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Satchu's Rich Wrap-Up
Tuesday 27th of May 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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KENYA has been planning its first sovereign 10-year dollar-de-
nominated Eurobond since last year and proceeds from this sale had
been factored into the 2013/2014 budget.

The urgency around the payments of Sh1.4 billion ($16 million) to
Anglo Leasing, which were made after authorisation by Presi- dent
Kenyatta, was surely because the President and his team could see a
road crash in the local markets if those markets were called upon to
make good the shortfall in the event of a skipped Eurobond.

“The road show will take four or five days, so we could go to the
markets this month,” Cabinet Secretary for National Treasury Henry
Rotich told Bloomberg in Kigali last week.

It’s always difficult to unpick cause and effect (and insecurity has
been undercutting our asset prices), but you will have noted the
shilling closed at a 2.5-years low on May 20 and printed a trade above
88.00 against the dollar last week. However, this time of the year is
a period of secular weakness for the shilling as full-year dividends
are upstreamed to parent companies.
On balance and subject to security issues staying on the trend line
(considerably elevated in 2014), then the shilling should improve from

The FTSE NSE 25 Index, which had been on a hot streak in April, posted
its worse losing streak in 2014 through last week. You do not have to
be a rocket scientist to work out that the blowback on Kenyan assets
from a Eurobond miss at this time would have been severe.

Whilst I admire the bravura calls about how we are going to ship in
one million Chinese tourists, I can assure that if the asset markets
which are hard-nosed were treated to that kind of balo- ney, the
shilling would be going the way of the Ghana cedi, where policy makers
have been peddling a narrative no one believes in and each time the
narrative gets peddled, the cedi sinks further.

With regard to policy-making and policy utterances, I think selling
the Eurobond will have an enormously beneficial impact. We often cite
‘sovereignty’ as a catch-all phrase and it is worth pointing out that
we are ceding a great deal of sovereignty by selling this Eurobond.
Essentially, international investors and our bondholders will now have
the capacity to price our credit on a real time basis. The cause and
effect will be seen on a continuous real time basis. I believe this
will over time kick some of the more ‘outlier’ behaviour into touch.

The issue size of our Eurobond will be not less than $1.5 billion
(Sh131.79 billion) and I would err towards trying to sell as much as
$2 billion (Sh175.72 billion) worth of Eurobond. The redemption of a
syndicated loan of $600 million was kicked three months down the road
but evidently, Eurobond proceeds will have to deduct $600 million. A
$1.5 billion issue will mean $0.9 billion of net new money. I incline
to the view that we need a $2 billion issue – $1.4 billion of net new

In the event we unload $2 billion of bonds, then I too can foresee the
scenario PS Kamau Thugge outlined to the Business Daily: “When the
Eurobond goes through, hard currency worth billions of shillings will
have a strengthening impact on the shil- ling and pull down interest
rates. That is the kind of scenario our next fiscal year is based on.”

Let me finish by trying to answer the $64,000-question, which is what
price are we going to have pay for this money? In order to answer
this, we have to take a look at other sub-Saharan Africa issuers and
those bonds which have a proximate maturity to our proposed issue.

I surmise that the Kenya will be satisfied if it can sell at a yield
of 6.5 per cent in the event of a small issue size and closer to seven
per cent if it goes for a super-sized issue of $2 billion.

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I am looking forward to being in Maputo for the Government of Mozambique and the IMF conference May 29th-30th @IMFNews

The Government of Mozambique and the IMF will convene a high-level
conference in 2014 to take stock of Africa’s strong economic
performance, its increased resilience to shocks, and the key ongoing
economic policy challenges. The Africa Rising conference will be held
May 29-30, 2014, in Maputo. The event is intended to follow up on the
2009 Tanzania Conference, which helped galvanize international support
for Africa after the 2008 financial crisis.

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GREETINGS from the @SerenaHotels Polana, Maputo. I can confirm that Maputo is the land of wonderful and flavoursome tiger prawns. Maputo Boom Town June 4th 2012

The Architecture is also deliciously retro. By the way, the Polana was
built in 1922 and the flavour is fabulously Riviera and very swanky.
It is less than 4 hours by plane from Nairobi and surely set to be the
most of in things and places to visit.

Of course, Mozambique has popped large onto the global radar because
of gas reserves that have been discovered offshore and in the deep
sea. I have said before, that I believe the eastern seaboard of Africa
is clearly the last great energy prize in the c21st and I believe this
lake of hydrocarbons stretches from Mozambique up through
Tanzania,Kenya and Somalia. We remain in the early stage of this
discovery process but Mozambique is further along the curve.

Mozambique is the next Qatar.

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Christine @Lagarde MD @IMFNews at #Mindspeak @YouTube

Macro Thoughts

Home Thoughts

I took delivery of 5 Don Delillo and 5 Thomas Pynchon Books Sunday and
read the Book Martin Amis is reviewing below.

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LAUREATE OF TERROR Don DeLillo’s prophetic soul. BY MARTIN AMIS

DeLillo is the laureate of terror, of modern or postmodern terror, and
the way it hovers and shimmers in our subliminal minds. As Eric
Hobsbawm has said, terrorism is a new kind of urban pollution, and the
pollutant is an insidious and chronic disquiet. Such is the air
DeLillo breathes. And so strong is this identification that we feel
slightly dislocated when, in “The Ivory Acrobat” (1988), he confronts
a form of terror that is “natural” and therefore ancient and innocent:
the earthquake. Set in Athens during a time of tremors, and told, with
great inwardness, from a woman’s point of view (“Something had
basically changed. The world was narrowed down to inside and
outside”), the story is expertly realized; but it is not pressingly
DeLilloan. “Now that Terror has become local, how do we live?” the old
nun, Sister Edgar, asks in “The Angel Esmeralda” (first published in
1994 and later incorporated into “Underworld”)—and we feel we are back
in the right neighborhood. “What is Terror now? Some noise on the
pavement very near, a thief with a paring knife or the stammer of
casual rounds from a passing car.”

Such a register sustains the even more enchanting “Human Moments in
World War III” (1983). A “mission specialist” and his young sidekick,
Vollmer (one of DeLillo’s comically intimidating nerds, like Heinrich
in “White Noise”), are up in Tomahawk II, orbiting the earth and
gathering intelligence, tricked out with their suction clogs, modal
keys, sense frequencers, and quantum burns. The specialist is
monitoring data on his mission console when a voice breaks in, “a
voice that carried with it a strange and unspecifiable poignancy.” He
checks in with his flight-dynamics and conceptual-paradigm officers at
Colorado Command (and we ask ourselves—has there ever been a more
distinctive exponent of dialogue than Don DeLillo?):

“We have a deviate, Tomahawk.”
“We copy. There’s a voice.”
“We have gross oscillation here.”
“There’s some interference. I have gone redundant but I’m not sure
it’s helping.”
“We are clearing an outframe to locate source.”
“Thank you, Colorado.”
“It is probably just selective noise. You are negative red on the
step-function quad.”
“It was a voice,” I told them.
“We have just received an affirm on selective noise. . . . We will
correct, Tomahawk. In the meantime, advise you to stay redundant.”

The voice, in contrast to Colorado’s metallic pidgin, is a melange of
repartee, laughter, and song, with a “quality of purest, sweetest
sadness”: “Somehow we are picking up signals from radio programs of
forty, fifty, sixty years ago.” Meanwhile, there is the blue planet,
tenderly rendered, with its “sediment plumes and kelp beds,” “lava
flows and cold-core eddies,” “storm-spiraled, sea-bright, breathing
heat and haze and color.” And meanwhile, “Vollmer drifts across the
wardroom upside down, eating an almond crunch.”

In common with his extraordinary ear for jargon (not least the jargon
of everyday life), DeLillo’s predictive powers have been much
remarked. To take one graphic instance, it is clear that he never
regarded the World Trade Center as a pair of buildings: to him they
were always a pair of bull’s-eyes. In the novel “Players” (1977),
Pammy Wynant works in the W.T.C. for a grief-management firm: “The
towers didn’t seem permanent. They remained concepts, no less
transient for all their bulk than some routine distortion of light.”
This is certainly very striking—though we may wonder if the quoted
lines shine the brighter as prose because they happened to come true.
DeLillo said long ago that the mood of the future would be determined
not by writers but by terrorists; and those who mocked him for this
forecast must have felt even worse than the rest of us did on
September 12, 2001.

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A Vietnamese fishing vessel capsized in disputed waters in the South China Sea on Monday after "harassing and colliding" with a Chinese fishing boat, the official Xinhua news agency said on Tuesday.
Law & Politics

“It was rammed by a Chinese boat,” ministry spokesman Le Hai Binh said
by phone of the Vietnamese vessel.


Japanese Prime Minister Shinzo Abe said he hoped to boost maritime aid
to Vietnam. Beijing’s “unilateral drilling activities” have raised
tensions in the area, Abe told the Wall Street Journal in an interview
May 23.

Japan is separately embroiled in a dispute with China over islands in
the East China Sea. Its Defense Ministry said May 24 that Chinese
SU-27 fighter jets flew unusually close to two of its military planes.

The sinking of the Vietnamese boat reflects “very dangerous actions
which threaten human life,” Japan’s Chief Cabinet Secretary Yoshihide
Suga told reporters today in Tokyo. “It is important that all nations
work for the return to regional stability, act calmly, carefully in
accordance with international law, and don’t act unilaterally to
increase tensions.”


China is beating up on Vietnam because it can.

@AbeShinzo's Strategy: Rearrange Region's Power Balance @WSJ


TOKYO—Japanese Prime Minister Shinzo Abe laid out an assertive foreign
policy agenda, saying he hoped to accelerate maritime aid to Vietnam
amid its territorial standoff with China and host Vladimir Putin this
year despite the Russian president's isolation from the West.

Beijing's "unilateral drilling activities" for oil in waters claimed
also by Hanoi have led to "heightening of tensions," Mr. Abe told The
Wall Street Journal in an interview Friday. "We will never tolerate
the change of status quo by force or coercion," added the Japanese
leader, who has assiduously courted Southeast Asian leaders during the
past year and offered himself as a counterweight to China's

As part of his broader strategy to rearrange the region's power
balance, Mr. Abe also signaled a desire to keep alive his diplomatic
overtures to Russia. He condemned Russia's annexation of portions of
Ukraine and noted that Japan has imposed sanctions in coordination
with the U.S. and Europe. But he made clear that he also hoped to
maintain the dialogue he has intensified through five summit meetings
with Mr. Putin, more than Mr. Abe has had with any other head of

"Regarding the visit to Japan by President Putin, I agreed with the
president that we should carry it out in autumn of this year," Mr. Abe
said. The two leaders have agreed to accelerate talks over a
long-elusive peace treaty from World War II. Mr. Abe hopes to win
return of Japanese islands seized at the end of the war, get further
access to Russian energy and win a new partner in his bid to contain

Mr. Putin was less welcoming to Japan, however, telling foreign
journalists Saturday that Tokyo's sanctions against Russia surprised
him and left him unsure whether Japan was ready for talks.

Mr. Abe's remarks came a day before tensions flared anew in Japan's
dispute with China over a small group of islands in the East China Sea
as well as the surrounding airspace. Twice on Saturday, Chinese
fighter jets flew perilously close to Japanese reconnaissance craft,
leading both governments to file protests. Japan said China's actions
were "meant to intimidate," while China said Japan had "carried out
dangerous actions, in serious violation of international laws."

The weekend exchange underscored a theme of Mr. Abe's
administration—that the region around Japan is increasingly dangerous,
and that Tokyo has no choice but to embrace a more muscular foreign
policy in response. Since taking office in December 2012, Mr. Abe, 59
years old, has tried to remake the image of a country long defined by
passive diplomacy and its role as a junior ally to the U.S.

As part of that campaign, Mr. Abe on Friday will deliver the keynote
speech to the annual Shangri-La Dialogue security conference in
Singapore, the first Japanese prime minister to do so.

But Mr. Abe has struggled at times to sell his agenda. In mid-May he
announced plans to move forward with a proposal to reinterpret Japan's
postwar pacifist constitution in a way that would loosen some of the
tight restrictions on Japan's military. His goal is to make Japan a
more equal partner with the U.S. in policing Asia, a change the
American military has encouraged as China boosts its defense spending
while the Pentagon faces cutbacks.

"It's difficult for the general public to understand. And there is
strong opposition," Mr. Abe acknowledged.

His administration has been unusually stable and popular after Japan
endured a series of weak, short-lived prime ministers. After two
election victories, the coalition led by his ruling Liberal Democratic
Party controls majorities in both houses of parliament. But his power
and popularity stem mainly from his "Abenomics" program to end Japan's
long economic slump.

Asked to define how he would enhance Japan's ability to support
American troops in the region, the prime minister seemed to have
trouble crafting a message that would satisfy Washington without
alarming his dovish coalition partner, the New Komeito Party. "It is
very difficult for me to respond in a concrete way," he said, adding
that "we will be discussing and reviewing how we can respond to
various situations that may arise in waters close to Japan."

Still, Mr. Abe is moving to step up Japan's role. He has repeatedly
issued public statements supporting the Philippines and Vietnam in
their territorial disputes with China in the South China Sea,
suggesting a similarity to Japan's own standoff in the East China Sea.

That has drawn rebukes from China. "The real purpose of Japan is to be
involved in the South China Sea dispute to pursue its own hidden
political end," said foreign ministry spokesman Hong Lei Friday. "We
urge the Japanese side to stop all provocative words and deeds."

Mr. Abe has also extended modest, but symbolically significant,
maritime aid to countries facing off with China. In December, Japan
provided 10 patrol vessels to the Philippine Coast Guard, and it
announced talks that same month for similar aid to Vietnam.

Hanoi has been trying to beef up its military firepower and has sought
to persuade the U.S. to lift a ban on sales of lethal weapons.

In the interview, Mr. Abe said he had met Vietnam's deputy prime
minister, Vu Duc Dam, the previous day and was told that Vietnam
"would certainly like to request the provision of the patrol boats as
soon as possible." Mr. Abe said he, too, wants to accelerate the

In recent weeks, the standoff between Vietnam and China has turned
physical, with vessels ramming each other and water cannons fired. Mr.
Abe wouldn't say if he envisioned the Japanese-made boats being
deployed in that confrontation. "We are considering providing the
boats based upon the view that they will be helpful in bringing about
stability and peace in that region," he said.

But, he added, "the boats aren't built yet, so it's not that they'll
be ready tomorrow."


Prime Minister @AbeShinzo is very much the Pivot to Asia's Attack Dog.

02-DEC-2013 The Pivot to Asia bares its Fangs


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

Colonel Steve Warren at the Pentagon said Washington had “conducted
operations in the area of the Senkakus”.

“We have continued to follow our nor- mal procedures, which include
not filing flight plans, not radioing ahead and not registering our
frequencies,” he said.

‘’The Pentagon sent two strategic bombers (capable of nuclear strikes)
directly into an airspace which the Chi- nese have just declared an
“air defense identification zone” in which non-compliance with Chinese
rules would trigger “emergency defensive measures”, and to make sure
to inflict the maximal amount of loss of face on China.’’

I see the pivot to Asia as the encirclement of China, then the
shrinking of its operating theatre and then lighting the tinderbox
that is the periphery and Xinjiang might well morph into China’s
Afghanistan. You will recall that the architect of Russia’s defeat in
Afghanistan was Zbigniew Brzezinski and he remains a foreign policy
eminence grise with the president’s ear. The US probably feels it
holds a decisive hard power advantage at this moment and given that
the trajectory is one of gradual erosion of that decisive advantage
leads me to the view that this pivot to Asia has a logic and momentum
of its own. Therefore, I see the US being increasingly determined to
press its advantage. One might even posit that calming down the
Iranian front, allows the US to better concentrate its energies on the
pivot to Asia.

One of the key elements of the Pivot to Asia is the air-sea battle
concept. This concept envisages the battle beginning with a “blinding
attack” against Chinese anti-access facilities and incorporates
“distant blockade” operations. China’s dependence on foreign oil is
increasing just as the US’ dependency is decreasing. And
interestingly, given my belief that the Eastern seaboard is a fabulous
energy prize, that puts the Indian Ocean in many respects right into
the geopolitical frame. If you are considering ‘’distant blockade’’
operations, one of those areas you will be blockading is this part of
the world, given the amount of energy that is likely to be sold into
Asia, in the future.

The Snake by @Aiww @Hirshhorn [best symbolises the ''policy of containment'']


@MEAIndia  History is made!! All invited foreign leaders with
Indian leaders at the Swearing-in Ceremony of PM @narendramodi


IT was on April 9, 1998 when then South Africa Deputy President Thabo
Mbeki, in his address to the United Nations University in Tokyo,
Japan, spoke of the African Renaissance.


“One of our answers to this question is that, as Africans, we recall
the fact that as the European Renaissance burst into history in the
15th and 16th centuries. There was a royal court in the African city
of Timbuktu which, in the same centuries, was as learned as its
European counterparts.

“What this tells me is that my people are not a peculiar species of
humanity! I say this here today because it is true, but also because I
know that you, the citizens of this ancient land, will understand its
true significance.

“And as we speak of an African Renaissance, we project into both the
past and the future. I speak here of a glorious past of the emergence
of Homo sapiens on the African continent,” Mr Mbeki said.

Thabo Mbeki


 The Islamic republic’s oil minister said over the weekend: “As a
country capable of supplying gas in very big volumes, Iran is always
willing to be present in Europe’s market, either through pipeline or
in LNG [liquefied natural gas] form.”


Saving South Sudan - Full Length VICE VIDEO


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Currency Markets at a Glance WSJ
World Currencies

Euro 1.3656
Dollar Index 80.24
Japan Yen 101.96
Swiss Franc 0.8946
Pound 1.6858
Aussie 0.9260
India Rupee 59.032 The rupee declined 0.4 percent to 58.9550 per
dollar as of 9:38 a.m. in Mumbai, according to prices from local banks
compiled by Bloomberg. It touched 58.3350 on May 23 -
There was talk of Intervention, in fact.
South Korea Won 1023.55
Brazil Real 2.2240
Egypt Pound 7.1456
South Africa Rand 10.3420

The euro has fallen 1.5 percent this month versus the dollar, while
the yen has gained 0.3 percent. The Aussie slid 0.3 percent and New
Zealand’s kiwi lost 0.7 percent since April 30.

“The key issue today, however, is timing.”


“What we need to be particularly watchful for at the moment is, in my
view, the potential for a negative spiral to take hold between between
low inflation, falling inflation expectations and credit, in
particular in stressed countries,” Draghi said in a speech at the ECB
Forum in Sintra, Portugal. “The key issue today, however, is timing.”

“This is fertile ground for a pernicious negative spiral, which then
also affects expectations,” he said. “Term-funding of loans, be it
on-balance sheet -– that is, through refinancing operations -– or
off-balance sheet -– that is, through purchases of asset-backed
securities -– could help reduce any drag on the recovery coming from
temporary credit supply constraints.”

Inflation in the 18-nation euro area has been below 1 percent since
October, less than half the ECB’s goal, and economies from Italy to
the Netherlands contracted in the first quarter. Unemployment
(UMRTEMU) was 11.8 percent in March, near the record 12 percent
reached last year.

Euro versus the Dollar 3 Month Chart 1.3656


The euro rose to $1.3646 as of 5 p.m. New York time after falling to
$1.3615, the weakest since Feb. 13 and below its 200-day moving
average of $1.3639

Dollar Index 3 Month Chart INO 80.24


Dollar Yen 3 Month Chart INO 101.96


Kuroda will speak in Tokyo at a conference hosted by the BOJ and the
Institute for Monetary and Economic Studies.

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Commodity Markets at a Glance WSJ

Gold 1 Year Chart INO 1290.36 [very soft]


Crude Oil 1 Year Chart INO 104.39 [China, it turns out has been a
very big Buyer of late]


The contract climbed 61 cents to $104.35 on May 23, the highest close
since April 21. The volume of all futures traded was three times the
100-day average. Prices have increased 6.1 percent this year.

WTI has gained 4.7 percent in May, set for the first monthly advance
since February.

WTI has technical resistance along its upper Bollinger Band, data
compiled by Bloomberg show. Futures halted advances in early March and
mid-April near this indicator, at about $105.25 a barrel today. Sell
orders tend to be clustered around chart-support levels.

Roberto Cavalli approaches Investcorp for possible investment: source


Talks between Cavalli and Investcorp, which has owned Gucci (PRTP.PA)
in the past and was also a bidder for the 20 percent stake in Versace,
are at a preliminary stage and nothing has been decided, the first
source said.

"We've been approached by Cavalli as they believe we would be a
credible buyer," a source at Bahrain-based Investcorp said.

Italian designer Roberto Cavalli poses before the start of his
Spring/Summer 2014 collection during Milan Fashion Week September 21,


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Foreign Investment in Africa Seen at Record $80 Billion in 2014, Report Shows

BRUSSELS—Foreign investment in African economies will reach a record
$80 billion in 2014, as business leaders in developed economies put
the recession behind them and Chinese and others from emerging markets
continue to show a strong interest in African assets, a report said on

The U.S., the U.K. and France still lead the foray. The three
countries combined held the biggest share of Africa investments in
2012—the latest available data—totaling $178.2 billion. The so-called
Brics countries—Brazil, Russia, India, China and South
Africa—collectivelyheld investments valued at $67.7 billion, of which
$27.7 billion were Chinese.

The in-depth survey was compiled by the African Development Bank, the
United Nations Development Program and the Organization for Economic
Cooperation and Development and launched in Kigali on Monday at the
start of the ADB's annual meetings.

Foreign-investor interest remains fixed on a handful of African
nations, however. Last year, "the top six recipients, representing
one-third of the continent's population, received the same amount of
foreign direct investment as the remaining 48 countries together," the
report said. The top destinations were the continent's two largest
economies, South Africa and Nigeria.

While most of the overseas private capital was lured by resource-rich
African states, the report noted ever-more manufacturing and services
projects are represented in the mix. Of the total foreign direct
investment in 2013, 65% flowed to resource-rich countries, compared
with 78% in 2008, as money was increasingly directed to countries
without natural resources that presented attractive opportunities in
other industries.

African investors also continued to boost their presence on the
continent, representing 18% of total investment in new—or
"greenfield"—projects in 2012, up from 7% in 2007. Unlike their
foreign counterparts, who directed most of their attention to the
mining sector, iInvestors from the continent preferred financial
services, construction and communication projects.

A combination of foreign direct investment, portfolio investment in
stock and debt, growing remittances from workers sending money home
and improved tax revenue has meant the continent's overall dependence
on foreign aid will continue to shrink as a proportion of its external
financing, the report showed. Foreign aid as a proportion of total
foreign capital inflows to Africa was set to decline to about 26% in
2014 from 30% the year before, the report said. But foreign aid will
continue to increase this year, to about $55 billion, and the poorest
African nations rely on it to survive.

Overall, the continent's economic growth has been outpacing the
world's, but it is very uneven among countries and regions, the report

Economic output for the whole of the continent is expected to grow by
4.3% this year and 5.7% in 2015, but East and West African regional
economies are set to grow significantly faster than other regions.

South Africa's economy—hit by strikes and affected by the slowdown in
developed economies—is a drag on sub-Saharan African growth, the
report said. The concern echoed the International Monetary Fund's
findings presented in April. Sub-Saharan African economies will grow
by 5.8% this year and by 5.9% next year, but the rate is a full
percentage point higher if South Africa is excluded from the

The South African economy—overtaken in April by Nigeria's as the
biggest on the continent—will grow 2.7% in 2014 and 3% in 2015.

Nigeria's economic growth will slow slightly, to 7.2% in 2014 and 7.1%
in 2015, from 7.3% last year, the report said. Oil theft and poor oil
exploration stifle that industry's potential while heightened turmoil
in the country's northeast is casting a shadow on its financial

Boko Haram, an Islamist terrorist group, has been wreaking havoc in
north-eastern Nigeria and has stepped up its attacks on civilians in
recent months. The group in April claimed the kidnapping of more than
200 schoolgirls, leading the U.S. and other foreign powers to deploy
search missions in the region to help retrieve the students. The
Nigerian government's handling of the situation has generated severe

The overall security and political situation has improved in the
region, despite persistent pockets of conflict, the report said. The
Central African Republic and South Sudan have been ravaged by war for
months, while Somalia and Libya are also facing financial instability
because of internal turmoil.

Zimbabwe Heads for Recession as Factory Shutdown Spurs Deflation


Five years after Zimbabwe emerged from recession, ended hyperinflation
by abandoning its local currency and spurred farming production, the
economy is at risk of contracting again. Foreign currency needed to
pay wages and buy imports has dried up, Mugabe’s government has given
investors mixed signals on plans to seize company stakes as part of
its “indigenization” policy, and factories are operating at just 40
percent of capacity.

“We’re already in recession and the economy will probably shrink by 1
percent this year,” John Robertson, an independent economist, said by
phone from Harare. “Even if government does act on its promise to
soften indigenization laws, it’ll take at least a year before foreign
investors build factories or sink mines.”

Hyperinflation, estimated by the International Monetary Fund to have
peaked at 500 billion percent in 2008, came to a halt when authorities
dropped the Zimbabwean dollar, ending the central bank’s ability to
print money to pay the government’s debt. Zimbabwe now uses a
multi-currency system that includes the U.S. dollar and South African

The recovery spurred investment from Pick n Pay Stores Ltd., South
Africa’s second-biggest grocer, and Tiger Brands Ltd. (TBS), the
Johannesburg-based maker of food products such as Jungle Oats.

It also fueled agriculture, with tobacco output surging more than
three-fold to 167 million kilograms in the five years through 2013.
Production had slumped following Mugabe’s 2000 land reform program
that saw the government seizing commercial farms owned by white
landowners to give to black Zimbabweans, many of who were subsistence

That progress is now at risk. Retail sales fell 30 percent in February
from the previous month, while 15 factories in the metals and
engineering industries closed in the period, the Finance Ministry said
in a monthly report on its website. Consumer prices declined for a
third consecutive month in April, reflecting depressed demand.

“There’s no clear sign of a way out of the difficulties,” Thea Fourie,
an analyst at IHS Inc. (IHS), a global business research company, said
by phone from Johannesburg. “It’s pretty bad in Zimbabwe right now.”

Zimbabwe’s benchmark stock index has slumped 15 percent this year, the
worst among 14 African stock markets tracked by Bloomberg.

Finance Minister Patrick Chinamasa has said a law that forces foreign
and white-owned companies to cede 51 percent stakes to black
Zimbabweans will be eased. The government is working on a “sector by
sector” plan and won’t compel all foreign-owned companies to sell, he
said on April 23.

“Although some investors might see the apparent softening of rhetoric
on indigenization as an opportunity, which would provide some relief
to the liquidity crisis, the minister’s announcement underlines the
uncertainty of the policy environment and the high level of state
intervention,” Mike Davies, an analyst with Cape-Town-based Kigoda
Consulting, said in an e-mailed response to questions.

For cross-border traders like Takavarasha, remaining in South Africa
as an undocumented immigrant is becoming more promising than trying to
sell goods in Zimbabwe. The Johannesburg-based University of
Witwatersrand estimates that as many as 1.5 million Zimbabweans, or
more than a 10th of Zimbabwe’s population, live in South Africa.

“The profit is less and less and there’s no work in Zimbabwe,” he
said. “The economy is going down. Maybe it’s best to leave for a
couple of years and wait and see.”

U.S. Trains African Commandos to Fight Terrorism New York Times Subscriber


WASHINGTON — United States Special Operations troops are forming elite
counterterrorism units in four countries in North and West Africa that
American officials say are pivotal in the widening war against Al
Qaeda’s affiliates and associates on the continent, even as they
acknowledge the difficulties of working with weak allies.

The secretive program, financed in part with millions of dollars in
classified Pentagon spending and carried out by trainers, including
members of the Army’s Green Berets and Delta Force, was begun last
year to instruct and equip hundreds of handpicked commandos in Libya,
Niger, Mauritania and Mali.

The goal over the next few years is to build homegrown African
counterterrorism teams capable of combating fighters like those in
Boko Haram, the Islamist extremist group that abducted nearly 300
Nigerian schoolgirls last month. American military specialists are
helping Nigerian officers in their efforts to rescue the girls.

“Training indigenous forces to go after threats in their own country
is what we need to be doing,” said Michael A. Sheehan, who advocated
the counterterrorism program last year when he was the senior Pentagon
official in charge of Special Operations policy. Mr. Sheehan now holds
the distinguished chair at the Combating Terrorism Center at West

As the United States military seeks to extend its counterterrorism
reach in Africa, President Obama is expected to appear at West Point
on Wednesday to emphasize a foreign policy that would avoid large land
wars, like those in Afghanistan and Iraq, and instead stress the
training of allied and partner nations to battle militants on their
own soil.

Since the attacks on Sept. 11, 2001, the United States has slowly
built a multipronged counterterrorism strategy in Africa: It has
carried out armed drone strikes in Somalia from its only permanent
base on the continent, in Djibouti; backed African proxies and French
commandos fighting Islamist extremists in Somalia and Mali; and
increasingly trained African troops to combat insurgents.

Under the new Africa plan, the Pentagon is spending nearly $70 million
on training, intelligence-gathering equipment and other support to
build a counterterrorism battalion in Niger and a similar unit in
nearby Mauritania that are in their “formative stages,” a senior
Defense Department official said.

“You have to make sure of who you’re training,” said Maj. Gen. Patrick
J. Donahue II, the commander of United States Army soldiers operating
in Africa. “It can’t be the standard, ‘Has this guy been a terrorist
or some sort of criminal?’ but also, ‘What are his allegiances? Is he
true to the country, or is he still bound to his militia?’ ”

The American military uses conventional troops and elite Special
Operations forces to train foreign armies all over the world. The
tasks range from teaching basic marksmanship to more advanced
counterterrorism tactics and techniques.

In the past decade, the Bush and Obama administrations put a premium
on training and equipping foreign troops to combat terrorists and
other Islamist extremists and persuaded Congress to approve funding
for those programs.

The new program to train small counterterrorism forces in Africa
resembles larger efforts by American Special Operations troops carried
out in Iraq and Afghanistan. Pentagon officials declined to comment
publicly on the new program, but budget documents reveal some details.

In Libya, the Pentagon has allotted just over $16 million from a
train-and-equip fund to develop two companies of elite troops and
their support elements “to counter terrorist and extremist threats in
Libya,” according to budget documents. For the aborted training
outside Tripoli, the Defense Department also tapped into a classified
spending account called Section 1208, devised to aid foreign troops
assisting American forces conducting counterterrorism missions.

For Mauritania, about $29 million has been set aside for logistics and
surveillance equipment in support of the specialized unit.

For Niger, where the United States launches unarmed surveillance
drones to fly over Mali in support of French and United Nations
troops, the Pentagon is spending nearly $15 million on the country’s
new counterterrorism unit. The funds are part of $39.5 million this
year to train and equip the West Africa nation’s army as it struggles
to stem a flow of insurgents across Niger’s lightly guarded borders
with Mali, Nigeria and Libya.

Maman S. Sidikou, Niger’s ambassador to the United States, said he
could not comment on the counterterrorism unit, but he added in an
email, “Training remains a critical part of our needs to further
increase our men’s readiness to face the many challenges of our
regional environment.”

Mr. Sheehan, the former Pentagon official, said a 12-member Army
Special Forces team could train about 50 soldiers initially, and
expand after that. “It can be done,” said Mr. Sheehan, who conducted
similar training in Latin America in the 1980s as a Special Forces

J. Peter Pham, director of the Africa Center of the Atlantic Council,
a policy research group in Washington, said the United States must
make tough political judgments before investing in ambitious
counterterrorism training programs. Mr. Pham cited the lessons of
Mali, where American-trained commanders of elite army units defected
to Islamic insurgents that seized the north last year.

“The host country has to have the political will to fight terrorism,
not just the desire to build up an elite force that could be used for
regime protection,” Mr. Pham said. “And the military has to be viewed
well or at least neutrally by a country’s population.”

American counterterrorism officials also warn that without a
commitment to support the specialized units, training can stall. “It’s
very difficult, very challenging dealing with African forces,” said
Rudy Atallah, the former director of African counterterrorism policy
for the Pentagon. “You train them to a certain level, and then they
can run short on gear, communications, even tires for their vehicles.”

American officials say trainees must be carefully screened and
monitored for possible human rights violations or shifting
allegiances. “Any unit we train could be used to go after political
opponents rather than Al Qaeda,” said Frederic Wehrey, a senior policy
analyst with the Carnegie Endowment for International Peace who has
visited Libya frequently.

No episode is a more sobering reminder of these risks than the
collapse of the American counterterrorism training mission last August
at Base 27, also called Camp Younis, a Libyan military installation
about 15 miles from Tripoli, the capital.

The American trainers issued the Libyans M4 automatic rifles,
night-vision goggles, Glock pistols and armored vehicles. The Libyans
took custody of the weapons and equipment and were responsible for
safeguarding them in a warehouse at the camp, American military
officials said.

In a predawn raid on Aug. 4, gunmen believed to be from one of the
local militias overpowered the Libyan guards and seized the weapons
and equipment in the storage area, American officials said.

The American trainers were not at the training camp when the raid
occurred because they regularly stayed at a nearby villa that served
as a safe house at night, American officials said.

American military officials briefed on the raid suspect that the theft
was an inside job in which a Libyan officer or soldier tipped off some
local Tripoli militia members about the matériel stored at the base.
Much of the stolen equipment was later recovered, but not before news
reports indicated that some of the pilfered weapons had showed up
online for sale on the black market.

The episode abruptly ended a weekslong training course that American
and Libyan officials had hoped would restart broader training efforts
that were suspended after the attack on the American Mission in
Benghazi on Sept. 11, 2012.

A former American Special Operations officer said there was a broader
lesson for any future Libya training mission: “The take-away here is
they’re going to take a lot more adult supervision to make sure the
checks and balances are in place, so you don’t have outside militia
taking over.”

South Africa All Share Bloomberg +9.71% 2014 [Index above 50,000 for 1st time]


50,021.72 +69.03 +0.14%

Dollar versus Rand 6 Month Chart INO 10.3422


Egypt Pound versus The Dollar 3 Month Chart INO 7.1482


Egypt EGX30 Bloomberg +30.66% 2014 [Africa's best in 2014]


8,736.28 -26.58 -0.30%

If the equity markets had a vote in Egypt, army chief general Abdel
Fattah al-Sisi would actually get one of those impossible- to-believe
votes of 99.8% 20-JAN-2014


@ReutersWorld Egyptian presidential candidate Sisi [has proven
wily and subtle]


Nigeria All Share Bloomberg -0.6% 2014


39,755.46 -78.48 -0.20%

has rallied 1,160 points over the last few weeks which is a Signifier
when laid against the News Flow.

read more

Nigeria 'knows where missing girls are' @AJEnglish #Bringbackourgirls

Nigeria's military has located nearly 300 school girls abducted by
Boko Haram six weeks ago but fears using force to try to free them
could get them killed, the country's chief of defence said.

Air Marshall Alex Barde told demonstrators supporting the
much-criticised military on Monday that Nigerian troops could save the

But he added: "We can't go and kill our girls in the name of trying to
get them back".

Barde spoke to thousands of demonstrators who marched to Defence
Ministry headquarters in Abuja, the capital. Many were brought in on
buses, indicating it was an organised event.

Asked by reporters where they had located the girls, Barde refused to elaborate.

"We want our girls back. I can tell you we can do it. Our military can
do it. But where they are held, can we go with force?'' he asked the

People roared back: "No!"

"If we go with force what will happen?" he asked.

"They will die," the demonstrators said.

Barde said the military's efforts should not be criticised.

"Nobody should come and say the Nigerian military does not know what
it is doing. We know what we are doing," he said.


The Detachment of the President from this Situation for three whole
weeks before he uttered a word was truly breathtaking.

read more

Nigerian Military on abducted girls: "We know where they are" (0:35) @Reuters #BringbackourGirls

Ghana Stock Exchange Composite Index Bloomberg +5.32% 2014


Through the looking glass: Counterterrorism and the securitisation of
Africa's politics


The 2002 National Security Strategy states: “The events of September
11 2001 taught us that weak states… can pose as great a danger to our
national interests as strong states.”

The central plank of this new security policy is counterterrorism
funding and training of African militaries. As a
result,counterterrorism funding has skyrocketed as has the United
States military’s footprint in Africa under the guise of the United
States Africa Command (Africom).

Moreover, domestically, “smart” African leaders have cleverly
exploited this new “securitised” environment to shrink political space
and criminalise dissent by labelling their political opponents

These African leaders are adept at exploiting the mixed signals
emanating from the United States government; the State Department will
come around and issue fluffy rhetoric about democracy, good governance
and respect for human rights, but provide little money, while the
Department of Defence hardly says anything in public, but gives out
plenty of money.

As an added advantage, there are few accountability mechanisms in
counterterrorism funding.

The Pakistan-isation of Kenya

In the war against the Taliban, Pakistan was the centre of gravity as
much as Afghanistan, providing a safe haven from where al-Qaeda and
the Taliban operated. In the War on Terror in the Horn of Africa
targeting al-Shabab in Somalia, Kenya has become the new Pakistan; it
provides Western intelligence with the infrastructure and base from
where to wage the war.

Unlike in Pakistan, there is marginal political cost to the political
elite in Kenya for backing the Western-led operations. Not yet at
least. However, this uncritical embrace of the counterterrorism
project coupled with sending the Kenya Defence Forces into Somalia in
October 2011 has exposed the country’s domestic security underbelly –
its inability to police and provide adequate security domestically.

The systemic and structural problems within the security machinery
mean it lacks finesse in operating in the new and ever-shifting
security ecosystem. Further, the intervention has revealed that Kenya
cannot police its border adequately. The consequences of intervention
in Somalia are an increasing blowback of insecurity in Nairobi and the
northeastern and Coast counties,particularly a series of grenade
attacks against government targets,public meeting spaces, and

The highlight of the security blowback post-Somalia intervention was
the September 24, 2013 attack on the high-end Westgate shopping mall
popular with Western expatriates and a symbol of the conspicuous
consumption of the new Africa. While al-Shabab has claimed
responsibility for some of the grenade attacks, others are likely to
be the work of opportunistic criminal groups.

Museveni’s success in appropriating the terrorism discourse has bought
him time, immunity and plenty of funding. Initially, he referred the
murderous Lord’s Resistance Army’s leader Joseph Kony to the
International Criminal Court, but when he realised his army could
become implicated, he labelled Kony a terrorist.

Museveni’s canny grasp of the terms between himself and the United
States was clear and was vindicated immediately after he signed one of
the harshest anti-homosexuality laws in the world. The US, after
initial mumbling and public pronouncements, sent the regime more money
and weapons in the fight against Kony.

In Ethiopia, the state is pretty much in control of the
telecommunication architecture, such that even those in the diaspora
cannot escape the state dragnet. As a result, it is clear that with
the advent of terrorism and counter terrorism in Africa, mobilising
against the state has become incredibly difficult, holding back the
evolution of democracy.


Aly-Khan Satchu

The US via @USAfricaCommand holds a decisive hard power Lever with
which to tilt the African Pitch. With the parabolic shift in
asymmetric type risks [see Al Shebaab and Boko Haram], we are now
learning that scandals like Anglo-Leasing which were transacted in the
murky area of ''National Security'' has resulted in a hopeless
situation where Security Agencies have now fallen so far behind the
curve they are off the charts. This Chasm is not going to be narrowed
anytime soon.

I also believe that @USAfricaCommand will increasingly be seen as an
instrument that can staunch the Chinese advance on the continent.

Your Point about Social Media is an interesting one. Africans have
become increasingly vocal and the Political Class will eventually need
a more sophisticated ''call and response'' and ultimately democratic
reaction to Social Media, I think.

Aly-Khan Satchu

A man and woman who blew themselves up in a restaurant in Djibouti on
Saturday - in the first attack of its kind in the East African state -
were probably Somalis, the interior minister said.


Ethiopia pushes retail door ajar to foreigners


Ethiopia has pushed the door ajar for foreign retailers keen to enter
the fast-growing market of 90 million people, welcoming them as
managers but keeping the state in control.

It is a tantalising, if limited, offer for firms such as Walmart of
the United States and Kenya’s Nakumatt supermarket, which already have
stores elsewhere on the continent and would like a foothold in
sub-Saharan Africa’s fifth biggest economy.

“It is a vibrant market. The population is huge, the income is there,
they have a lot to go around,” Nakumatt’s managing director Atul Shah
said. “Why are we not there?”

Instead of following other African countries which have opened up to
foreign retailers, the nation that was once run by communists is
launching a state-owned cash-and-carry wholesaler called Alle that it
promises to run as if a private firm.

“Retail distribution is not competitive, it is archaic,” Finance
Minister Sufian Ahmed told Reuters when asked about Ethiopia’s plans
to shake up the retail industry.

“We are looking for outside management just to get international
experience. We are open to any option, not only for Alle, but for any
other major public enterprise,” he added.

Such prospects elsewhere in Africa – despite huge wealth disparities
across the continent – have drawn big retail names to flashy shopping
malls serving the middle class.

“Africa is brimming with potential for global retailers with its one
billion people and growing economy,” consultancy A.T. Kearney said in
its 2014 African Retail Index report. “It is easy to see why many
retailers consider sub-Saharan Africa the next big thing.”

Big brands are prising open the door in some areas. Drinks giant
Diageo bought a brewery and fashion retailer Hennes & Mauritz makes
garments in Ethiopia. The Ethiopian Investment Agency told Reuters
last year that Unilever and Nestle were both sniffing around.

Walmart’s South African subsidiary Massmart Holdings said Ethiopia was
a “compelling growth opportunity” but one it could not yet exploit.
“Legally we just can’t do it. But I’d love to trade in Ethiopia,” Mark
Turner, Massmart’s Africa director told Reuters. “They’d welcome
wholesale operations and that’s just not an option for us.”

Despite hurdles, Ethiopia remains an enticing market. Experience from
emerging markets around the world shows retailing starts to expand
significantly when a country’s per capital national income reaches
$750 and really takes off at $3000, according to McKinsey Global

In 2012, Ethiopia’s per capita income was $410 and it aims to reach
middle income status – defined as $1,430 by the World Bank – in just
over a decade.

Ethiopia’s middle class is already increasingly brand conscious, even
if available cash remains limited, said U.S.-educated Nega Asfaha who
manages the Zefmesh Grand Mall, Ethiopia’s largest shopping centre.

“The middle class is demanding more convenience, more choice, more
brands,” said Nega. “But it doesn’t have that disposable income to
really go out there and shop like you would at Macy’s at the weekend.”

Kingdom of Swaziland only has around $790,000 left in the bank,
according to the central bank's latest estimate


The World Bank will offer $1 billion in financing to help Angola
rebuild infrastructure and develop its agriculture, an official at the
Washington-based lender said on Monday.


read more

"I can confirm that two Kenyan Defense Forces soldiers died today after they were ambushed by suspected Al-Shabab rebels at Hindi in Lamu [in southeastern Kenya]," Lamu East Officer Commanding Police Division Samson Obare told Anadolu Agency.
Kenyan Economy

Obare added that several other soldiers had been injured in the ambush.

"They were attacked by a group of around ten people who were heavily
armed… Most of the soldiers were caught unaware," he recounted.

The convoy had been ferrying supplies to Somalia, he added.

"They were in a group tasked with taking supplies to Ras Kamboni in
Somalia. I believe their vehicle had broken down," he added.

9-MAY-2014 The Dash-Board is Blinking Amber


read more

More than 600,000 Kenyans are directly employed in the tourism sector, which provides 12.5 percent of the country’s GDP.
Kenyan Economy

Equity Bank of Kenya's mobile service set for July launch

Equity Bank of Kenya plans to launch a mobile telecoms service in
July, eyeing a piece of the fast-growing cellphone-based financial
services market, it said on Monday.

Kenya has led the world in mobile money, with the M-Pesa platform of
its largest telecoms operator Safaricom offering banks a cheap and
easy way to reach the large number of people without access to formal
financial services.

In the year ended March, Safaricom reported M-Pesa service revenue of
26.56 billion shillings ($302.51 million), up 21.6 percent from the
previous year.

James Mwangi, Equity's chief executive, said it had teamed up with the
east African nation's No. 2 telecoms firm, the local arm of Bharti
Airtel, to roll out its new service.

Equity was licensed as a Mobile Virtual Network Operator (MVNO) by the
telecoms regulator earlier this year, giving it permission to run a
service using a telecom operator's network.

It will offer its customers sim cards linked directly to their bank
accounts. They will then be able to access their accounts and apply
for loans via their mobile phones.

Mwangi said Equity, Kenya's biggest lender by depositors, will seek to
expand the service across east African countries where both firms
operate, if the service catches on in Kenya.

"The good thing with this partner is that then we are able to look at
east Africa as they are in Uganda, Rwanda and Tanzania," Mwangi told
an investor briefing. "As soon as we succeed in Kenya, we repeat the
same in the region."

Equity has outlets in Uganda, Tanzania, Rwanda and South Sudan.

Adil El Youssefi, Airtel Kenya's chief executive, said the service
would help his firm chip away at Safaricom's market share.

Mwangi said Equity's investment was minimal as it did not need to
spend money on telecoms infrastructure.

Airtel agreed to let the bank use up to 60 percent of its spare
network capacity at a variable rate depending on usage.

"There is no capital expenditure because we are being hosted," Mwangi
said. "It's plug and play."

Safaricom's M-Pesa platform has grown rapidly since its launch in
2007. One service run by Commercial Bank of Africa on M-Pesa - called
M-Shwari - had attracted over 24 billion shillings in deposits and
lent 7.8 billion shillings by February this year, after it was
launched in 2012.

Equity said its mobile customers would be able to take loans on the
platform at interest rates between 1-2 percent per month.

Its first quarter profit rose by 21 percent to 5.4 billion shillings
($62.14 million), lifted by growth in its loan book, it said in April.

Equity Bank share price data here +30.89% in 2014


Kenya Shilling versus The Dollar Live ForexPros 87.899 last


@moneyacademyKE  Historical chart showing USDKES during April-June
period cc @alykhansatchu


"They hit all the banks with quite large amounts," said I&M bank
trader Abhinav Mathur.


The prospect of further sales of hard currency meant investors were
now reluctant to break the 88 level again, Mathur said.

On balance and subject to security issues staying on the trend line
(considerably elevated in 2014), then the shilling should improve from
here 26-MAY-2014


The shilling will remain below 88 per dollar as long as there is no
increase in militant attacks, said Aly-Khan Satchu, chief executive
officer of Rich Management Ltd. in Nairobi.


“People are looking forward to an inflow of dollars” from the Eurobond
sale, he said.

Nairobi All Share Bloomberg +9.3377% 2014 [has corrected 2.13% since
setting an All Time Closing High of 152.67 on the 12th of May]


149.41 -0.39 -0.26%

Nairobi ^NSE20 Bloomberg -0.549% 2014 The Nairobi NSE20 below 4,900
level for the first time since April 10th]


4,899.92 -25.66 -0.52%

Across parts of central Kenya and the Rift Valley, the Jubilee
strongholds, ignorant villagers are being primed to believe that all
those bombings blamed on Al-Shabaab are actually part of the same plot
to shake the Uhuru-Ruto regime. This is scary stuff.

mgaitho@ke.nationmedia.com @MachariaGaitho

Kenyan firm gets licence for charter flights to China

Hong Kong exchange-listed logistics firm Frontier Services Group’s
(FSG) plans to offer chartered passenger and cargo flights to China
have got a major boost after the Kenyan aviation regulator granted its
associate company a licence to fly to Asia.

FSG, whose board chairman is former US Navy Seal Erik Prince, has
substantial shareholding in Kenyan company Phoenix Aviation.

The Kenya Civil Aviation Authority (KCAA) on Friday expanded Phoenix
Aviation’s licence allowing it to operate chartered flights to Asia.

“It opens up new destinations in Asia for Phoenix Aviation’s
specialised medical evacuation services,” said FSG in a statement.

“Phoenix Aviation sought to allow themselves the flexibility of
serving the Chinese State-owned Enterprises that FSG works with.”

Mr Prince, 44, is the founder of Blackwater— the controversial US
defence contractor that at one time came under fierce criticism over
its operations in Iraq.

FSG chief executive Gregg Smith said in an earlier interview the
company was targeting Chinese mining firms with operations in Africa
as major clients for its logistics services.

Every Listed Share can be interrogated here


read more

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

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