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Satchu's Rich Wrap-Up
 
 
Friday 04th of July 2014
 
Morning
Africa

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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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Land Rover on Safari L319 Discovery/LR4 @Rmakenya @Lewa_Wildlife
Africa


Macro Thoughts

Home Thoughts

"The master in the art of living makes little distinction between his
work and his play, his labor and his leisure, his mind and his body,
his information and his recreation, his love and his religion. He
hardly knows which is which. He simply pursues his vision of
excellence at whatever he does, leaving others to decide whether he is
working or playing. To him he's always doing both."
Lao-Tzu

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Scientists discover fragment of 'missing link' asteroid that led to explosion of life on Earth
Africa


Scientists in Sweden have discovered a never-before seen class of
meteorite that could be the ‘missing link’ between a gigantic
collision in the asteroid belt 470 million years ago and the
subsequent explosion of diverse life forms here on Earth.

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US Sends Green Berets to Northern Iraq
Law & Politics


Special Forces advisors have set up an operations center in northern
Iraq as part of the expanding U.S. political and military effort to
keep Iraq from splintering against attacks by Islamic extremists,
Defense Secretary Chuck Hagel said Thursday.

In recent days, a small team of advisors opened up a Joint Operations
Center (JOC) in Irbil, capital of the semi-autonomous Kurdish Regional
Government, Hagel said at a Pentagon briefing with Army Gen. Martin
Dempsey, chairman of the Joint Chiefs of Staff.

"We're not cooperating with Iran now," Dempsey said. "It's not
impossible that in the future we would have reason to do so."

“North Korea now is extraordinarily dependent on China and the road to
Pyongyang goes through Beijing” Robert Kelly

http://www.bloomberg.com/news/2014-07-02/xi-arrival-in-south-korea-marked-by-north-korean-missile-tests.html

“If South Koreans want the North Koreans to move on any important
issues, you’ve got to get the Chinese on board, because it’s only the
Chinese that have the leverage to arm-twist Pyongyang.”

 Bilateral trade reached $266 billion last year, up 7.5 percent from 2012.

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China attacks Japan 'barbarous' war past
Law & Politics


"In the first half of the 20th century, Japanese militarists carried
out barbarous wars of aggression against China and Korea, swallowing
Korea and occupying half of the Chinese mainland," Xi Jinping said on
Friday at Seoul National University.

read more



Currency Markets at a Glance WSJ
World Currencies


Euro 1.3599
Dollar Index 80.23
Japan Yen 102.05
Swiss Franc 0.8939
Pound 1.7162
Aussie 0.9362
India Rupee 59.805 India’s currency rose 0.7 percent this week to
59.6875 per dollar as of 9:51 a.m. in Mumbai, according to prices from
local banks compiled by Bloomberg. That’s the biggest gain since the
period ended May 16.
South Korea Won 1009.55
Brazil Real 2.2098
Egypt Pound 7.1502
South Africa Rand 10.7253

Euro versus the Dollar 3 Month Chart 1.3599

http://quotes.ino.com/charting/index.html?s=FOREX_EURUSD&v=d3&t=c&a=50&w=1

Dollar Index 3 Month Chart INO 80.23

http://quotes.ino.com/charting/index.html?s=NYBOT_DX&v=d3&t=c&a=50&w=1

Sterling 3 Month Chart 1.717635 [might even reach 2:1]

http://quotes.ino.com/charting/index.html?s=FOREX_GBPUSD&v=d3&t=c&a=50&w=1

read more


Commodity Markets at a Glance WSJ
Commodities


Gold 1 Year Chart INO 1319.52

http://quotes.ino.com/charting/index.html?s=FOREX_XAUUSDO&t=c&a=50&w=1&v=d12

Bullion for immediate delivery was at $1,320.86 an ounce at 2:42 p.m.
in Singapore from $1,319.53 yesterday, when prices dropped 0.6
percent, according to Bloomberg generic pricing. The metal rose to
$1,332.33 on July 1, the highest since March 24, and remains 0.4
percent higher this week.

Crude Oil 1 Month Chart INO 103.95

http://quotes.ino.com/charting/index.html?s=NYMEX_CL.Q14.E&v=d1&t=c&a=50&w=1

Emerging Markets

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Investors chasing high returns are ready to overlook danger, poor governance and creaking infrastructure July 3, 2014 @KatrinaManson @FT
Frontier Markets


When shooting erupted one night last year throughout Juba, capital of
the world’s newest country, Phil Taylor hit the floor of his room and
crawled around for days. “We got caught in the crossfire and things
got fairly hairy,” he says. “Bullets were hitting the wall; there were
bodies on the street outside.”

As general manager of Network Support Services, a telecoms tower
service provider owned by a UK private equity fund, he has grappled
ever since with the impact South Sudan’s civil warhas had on business.
Of the 160 towers he services, 15 are too dangerous to reach, the
government forbids servicing in rebel-held areas and he has lost a
vehicle to requisitioning.

“Day one, the rebels came and siphoned our diesel. Day two they came
for the battery and day three they came and towed the whole truck with
two generators away,” he says with a stoic laugh. “It’s the very
definition of force majeure really.”

Such is business in a war zone – and an example of the risks that go
with investing in volatile frontier markets. Yet ever more investors
keen for high returns, social impact and an extreme challenge are
flocking to Africa’s frontier markets from South Sudan to Sierra
Leone, Ethiopia to DR Congo.

The push into these markets is an outgrowth of two larger investment
trends: a global hunt for yield, in which investors have pumped money
into the sovereign debt of Greece and other countries that were on the
verge of economic collapse only a few years ago, and a broader
narrative of rising African growth. The risks of investing in
countries that are often plagued by poor governance, conflict and weak
infrastructure are being shrugged off by specialist and, increasingly,
mainstream investors.

“Investors interested in African frontier markets are accessing them
through diversified frontier markets funds or using South Africa as a
gateway in order to avoid being exposed to a number of small, illiquid
markets,” says Cameron Brandt at EPFR Global, which tracks flows into
Africa.

Sub-Saharan Africa still garners a tiny proportion of global
investment but foreign direct investment to the region is rising: up 5
per cent to $56bn last year. The world’s largest sovereign wealth fund
last week joined the rush when Norway’s $890bn fund said it would
target more of Africa’s markets in an effort to raise returns.

African mergers and acquisitions last year totalled $30bn generated by
1,000 deals. More than 220 private equity managers now target Africa.
The African Private Equity and Venture Capital Association (Avca) says
the 53 private equity deals completed last year for which it has data
were worth $3.2bn – but still lower than Africa’s 2007 peak at $4.7bn.

Some of the world’s largest fund managers, in search of bigger returns
that come with growing economies, are also making forays into
unfamiliar markets via the frontier rather than more established
economies such as Nigeria, South Africa or Kenya.

Carlyle Group, one of the world’s largest private equity firms, this
year closed its maiden Africa fund with $698m, 40 per cent above
target. It chose a Tanzanian agribusiness investment for its first
deal, followed up by a trucking and logistics company in Mozambique.

KKR entered Africa in June with a $200m stake in an Ethiopian rose
farm. Bob Diamond, the former head of Barclays, has raised more than
$600m for deals on the continent since 2013, entering mid-market
banking in frontier countries such as Botswana, Rwanda and Zimbabwe.

While global funds struggle to find many deals worth more than $100m,
most private equity deals in Africa remain small, below $10m,
according to Avca. While these offer some of the best prospects for
returns, it also limits the capacity and appetite of big spenders.

Frontier markets may be small, illiquid and poorly developed but their
expansion from a low base regularly surpasses other emerging markets.
The International Monetary Fund expects frontier Africa growth to
outpace even frontier Asia by 2016 at 6 per cent a year, making it the
fastest expanding region in the world.

Tapping into such growth comes with its own set of hazards. Some
investors speak of discovering that financial backers include
terrorist groups or have hired security guards who juggle grenades.
One Ivory Coast investor refers to “my bugger-off bag” that sits by
his desk in case he has to flee sudden fighting.

But the African frontier also offers inefficient markets and
unregulated monopolies that promise significant rewards. Top of the
list are the largely fail-safe, cash-generating quick wins of banking,
brewing and cement. “If you’ve done nothing else, investing in
banking, breweries and cement should make you returns in frontier
markets,” says Michael Turner of Actis, a UK private equity fund with
$4bn under management in frontier and emerging markets. “But with the
rise of consumerism, retail, education and healthcare sectors are
growing, too.”

The most hardy are keen to manage companies directly. Mr Taylor, who
kayaks the Nile in his spare time, has escaped arrest by young men
with bows and arrows by proposing a group photo, perched on a pallet
of frozen chickens at the back of an Antonov aircraft to make
unorthodox logistics deliveries, and survived regular bandit attacks
(his driver’s finger was shot off).

“It’s a crazy place – there are almost no rules so you have to make it
up as you go along and it’s quite interesting to have to do that.
There’s no straightforward solution,” he says.

Despite the risks, this year is likely to prove NSS’s best, not least
because most of the competition has left South Sudan. Juba’s
construction – and land prices – continue to boom and the currency is
largely stable.

“It is amazing how little the breakdown of government affects the
economy. Africa’s major story is that vibrant economies are growing
despite their governments,” says Coco Ferguson, founding partner of
Maris Capital, which owns NSS.

Although not every desk-based investor may wish to negotiate landmines
and state disintegration, they do have in creasingly easier access to
African growth in far-flung frontier markets. Many private equity
funds are backed by large development finance institutions eager to
boost small businesses and create jobs, pushing them into ever more
remote, small markets. Institutional investors from the US and Europe,
family offices and a growing number of African investors are also
tapping the growth of the emerging middle class through debt and
listed equity.

“Africa has started to get a mature investor base. Before, investors
didn’t have the luxury of choosing the asset class they wanted and now
they have the choice,” says Mohammed Hanif, chief executive at Insparo
Asset Management, which allocates some of its $170m under management
to debt and equity in frontier Africa.

His firm buys into 40 of Africa’s 1,200 stocks quoted on its 23 stock
exchanges. He believes 250 companies are sufficiently liquid to merit
investment. Some, such as Safaricom, which is among the largest and
most liquid of the 63 businesses on Kenya’s securities exchange, draw
more than half their shareholders from abroad. Bob Collymore, its
chief executive, considers that a vote of confidence that helps
attract more investment.

The cost of buying and selling shares in the least efficient markets
is high: above 2.5 per cent of their value in Uganda, Tanzania and
Zimbabwe. Larry Speidell at Frontier Market Asset Management, one of
The few US boutique firms targeting the sector, with $250m under
management, prefers Africa’s “second-tier” stocks to the more liquid
trades that are already attracting foreign money. “I still think that
the small-caps in the frontier are more interesting than the large
liquid names that go up and down on US Fed policy,” he says.

Thanks in part to loose monetary policy in the west, African countries
are likely to issue record volumes of sovereign eurobonds worth in
excess of $11bn this year, including from Mozambique and Zambia. Some,
such as Tanzania, are still liberalising government securities to
offer them to foreign investors. But local currency bonds can offer as
much as twice the return of dollar denominated ones if investors are
prepared to take a punt on inflation.

“Nigeria’s local sovereign bond is easily as liquid as its Eurobond;
Uganda is less liquid [than others] but it’s starting to hit people’s
radars,” says Mr Hanif, who has allocations in local currency bonds in
Nigeria, Kenya and Uganda. He is also watching the development of
derivatives markets in Egypt and elsewhere.

The other main draw of the frontier markets is that their growth
prospects are so strong they are shielded both from global finance
trends and even sometimes domestic events. Mr Hanif says Egypt, with a
more developed economy, remains only “half-frontier, half-emerging”,
with foreign outflows broadly following its own bad headlines.
Nigeria’s stock market has boomed despite insecurity and high-level
sackings, suggesting investors are so keen to access growth they are
prepared to forgive domestic crises.

Smaller, more remote markets offer even less correlation, although it
is not yet clear if the returns justify the greater risk, says Tom
Cairnes. Eight years ago he started ManoCap, a $23m private equity
fund manager, in Sierra Leone, a country of only 6m people that had
just emerged from conflict. The fund is yet to exit any of its four
investments, which range from fisheries to phones, but company
turnover has increased 2.5 times and created 150 jobs.

“People talk about Africa being risky but they don’t know what it
means,” says Mr Cairnes, adding an employee had lost relatives to the
Ebola epidemic. “It’s constant. The generator breaks down, the
national grid isn’t on, your ice melts and you still have to pay
 alaries. It involves continual crisis management.”

Wary of costs and the need to generate higher returns, larger
investors are focusing on countries with big populations offering
untapped demand. “After Kenya, Nigeria and a few others, the next
round of frontier markets are places like Ethiopia, Tanzania and DR
Congo, the ones with the larger populations, although there’s still a
lot of difficulties in those markets. They’re not easy places to
invest,” says Rory Ord at investment advisers RisCura.

All present obstacles. Tanzania, with 50m people, caps foreign
investment in equities and forbids it in government securities;
Ethiopia, with 90m, refuses foreign money in core sectors including
finance and telecoms, which delivered stellar returns into the early
2000s. DR Congo, with 70m, lacks contract security.

That has not stopped investors readying themselves. More than half a
dozen private equity investors have established funds targeting
Ethiopia in the past eight years, with companies producing everything
from coffee and cement to wine and biscuits.

The final frontier is shifting still further. Such is the appeal of
the cash-generating potential of the fledgling market that last year a
group of western investors began preparing a $10m private equity fund
for Somalia, a country beset by an al-Qaeda-linked insurgency yet to
recover from 23 years of civil war.

They aimed to develop security, logistics and beachside property
businesses to serve the country’s tentative commercial resurgence. A
string of deadly attacks in Mogadishu has put those plans on hold but
Mr Hanif – one of the founders keen on establishing early market entry
– is not giving up: “There will be a time for it.”

“In frontier markets if you pick the winner in a market which is
growing and often lacking any competition then the returns are stellar
– but you may not make that in 10 years,” he says.

“If we’d kept shares in two of our companies in our 10-year fund until
today, they would be worth 40 times what we paid 15 years ago,” says
Mr Turner. “But it requires a long-term commitment to the market; not
all pension funds in the US that are dipping their toe [in Africa] for
the first time are quite prepared to do that.” Multinationals such as
Nestlé have always known this and are better placed to play the long
game in Africa. In the past six years it has built two factories – in
Kenya and DR Congo – in an attempt to serve some of the most
under-developed markets.

read more


Leaders at African summit vote to have immunity from war crimes and genocide prosecution
Africa


The vote took place on Friday at an African Union summit vote in
Equatorial Guinea, during a session journalists were excluded from,
and news of it was only mentioned in a statement about the outcome of
the summit on Monday, according to Amnesty International.

It came to light in a paragraph listing legal instruments agreed at
the meeting included the "Protocol on Amendments to the Protocol on
the Statute of the African Court of Justice and Human Rights".

The amendment bars the court from prosecuting sitting African leaders
and vaguely identified "senior officials". It was objected to by
forty-two African and international civil society and rights groups.

The decision was condemned by Amnesty International as "a backward
step in the fight against impunity and a betrayal of victims of
serious violations of human rights".

Amnesty's Netsanet Belay said: "At a time when the African continent
is struggling to ensure that there is accountability for serious
human-rights violations and abuses, it is impossible to justify this
decision which undermines the integrity of the African Court of
Justice and Human Rights, even before it becomes operational."

South Africa All Share Bloomberg +12.2405% 2014

http://www.bloomberg.com/quote/JALSH:IND

51,918.44 +34.73 +0.07%

Dollar versus Rand 6 Month Chart INO 10.7223

http://quotes.ino.com/charting/index.html?s=FOREX_USDZAR&v=d6&t=c&a=50&w=1

Egypt Pound versus The Dollar 3 Month Chart INO 7.1503

http://quotes.ino.com/charting/index.html?s=FOREX_USDEGP&v=d3&t=c&a=50&w=1

Egypt EGX30 Bloomberg +21.763% 2014

http://www.bloomberg.com/quote/CASE:IND

8,258.40 +116.15 +1.43%

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

http://www.rich.co.ke/media/docs/038NSX2001.pdf

Egypt to start implementing capital gains tax on Sunday

http://af.reuters.com/article/investingNews/idAFKBN0F811020140703

Egypt's President Abdel Fattah al-Sisi passed the law on Tuesday,
imposing a 10 percent tax on capital gains and stock dividends as the
cash-stripped country of 85 million seeks to boost revenue to help its
ailing economy.

"We will deduct 6 percent of the realised profit from foreign
investors with each transaction under the tax account but for the
Egyptian investors we will record the realised profits and send them
to the tax authority which will collect," Bary added.

Nigeria All Share Bloomberg +3.283% 2014 [more than 5 Year Highs]

http://www.bloomberg.com/quote/NGSEINDX:IND

42,686.58 +77.11 +0.18%

Ghana Stock Exchange Composite Index Bloomberg +10.909% 2014

http://www.bloomberg.com/quote/GGSECI:IND

2,379.25 +4.64 +0.20%

Ghana Cedi Seen at Risk of Sliding to 4 Per Dollar at HFC Bank

http://www.bloomberg.com/news/2014-07-03/ghana-cedi-seen-at-risk-of-sliding-to-4-per-dollar-at-hfc-bank.html

Ghana’s cedi is at risk of weakening as much as another 19 percent
this year as West Africa’s second-biggest economy struggles to rein in
a budget deficit, according to HFC Bank Ghana Ltd.

The cedi may fall to 3.50 and 4 per dollar, Benjamin Dzoboku, head of
treasury at the Accra-based lender, said in an interview in the
capital, Accra yesterday. It dropped 1.4 percent to 3.24 per dollar by
8:29 a.m. in Accra. The currency of the world’s second-biggest cocoa
producer depreciated 27 percent this year, the most among 24 African
currencies tracked by Bloomberg.

The central bank will probably raise interest rates by 200 basis
points at its next meeting on July 9 to contain inflation at a
four-year high and make cedi assets more attractive, Dzoboku said. The
Bank of Ghana left the key rate unchanged at 18 percent on April 2.
The increase may not be enough to ward off more cedi weakness, he
said.

The government may have to borrow from the International Monetary Fund
to bolster its falling foreign-exchange reserves, which will be
cheaper than selling Eurobonds for the third time, said Dzoboku.

read more



Barclays Investment Bank Hires in Africa as Mergers Pick Up
Africa


“Chairman David Walker is very supportive,” said Van Coller. “Board
members come and visit us -- that never used to happen.”

Sasol Ltd. (SOL) is considering a gas-to-liquids plant in Mozambique
with Eni SpA of Italy and the southern African country’s oil company

http://www.bloomberg.com/news/2014-07-03/sasol-eni-plan-study-of-a-gas-to-liquids-plant-in-mozambique.html

read more




''US Embassy #Nairobi is open for business and we have no intention of closing it'' @BobGodec
Kenyan Economy


Recently, however, some have questioned our partnership and spread
unfounded rumours. Here are the facts.

The US has excellent relations with the government and people of
Kenya. We do not support any political party or any particular
politician in Kenya.

We support the ideals and principles set out in Kenya’s Constitution
and our own. The US seeks to help Kenya expand its economy and create
jobs.

Our travel warnings summarise the security situation in Kenya to allow
American citizens to make informed decisions about travel. They do not
tell Americans to avoid Kenya.

read more


Selfie with Ambassador @Bobgodec 4th of July on the 3rd in #Nairobi
Kenyan Economy


The United States of America has overtaken China to become Kenya’s
second-largest source of imports, defying recent cooling diplomatic
relations with East Africa’s largest economy and Nairobi’s decade-long
policy of looking East.

http://www.businessdailyafrica.com/America-overtakes-China-in-race-for-Kenyan-imports/-/539552/2371376/-/xbkb0kz/-/index.html

The value of US exports to Kenya rose to Sh29.5 billion in May
compared to China’s Sh21.1 billion, according to Kenya National Bureau
of Statistics (KNBS) data.

America also rose to become the largest consumer of Kenyan exports
during the same month, overtaking Uganda which has held the top spot
in the past six years.

KNBS data shows that American consumers took in Sh3.6 billion worth of
Kenyan goods in May ahead of Uganda’s Sh3.5 billion.

Conclusions


North America purchased 66% of our $2b of Eurobonds.

Kenya Shilling versus The Dollar Live ForexPros 87.917

http://j.mp/5jDOot

The shilling has lost 1.25 percent versus the dollar so far this year.

Duncan Kinuthia said the markets had already priced in the political
noise but that could change if things got out of hand

http://www.reuters.com/article/2014/07/03/kenya-markets-idUSL6N0PE3FA20140703

"If sudden pronouncements are made or we have riots or any sort of
violence, that obviously could impact the currency negatively," he
said.

Nairobi All Share Bloomberg +11.694% 2014

http://www.BLOOMBERG.COM/quote/NSEASI:IND

152.63 -1.01 -0.66%

Nairobi ^NSE20 Bloomberg -0.8526% 2014

http://j.mp/ajuMHJ

4,884.69 -38.30 -0.78%

Every Listed Share can be interrogated here

http://www.rich.co.ke/rcdata/nsestocks.php

@Jaguar in the Jungle F-Type 3.0 V6 Convertible #Safaricommarathon
@Lewa_wildlife @RMAKenya @JLR @Youtube

https://www.youtube.com/watch?v=JOMMZmVNM1k&feature=youtu.be

@Jaguar F-Type 3.0 V6 S/C Convertible

http://www.twitpic.com/e7138m

Dr. @HCCTurner takes a spin in a @Jaguar F-Type @rmakenya @YouTube

https://www.youtube.com/watch?v=Ct9XvmWaJeA

The White Widow Searching For Samantha BBC Documentary 2014 @adam_wishart

https://www.youtube.com/watch?v=TNnoChMZNDU

Documentary. Samantha Lewthwaite is one of the world's most wanted
terrorists. The widow of Jermaine Lindsay, one of the 7/7 bombers, she
claimed ignorance of her husband's lethal intentions. She said she was
a victim too. But now she's on the run, somewhere in Africa, charged
with conspiracy to cause explosions.

For three years British, American, and Kenyan security services have
been after the so-called White Widow. But what strange journey has
this former sixth form schoolgirl from a quiet home counties market
town taken? How did she end up as the friend and confidante of some of
the top echelons of al-Qaeda?

Filmmaker Adam Wishart has spent a year tracking down the real story
of Samantha Lewthwaite - for the first time revealing her path to
radicalisation and the hate preacher who inspired her.

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

http://www.rich.co.ke/media/docs/039NSX3009-2.pdf

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

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

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

I kept thinking to myself ‘sangfroid’ is such an unusual word. It
means coolness of mind; calmness; composure a kind of cold bloodedness
under pressure. And therefore, I am putting Samantha Lewthwaite at the
scene and I think she live-tweeted from inside Westgate for an as yet
undetermined period.

#Westgate seen from @CNBCAfrica 's #Nairobi Bureau on the 19th Floor
AMBank House 283 days ago

http://www.twitpic.com/deneco

read more



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