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Satchu's Rich Wrap-Up
Tuesday 03rd of June 2014

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I am just so pleased with the camera on my @Samsung s5 Phone @SamsungMobileKE

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Mozambique: #Africarising - Mozambique Could Be the Next Qatar BY ALY KHAN SATCHU, 2 JUNE 2014 @IMFNews @Lagarde

I was kindly invited by the IMF and the Government of Mozambique to
attend the second Africarising conference in Maputo last week. Maputo
sits at the end of the ancient Indian Ocean maritime route.

"The precocity of the Indian Ocean as a zone of long-range navigation
and cultural exchange is one of the glaring facts of history', made
possible by the 'reversible escalator' of the monsoon." [Professor
Felipe Fernández-Armesto].

Today, it is self-evident that Mozambique sits on gas reserves which
will [if the execution is optimal - and optimal execution around our
natural resources is a sine qua non of the #Africarising narrative] in
my opinion transform Mozambique into the next Qatar.

Just like our President who said the following of Madame Lagarde the
MD of the IMF when he hosted her at State House in Mombasa last year;
"Madame MD your style has won you accolades amongst your peers and IMF
member states calm, cool, persistent inclusive and considerate"

I too am an admirer of the MD. I appreciate her emphasis on what I
characterise as "Girl Power" because I know that countries that
leverage the female component have a head start and a competitive

I appreciate the nature and tone of the IMF's engagement in Africa
which has been recalibrated for the c21st. And it clear to me, that
the IMF has a role to play, not least because policy makers will make

Look at Ghana where the president claims he is looking for a
'home-grown' solution to a situation of his making and frankly there
isn't one. I follow markets ahead of words and the Ghana Cedi which
has collapsed more than 20 per cent this year is the loudest signifier
of all.

Some might feel that Madam Lagarde's IMF soft pedals on key issues but
my impression is that underneath Lagarde's velvet glove, there lies an
iron fist.

In my humble opinion, the IMF is more that a bank of last resort, a
bail out bank as it were, they are inserting themselves into the
policy making architecture and it is that normative influence that I
hope will keep the #Africarising narrative on track.

Interestingly, you will note a linguistic inflexion point in Zimbabwe
of late. This is entirely due to the IMF and I wish to give a hat tip
to another friend Domenico Fanizza. Its early days but there is a
trend change.

The last decade has been one where Africa has risen [it's narrow
because because it's only a decade old and as such only a recent
phenomenon in the scheme of things] and it has been a rising tide that
floated all boats.

Stock Markets rallied from east to west from north to south. It was a
momentum thing. You can imagine the cry of "Surf's Up" resonating all
over the World and fund managers from New York to London, from Tokyo
to the GCC getting their swimming trunks and their surf boards.

Well what is clear in 2014 #Africarising is no longer a homogenous
thing. You have to pick your waves now otherwise like those who missed
the 'reversible escalator' of the monsoon you might find yourself
beached with no way back. The momentum is no longer uniform and the
markets are punishing missteps and how.

It is a little counter-intuitive but this is why I want the government
to issue the Eurobond as quickly as possible. The reason being that
for the first time, the markets will respond to policy making on a
real time basis.

This will bring some of the outlier utterances firmly under control.
The cause and effect will be there for all to see because as long as
it is not, the crazies still have a voice. And, I, for one, am
fatigued by having to engage with the crazies.

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Mao II, published in 1991, is Don DeLillo's tenth novel. It was the winner of the PEN/Faulkner Award in 1992.

The title is derived from a series of Andy Warhol silkscreen prints
depicting Mao Zedong

"The future belongs to crowds."  -- Don DeLillo, Mao II

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Andy Warhol's Chairman Mao

"I used to announce ballgames to myself....I was the players, the
announcers, the crowd, the listening audience and the radio. There
hasn't been a moment since those days when I've felt nearly so good."

"We all know how the thing we secretly fear is not a secret at all but
the open and eternal thing that predicts its own recurrence."
--      Mao II by Don Delillo

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IISS Shangri-La Dialogue As Delivered by Secretary of Defense Chuck Hagel, Singapore, Saturday, May 31, 2014
Law & Politics

The rebalance is not a goal, not a promise, or a vision - it's a reality.

A central premise of America's strategy in the Asia-Pacific is our
recognition that, in the 21st century, no region holds more potential
for growth, development, and prosperity than this one.

But in recent months, China has undertaken destabilizing, unilateral
actions asserting its claims in the South China Sea. It has restricted
access to Scarborough Reef, put pressure on the long-standing
Philippine presence at the Second Thomas Shoal, begun land reclamation
activities at multiple locations, and moved an oil rig into disputed
waters near the Paracel Islands.


Chuck Hagel ratcheted the Linguistics several notches higher.

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Hagel Says China's Actions in South China Sea Destabilizing
Law & Politics

Speaking separately on China Central Television, Wang said Hagel had
"openly pointed" his finger at China in a public setting, according to
a summary posted on CCTV's website. "Secretary Hagel's speech is full
of American hegemony; secondly, it's full of threats and intimidation;
thirdly, it's full of instigation and incitement, aimed at provoking
restless elements in the Asian-Pacific region to stir up trouble."

"I feel they're echoing each other and sang a duet," Wang said of
Hagel and Abe, according to CCTV. "We can see from the Shangri-La
Dialogue this year, it's Japan and the U.S. who stirred up conflict."

The U.S. remains "committed to ensuring that any reductions in U.S.
defense spending do not come at the expense of America's commitments
in the Asia-Pacific," Hagel said. "The rebalance is not a goal,
promise, or a vision - it is a reality."

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Once on the edge of defeat, Syria's Assad runs again for president
Law & Politics

It was not so long ago that Bashar al-Assad's enemies thought he was finished.

In the summer of 2012, the rebels were not just at the gates of
Damascus, but inside the capital, preying on Assad's harried forces.

Buoyed by a sequence of victories over the past year, won in large
part through Iran and Hezbollah, its Lebanese paramilitary proxy,
Assad will be elected president this week for a third seven-year term,
symbolically contested by selected opponents playing walk-on roles to
pad out the main drama.

There is a note of triumphalism when he speaks, a sense that the tide
of the crisis, that began as a popular revolt against his rule, has
turned in his favour.

Despite the loss of 160,000 lives and the displacement of 10 million
Syrians, the shattering of cities like Homs and Aleppo and wholesale
destruction of infrastructure and the economy, Assad proclaims Syria
will become again what it once was.

During a visit to the ancient Christian town of Maaloula on Easter
Sunday, after it had been recaptured from rebels, he told soldiers:
"We will remain steadfast and bring security back to Syria and defeat
terrorism. We will hit them with an iron fist and Syria will return to
how it was."

"The battle may be long but we're not afraid; Syria has been like that
all its life," he said on another stop at nearby Ain al-Tina. "As long
as we're together...we'll rebuild it. However much they destroy we
will rebuild and make it even better."

Such is his confidence that he is contemplating retaking the whole
country after the presidential election, according to a Lebanese
political ally who sees him regularly.

Having regained control of a chain of cities up the north-south
backbone of the country, secured his grip on the north-west coast and
Alawite heartland, and cleared rebels away from Lebanon's border, he
is mulling a new offensive against Aleppo, before pushing right up to
the northern frontier with Turkey.

According to the Lebanese ally he would leave parts of eastern Syria
that are connected to the insurgency in western Iraq under the control
of al-Qaeda-linked jihadis - fitting Assad's contention he is fighting
foreign-inspired terrorists.

This would also send a warning to Western and Arab supporters of the
mainstream rebels that getting rid of him opens the gate to Sunni


The Price that ordinary Syrians have paid is just appalling.
Assad has proven very sticky and he would in fact win a free and fair
election all ends up.

Bashar Assad


Death by a thousand cuts By Peter Lee


President Obama's unwillingness to employ military action against
Syria or in the Ukraine is, I think, a reflection of his bedrock
principle, his aversion to committing US military power unless it is
absolutely necessary, a conviction that he has maintained at some cost
against determined pushback by hawks within his administration, in
Washington, and internationally. No more Vietnams or Iraqs.

Unfortunately, the flip side of the Obama doctrine is that the United
States remains committed to a forward counter-terrorism posture and US
"leadership", ie the ability to shape events overseas even without
using military power.

Even when holding back on military power, there are plenty of ways for
the United States to cripple a designated adversary. There's economic
sanctions - financial warfare through the international banking,
economic, and trade system; there's subversion, through the Internet,
through support of dissident parties and insurrectionists; there's
proxy wars. There's the Joint Special Operations Command. And of
course, there are drones.

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Xinjiang might well morph into China's Afghanistan 02-DEC-2013
Law & Politics

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 @Zbig and he remains a foreign
policy eminence grise with the president's ear.

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Israel to deploy nuclear-armed submarines off Iran coast Haaretz
Law & Politics

Sunday Times quotes IDF official saying the 3 German-made long range
submarines will gather intelligence, act as deterrent and potentially
land Mossad agents.

 "The 1,500km range of the submarines' cruise missiles can reach any
target in Iran," a navy officer told the Times.

Apparently responding to the reported Israeli activity, an Iranian
admiral told the Times: "Anyone who wishes to do an evil act in the
Persian Gulf will receive a forceful response from us."

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Currency Markets at a Glance WSJ
World Currencies

Euro 1.3604 The dollar was little changed at $1.3603 per euro as of 1
p.m. in Tokyo after appreciating to $1.3586 on May 29, the strongest
level since Feb. 13
Dollar Index 80.60
Japan Yen 102.38
Swiss Franc 0.8984
Pound 1.6746 The pound has appreciated 9.4 percent in the past year,
the best performer among 10 developed-nation currencies tracked by
Bloomberg Correlation-Weighted Indexes
Aussie 0.9250 Australia's dollar was little changed at 92.50 U.S.
cents after dropping 0.7 percent yesterday.
India Rupee 59.145
South Korea Won 1023.85
Brazil Real 2.2766
Egypt Pound 7.1403
South Africa Rand 10.6615

Ten-year Treasury yields were little changed at 2.52 percent after
rising five basis points yesterday. They tumbled 17 basis points in
May, the biggest monthly drop since January.

Dollar Index 3 Month Chart INO 80.60


The Bloomberg Dollar Spot Index, which tracks the U.S. currency
against 10 major counterparts, was little changed at 1,014.65 after
reaching 1,015.38 yesterday, the highest since April 7.

Euro versus the Dollar 3 Month Chart 1.3604


European policy makers will cut the central bank's deposit rate to
negative 0.1 percent from zero, according to 32 of 50 economists in a
Bloomberg survey.


Twelve more predicted a reduction to minus 0.15 percent.

The ECB is working on a proposal for a conditional longer-term
refinancing operation and expects to have a plan ready for the
meeting, according to a central bank official familiar with the

Euro-area inflation probably slowed to 0.6 percent in May from 0.7
percent in April, according to the median forecast in a Bloomberg
survey taken before the data's release today. That would leave it at
less than 1 percent for an eighth month, compared with the ECB's goal
of just below 2 percent.

Dollar Yen 3 Month Chart INO 102.38


Dow, S&P end at records 1 Year Chart @YahooFinance


Dow, S&P end at records; Apple, Google drag on Nasdaq @Reuters


The Dow Jones industrial average .DJI rose 26.46 points or 0.16
percent, to 16,743.63. The S&P 500 .SPX gained 1.40 points or 0.07
percent, to 1,924.97. But the Nasdaq Composite .IXIC dropped 5.42
points or 0.13 percent, to 4,237.20.

The Dow ended at a second consecutive record high while the S&P 500
closed at a third consecutive record though volume was still slight,
suggesting a lack of conviction behind the advance. Both the Dow and
the S&P 500 also set lifetime intraday highs on Monday.

The CBOE Volatility Index .VIX gained 1.6 percent but was still near
the lows not seen since March 2013. The drop in the "fear index" to
such lows has many, including Federal Reserve officials, concerned
that the market is complacent.

12-AUG-2013 The Recovery in the West is not a Mirage It Is Real


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Commodity Markets at a Glance WSJ

Gold 1 Year Chart INO 1243.33 [lower still]


Bullion for immediate delivery traded at $1,243.09 an ounce by 9:14
a.m. in Singapore from $1,243.93 yesterday, according to Bloomberg
generic pricing. The metal slid to $1,241.11 yesterday, the lowest
since Feb. 3, as the Standard & Poor's 500 Index reached a record and
the dollar climbed to a two-month high against 10 major counterparts.

Gold slumped 28 percent last year on expectations that the Federal
Reserve will reduce asset purchases as the economy recovers. The metal
declined 3.3 percent in May, the biggest monthly drop this year, as
the euro weakened 1.7 percent versus the dollar on speculation that
the European Central Bank will add stimulus when policy makers meet on
June 5.


Lower still.

Crude Oil 6 Month Chart INO 102.52


Five of the World's Most Luxe First-Class Cabins


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Ecuador Sends Gold Bricks to Goldman Sachs in Liquidity Hunt
Emerging Markets

The central bank said it will send 466,000 ounces of gold to Goldman
Sachs, worth about $580 million at current prices, and get the same
amount back three years from now. In return, Ecuador will get
"instruments of high security and liquidity" and expects to earn a
profit of $16 million to $20 million over the term of the accord. The
central bank didn't detail additional terms of the transactions, such
as any fees or financing costs paid to Goldman Sachs.

The Hindu Triad, from the Indian Civilization series, 2008-11, by
MF Husain. Photograph: Courtesy of Usha Mittal (c) Victoria and Albert
Museum, London


Frontier Markets

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Malawi's president seeks 'new friends' in China, Russia

Blantyre (Malawi) (AFP) - Malawi, traditionally dependent on Western
aid donors, will look for "new friends" in countries such as China and
Russia, newly elected President Peter Mutharika said at his
inauguration Monday.

The ceremony at a stadium in the commercial capital Blantyre was
boycotted by outgoing president Joyce Banda, who was soundly beaten by
Mutharika in disputed elections held on May 20.

Mutharika, who takes power in one of the world's poorest countries
where 40 percent of the budget comes from aid, said the donor nations
were "welcome to stay here".

Foreign policy would be based on what is best for Malawi, he said.

"We will continue with traditional relationships, but we are now
looking for new friends in emerging economies such as Brazil, China,
India, South Africa and Russia."

Britain and the United States have pledged to work with his government.

Mutharika said he regretted Banda's absence, saying she had "declined
to come here and hand over power to me.

"I was looking forward to shaking her hand and burying the past. I
have an olive branch in my hands."

A spokesman for Banda said: "She was not officially invited and her
official presidential convoy was withdrawn early hours of Saturday as
soon as it was announced that Peter Mutharika had won the presidency.

"It would have been difficult for the outgoing president to travel to Blantyre."

Mutharika takes over despite facing treason charges for attempting to
conceal the death in office two years ago of his brother, Bingu wa
Mutharika, in an alleged bid to prevent Banda -- then vice-president
-- from assuming power.

"It's been a long journey," Mutharika said of his ascent to power. "We
didn't know we would reach this far and be here today."

- 'No revenging or vengeance' -

He said he had no intention of "revenging or vengeance".

Malawi's new president Peter Mutharika waves at the Kamuzu stadium


All African countries except Eritrea receive some form of U.S.
military assistance, according to data from the U.S. State Department.


Most of this assistance is channeled through the department's
International Military Education and Training program, which
facilitates professional relationships with African militaries. The
Obama administration is looking to invest in "new, effective and
efficient small footprint locations and developing innovative
approaches to using host nation facilities or allied joint-basing" as
part of its focus on security in Africa. A handful of African nations
-- including Ethiopia, South Sudan, Niger, Uganda, Kenya, Mauritania,
Mali, the Seychelles and Burkina Faso -- already host U.S. drone sites,
shared bases and military surveillance facilities. Also, the U.S.
maintains a secretive program training counterterrorism commandos in
states that straddle the vast Sahara, whose ungoverned spaces provide
a rear base for terrorist groups.

The U.S. geographic command responsible for Africa is overseen by U.S.
Africa Command (AFRICOM), based in Stuttgart, Germany. In 2009, two
years after it was created, AFRICOM had an operating budget of about
$400 million and more than 1,000 staffers. Unlike other similar U.S.
operations, it is fully integrated with other U.S. agencies in Africa
-- including USAID and the State, Commerce and Treasury departments.
This arrangement informs AFRICOM's focus on a 3-D approach -- defense,
diplomacy and development -- in the region.


@USAfricaCommand  is a compelling and decisive Hard Power Lever that
spans the continent and which can be deployed to tilt the Pitch.

"Policies need to be designed in such a way to ensure that a surge in
growth can also spur structural transformation," according to the
Maputo joint declaration, which was agreed after the meeting IMF
Africarising Conference


"Sub-Saharan Africa will need to redouble efforts to harness the
opportunities offered by its abundant natural resources and ensure
that their fruits are equitably shared," the governments agreed.

Lagarde said policymakers had no illusions about the scale of the
problems affecting Africa. "There has clearly been a solid trend of
growth over the last few years, and obviously surprisingly so during
the financial crisis. There are also big issues to be addressed, and
potential risks on the horizon."

But she also insisted the picture was better today than in previous
decades, saying: "You have to flashback, what was it like 10 years

#Africarising but no longer in the rising tide floats all boats way it
was in 2012 and 2013 @Imfnews


"Africa rising is the good news part of the message; Africa watching
is the second part of the message", she told beyondbrics in an
interview in Maputo


"There has been a solid phase of growth," she told reporters at an
IMF-sponsored "Africa Rising" conference in Maputo, Mozambique. But
she is cautioning that there are "big issues to be addressed". Hence
the new concept: "Africa watching".

Mozambique's Renamo Says Cease-Fire Over as 20 Military Killed


Mozambique's opposition Renamo said the country's Muxungue region was
a "conflict zone" after it ambushed soldiers trying to kill its leader
Afonso Dhlakama.

At least 20 military died on May 31 and June 1, following "provocative
attacks" by government forces, Antonio Muchanga, a spokesman for the
Mozambique National Resistance party, told reporters today in Maputo,
the capital. Renamo didn't suffer any casualties, he said.

"We were aware that the government was planning a large attack in the
Gorongosa hills to chase and kill our leader," Muchanga said. "We
prepared our men and ambushed them."

If the military wanted to kill Dhlakama, it would have done so
sometime ago, said Gabriel Muthisse, head of the government's
delegation for talks with Renamo. Muthisse said he was unaware of any
deaths. President Armando Guebuza said yesterday that Renamo attacks
wouldn't disrupt elections in October.

China Swaps Gusto for Rigor in Africa as It Learns From Mistakes


China's gung-ho foray into Africa is waning. As trade with the
continent surpasses an annual $160 billion, its companies are avoiding
risk by taking smaller stakes in projects close to making money.

Cowed by capricious commodity prices, political instability and a
string of lost investments, Chinese financiers aren't as gutsy as when
state-owned giants used their heaps of cash to propel the nation's "Go
Out" drive and whip up business abroad 15 years ago.

"There was a lot of enthusiasm and momentum," said Clement Kwong,
whose Beijing-based Long March Capital Ltd. clubbed together with
other investors last year to take over a South African gold company.
"That momentum is definitely reined in by a new level of risk aversion
and caution."

China surpassed the U.S. as Africa's largest trading partner in 2009.
Trade volumes soared 11-fold in the decade through 2013, according to
data from the Geneva-based International Trade Centre. The quest for
profit now trumps the wider aim of creating a Chinese footprint

Libya gave China its biggest wakeup call, when the 2011 civil war
forced Chinese construction companies to abandon billions of dollars
worth of equipment and business, and 30,000 Chinese workers were

"We need to price in things like regime change and the cost of
operating in a somewhat less than transparent environment," Kwong, 47,
said wearing a checked shirt, blue jeans and white sneakers and
sipping iced coffee on the terrace of his Johannesburg hotel. South
Africa's business hub is Kwong's base from which he looks for other
African acquisitions.

Examples of the new pattern abound. China National Offshore Oil Corp.
is partnering with Tullow Oil Plc and Total SA to develop Uganda's
oilfields, which they estimate hold 3.5 billion barrels of crude.
Beijing Haohua Energy Resource Co. Ltd. last year bought a 24 percent
stake in South Africa's Coal of Africa Ltd. for $100 million.

China National Petroleum Corp. last year bought a fifth of an
off-shore Mozambican gas field for $4.2 billion. China Petroleum &
Chemical Corp. purchased a 10th of an Angolan oil and gas field for
$1.5 billion. In Sierra Leone, China Railway Materials, Shandong Iron
and Steel Group and Tianjin Materials and Equipment Corp. between them
invested $1.8 billion in London-listed African Minerals Ltd. (AMI)'s
Tonkili mine, Africa's second-largest iron-ore producer, including in
rail and port infrastructure.

Chinese capital growth has been "frighteningly explosive" and has
spread to private groups, which need to invest abroad to make greater
returns, according to Kwong.

"The more de-risked a project, the easier it is to get funded today,
so something without even a pre-feasibility report is a little
difficult to swallow," Kwong said, before flying to Zimbabwe to look
at another possible project. "But if it is near production, but
requires a substantial amount of capex to take it into production in
order to unlock value, that is probably our favorite type of profile."

"Africa is by far and for sure the single most important and most
welcoming destination," Changhui Zhao, the chief country risk analyst
at China Exim Bank, said in an interview from Beijing. "For many
outsiders these countries may seem risky, because of the order
disturbances, ethnic tensions or even foreign incursions. If you
understand the place you are in, then you will see how much premium
you will be awarded."

"The Chinese go there with a mentality to conquer," Elias Masilela,
the outgoing chief executive officer of the Public Investment Corp.,
which manages $153 billion of mainly South African state worker
pensions, said in an April interview. Chinese companies demand
regulatory breaks because of the amount of investment they bring, he

"I cannot blame the Chinese entirely for that," Masilela said. "I also
blame the receiving governments."


@USAfricaCommand is an instrument that is in part designed to staunch
the Chinese Advance in Africa.

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Angola Announces Ruling MPLA Special Congress for December

"As we said before, it will be a congress of analysis and reflection,
not to renew the mandates of executive bodies," he said.

He said a renewal of MPLA's leadership will only occur in the regular
congress, scheduled for 2016, based on a scene of stability, cohesion
and affirmation of the MPLA's leadership in society.

Average FDI for Zimbabwe for 2002 to 2012 is US$88 million, compared
toUS$800 million for Zambia, US$586 million for Mozambique and US$486
million for Botswana.


South Africa All Share Bloomberg +7.7003% 2014


49,817.89 185.19 0.37%

Dollar versus Rand 6 Month Chart INO 10.6615


Egypt Pound versus The Dollar 3 Month Chart INO 7.1403


Egypt EGX30 Bloomberg +18.169% 2014

8,015.23 +120.50 +1.53%

How Sisi plotted to save army rule even while Hosni Mubarak was in
power Telegraph


Egypt's new strongman drew up a blueprint for the army to seize power
in case of a revolution against ex-president Hosni Mubarak as long ago
as 2010, senior advisers have revealed.

Abdulfattah el-Sisi, who won 97 per cent of the vote in last week's
presidential election, was little known to either Egyptians or the
outside world before his swift rise to power.

The advisers have told The Telegraph he had already been identified by
the army's top brass before the 2011 revolution as its coming man, at
a time when splits were growing between the military and the family of
the 82-year-old Mr Mubarak.

In late 2010, when the then General Sisi was head of military
intelligence, he was asked by his then bosses, who had already decided
he should be the next minister of defence under any political
settlement, to prepare a study of Egypt's political future.

He predicted that Mr Mubarak would try to pass on the country's
leadership to his son, Gamal, possibly as early as the following May,
and that this could cause popular unrest. The report recommended the
army should be prepared to move in to ensure stability - and preserve
its own central role in the state.

As it turned out, events moved faster than anyone expected, with the
uprising in Tunisia triggering street protests in Cairo in January
2011. Within a week, the army had enacted the plan Mr Sisi
recommended, putting troops on the streets and saying it stood with
the Egyptian people - making clear that Mr Mubarak and his sons were
expendable, but the army was not.
Mr Mubarak was duly forced to resign on February 11.

The revelations about the army's role at the time of his downfall are
causing many of the revolutionaries to question whether the Tahrir
Square protests brought down anything more than the figurehead of the
old regime.

"When the revolution of January 25 exploded, the army already had
plans to deploy," said Hassan Nafaa, a prominent political scientist
who was briefed personally on his report by the then General Sisi.

"I came to the conclusion that the army took advantage of the
revolution to get rid of Mr Mubarak's scheme of succession - maybe
also that they had to sacrifice Mubarak, rather than the regime

Nigeria All Share Bloomberg +0.4181% 2014


41,502.00 +27.61 +0.07%

Ghana Stock Exchange Composite Index Bloomberg +8.3512%


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The zebra odyssey encompasses a roundtrip journey of 500 kilometers (300 miles), starting in floodplains near the Namibia-Botswana border at the beginning of the wet season. WAPO

It follows a route across the Chobe River and ends at the seasonally
full waterholes and nutritional grass of Nxai Pan National Park in
Botswana. The zebras spend about 10 weeks there before heading back.

Local residents and conservationists knew the zebras left the Chobe
River floodplains and returned months later in the dry season, but
they didn't know where the animals went.

It wasn't until researchers put satellite tracking collars on eight
zebras and monitored their movements in late 2012 and 2013 that the
migration was discovered. The findings were published this week in the
conservation journal Oryx.

"This is the longest known land migration in Africa, in terms of
distance between endpoints," Naidoo said.

read more

Bankers assured of Zim reforms

Harare - Executives with foreign-owned banks are expecting reforms to
Zimbabwe's indigenisation policy to come into effect during the third

Finance Minister Patrick Chinamasa told investors and fund managers,
gathered for the Imara Investment Conference in Harare, on Thursday
that President Robert Mugabe's cabinet had decided to review the

The policy requires foreign firms to give a 51 percent stake to black
Zimbabwean partners.

This threshold has unnerved investors and has been blamed for low
investor appetite for Zimbabwean projects.

Banking sector executives said that reforming the contentious policy
would bring the clarity needed to aid efforts to attract investors.

"We now have a clear understanding of indigenisation in the banking
sector," said George Guvamatanga, the managing director of Barclays

"I wouldn't say it's still an issue that concerns us."

The Zimbabwean unit of British-listed Barclays is one of about four
foreign-owned banks that would have been affected by the
indigenisation law.

The others are units owned by Standard Bank, Nedbank and Standard
Chartered Bank.

Other banking executives said reforms to the indigenisation policy
would help them secure fresh capital for use in the economy.

They said the move to review the policy was in response to the
"continued meltdown in the economy" and the government's growing
realisation that "fresh capital is needed to boost the productive
base" of the economy and curb rising imports.

Speaking to the investors, Chinamasa said that the government wanted
to come up with a "framework that is transparent".

"There have been a lot of misconceptions and confusion around that
issue of indigenisation," he said.

"We understand that as investors you come here to make money and you
are the goose that lays the golden eggs - but don't take all the eggs
away with you."

Chinamasa had told parliament earlier that the cabinet had decided to
review the indigenisation policy as a way of clarifying it because it
had become apparent that it had unnerved investors.

"Cabinet yesterday took a decision that we should align the investment
laws, indigenisation law, the empowerment laws to our policies as
pronounced by His Excellency (President Mugabe)," he said.

"The cabinet directed the minister of youth and indigenisation to take
up this issue."

Terror groups on backfoot after drug seizures on seas


In April, the Combined Task Force (CTF-150) of the naval coalition
based in Bahrain, pulled in a whopping 1,032kg of heroin, a record,
near Kenya and Tanzania.

read more

Bombings threaten Kenya growth goals, open new strains with wary West
Kenyan Economy

Recent bombings in Kenya have dented President Uhuru Kenyatta's plans
to boost tourism and undermined his pledge to restore security after
last year's Westgate shopping mall attack.

Travel warnings issued by the United States, Britain, France and
Australia last month have sent their citizens packing, emptying
Kenya's palm-fringed beaches and forcing hotels to lay off staff.

On taking office last year Kenyatta vowed to lift tourist numbers to 5
million annually within five years, three times' last year's level,
and get economic growth into double figures in his bid to raise
incomes and lift millions out of poverty.

The travel alerts are also a fresh point of friction between the West
and Kenyatta, whose pending trial at the International Criminal Court
(ICC) has cast a shadow over relations with a nation seen as an ally
in the battle against militant Islam.

"The West risks opening a new divide with Kenyatta as they did with
the ICC, but the tension so far appears more benign," said Macharia
Munene, a university lecturer in Nairobi.

The travel advisories have put the coastal city of Mombasa, where
suspected Islamist bombers killed three people this month, off-limits
to many tourists. Western governments have also urged vigilance
elsewhere. As tourists fled, jobs have also gone.

"I was sent home ... because there weren't enough visitors at the
hotel," said 27-year-old Tumaini Sidi, a maid at the luxury Sai Rock
Beach & Spa Hotel in Mombasa.

Beach resorts and safari lodges now face the challenge of securing
bookings for the crucial July-September period, as Somalia's al
Shabaab Islamist group has threatened more strikes if Kenya doesn't
pull troops out of Somalia. Kenya said it won't quit Somalia.

Tourism is Kenya's second-biggest source of foreign exchange after
agriculture, earning $1.02 billion last year or about 12 percent of
the nation's gross domestic product. But those figures only tell half
the story. The industry is a major employer, providing about 500,000
jobs directly and generating work for a host of support industries,
from food suppliers right down to vendors selling trinkets on the

Some 900 tourists cut short their holidays after Britain issued its
warning on Mombasa on May 14, weighing on an industry that saw tourist
numbers slide to 1.5 million last year after an all-time peak of 1.8
million in 2011.

If the decline deepens severely this year, some economists say it
could shave 1 percentage point or more off economic growth, which the
IMF forecasts at 5.5-6 percent.

"Kenyatta's double-digit target for economic growth was already overly
optimistic, but the continued decline in the tourism sector will
further complicate efforts to boost growth," said Sarah Collier at
UK-based risk consultancy Maplecroft.

As Europeans, who account for nearly half of Kenya's tourists, become
wary, the government is eying more visitors from China, but that is a
long-term plan. There were only 38,000 Chinese visitors in the
2012/2013 fiscal year.

"The impact of the security situation on domestic confidence is far
more important as a driver of growth," said Razia Khan, head of Africa
research at Standard Chartered bank said. "This is where Kenya faces
its greatest vulnerability."

Some Western diplomats, though, voiced frustration that Kenya had not
bolstered security more robustly after Westgate. No top officials lost
jobs over the attack, even when troops were found to have looted the
mall during the four-day siege.Western diplomats and security experts
also say security forces are being hampered by poor coordination
between agencies. And Kenyan strong-arm tactics can be
counter-productive, despite counter terrorism and other training from
Britain, the United States and Israel amongst others.

Al Shabaab has not claimed responsibility for the May attacks in
Nairobi and Mombasa, which has prompted some to question whether the
government is right to blame it. Officials insist it is al Shabaab or
their sympathisers. Al Shabaab could not be reached for comment.

"It is rented terrorists," said Mutahi Ngunyi of Nairobi-based
consultancy firm Consulting House, adding the Somali group was paying
sympathisers to lob grenades or detonate home-made explosives.

Privately, some Kenyan officials also say Washington and European
governments are playing politics, seeking to punish Nairobi for its
closer ties with Beijing and for awarding new contracts, such as a new
railway, to China rather than the West.

Western states, who are big aid donors, say they are only acting
because of security worries.

"We are not allowed to politicise security," said John Bradshaw, the
British High Commission spokesman in Nairobi.


read more

19-MAY-2014 The Dash-Board is Blinking Amber
Kenyan Economy

Kenya pays price over graft scandal to ease bond sale FT Subscriber


It should have been a triumph that would revive Kenya's status as a
favourite with foreign investors. Instead, the country's long-awaited
debut on the sovereign bond market has become entangled in a
decade-old corruption scandal.

The presidency justified the payments, explaining that to do otherwise
would "irreparably injure Kenya's reputation". But John Githongo, the
corruption-busting official who first exposed the "Anglo Leasing"
scandal and later fled the country, says Kenya's reputation was
irreparably damaged long ago.

"We are going to have to pay off a bunch of ghosts [companies] so we
can borrow more money that we might end up giving to another bunch of
ghosts," he says in an interview. "There is no precedent for such a
borrowing [as the sovereign bond] being spent on the right stuff in
Kenyan history," he adds.

"The eurobond is still very nicely anticipated but it [the Anglo
Leasing affair] is politically toxic," says one investor.

26-MAY-2014 Kenya needs $2BN Eurobond for more net new Money


Kenya Shilling versus The Dollar Live ForexPros 87.656


The shilling closed at a 2.5-years low on May 20 and printed a trade
above 88.00 against the dollar last week 26-MAY-2014


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

Nairobi All Share Bloomberg +9.915% 2014


150.20 +0.36 +0.24%

Nairobi ^NSE20 Bloomberg -0.92166% 2014


4,881.56 -13.57 -0.28%

Every Listed Share can be interrogated here


Sasini Tea and Coffee reports 6 month Earnings PAT -85.722% and issues
a FY Profits Warning


Par Value:                  1/-
Closing Price:           15.90
Total Shares Issued:          228055504.00
Market Capitalization:        3,626,082,514
EPS:             0.54
PE:                 29.444

One of Kenya's lead tea and coffee producers.

Earnings 6 months through 31st March 2014 versus 6 months through 31st
March 2013

6 Month Revenues 1.377568b versus 1.474913b -6.6%
Fair Value Biological Gains or [losses] [12.334m] versus 50.253m
Results from operating activities 39.463m versus 285.059m -86.156%
H1 Profit Before Tax 40.744m versus 286.368m -85.77%
H1 Profit After Tax 28.621m versus 200.458m -85.722%
H1 Earnings Per Share 0.10 versus 0.91 -89.01%

Company Commentary

The decrease in the Profits is largely as a result of significantly
lower prices of Tea and lower production of Coffee in the Period under
No Interim Dividend


dramatic slow down in Earnings. Tea Prices have been soft and Coffee
production lower and therefore company was unable to ride the higher
Coffee price structure
The Issue with these Companies is that the Net Asset Value is
significantly higher than the share price.

Rea Vipingo which is currently frozen at the @NSEKenya reports 6 month
PBT -31.803% Earnings here


Par Value:                  5/-
Closing Price:           27.50
Total Shares Issued:          60000000.00
Market Capitalization:        1,650,000,000
EPS:             7.37
PE:                 3.731

Well established agricultural business with a focus on sisal.

H1 Earnings 6 months through 31st March 2014
H1 Revenue 1.310325b versus 1.243925b +5.337%
H1 Profit before Tax 191.534m versus 280.856m -31.803%
H1 Profit after Tax 123.861m versus 190.752m -35.066%
H1 Earnings Per Share 2.06 versus 3.18 -35.22%
No Interim Dividend


Revenues were higher which speaks to the low beta Nature of Sisal Prices.
Rea is subject of a Bidding War.

09-DEC-2013 ::  BIDDING WARS The Robinows vs. Centum


read more

On $145,000 Safari, Helicopters Unlock African Wilderness
Kenyan Economy

The sun has just risen above the snow-covered summit of Mount Kenya
when Ben Simpson lifts off from the backyard of his tin-roofed cottage
on Kenya's Laikipia Plateau. A lean, sun-weathered 39, Simpson is
among the most-experienced and -sought-after bush pilots on the
African continent, Bloomberg Pursuits will report in its Summer 2014
issue. Simpson has flown relief missions to Somalia in Cessna
Caravans, delivered emergency supplies by helicopter to paragliders
stranded at 5,660 meters (18,570 feet) on Mount Kilimanjaro, conducted
geological surveys for East Africa's growing natural gas and oil
industry and helped nature-documentary filmmakers amass hundreds of
hours of aerial footage.

He's piloted his French-built Eurocopter AS350 B3 through the
Rwenzoris -- aka the Mountains of the Moon -- whose treacherous winds
can turn in mere minutes from dead calm to more than 160 kilometers
(100 miles) per hour. And he knows the locations, far from any road or
airstrip, of the crystal-clear swimming holes of Ethiopia's Danakil
Depression, the hottest spot on the planet.

The U.K.-born, Hong Kong-raised Simpson is the director of Tropic Air
Helicopters, which he co-founded in 2004 with Jamie Roberts, the
bush-pilot son of a colonial crocodile hunter who guided Britain's
Prince Philip on an expedition to Lake Turkana in 1963. Working with
three other Tropic Air pilots, Simpson and Roberts create private
wilderness safaris to scenic, secret places in Ethiopia, Kenya,
Namibia and Uganda. For the ultra-adventurous, they'll stage
excursions to the Democratic Republic of Congo, Sudan, South Sudan and

Designed for "hot and high environments," according to Simpson, the
AS350 B3 is one of the most powerful and versatile civilian flying
machines on earth, capable of an 8,800-meter landing on Mount Everest.

Ben Simpson, Tropic Air's principal helicopter pilot. "We live on
coffee and cigarettes," Simpson says, downing a quick cappuccino.

Ultimately, though, it's the pilot's knowledge of local conditions
that makes a flight safe. Simpson and his colleagues can, for example,
pinpoint the location of every anti-aircraft battery along Ethiopia's
northern border with Eritrea and -- equally important -- the
commanders of Ethiopia's air bases know them, by the helicopters'
Tropic Air logo and distinctive sky-blue paint job.

Tropic Air's rarefied safari clientele amount to perhaps just 60
people a year, but it's a viable business nonetheless, thanks to bills
as breathtaking as the landscapes.

The quote for an eight-day itinerary to Ethiopia in one helicopter for
up to four passengers starts at $145,000, depending on the number of
flying hours. In Ethiopia, that might include the famous, monolithic,
rock-cut churches of Aksum and Lalibella, along with excursions to
photograph Ethiopian wolves in the Bale Mountains and tribes living a
pre-Iron Age existence on the banks of the Omo River.

"The amount is entirely inclusive, meaning every activity, meal, bar
bill, tip and, to a degree, souvenir is picked up by us," Simpson
says. "Once we depart, the client never dips into his pocket."

My personal plan is a bit less extravagant: a morning flight with a
mountain landing in the vicinity of Tropic Air's headquarters at
Nanyuki, a colonial-era farming town just south of the equator and a
gateway to the parks of Kenya's Northern Frontier District.

Simpson and I fly westward at 190 kph over Kikuyu farmland and
Dutch-owned flower hothouses into an acacia-studded landscape on the
Great Rift Valley floor where Masai and Samburu pastoralists graze
camels, cattle and goats. Soon, we're following the Ewaso Ng'iro, a
fat, brown ribbon of river wending toward Samburu National Park.

"From Mount Kenya, I can fly you through six climatic zones, from
glacier to desert, in just 25 minutes," Simpson says over the headset.

Say hello the the hypermobile safari, where helicopters hop nations in
search of migrating animals and more. Photograph: John
Balsom/Bloomberg Pursuits

"Every day is new," Simpson says. "The clouds, the grasses, the wildlife."

"The elephants get a bit skittish, because there's poaching and
because they associate the helicopter rotors with vets and darting,"
Simpson explains as he whirs away to leave the pachyderms in peace.

"For a client seeking a real experience that is not part of the
cookie-cutter safari package, helicopters are manna from heaven," says
Bousfield, who has guided the likes of Ethan and Joel Coen in
Botswana's Kalahari Desert.

"In one week, you can cover what in some countries would take a month
in a 4x4. Plus, a helicopter doesn't leave tracks or require building
remote airstrips, so the ecological footprint is fairly light."

read more

Pilot Mario Magonga, a former Kenya AirForce Colonel and Tropic Air's Northern Kenya Safari Specialist, on the shore of Lake Michaelson.
Kenyan Economy

About 200 employees of Tata Chemicals Magadi Ltd will lose their jobs
as the company plans to close down its Premium Ash Magadi (Pam) plant


About 200 employees of Tata Chemicals Magadi Ltd will lose their jobs
as the company plans to close down its Premium Ash Magadi (Pam) plant
operations. Managing Director Muchira Mbui said the restructuring is
due to high cost of energy incurred by the plant, consuming about
Sh300 million. This represents about 70 per cent of the firm's total
energy demand.

"Since it was commissioned, energy bills by the plant are estimated to
be in the region of Sh16.5 billion (based on the current exchange rate
($187 million), and this has eroded the firm's profitability," he
noted. As a result, he warned Kenya is likely to lose about Sh4.4
billion ($50 million) in foreign exchange earnings. The company
supplies about one per cent of the global soda ash. However, the
company will preserve it until a time when it would have viable
sources of energy to restart production. The mothballing, Mbui
regretted, is a reflection of the high cost of energy, a factor that
has scared away potential investors from the country.  "This is a
reflection of the adverse effect in the heavy industries and how
uncompetitive Kenyan products are," he said. Kenya Association of
manufacturers estimates that power tariffs in Kenya currently stand at
$18.7/kw, compared to Ethiopia's $3/kw and Tanzania's $0.09/kilowatt.

Firms plan Sh50bn cash calls on rising business confidence


Kenyan companies will be seeking to raise more than Sh50 billion in
the next six months, signalling a build-up of business confidence from
last year's relative inactivity caused by election fears.

More than 10 local businesses, including banks, have announced plans
to raise billions of shillings in pursuit of growth plans that were
frozen during 2013's highly charged elections - offering investors a
wide range of options.

Mortgage lender, Housing Finance, tops the list of companies that are
hungry for cash with a Sh20 billion bond plan while electricity
producer KenGen, National Bank, Diamond Trust Bank (DTB) and Uchumi
have announced plans to ask current owners for money through rights

Some companies have also recapitalised their retained earnings by
issuing shareholders with bonus shares.

KenGen is expected to be the first in the market next month with a
Sh15 billion cash call through a rights issue.

The fundraiser, initially scheduled for May, was pushed back to give
the company's management time to negotiate with the government, its
majority shareholder, to participate.

In the banking sector, National Bank, also a State-owned firm, is
expected first in the market with a Sh10 billion cash call that its
shareholders approved last Friday.

Uchumi and DTB are yet to disclose the size of their rights issue
though DTB is expected to have completed its issue by July.

read more

N.S.E Today

The Shilling was last trading at 87.612 and better than 30 month intra
day Lows of above 88.00 reached on three occasions in May.
The Wires are reporting that the Central Bank has been seen in the
markets and defending the Shilling.
This is a time of secular weakness for the Shilling as Full Year
Dividends are upstreamed to Parent companies.
Clearly the Shilling has been softened up in part by the Security
situation and as long as we stay on the Trendline [elevated in 2014, I
admit] and do not spike then the Shilling should hold below 88.50.
The Equity Market had a banner session with Turnover clocking 1.906b.
The Official closing data has not been received as I file this.
The Equity market has closed lower and remains in a soft Patch for prices.

N.S.E Equities - Agricultural

Kakuzi rallied 7.53% to set a Fresh All Time Closing High of 157.00.
Kakuzi traded 16,400 shares which were all the shares that were
available for Sale. Kakuzi is +65.263% in 2014 in a move that has
gained Traction particularly in the last 4 weeks.

N.S.E Equities - Commercial & Services

Safaricom was the most actively traded share at the Securities
Exchange and eased back 1.158% to close at 12.80 and traded a top 5
Volume session for 2014 with 44.054m shares worth 565.643m changing
hands. Safaricom is +17.97% in 2014 and is 2.66% below an All Time
High set on more than 3 occasions in May.

Scangroup ticked 0.5235% lower to close at 47.50 on heavy volume of
11.634m shares [3.0707% of its shares and a very chunky position]
worth 552.649m. Scangroup is WPP's SSA Advertising vehicle and lifted
FY 2013 Billings +13.596%.

N.S.E Equities - Finance & Investment

Equity Bank had surged 15.8722% 4 weeks through this morning and on
real heavy volume as Investors interpreted the Mobile Virtual Operator
License as a bullish development. The Potential for Equity to roll
this out in line with Airtel's Africa Footprint is also difficult to
model but an unabashedly bullish opportunity. Equity Bank eased 1.2%
to close at 41.25 and traded 3rd at the Exchange with 6.82m shares
worth 281.81m changing hands.
Kenya Commercial Bank retreated 2.0408% to close at 48.00 and traded
2.089m shares worth 100.438m.

CFC Insurance Holdings firmed 2.906% to close at 17.70 and was trading
shares at a session high of 18.80 +9.3% at the Finish Line.

N.S.E Equities - Industrial & Allied

EABL closed unchanged at 283.00 on solid volume of 691,900 shares.
EABL found real strong support just below these levels last week.

Bamburi Cement traded 358,100 shares all at 172.00 and unchanged.
Bamburi Cement has retreated 18.095% in 2014.
East African Portland Cement traded 900 shares and all at 81.00
-8.99%. Portland remains +17.391% in 2014.
Athi River Cement eased 1.23% to close at 80.50 and traded 106,800 shares.

Express rallied 8.29% to close at 7.65 and traded 24,600 shares.
Express has rallied +96.15% in 2014 an has been a leader in what has
been a dynamic Bull Move in the small cap sector at the Securities
Exchange in 2014.

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

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