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Macro Thoughts

Home Thoughts

"Laughter is the language of the soul." -- Pablo Neruda

"I got lost in the night, without the light of your eyelids, and when
the night surrounded me I was born again: I was the owner of my own
darkness." -- Pablo Neruda

"I hunger for your sleek laugh and your hands the color of a furious
harvest. I want to eat the sunbeams flaring in your beauty." -- Pablo
Neruda

I am cajoling Hannah to join me for a visit to the Samburu preferably
during the Full Moon.

I speculate that a more immediate explanation for the quick sanctions
slapdown was that Kim Jung Un had compounded his diplomatic crime of
trying to split and circumvent the Six Party Talks united front
through unilateral outreach by dealing with the Monster of the Century
(actually monster of three weeks ago and I expect soon to resume the
crown) Vladimir Putin.

The PRC and the US, in fact, have a joint interest using the Six Party
Talks to neutralize independent North Korean diplomacy and keep the
initiative out of the hands of the DPRK and, for that matter, South
Korea, Japan, and the Russian Federation.

The PRC, I think, wants to maintain North Korea as an impotent buffer
state under its thumb, and the United States wants to quarantine North
Korea as a nettlesome nuclear power (and, perhaps, an important
non-Chinese justification for the enormous US's North Asia military
presence). Neither superpower, in other words, places a high priority
on seeing North Korean diplomacy evolve beyond the current futility

They all have had tiny little hands like the Elves in the Elves and
the Shoemaker. And this country has nuclear weapons and on its border
with its neighbour South Korea sit 25,000 American soldiers.

The media keeps chanting like a mantra, China will rein North Korea
in. It is not in their Interests to have a mad dog like North Korea as
an ally. And whether its the BBC, The New York Times or Radio France.
I venture this is an embedded narrative fallacy and that most Western
commentators are apparently popping Qaaludes.

China is taking a much more forward position and particularly in Asia,
its near abroad.

I believe North Korea is the perfect instrument for China

AFTER many debilitating jabs, Yemen's Houthi rebels appear to be
moving in for the kill against the staggering government of President
Abd Rabbo Mansour Hadi. The mostly Shia militiamen burst out of their
northern redoubt in 2011 and advanced progressively into the capital,
Sana'a, by cannily exploiting the country's power vacuum, engaging in
populist politics and launching a series of well-timed attacks.

Mr Hadi was said to be hiding at his private home, surrounded by armed foes.

The consequences of instability in Yemen extend far beyond its borders.

A damaged trolleybus after it was hit by a shell in Donetsk,
Ukraine. Photograph: Barcroft Media/TASS
http://www.theguardian.com/world/2015/jan/22/donetsk-bus-stop-shelling-kills-13

Washington (AFP) - President Barack Obama will not meet Benjamin
Netanyahu when the Israeli prime minister visits the United States in
early March, the White House said Thursday.

"The president will not be meeting with Prime Minister Netanyahu
because of the proximity to the Israeli election," said National
Security Council spokeswoman Bernadette Meehan.

'Chief Guest' @BarackObama Will Sit for Hours So That India and U.S.
Can Move Closer
http://www.bloomberg.com/news/2015-01-23/india-embraces-obama-as-part-of-long-term-plan-to-mend-relations.html

Barack Obama will do something in India on Monday that an American
president almost never does in public.

He'll sit in one place, in a foreign country, for hours.

Obama will be the official "chief guest" at India's Republic Day
parade. The first U.S. president invited to attend, his presence will
signal an increasingly close relationship between partners with a
sometimes prickly history.

Though presidents avoid lingering in public for security and schedule
reasons, Obama will remain on a reviewing stand alongside his host,
Prime Minister Narendra Modi, in the view of thousands of spectators
and a television audience of millions.

The unusual appearance -- also making him the only two-time U.S.
presidential visitor to India -- caps a remarkable turnaround in
bilateral ties since the December 2013 arrest of an Indian diplomat in
New York.

"As we look forward at the kind of global priorities where we want to
make progress the next two years, we literally cannot achieve our
objectives without cooperation from India," Ben Rhodes, Obama's deputy
national security adviser, told reporters this week.

While in Delhi, Obama will give a speech, attend a chief executives'
summit, and join Modi for a question-and-answer session on state-run
radio. The president and first lady Michelle Obama will also tour the
Taj Mahal in Agra, the white marble mausoleum that is India's
best-known tourist attraction.

Conclusions

India rising under @NarendraModi

Money printing

Europe printed a negative year-on-year deflation rate of 0.2 per cent
in December and the European Commercial Bank is imminently looking to
launch a Quantitative Easing [money-printing] programme.

The euro/dollar exchange rate is headed to parity and even lower in
2015. I know Goldman Sachs has a parity call for euro/dollar in 2016,
but I think the unravelling will happen in 2015 and a lot more
quickly.

The economic blowback from the frozen conflict in Ukraine with Russia
has exacted a price, as well. Economics and geopolitics are more
intertwined than ever before. If European bond yields - they are at
record all-time lows - are the 'signal in the noise', then this means
Europe is in danger of a major 'death-spiral'.

Germany (GDBR10)'s 10-year yield fell to a record 0.417 percent and
the nation's two-year rate touched minus 0.183 percent, also an
all-time low.
http://www.bloomberg.com/news/2015-01-23/italian-bond-gains-push-yield-below-1-5-on-ecb-purchase-plans.html

It was Lorenzo who told me 252 days ago that this decision was
essentially made and look it took 252 days, which speaks to the [lack
of] Speed in the decision making of such a big Institution.

Euro 1.3336  touched $1.1315, the weakest since September 2003
Dollar Index 94.34
Japan Yen 118.38
Swiss Franc 0.8725
Pound 1.4998
Aussie 0.7996 Australia's dollar fell below 80 U.S. cents for the
first time since 2009.
India Rupee 61.535
South Korea Won 1083.65
Brazil Real 2.5742
Egypt Pound 7.3939
South Africa Rand 11.4161

A gauge of the U.S. dollar was set for its highest since 2004 on
prospects America will outperform Europe and Japan, allowing the
Federal Reserve to become the first central bank among the major
economies to raise interest rates this year.

The Bloomberg Dollar Spot Index, which tracks the U.S. currency
against 10 major peers, gained 0.1 percent to 1,156.68.

"The prospect of the Fed statement next week -- which reiterates that
the economy is recovering well and most likely they need to raise
rates this year -- definitely underpins the dollar," Westpac's Callow
said.

The dollar is the biggest gainer in the past week among 10
developed-nation peers tracked by Bloomberg Correlation-Weighted
Indexes. It added 2.2 percent, the yen rose 1.4 percent and the euro
was down 0.1 percent.

The Federal Reserve has stopped printing dollars and I think the Fed
is just one headline economic print from raising interest rates.

A rate hike, even as small as 0.25 per cent, will be the catalyst for
a renewed surge in the dollar.

The Dollar Index is headed a lot higher - buy the dollar.

Crude Oil 5 day Chart INO 46.97
http://quotes.ino.com/charting/?s=NYMEX_CL.H15.E

Futures rallied as much as 3.1 percent in New York and 2.6 percent in
London after the Saudi royal court announced the death in a statement.
http://www.bloomberg.com/news/2015-01-22/oil-surges-after-saudi-media-reports-king-abdullah-s-death.html

Crown Prince Salman bin Abdulaziz will succeed Abdullah on the throne.
The kingdom, the world's largest crude exporter, led OPEC's decision
to maintain its oil-production quota at a meeting in November,
exacerbating a global glut that's driven prices lower.

"The passing of King Abdullah is going to increase uncertainty and
increase volatility in oil prices in the near term," Neil Beveridge, a
Hong Kong-based analyst at Sanford C. Bernstein & Co., said by phone.
"I wouldn't expect a change in policy in the near term to be known,
but the passing comes at a challenging time for Saudi Arabia."

Emerging Markets

Frontier Markets

Somali government soldiers and African Union Mission in Somalia
(AMISOM) peacekeepers secure the scene of a suicide car explosion in
front of the SYL hotel in the capital Mogadishu January 22, 2015.
@Reuters
http://af.reuters.com/news/pictures/articleslideshow?articleId=AFKBN0KV19220150122&channelName=#a=1

Turkey's Erdogan seeks closure of Gulen-linked schools in Africa
http://www.reuters.com/article/2015/01/22/us-ethiopia-turkey-erdogan-gulen-idUSKBN0KV1MA20150122

Therefore, the preeminent point to note is that protests in Burkina
Faso achieved escape velocity.

49,872.69 +283.90 +0.57%

South Africa's central bank will wait to see the second round effects
of the sharp drop in oil prices before making a policy response,
Governor Lesetja Kyanyago said at the Davos World Economic Forum.
http://af.reuters.com/article/investingNews/idAFKBN0KV10Y20150122

Dollar versus Rand 6 Month Chart INO 11.4166
http://quotes.ino.com/charting/index.html?s=FOREX_USDZAR&v=d6&t=c&a=50&w=1

9,898.86 +42.56 +0.43%

Nigeria's national security adviser said on Thursday he had advised
the country's electoral commission to consider delaying elections
planned for next month so that it has time to distribute voters' cards
to all those entitled to them.

Sambo Dasuki said during a talk at a London think-tank that the
Independent National Electoral Commission (INEC) had 30 million cards
left to distribute and had only managed to distribute 30 million in
the past year.

"What sense does it make to vote three months early when there are 30
million cards still with INEC? That's my position," Dasuki said.

The oil warfare specialist, US President Barack Obama, has
successfully wrestled crude price to below $50 a barrel, and with that
effected a choke- hold on Vladimir Putin's Russia, Venezuela and
others as far afield as Nigeria and Angola.
http://www.rich.co.ke/media/docs/038NSX1201.pdf

Ghana Stock Exchange Composite Index Bloomberg -2.34% 2015
http://www.bloomberg.com/quote/GGSECI:IND

South Africa's Standard Bank to open rep office in Ethiopia
http://af.reuters.com/article/investingNews/idAFKBN0KV1V520150122

"We go where our clients are. More and more of our clients are
starting to ask about Ethiopia," said Wondwosen, whose bank has
operations across the continent. "It just makes sense to for us to
start to get to know Ethiopia."

Conclusions

Manufacturers are very keen on Ethiopia.

Speaking with CBS News after the panel, Diamond said, "We are
operators -- we're not really just investors. And so we can impact the
vision, we can impact the capital, the liquidity, the funding. We can
impact the talent -- most important the technology and the platform --
so we can develop capital markets platforms to get lending to small
businesses and to entrepreneurs."

The NSE in full-year 2014 returned 19.2 per cent growth, taking
account of all listed shares, while Tanzania and Uganda markets traded
22.7 and 14.1 per cent higher respectively.

The worst performers in local currency terms were Zimbabwe where the
market lost 19.5 per cent and Nigeria which lost 16.1 per cent of its
value in the year.

In dollar terms, however, most markets had negative returns.
Performers with positive returns were only Kenya, Uganda, Tanzania and
Malawi. The worst performers were Ghana, Nigeria and Zimbabwe.

Ghana lost 31.9 per cent while Nigeria and Zimbabwe lost 27.9 and 19.5
per cent respectively in the year.

31-DEC-2014 The Nairobi All Share will post its third consecutive winning year.
http://www.rich.co.ke/media/docs/031NSX3112-2.pdf

CFC Bank raised Sh5.08 billion out of the anticipated Sh4 billion
corporate Bond Nation
http://www.nation.co.ke/business/CfC-Stanbic-Bank-Corporate-Bond-Expansion/-/996/2599042/-/otcev3z/-/index.html

The bond is priced at a fixed coupon rate of 12.95 per cent and
qualifies as Tier II capital, which is aimed at further strengthening
the bank's already adequate total capital position.

CFC Bank share price data here
http://www.rich.co.ke/rcdata/company.php?i=MTU%3D

Par Value:                  5/-
Closing Price:           124.00
Total Shares Issued:          395321638.00
Market Capitalization:        49,019,883,112
EPS:             12.97
PE:                 9.561

Kenya Shilling versus The Dollar Live ForexPros 91.75
http://j.mp/5jDOot

Nairobi All Share Bloomberg +1.4% 2015
http://www.BLOOMBERG.COM/quote/NSEASI:IND

165.17 +0.39 +0.24%

Nairobi ^NSE20 Bloomberg +1.18% 2015
http://j.mp/ajuMHJ

5,172.88 +12.92 +0.25%

Every Listed Share can be interrogated here
http://www.rich.co.ke/rcdata/nsestocks.php

Yesterdays Announcement of QE by the ECB has sent the Euro into a Tail
Spin and the Euro was last trading at 1.1178 versus The Dollar and is
unravelling at speed and head to Parity versus the Dollar and below.
International Markets have been extraordinary this year. It was only a
few short days ago that the Swiss Central Bank lifted its EURO-CAP and
sent the Swiss franc into orbit.
The Nairobi All Share surged 0.905% to close at 166.68. The All Share
is +2.326% in 2015 and within 0.5133% of an all time from last year.
The Nairobi NSE20 rallied  45 points to close at 5217.88
Volume picked up clock speed to total 772.67m with heavy volume action
in the Big Caps.
Nairobi is coming into 2015 off a 36 month Bull Run which saw
Investors bagging a 144% return [ex dividends] over that 3 year
period.
The Inflexion Point is roiling Nigeria but is set to provide a Silver
bullet a wonderful grassroots stimulus here in Kenya.
It was Pradeep Paunrana Esquire [at a KAM_Kenya Sundowner Function - I
told Betty Maina the CEO you have sprinkled Fairy Dust over these
Manufacturing Folks] who drew a similarity between 2015 and 2006-2007
when the Economy boomed.
His Comparison is we'll made. The Price Remission in Fuel will add
significant stimulus to the Economy.

Safaricom was the most actively traded share at the Securities
Exchange and eased 0.35% to close at 14.15 and traded heavy volume
action of 14.165m shares worth 200.48m. Safaricom is +0.7117% in 2015
and will rebound from these Levels. The Growth Story is very much
intact.

.@Safaricomltd share price data +0.7117% 2015
http://www.rich.co.ke/rcdata/company.php?i=NTU%3D

Kenya Airways rallied 3.66% to close at a 9.90 and traded 154,000
shares. Kenya Airways is +13.79% in 2015 as the share starts to play
catch up with what has been a worldwide Airline stock Rally. Recent
and decisive moves are also mending sentiment towards the stock.

@KenyaAirways share price data here +13.79% 2015
http://www.rich.co.ke/rcdata/company.php?i=OA%3D%3D

TPS Serena surged +6.16% to close at 38.75 and traded 62,700 shares.
The Tourism Sector has challenges in bending the Perception curve but
TPS Serena's share price has everything and then some baked into the
price and room to rally up to 50.00 if sentiment starts to mend
towards the sector.

Kenya Commercial Bank firmed 0.85% to close at 59.50 and within
touching distance well 0.8333% to be exact of a Life Time Closing High
of 60.00 reached in August last year. Todays move higher was on good
volume action of 2.458m shares worth 146.317m. Kenya Commercial Bank
is +4.385% in 2015 and this run up in 2015 is a bullish Price Signal.

.@KCBGroup share price data here +4.385% 2015
http://www.rich.co.ke/rcdata/company.php?i=MjE%3D

Equity Group Holdings traded 3rd at the Securities exchange and surged
+5.769% to close at 55.00 and traded 2.582m shares worth 142.866m.
Equity Bank has rallied +10.00% so far in January,

Equity Group Holdings share price data here +10.00% 2015
http://www.rich.co.ke/rcdata/company.php?i=MTc%3D

Standard Chartered Bank rallied +1.488% to close at 341.00 and traded
4,100 shares. Standard Chartered had 10 Buyers for every Seller
signalling an imminent and meaningful spike higher.

Jubilee Insurance rallied +5.65% to close at 486.00.

EABL rallied +1.2944% to close at 313.00 and traded 368,000 shares
worth 115.474m. EABL is +1.6233% in 2015 and in a closed period ahead
of a February Earnings Release. EABL targets 400.00 in 2015 and these
levels present optimal Entry Levels versus 300.00 which has major Buy
Side Support.

EABL share price data here +1.6233% 2015
http://www.rich.co.ke/rcdata/company.php?i=MzQ%3D

Mumias Sugar retreated a further 5.45% to close at 2.60 and the Supply
overhang traded out in todays session with 15.326m shares worth
39.965m traded. Mumias Sugar remains +33.333% in 2015 even after
correcting 25.71% off a 2015 high of 3.50 reached 19th January 2015.
The Price base out today.

Mumias Sugar share price data here
http://www.rich.co.ke/rcdata/company.php?i=Mzg%3D

Kenya power KPLC closed unchanged at 15.00 and transacted 3.084m
shares worth 46.276m. KPLC is +3.78% in 2015 but has corrected 6.83%
off a 9th January 2015 High. Strong Buy Side Demand is clustering just
below 15.00.

Athi River Mining firmed 1.85% and has room to rebound further.
East African Portland was high ticked +9.09% to close at 60.00 on just
100 shares.