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01-DEC-2014 US Emerges As New Price Setter For Oil Market
The price of oil simply crumbled last week. Brent crude, the global
benchmark, slumped as low as $69.78 a barrel on Friday, the lowest
since May 2010. Brent Crude prices peaked this year at $115.71 in
West Texas Intermediate fell to the lowest since 2009 and closed at
$66.15 a bar- rel. WTI was trading above $100.00 a barrel in June this
The sharp fall last week was triggered by OPEC who refused to throttle
back supply. US oil production has risen to 9.077 million barrels a
day, the highest level in weekly data from the Energy Information
Administration going back to 1983. Output will climb to 9.4 million
barrels next year, the most since 1972, it forecasts.
On 13-OCT-2014 I said: "The conditions [and I will explain them
momentarily] are optimal for a complete wash-out [a 'blow-off bottom'
was more earthy description in my time] down as far as $50 a barrel''.
That prediction of $50.00 a barrel looks in sight now.
''It is the US that is the new price setter for the oil markets and
this is a deep and important geopolitical development '' I said on
October 13 and this was confirmed by Miswin Mahesh, a London-based
commodities analyst at Barclays Plc, who said in an e-mail to
"OPEC's decision means it is over to you America, this opens the
window for the US to be the new swing producer."
The meeting in Vienna merely confirmed that the US has wrestled
control of the oil markets. President Obama while getting creamed in
the mid-terms, has been a very subtle, skilled and hard-nosed exponent
of currency and now oil warfare. This plan to undercut oil was
exquisitely constructed and executed. The Russian Ruble has been
crushed, the Russian Central Bank has dropped a $100b defending the
currency. Iran might have got an extension but the new oil price
normal keeps them on the ropes. Venezuela's oil income has fallen by
35 per cent and is set to tumble further.
This is a very 21st century 'Shock and Awe 'and a bullet has not even
Of course, there is collateral damage. Nigeria has devalued the Naira
and are going to have to de- value further. The naira weakened 7.3 per
cent this month, the most among the 24 African currencies tracked by
Bloomberg and worst month since December 2008.
The Angolan kwanza is at a record low.
East African Oil and Gas has crashed and burned, Tullow Oil PLC has
slumped 50.175 per cent in 2014 and Africa Oil has slumped 67.822 per
cent. The markets are calling it and the call is very bearish. The
sector is set to be 'mothballed'.
The oil price collapse marks a major inflexion point. The global
consumer is back. The value of this stimulus is worth a $1 trillion to
13-OCT-2014 :: Who Kneecapped Oil?
The conditions [and I will explain them momentarily] are optimal for a
complete wash-out [a 'blow-off bottom' was more earthy description in
my time] down as far as $50 a barrel. Markets over- shoot, crude oil
does it big time and any and every model needs to consider such a
@alykhansatchu Sun rise and Shine
"Men are born soft and supple; dead they are stiff and hard. Plants
are born tender and pliant; dead, they are brittle and dry. Thus
whoever is stiff and inflexible is a disciple of death. Whoever is
soft and yielding is a disciple of life. The hard and stiff will be
broken. The soft and supple will prevail."
-- Lao Tzu
Russian Warships Enter English Channel Amid Tension Over Ukraine
Law & Politics
Russian warships entered the English Channel amid simmering tensions
with the U.S. and Europe over the conflict in Ukraine.
The squadron will conduct exercises in the area, according to a
spokeswoman for Russia's Northern Fleet. At least four vessels led by
the anti-submarine ship Severomorsk plan drills in the expanse of
water separating England from continental Europe, the state-run news
service RIA Novosti said yesterday, citing a statement by the Russian
Navy. NATO said the foray isn't "alarming, it's normal maritime
The alliance has sent jets to intercept Russian planes more than 400
times this year, a 50 percent increase from 2013, NATO Secretary
General Jens Stoltenberg said Nov. 20.
The ruble tumbled in its worst month in more than five years as a
slump in oil threatened to deepen Russia's economic slowdown.
The ruble weakened 1.6 percent to 49.40 per dollar by 7 p.m. yesterday
in Moscow. The dollar-denominated RTS stock index slid 3.2 percent
yesterday to the lowest since July 2009, while the yield on 10-year
government bonds rose to a five-year high.
While recent tensions with NATO have centered on aerial encounters,
Russia also moved warships toward Australia on the eve of a Group of
20 summit this month. U.K. Prime Minister David Cameron said the
flotilla was a symbol of "international machismo."
"The Russians have every right, as do all navies, to transit the
English Channel," NATO spokesman Jay Jansen said by phone. "It's an
international waterway, as long as they stay out of territorial
Oil and Currency Warfare levels now extreme.
In Syria, Isis appears to be dramatically losing the battle for hearts and minds with more than 92% of tweets, blogs and forum comments hostile to the militants
Law & Politics
Outside Syria, support for Isis, always a minority among online
communities, rises significantly. Forty-seven per cent of studied
tweets and posts from Qatar, 35% from Pakistan, 31% from Belgium and
almost 24% of posts from UK and 21% from the US were classified as
being supportive of the jihadist organisation compared with just under
20% in Jordan, Saudi Arabia (19.7%) and Iraq (19.8%).
''We all used to belong to a great and proud nation. Now everything is
fragmented, and ruined. We have nothing - all of us have become
beggars and refugees in our own land."
Pope Francis and Istanbul's Grand Mufti Rahmi Yaran pray together
in the Blue Mosque. Photograph: AP
Francis then paid a visit to the Hagia Sophia, the most important
cathedral of Orthodoxy for almost 1,000 years.
"This is a big shock in Caracas, it's a shock in Tehran, it's a shock in Abuja," Daniel Yergin, vice chairman of Englewood, Colorado-based consultant IHS Inc. and author of a Pulitzer Prize-winning history of oil, told Bloomberg Radio.
"There's a change in psychology. There's going to be a higher degree
"If the governments aren't able to spend to keep the kids off the
streets they will go back to the streets, and we could start to see
political disruption and upheaval," said Paul Stevens, distinguished
fellow for energy, environment and resources at Chatham House in
London, a U.K. policy group. "The majority of members of OPEC need
well over $100 a barrel to balance their budgets. If they start
cutting expenditure, this is likely to cause problems."
"Saudi Arabia, U.A.E. and Qatar can live with relatively lower oil
prices for a while, but this isn't the case for Iran, Iraq, Nigeria,
Venezuela, Algeria and Angola," said Marie-Claire Aoun, director of
the energy center at the French Institute for International Relations
in Paris. "Strong demographic pressure is feeding their energy and
budgetary requirements. The price of crude is paramount for their
economies because they have failed to diversify."
Oil and gas provide 68 percent of Russia's exports and 50 percent of
its federal budget. Russia has already lost almost $90 billion of its
currency reserves this year, equal to 4.5 percent of its economy, as
it tried to prevent the ruble from tumbling after Western countries
imposed sanctions to punish Russian meddling in Ukraine. The ruble is
down 31 percent against the dollar since June.
While the country's economy minister and some oil executives have
warned of tough times ahead, President Vladimir Putin is sanguine,
suggesting falling oil won't force him to meet Western demands that he
curb his country's interference in Ukraine.
"Winter is coming and I am sure the market will come into balance
again in the first quarter or toward the middle of next year," he said
Nov. 28 in Sochi.
Even before the price tumble, Iran's oil exports were already
crumbling because of sanctions imposed over its nuclear program.
Production is at a 20-year low, exports have fallen by half since
early 2012 to 1 million barrels a day, and the rial has plummeted 80
percent on the black market, says the IMF.
The Organization for Economic Cooperation and Development estimates a
$20 drop in price adds 0.4 percentage point to growth of its members
after two years. By knocking down inflation by 0.5 point over the same
period, cheaper oil could also persuade central banks to either keep
interest rates low or even add stimulus.
13-OCT-2014 Who Kneecapped Oil?
The conditions [and I will explain them momentarily] are optimal for a
complete wash-out [a 'blow-off bottom' was more earthy description in
my time] down as far as $50 a barrel. Markets overshoot, crude oil
does it big time and any and every model needs to consider such a
My point is that Barack Obama has taken control of the crude oil
cockpit; he is in charge of the airplane. He has control of all the
instruments and it has been a wild ride for the last few weeks, which
could get a whole lot wilder.
Crude Oil 1 Month Chart INO 64.69
Gold 1 Year INO 1151.79
Gold fell more than two percent at one point to $1,142.90 per ounce
XAU=, its lowest level in more than three weeks, while silver also
took a hit, falling more than six percent to a five-year low below
$14.50 per ounce XAG=.
The Swiss measure, had it been approved, would have compelled the
Swiss National Bank (SNB) to more than double its gold reserves and
banned it from ever selling the metal, threatening its ability to
defend a 1.20 euro cap on the Swiss franc imposed at the height of the
euro zone crisis.
20-OCT-2014 Ebola Severity Lies in Speed of Infections [the escape velocity [vitesse de liberation]]
I have recently discovered an outstanding contemporary intellectual
thinker called Paul Virilio who said the following about electronic
"The effectiveness of electronic money lies in its mass, which
increase its velocity of circulation.''
Virilio claims that as the "last post-industrial resource,
acceleration exceeds accumulation...the escape velocity becomes the
equivalent of profit."
Virilio believes that acceleration and speed are the defining
characteristics of our new world.
So my first point about the Ebola virus is that it is not about the
absolute number of cases, it is about its 'escape velocity' viruses
that exhibit non-linear and exponential characteristics. WHO recently
predicted that the number of Ebola cases in three West African nations
may jump to between 5,000 and 10,000 a week by December as the deadly
viral infection spreads. My point is that we have not entered the
parabolic phase yet, when the escape velocity is at its fastest and
therefore, the comparison with malaria and influenza might be an
President Francois Hollande has his temperature measured upon his arrival at the Donka hospital in Conakry, Guinea, Friday, Nov. 28, 2014
French President Francois Hollande has his temperature measured upon
his arrival at the Donka hospital in Conakry, Guinea, Friday, Nov. 28,
2014, as part of a one day visit in Guinea focused on Ebola situation.
Hollande is set to become the first Western head of state to visit one
of the west African countries worst hit by Ebola as he flies into
Guinea for a brief stopover.
CONAKRY, Guinea -- French President Francois Hollande brought a message
of hope to Guinea on Friday, where thousands of residents lined the
roads while clapping, drumming and dancing to catch a glimpse of the
first Western leader to visit a country hard hit by Ebola.
Guinean President Alpha Conde greeted his French counterpart at the
airport and said that if Hollande could visit the country, then
"There is hope," said Hollande, "The hope of those who have been
cured. The hope that we can control this epidemic ... The very fact
that hope exists."
Why Angola, Uganda and Somalia need to be on a 'revolution watch-list'
A study from Population Action International reveals that between 1970
and 2007, 80% of all new civil conflicts occurred in countries with at
least 60% of the population younger than age 30.
PAI's findings are reinforced by empirical analysis by Henrik Urdal at
the International Peace Research Institute, who found that even after
controlling for level of development, regime type, total population
size and past outbreaks of conflict, countries with a large "youth
bulge" were 150% more likely than those with more balanced age
structures to experience civil conflict in the last half of the 20th
Today, most of Africa is getting slightly older now, having reached
their youngest points a few years or decades earlier. But there are a
few exceptions, and these are countries that need to be on a
Angola is one of the few countries in Africa that is actually getting
younger; in 2010, its median age was 16.0, the youngest that the UN
Population Division has recorded so far.
Uganda, too, seems to be hovering at a median age of about 15 years since 1995.
The most worrying, though, is Somalia, because it is getting younger
in an environment of entrenched instability, porous borders, easy
access to weapons and religious extremism. The median age was 16.1
years in 2010, compared to 17.5 years when its central government
collapsed in 1991.
10-NOV-2014 :: Ouagadougou's Signal to Sub-Saharan Africa
The tipping point for this accelerated sequence of events was
President Compaoré stacking parliament in order to extend the
presidential term limit. There are plenty of African presidents who
are seeking to pull off the same magic trick and events in Ouagadougou
have surely put them on notice.
Martin Aglo, a law student from Benin, told Reuters: "After the Arab
Spring, this is the Black Spring".
During the Arab Spring [now in the bleak mid-Winter], nearly all
commentators spoke of how this North African wildfire could not leap
the Sahara and head to sub-Saharan Africa. The reasons were that the
State [incumbents] had a monopoly on the tools of violence and would
bring overwhelming force and violence to bear.
We need to ask ourselves; how many people can incumbent shoot stone
cold dead in such a situation - 100, 1,000, 10,000? This is another
point: there is a threshold beyond which the incumbent can't go. Where
that threshold lies will be discovered in the throes of the event.
Therefore, the preeminent point to note is that protests in Burkina
Faso achieved escape velocity. Overthrowing incumbents is all about
acceleration, momentum and speed best characterised by the German word
Out of a population of 17 million people in Burkina Faso, over 60 per
cent are aged between 17 and 24 years, according to the World Bank,
and this is another point to note. The country's youth flexed their
muscles. What's clear is that a very young, very informed and very
connected African youth demographic [many characterise this as a
'demographic dividend'] - which for Beautiful Blaise turned into a
demographic terminator - is set to alter the existing equilibrium
between the rulers and the subjects, and a re-balancing has begun.
The President returns to find Parliament and people alike outraged by
the latest corruption scandal.
The CCM is looking for a way out Having spent much of November
convalescing in the United States after prostate surgery, President
Jakaya Mrisho Kikwete came home to find a country in turmoil over the
escrow account scandal and demanding action. Yet again, corruption is
dominating politics and the media. Foreign Affairs Minister Bernard
Membe recently described it as 'by far the most serious challenge'
Tanzania has to face. The urgency of decisive action has now been
underlined by developments in Parliament in Dodoma, where an attempt
by Prime Minister Mizengo Pinda to prevent a highly sensitive
corruption debate from taking place was firmly overruled by Speaker
Anna Makinda. As a result, over the past few days members of
parliament have proceeded to debate the explosive findings of its
Public Accounts Committee regarding a host of questionable payments
involving power producer Independent Power Tanzania Limited (IPTL).
Tanzania's parliament votes to dismiss ministers after graft report
Tanzania's parliament voted on Saturday to dismiss senior officials,
including the attorney general, the energy minister and several other
members of cabinet, after a report on corruption in the energy sector.
In its war to create a caliphate across Syria and Iraq, the Islamic State is opening a front in North Africa, where affiliated militants are wreaking havoc in eastern Libya and Egypt's Sinai Peninsula
Kabila 'coup plot': DR Congo suspects acquitted in South Africa
Etienne Kabila says he is the son of former DR Congo President Laurent
Kabila, and that Joseph Kabila, the current leader, is not his real
Etienne Taratibu Kabila, head of the Union of Nationalists for the
Renewal of the DR Congo (UNR) accused of plotting to topple the
government, stands in the court in Pretoria on February 27, 2013
South Africa All Share Bloomberg +7.901% 2014
49,911.37 -646.46 -1.28%
South Africa is the only African country to have hosted F1 races, with
the last one being held at the iconic Kyalami race track that was
boycotted by some teams over the country's apartheid policy.
Decrepit and in debt, Kyalami recently looked in danger of being
bought by developers who would have torn it apart for housing.
However, it was saved when it was bought by German car company Porsche
for $20m, ensuring it will be kept for motorsport--and possibly the
venue of a future F1 return to the continent.
Dollar versus Rand 6 Month Chart INO 11.1144
Egypt Pound versus The Dollar 3 Month Chart INO 7.1468
Egypt EGX30 Bloomberg +37.23% 2014
9,307.88 -18.07 -0.19%
The naira briefly touched a record low of 180.90
The naira briefly touched a record low of 180.90, according to Thomson
Reuters dealing data, before the bank intervened with dollar sales to
lift it to 178.75 at the close, dealers said.
2:31 PM - 19 Nov 2014 @alykhansatchu The Currency heads to 200.00. The
Central Bank does not have the Fire Power. Matters #Nigeria and the
Nigeria All Share Bloomberg -16.4133% 2014
34,543.05 -162.43 -0.47%
Explosions Kill More Than 100 at Mosque in Nigerian City
"We have counted about 109 dead bodies at the Murtala general hospital
alone, apart from the ones at Nasarawa and Bamalli hospitals," Ibrahim
Shehu said yesterday in an interview at Murtala Mohammed hospital.
The U.S. State Department said in a statement last night that the
attacks "while as yet unclaimed, have all of the hallmarks of Boko
Haram and the group's disregard for human life as it continues in its
efforts to destabilize Nigeria."
Two explosions went off on the premises of the central mosque near the
Emir's palace in Kano followed by a third in the crowd of worshipers,
Saminu Hassan, a witness to the blasts, said by phone.
At least three gunmen fired into the terrified crowds before security
officials arrived, witnesses said.
"After multiple explosions, they also opened fire. I cannot tell you
the casualties because we all ran away," a palace staff member told
The emir of Kano, Sanusi Lamido Sanusi. Photograph: Facundo
'Nigeria at war', expert says, as talk of military takeover to end
Boko Haram crisis grows
A Nigerian security expert, Ona Ekhomu, told a TV debate that the
latest attacks showed that "we are at war in Nigeria".
His description of the Boko Haram onslaught, rhymed with the view of
other analysts who told Mail & Guardian Africa that the country was
close to a point when "the soldiers might stage a coup and try to
Some Nigerian blogs and social media comments have claimed that his
government is using Boko Haram as an instrument to "break the north's
back forever" and weaken its hand and voice in Nigerian politics.
That is widely viewed as a dangerous backdrop for the February election.
Abubakar Shekau "We are in your city," he said, addressing Nigeria's
President Goodluck 22-APR-2014
"We are in your city," he said, addressing Nigeria's President
That comment could have been made by the Al-Shebaab. Both Boko Haram
and Al-Shebaab represent a risk that David Lipton did not touch on,
that being asymmetric risks. The recent bombings in Abuja and last
years attack on Westgate confirm the potency of asymmetric risks.
Limuru Tea closed at a Record High of 1185.00 share data +137.00% 2014
Par Value: 20/-
Closing Price: 1185.00
Total Shares Issued: 1200000.00
Market Capitalization: 1,422,000,000
1st Half Earnings through 30th June 2014 versus through 30th June 2013
First Half Total Revenues 48m versus 58m -18.00%
Tea Prices fell 19% in the period under review.
First Half Pre Tax Profit 10.8m versus 18.8m 2013 -42.55%
No Interim Dividend
This is all about the Arbitrage between the share price and the Net
Asset Value. Limuru is now prime Real Estate and this is not reflected
in the share price.
Events in Vienna and an OPEC Meeting last week continue to reverberate
across the World.
Crude Oil continues to crater and WTI was last trading at $66.00 a Barrel.
This should see Fuel Prices prices adjust sharply lower and this will
provide a meaningful stimulus for the Economy.
The Challenge on the Oil Horizon was outlined by Africa Oil, which
said this month its plans in Kenya might be brought into question if
the long-term outlook saw prices dropping below $70 a barrel.
Therefore, I expect ''mothballing'' which might last as long as 24-36
months and if the Regulatory Environment is not conducive [the
swingeing Capital Gains Tax is plain onerous] then we could see an
even more complex scenario.
East African Oil and Gas [if it were listed on the Nairobi Securities
Exchange] is the worst performing Sector with Tullow Oil PLC -50.175%
and Africa Oil -67.822% in 2014.
The Securities Exchange clocked a high volume session today of 2.026b.
Centum traded 75.82% of todays volume and 3.78% of its shares.
The All Share firmed 0.538% to close at 164.15 and within 0.785% of a
Record High reached in September this year.
The Nairobi All Share was lifted on muscular Big Cap Action with
Safaricom +0.72% [back at a record], KCB closed within 0.847% of a
record and EABL pushed up to a 16 week High.
The Nairobi NSE20 closed 16.25 points better at 5172.57.
N.S.E Equities - Commercial & Services
Safaricom rebounded +0.72% to close at 13.90 and regain an All Time
closing High previously reached on Thursday last week. Safaricom was
traded shares as high as 14.00 +1.44% during the session. Safaricom
traded 6.083m shares worth 84.75m. Safaricom has posted a +32.445%
Total Return in 2014 and targets 15.00.
Safaricom share price data +32.445% 2014
Kenya Airways closed unchanged at 8.25 and traded 107,700 shares.
Airline stocks have soared world-wide as Investors anticipate the
Savings Airlines will win from the sharply lower Oil Price. Kenya
Airways has yet to participate in this rebound and essentially
Investors are looking for clarity and visibility on Kenya Airways's
hedging Policy and whether the Hedges have been removed. Leaving them
in place will be very problematical. The CFO was effusive in his
Praise for the Hedging Team at the Half Year Earnings Release.
Uchumi rallied +2.2% to close at 9.30 and traded 29,100 shares.
LongHorn Kenya closed 53.26% lower on the day it turned Ex-Bonus and
N.S.E Equities - Finance & Investment
Centum traded its heaviest session of the year to close unchanged at
61.00 with 25.196m shares worth 1.536b changing hands. Centum traded
3.78% of its shares today and that is a meaningful position. Centum is
+84.84% in 2014 [and this is following a triple digit percentage gain
in 2013] and accelerated H1 2014 PAT +38%.
Centum share price data here +84.84% 2014
Par Value: 0.50/-
Closing Price: 61.00
Total Shares Issued: 665441775.00
Market Capitalization: 40,591,948,275
Centum reports H1 2014 Earnings versus H1 2013
H1 Dividend Income 489m versus 364m +34%
H1 Interest Income 83m versus 94m [12%]
H1 Fund Management 337M versus 0
H1 Realised Gains 1.017b versus 307m +231%
H1 Unrealised Gains on Bonds [37m] versus 369m
H1 Income 1.897b versus 1.198b +57%
H1 Portfolio Costs [677m] versus [219m] +209%
H1 Finance Costs [262m] versus [298m]
Share of Associate Profit 327m versus 352m
H1 Profit before Tax 1.285b versus 1.033b +24.00%
H1 Profit after Tax 1.230b versus 0.892b +38%
H1 Other Comprehensive Income 2.062b versus 0.576b +258%
The Nairobi Securities Exchange [which self-listed earlier this year]
firmed 2.35% to close at 21.75 and was trading at 22.00 +3.53% at the
Finish. Todays move higher was on heavy volume action of 5.393m shares
Kenya Commercial Bank firmed 0.862% to close at 58.50 and traded
shares at a session and record high of 60.00 +3.45%. Kenya Commercial
Bank traded 498,300 shares with Buyers for 600% of the traded volume
at the Closing Bell. Kenya Commercial Bank will set a record High as
early as tomorrow. Kenya Commercial Bank is 0.847% below a record
reached in August this year.
Standard Chartered was firm and rallied +1.501% to close at 338.00 and
traded shares as high as 344.00 +3.3% at the Finale. Standard
Chartered is a well-managed Franchise.
Equity Bank firmed 0.5% to close at 50.00 and traded 580,300 shares.
Diamond Trust Bank ticked 1.19% easier to close at 249.00 and traded
Jubilee Insurance thrust +3.39% higher to close at 457.00 and traded
4,300 shares. Jubilee is +63.21% in 2014.
N.S.E Equities - Industrial & Allied
EABL rallied o.99% to close at 306.00 which is a 16 week closing High.
EABL traded 203,300 shares worth 62.407m. EABL has rallied +12.5% over
the last 4 weeks.
Total Kenya rallied +7.216% to close at 26.00 and traded 8,000 shares.
BAT traded 30,000 shares all at 900.00 -0.11%