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Satchu's Rich Wrap-Up
 
 
Monday 08th of December 2014
 
Morning
Africa

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Normal Board - The Whole shebang
Prompt Board Next day settlement
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The Latest Daily PodCast can be found here on the Front Page of the site
http://www.rich.co.ke

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.@CNBCAfrica Interview with @bonneytunya
Africa


I thank @FrankMatsaert @TrademarkeastA for a very insightful #Mindspeak

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@alykhansatchu · Dec 6 Tanzania has a trade surplus with Kenya @FrankMatsaert #Mindspeak not reported in the press
Africa


Macro Thoughts

Druckenmiller: "As a macro investor, my job for 30 years was to
anticipate changes in the economic trends that were not expected by
others - and therefore not yet reflected in securities prices. I
certainly made my share of mistakes over the years, but I was
fortunate enough to make outsized gains a number of times when we had
different views from various central banks''

read more


the dollar has been punching higher. If things tip big, the dollar might soar. 25-AUG-2014
Africa


The dollar has embarked on a meaningful and broad based rally as
investors anticipate a rate hike in the US ahead of all other
developed economies. 01-SEP-2014
http://www.rich.co.ke/media/docs/038NSX0109.pdf

The point I am making is that the dollar has just started getting
going. There will be blood in the water. There is a small window if we
want to be the sharks. 29-SEP-2014
http://www.rich.co.ke/media/docs/038NSX2909.pdf

The Shark Dubai Mall
http://www.twitpic.com/e1n55b

Home Thoughts

“The hoofbeats rang through the town like pistol shots.”

“We'd be fools not to ride this strange torpedo all the way out to the end.”
― Hunter S. Thompson, Fear and Loathing in Las Vegas

@alykhansatchu Moon over Nairobi
pic.twitter.com/sYbI3vVc3U

@planetepics The moon kissing the ocean
pic.twitter.com/qWPNixpWax

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Biden sees 'less than even' chance of nuclear deal with Iran
Law & Politics


"It's frozen the program, it's given us a shot for a peaceful
solution," he said. "I tell you, I think it's a less than even shot
but it's a shot, nonetheless."

Biden said that while the United States and Israel have tactical
disagreements, Washington remained fully dedicated to Israel's
security.

"We will not let Iran acquire a nuclear weapon - period," he said.
"End of discussion. Not on our watch."

Conclusions

Brinkmanship does not favour Iran.

The EU blocks Turkey? Turkey looks east. That’s Eurasian integration
on the move.

http://www.globalresearch.ca/from-south-stream-to-the-turk-stream-pipeline-huge-win-for-turkey-big-win-for-russia-historic-loss-for-eu/5418312

Washington has tried very hard to create a New Berlin Wall from the
Baltics to the Black Sea to “isolate” Russia. Now comes yet another
Putin judo/chess/go counterpunch – which the opponent never saw
coming. And exactly across the Black Sea.

A key Turkish strategic imperative is to configure itself as the
indispensable energy crossroads from East to West – transiting
everything from Iraqi oil to Caspian Sea gas. Oil from Azerbaijan
already transits Turkey via the Bill Clinton/Zbig Brzezinski-propelled
BTC (Baku-Tblisi-Ceyhan) pipeline.

So what Putin’s judo/chess/go counterpunch accomplished with a single
move is to have stupid EU sanctions once again hurt the EU. The German
economy is already hurting badly because of lost Russia business.

For the moment, let’s appreciate the magnitude of the geopolitical
shockwaves. There will be more, when we least expect them.

Conclusions


I think Putin has been very effectively kneecapped.

Israel strikes near Damascus: Syrian TV

http://www.reuters.com/article/2014/12/08/us-mideast-crisis-syria-israel-idUSKBN0JL0NK20141208

Syrian state television said on Sunday that Israeli jets had bombed
areas near Damascus international airport and in the town of Dimas,
near the border with Lebanon.

Israel has struck Syria several times since the start of the
three-year conflict, mostly destroying weaponry such as missiles that
Israeli officials said were destined for their long-time foe Hezbollah
in neighboring Lebanon.

"The Israeli enemy committed aggression against Syria by targeting two
safe areas in Damascus province, in all of Dimas and near the Damascus
International Airport," state television said, adding that there were
no casualties.

An Israeli army spokesman said he would not comment on the "foreign reports".

read more


Currency Markets at a Glance WSJ
World Currencies


Euro 1.2287 The U.S. currency was little changed at $1.2287 per euro
after gaining 1.4 percent last week.
Dollar Index 89.35
Japan Yen 121.50 The dollar rose 0.1 percent to 121.52 yen after
appreciating to 121.85, the highest level since July 2007.
Swiss Franc 0.9786
Pound 1.5565
Aussie 0.8292 Australia’s Dollar dropped 0.5 percent to 82.78 cents
after weakening to 82.76 cents, the lowest since July 2010.
India Rupee 61.958
South Korea Won 1121.40
Brazil Real 2.5893
Egypt Pound 7.1482
South Africa Rand 11.3666

The Bloomberg Dollar Spot Index, which tracks the U.S. currency
against 10 trading partners, climbed less than 0.1 percent to 1,122.80
at 1:57 p.m. in Tokyo, set for the highest close since March 2009.

The U.S. dollar has jumped 12 percent in the past six months, the best
performer of 10 developed-nation currencies tracked by Bloomberg
Correlation-Weighted Indexes. The yen slumped 7.6 percent and the euro
fell 0.6 percent.

China’s imports fell 6.7 percent, the customs administration said
today, compared with the median estimate among economists surveyed by
Bloomberg News for a gain of 3.8 percent increase. Exports rose 4.7
percent from a year earlier, less than the forecast for growth of 8
percent.

read more



The 321,000 advance in U.S. payrolls in November exceeded the most optimistic projection in a Bloomberg survey of economists
International Trade


Bloomberg Dollar Spot Index, which tracks the greenback against 10
trading partners, gained 0.8 percent to 1,121.41, headed for its
highest close since March 2009.

read more



California’s 'Hot Drought' Ranks Worst in at Least 1,200 Years
World Currencies


Higher temperatures increase evaporation and help deplete reservoirs
and groundwater. The California heat this year is like nothing ever
seen in modern temperature records. The chart above shows average
year-to-date temperatures in the state from January through October
for each year since 1895.

Global spending on digital advertising is forecast to increase 15
percent next year, buoyed by mobile and social media campaigns, and is
projected to equal outlays for television by 2019.

http://www.bloomberg.com/news/2014-12-08/digital-ad-spending-to-match-tv-by-2019-as-eyeballs-go-mobile.html

Digital expenditures in 2015 will reach $163 billion, or 30 percent of
total ad spending, according to Magna Global, a media research unit of
Interpublic Group of Cos. In four years, digital will account for 38
percent of global ad outlays, a proportion as large as TV, which has
held the biggest share of spending for more than a decade.

The forecast reflects consumers’ shift toward staring at their
smartphone screens all day, rather than their televisions, according
to Vincent Letang, Magna Global’s executive director for global
forecasting. In 2014, global mobile ad spending increased 72 percent,
he said.

“This year, next year, if you do the math, almost all the growth is
from mobile,” Letang said in a telephone interview. “Especially in the
home, for casual users and for entertainment purposes, tablets and
smartphones are making great progress.”

read more


Commodity Markets at a Glance WSJ
Commodities


The Bloomberg Dollar Spot Index is up 12 percent since June, while the
Bloomberg Commodity Index has slumped 17 percent over the same period.

Gold 6 month INO 1193.02

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

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Crude Oil 5 day chart INO 64.96 [lower still]
World Currencies


WTI for January delivery dropped 97 cents to $65.84 a barrel on the
New York Mercantile Exchange yesterday. It was the lowest settlement
since July 29, 2009. Prices are down 33 percent this year.

“The market’s responding to a double whammy of Saudi pressure,” Yawger
said. “The market was still feeling the aftereffects of the OPEC
meeting and then the Saudis dropped the hammer with their $2 cut in
the OSP. This will take several days to play out and we still have to
see how their rivals respond.”

OPEC’s 12 members pumped 30.56 million barrels a day in November,
exceeding their collective quota for a sixth straight month, according
to a Bloomberg survey of oil companies, producers and analysts.

read more



01-DEC-2014 US Emerges As New Price Setter For Oil Market
Commodities


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.

This is a very 21st century ‘Shock and Awe ‘and a bullet has not even
been fired.

The oil price collapse marks a major inflexion point. The global
consumer is back.

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The Engineered Decline in Oil Prices: Economic Warfare
Commodities


That is, the use of the price of oil as a highly effective weapon of
economic warfare in order to force Russia and associate resisting
regimes (like Iran and Venezuela) either to submit to the TE rule, or
face a possibly severe economic recession (depending on how long the
price of oil will be kept at very low levels) which could well lead to
‘velvet revolutions’ in all these countries and, possibly, to regime
changes.

read more


13-OCT-2014 :Who Kneecapped Oil?
Commodities


I have followed the oil market for eternity and the recent price
action is best characterised as unprecedented and white-knuckle.

In fact, the oil market has always been very high beta and exhibits
magnified price reactions to the demand and supply dynamic. Where
markets are net short, price setting can be determined by the last
buyer who is paying up in a net supply deficit scenario and that’s why
you see those big price spikes around futures expiry. However, this is
a binary thing. In a situation where there is a net surplus, the price
setter can be those last sales transacted at deep discounts.

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
price outcome.

The big game-changer has been US crude output which rose from 5.7
million barrels per day in 2011 to 8.4 million barrels in the second
quarter of 2014, a remarkable 47 per cent gain, and touched 8.88
million barrels a day last week, the most since March 1986, according
to the US Energy Information Administration.

President Obama and his administration is the answer to my question:
who kneecapped oil prices?

In fact, as long ago as 2011, Thomas Donilon, who was then a US
national security adviser, was signalling this and very clearly.

“America’s new energy posture allows us to engage from a posi- tion of
greater strength. Increasing US energy supplies act as a cushion that
helps reduce our vulnerability to global supply disrup- tions and
price shocks. It also affords us a stronger hand in pursuing and
implementing our international security goals.”

The US administration has turned price slasher and like in Alfred
Hitchcock’s totemic movie “Pyscho”, oil has been sliced up real good.
The US has flooded the oil market and the commodity is now a
geopolitical spear [Michael Klare and Tom Engelhardt].

It is the US that is the new price setter for the oil markets and this
is a deep and important geopolitical development. The new price levels
will have immediate and enormous geopolitical and financial knock-on
effects. It will place intolerable pressure on oil producers and
particularly those operating from a higher base price.

The Emirates chief executive Tim Clark was interviewed by Der Spiegel
about MH370. He said: “It’s anybody’s guess who did what.” 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 in- struments and it
has been a wild ride for the last few weeks, which could get a whole
lot wilder.

The producer price index is a measure of the prices that farmers
obtain for their crop, or the 'farm-gate' price. Base is 2004-2006 =
100

http://mgafrica.com/article/2014-12-04-africas-spice-trade-sees-a-boom-in-value

AS falling commodity prices threaten to cast a dark shadow on Africa’s
economic prospects, there is one group of producers that is striking
it rich – farmers of spices such as pepper, cloves, turmeric, chillies
and ginger.

Over the past few years, rising demand from an increasingly
consumerist middle class in Asia has pushed prices to the roof – black
pepper, for example, reached an all-time high in June, and is
currently trading around $9 per kg, up from $2 per kg a decade ago.

White pepper has seen a threefold rise, from $4 to $13 per kg. The
ratio of global pepper stockpiles to consumption now stands at less
than 10%, down from 75% in 2004, according to this report by
Bloomberg.

In Africa, Madagascar is the leading producer of spices such as
cloves, vanilla and pepper, all of which have seen a strong rise in
demand in the global market.

Data from FAO shows Madagascar exports $172million worth of cloves
every year, and is now the second largest producer globally of the
bitter, pungent spice, after Indonesia.

Olafur Eliasson at Fondation Louis Vuitton FT

http://www.ft.com/intl/cms/s/2/2ecac286-7a1c-11e4-9b34-00144feabdc0.html

With works including “Map for Unthought Thoughts”, a fivefold
symmetrically patterned immersive light and mirror installation;
“Double Infinity”, a corridor lined with blackened sandpaper; and a
rooftop sun-tracker directing rays into Frank Gehry’s building,
Eliasson has come up with a show steeped in abstraction. The effects
sound so ephemeral that they imply a riposte to the sturdy materialism
symbolised by the LV initials carved, jewel-like, over the building’s
entrance.

Eliasson says the show, entitled Contact, is “about the horizon that
divides, for each of us, the known from the unknown”. So are you an
existentialist? I ask the Danish/Icelandic artist when we meet in
London ahead of the opening later this month.

“Questions about life should be taken in a prosaic manner. Often,
ideas don’t come from the inside. And they’re not handed down from God
— that’s a romantic notion. They are pragmatic, they come from
everyday life, from the gutter of time,” he continues.

Eliasson was “10 days into art school” in Copenhagen in 1989 when “the
Wall came down, and we drove at once to Berlin”. He moved there
permanently in 1994. “There were not so many artists, 30 or 40 hanging
out together. My luck was that when I started there had just been a
financial crash, and there was a sudden change from the art of the
1980s to something more ephemeral and psychology-driven.

“I was already very interested in artists of the West Coast, James
Turrell, Robert Irwin, and also from New York — Félix González-Torres,
Cady Noland, the new sensitivity. We were not even against money, it
just wasn’t part of the equation, we didn’t even have a critique
against the market.”

“It still has a definition of a self. In my case, what constitutes a
self is the surrounding’s ability to hold it. When I speak to you now,
you’re carrying me, you reflect me.”

‘Olafur Eliasson: Contact’, Fondation Louis Vuitton, Paris, December
17-February 16 2015, fondationlouisvuitton.fr

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Congo's Kabila names new government in bid to broaden political base
Africa


The government, announced on state television, brings members of two
opposition parties to key posts, including Thomas Luhaka, the
secretary-general of the Movement for the Liberation of Congo. He will
serve as one of three vice-prime ministers.

 Kabila elevated to the same role ally Evariste Boshab,
secretary-general of his People's Party for Reconstruction and
Democracy. Boshab has pushed for a constitutional amendment to allow
Kabila to run for a third term.

 Some analysts say the government could weaken an already fractured
opposition, which has been led for decades by Etienne Tshisekedi's
Union for Democracy and Social Progress.

"The big question is whether this is part of a larger strategy of
delaying elections," said Jason Stearns, a Congo analyst at the Rift
Valley Institute. "Everyone who is in this new government has a vested
interest in staying in government as long as possible."

Renamo Protest Over Mozambique Election Result Rejected by Court

http://www.bloomberg.com/news/2014-12-05/renamo-protest-over-mozambique-election-result-rejected-by-court.html

Mozambique’s main opposition party said it continues to reject the
official result of October’s election, after the country’s
constitutional court dismissed its complaints about the outcome.

The Mozambican National Resistance, or Renamo, wants a caretaker
government to be formed, Antonio Muchanga, a spokesman for leader
Afonso Dhlakama, told reporters today outside its headquarters in the
capital, Maputo. Dhlakama is holding rallies around the country to
build support for the party’s demands.

“Because we have responsibilities over this country, we cannot look on
impassively and serenely,” Muchanga said. Renamo seeks a “serious
dialogue which will culminate in a compromise over the future of the
country.” Renamo wasn’t surprised by the court’s ruling, he said.

Dhlakama’s next rally will be held in Pemba, capital of the
northeastern province of Cabo Delgado, which is the home of
president-elect Nyusi and also the province where Anadarko Petroleum
Corp. and Eni SpA (ENI) are developing offshore gas fields predicted
to transform Mozambique’s economy.

The Renamo leader flies to Maputo on Dec. 9 to hold a rally in the
capital and Muchanga called on supporters to greet him at the airport.

Renamo’s campaign for an interim government amounts to “anarchy,”
President Armando Guebuza, who will hand power to Nyusi, said
yesterday during a state visit to Italy, according to Radio
Mozambique.

“The leader of the second-largest party is not the leader of Renamo,
it is someone else,” he said. “It might be Nyusi.”

read more



The evil genius of Shabaab, Boko and other jihadists; they've found a way to kill Africa as we know it @Cobbo3
Africa


If you want to take most of West Africa, all you have to do is to
collapse Nigeria. And if you then take Libya too, you can squeeze the
nations of Niger, Chad, and Burkina Faso in between to death, and put
yourself at the border of Tunisia and Algeria.

Ethiopia will be the biggest stumbling block in the east to the
carving of a caliphate. They are a hardy people, and at over 90
million Africa’s second largest population – just a little bigger than
Egypt. And that is why Egypt is important.

If it falls, it allows for an easy march in what will be highly
sympathetic Sudan, and then into both South Sudan and Ethiopia. And
because the historical Ethiopian enemy Somalia will be too eager to
join in a war against Ethiopia, it will be surrounded on all its
borders and easier to overcome—in theory, if nothing else.

Kenya is the gate

And that is where Kenya fits in. Taking Kenya places you on Ethiopia’s
southern border. And countries like Uganda will fall like dominoes
with their vital trading link through Kenya cut off.

IS has been wise to leave the rest of Africa out of its scheme. For
starters, the number of Muslims in these countries is relatively
small. But second, a bridge of countries that cuts across the
continent, from Angola, Zimbabwe, to Mozambique, protects the lower
middle of Africa.

These countries have a history of resistance against European
colonialists, and have once-battle hardened armies that can still
brush the rust off and form a formidable front. Other countries like
Ethiopia and Uganda too have the same tradition, but they are isolated
and cannot form a long networked defence line.

So, bring down Nigeria, Libya, Egypt, and Kenya and Africa is yours.
It is audacious and sounds like fantasy…but it is hugely tempting, and
the fruits from doing that will be massive for the jihadists. Mad and
murderous they might be, but stupid they are not.

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Somalian Prime Minister Abdiweli Sheikh Ahmed was removed from office by a no-confidence vote after a dispute with President Hassan Sheikh Mohamoud over cabinet appointments.
Africa


The no-confidence vote was backed by 153 lawmakers, with 80 voting
against the motion, the speaker said. Relations between the president
and prime minister deteriorated after Ahmed ordered Justice Minister
Farah Abdulkadir, a political ally of the president, to switch
positions with Veterinary, Animal Husbandry Minister Salim Aliyow
Ibrow. Ahmed was appointed in January as part of the 16th attempt to
establish an effective central administration in Somalia.

South Africa All Share Bloomberg +7.0261% 2014

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

49,506.59 +114.00 +0.23%

Dollar versus Rand 6 Month Chart INO 11.3889 [Target 12.00]

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

South Africa’s rand slumped to a six-year low against the dollar

http://www.bloomberg.com/news/2014-12-05/rand-slumps-to-six-year-low-versus-dollar-on-u-s-jobs-gains.html

The currency of Africa’s second-largest economy depreciated as much as
1.7 percent before paring losses to trade 1.4 percent weaker at
11.3538 per dollar by 6:06 p.m. in Johannesburg, the weakest level on
a closing basis since October 2008

Egypt Pound versus The Dollar 3 Month Chart INO

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

Egypt EGX30 Bloomberg +40.563% 2014 [2.8333% below a multi year high
reached Sep 30th 2014]

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

9,533.74 +75.17 +0.79%

Nigeria All Share Bloomberg -19.6012% 2014 [19 month Lows]

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

33,228.29 +52.51 +0.16%

Overnight rate jumps to 30 pct from 12 pct a week ago

http://www.reuters.com/article/2014/12/05/nigeria-interbank-idUSL6N0TP2CC20141205

The central bank withdrew around 300 billion naira ($1.7 bln) from the
system this week to reinforce monetary tightening introduced last
week, pushing the interbank overnight lending rate up to 30 percent,
from 12 percent a week ago, dealers said.

The central bank is struggling to prop up the naira, which has taken a
beating over the past few months as falling oil prices have shaken
confidence in the assets of Africa's leading energy producer.

On Friday, the naira closed at 180.1 to the dollar, the same level as
its previous close, after the central bank sold dollars on the
interbank market to prop it up. The naira was still below the bank's
new target band of 160-176 to the dollar.

Ghana Stock Exchange Composite Index Bloomberg +7.226% 2014 [17 week highs]

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

2,300.11 +13.75 +0.60%

African insurers in vogue as incomes rise

http://www.reuters.com/article/2014/12/07/uk-insurance-africa-idUSKBN0JL07R20141207

A growing middle class in sub-Saharan Africa is enticing European and
South African insurers to buy local firms focussing mainly on life
insurance and pensions, in the face of mature markets and strong
competition at home.Rapid economic growth in countries such as Ghana,
Kenya and Nigeria has increased the number of people with money to
spend on insurance to protect their wealth, while regulatory changes
are encouraging the growth of domestic savings and pensions.

Several major companies, including Swiss Re (SRENH.VX), Prudential
(PRU.L) and Sanlam (SLMJ.J), are buying insurers in Africa, with the
focus on life and pensions products in the more economically advanced
sub-Saharan countries.

Notwithstanding the challenges, the race is definitely on. David
Hodnett, Barclays Africa's deputy CEO, told a banking conference in
Johannesburg in November: "Every insurer that you look at has probably
about five or six suitors."

A Standard Bank report published in August said while the size of the
"middle class" in sub-Saharan Africa may have been overstated in some
studies, growth rates were nevertheless dramatic.

Its study of 11 sub-Saharan economies concluded the "middle class" had
risen from 4.6 million to 15 million since 2000 and would be over 40
million by 2030, with Africa's biggest economy Nigeria leading the
way.

Insurance penetration, or premiums written as a percentage of gross
domestic product, was 11.5 percent in Britain in 2013 but just 0.6
percent in Nigeria. For life insurance, penetration was 8.8 percent
versus 0.2 percent, according to Swiss Re data.

Life insurance premium volume in dollar terms rose 18.6 percent last
year in Kenya, 13.8 in Angola and 13.5 in Nigeria, compared with a 3.9
percent rise in Britain, the data showed.

"The level of life products and penetration is very low," said
Davinder Sikand, head of Africa at private equity firm Abraaj. "There
are a lot of opportunities to develop products to fit the needs of the
people."

One of the latest deals was French insurer AXA's (AXAF.PA) $250
million purchase last month of a majority stake in Nigeria's Mansard
Insurance, which offers life and general insurance.

South Africa-focused companies such as Old Mutual (OML.L) and Liberty
(LBHJ.J) are also eager to expand in the life market in sub-Saharan
Africa.

LeapFrog Investments, which invests in financial services in emerging
markets, launched its second Africa and Asia fund in September while
British insurer Prudential (PRU.L) has bought life insurers in Kenya
and Ghana this year.

Insurance specialists say middle-class and lower middle-class
customers in Africa are not as affluent as developed-world middle
classes, tend to be harder to reach and can require a larger use of
face-to-face agents.

The numbers in the Standard Bank survey are based on households that
consume more than $15 a day.

A shortage of skilled insurance staff, fragmentation of the market
across a large number of countries with many small insurance firms and
regulatory hurdles present more obstacles.

"It's quite challenging, a lot of work is required," said Frank
O'Neill, head of Middle East and Africa at Swiss Re. "It's not as
straightforward as if you look at Brazil: one single country."

Would-be insurance buyers will also need to do their homework to work
out which of the many local insurers offer the most value. Profits
across the board in Kenya's insurance sector, for example, rose 24
percent last year, but that covers nearly 50 companies.

Insurers are more likely to do well if they partner with banks, said
Dudu Tembo, portfolio manager at wealth manager Citadel Investment
Services, as "the challenge has been issues around distribution".

Reinsurance, or sharing the burden of insurance risk, is another
growth area, for instance for energy projects in countries such as
Angola or Mozambique. An Africa-focused reinsurance company, One Re,
launched last month.

read more


ICC Drops Crimes-Against-Humanity Case Against Kenyan Leader
Kenyan Economy


“One down, two to go,” Kenyatta said today a business event in Nairobi.

read more


Insecurity Our Achilles' Heel, As ICC Folds Case. The Star.
Kenyan Economy


THE news that the ICC has withdrawn charges against President Uhuru
Kenyatta had been expected, and at least by me, since Friday July 19,
2013 when I wrote then that:

‘The case against the President is crumbling like a stale biscuit’.

The markets had long ago looked through the interference that the ICC
presented and discounted it as a non-event. The Nairobi All-Share
Index struck a record high Thursday and Friday this week and has now
posted a 21.8 per cent return year- to-date. NASI entered a bull run –
characterised by a market that has rallied 20 per cent up – in June
2012, and has since remained relentlessly bullish. The All-Share has
rallied 155.2 per cent over the last three years, which is remarkable
when you consider the curveballs that it has had to deal with. Last
month, Kenya and Estonia were the best frontier markets world-wide.

NASI has been lifted to new highs recently by its two big hitters –
Safaricom and EABL. Safaricom surged a further 1.7 per cent on Friday
to a fresh record high of Sh14.80. A 19.3 per cent rally since
releasing first half earnings on November 4 has been a key catalyst in
the All-Share’s surge. The reaction is testament to how far
Safaricom beat earnings estimates. Its move to pipe 4G into homes is
now set to spike data spending big and the price is set to slice
through Sh15 as early as next week. EABL has been another key
precipitator of the bull move in the Nairobi All-Share. EABL has
surged 13.6 per cent over the last four
weeks. It has now lapped its Senator debacle and anecdotal evidence
confirms that the business is strengthening further. Kenya is set to
receive a meaningful stimulus from the sharply lower oil price, as the
commodity has been caught up in the cross- fire of a hot geopolitical
war and is set to stay lower and for longer
than the forward curve and the market expects.

Of course, this has negative and spill-over consequences for our very
nascent oil and gas sector, something I, for one, am not convinced
that our policy makers have internalised. This also will mark a
seismic shift for Africa, and its consumer economy in particular, as
high-flyers like Nigeria and Angola wrestle with a new price normal.

The shilling continues to confound expectations. I get asked to
comment on the slumping shilling. In response,  I always start with:

‘Well, actually it is not slumping, it’s doing rather well when you
consider that it is facing down a rampant dollar, which is at a more
than four-year highs against a basket of currencies’.

The shilling is at scratch for the year when you add in the carry [the
interest rate differential between the shilling and the dollar] and
that’s why I call it the ‘Teflon’ shilling. The performance is evenmore
impressive when you consider the cratering of hard currency tourism
and tea receipts.

The GoK tapped its record breaking $2 billion Eurobond issue for
another $750 million last month. Who would have believed that Kenya
could pull down $2.75 billion from the international capital markets?
Of course, we have to put this money to work and earn a return on it.

The $2.75 billion for Kenya is a breakthrough number whichever way you
choose to cut it. I remain of the view that the Eurobond cedes
important pricing power to international bond holders [we now have an
always price on Kenya’s credit] and that this will positively impact
policy making. Any hare-brained policy making will mean our credit
spread will take an immediate hit. This cause and effect is a good
thing in my view.

My friend Herve Gogo [who is now in Kinshasa but was once in Haiti and
during the earthquake and survived by taking cover under his desk]
told me the decision to let the IG of Police David Kimaiyo and the CS
for Interioragree with him.

Both had rock bottom ratings with the public and those ratings were
beginning to infect the President’s. In high stakes politics the world
over, that infection is always a signal. The point is that security
remains our Achilles’ Heel as it is in the West and for Nigeria as
well.

read more


In Kenya, police kill suspects with near-impunity
Kenyan Economy


Dr. Eric Thuo, a forensic specialist at the Independent Medico-Legal
Unit, a Kenyan human rights organization, studied gunshot-related
deaths in six  major urban areas between 2009 and 2014. By examining
post-mortem records,  he found 1,873 gun deaths. Police were involved
in nearly two-thirds of  them, many of them suspected assassinations.

“Illegal killings are the norm rather than the exception,” Thuo wrote
in his report.

Thuo’s findings, which he says are conservative, contradict Kenya’s
official statistics. Thuo was told by the Independent Police Oversight
Authority that only 120 people were fatally shot by police between
September 2012 and February 2014.

“The broader picture here is one of utter impunity,” said Leslie
Lefkow,  deputy director of Human Rights Watch’s Africa Division. “My
fear is that  the pattern of extrajudicial killings will only worsen.”

Human rights activists have blamed Kenya’s Anti-Terrorism Police Unit,
or ATPU, for some of the worst abuses. Suspects have been shot dead in
public  places, abducted from vehicles and courtrooms, beaten during
arrest and denied contact with their families or access to lawyers,
according to a Human Rights Watch report released in August.

Kenya Shilling versus The Dollar Live ForexPros 90.25

http://j.mp/5jDOot

Nairobi All Share Bloomberg +21.844% 2014

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

166.50 +0.66 +0.40%

Nairobi ^NSE20 Bloomberg +5.2375% 2014

http://j.mp/ajuMHJ

5,184.92 +15.04 +0.29%

@Safaricomltd share price data here +40.787% 2014

http://www.rich.co.ke/rcdata/company.php?i=NTU%3D

Interview with @BobCollymore CEO @Safaricomltd Nov 2014 @YouTube

https://www.youtube.com/watch?v=VVu_YJs3RDE&feature=youtu.be

With Thanks to @bobcollymore @SafaricomLtd for the Interview

http://www.twitpic.com/ec900x

@alykhansatchu  #CaptureKenya #UnexpectedKenya @Safaricomltd @MJCentre
@bobcollymore and Friends

pic.twitter.com/CEF5PDFxbg

@alykhansatchu "Kenya is made by the people not the landscapes"
@bobcollymore #CaptureKenya @SafaricomLtd @MJCentre

pic.twitter.com/bSwVy4Tlj9

Every Listed Share can be interrogated here

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

read more



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