44%
over the last two trading sessions. EABL traded 353,100 shares worth
95.406m, which represented 24.405% of the total volume traded today.
EABL is -6.89% in 2014 but has rebounded +23.28% since closing at a 52
week low on 19th February. The Violence of the Price Rebound informs
that the 52 week Low of 19th February was what is characterised as a
''Blow-Off Bottom''. A ''Blow-Off Bottom'' is oftentimes followed by
exactly the type of Price action we have witnessed. I expect a move
back to unchanged for the Year and 290.00.

EABL share price and Earnings data -6.89% 2014


BAT rallied +3.25% to close at 635.00 and traded 300 shares. BAT is
+5.833% in 2014 and Investors are evidently anticipating the FY
Dividend Pay Out.

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

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