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Satchu's Rich Wrap-Up
 
 
Tuesday 27th of January 2015
 
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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Interview yesterday with @CNBCAfrica's @Bonneytunya
Africa


Macro Thoughts

Home Thoughts

"You have brains in your head. You have feet in your shoes. You can
steer yourself any direction you choose. You're on your own. And you
know what you know. And YOU are the one who'll decide where to go..."
-- Dr. Seuss, Oh, The Places You'll Go!

"You're off to Great Places!
Today is your day!
Your mountain is waiting,
So... get on your way!"
-- Dr. Seuss, Oh, The Places You'll Go!

"Keep cool but care" -- Thomas Pynchon, V.

"What goes around may come around, but it never ends up exactly the
same place, you ever notice? Like a record on a turntable, all it
takes is one groove's difference and the universe can be on into a
whole 'nother song." -- Thomas Pynchon, Inherent Vice

read more




Putin: Ukraine army is NATO legion aimed at restraining Russia
Law & Politics


The Ukrainian army is essentially a 'NATO legion' which doesn't pursue
the national interests of Ukraine, but persists to restrict Russia,
President Vladimir Putin says.

"We often say: Ukrainian Army, Ukrainian Army. But who is really
fighting there? There are, indeed, partially official units of armed
forces, but largely there are the so-called 'volunteer nationalist
battalions'," said Putin.

He added that the intention of Ukrainian troops is connected with
"achieving the geopolitical goals of restraining Russia." Putin was
addressing students in the city of St. Petersburg.

According to Putin, the Ukrainian army "is not an army, but a foreign
legion, in this case a foreign NATO legion, which, of course, doesn't
pursue the national interests of Ukraine."

Kiev has been reluctant to find political solutions to the crisis in
eastern Ukraine and only used the ceasefire to regroup its forces, the
president stressed.

"Unfortunately official Kiev authorities refuse to follow the path of
a peaceful solution. They don't want to resolve [the crisis] using
political tools," Putin said, adding that first Kiev authorities had
first used law enforcement, then security services and then the army
in the region.

"It is essentially a civil war [in Ukraine]. In my view, many in
Ukraine already understand this," Putin added.

NATO Secretary General Jens Stoltenberg has reacted to President
Putin's words, calling his statement "nonsense."

"The statement that there is a NATO legion in Ukraine is nonsense.
There is no NATO legion," Stoltenberg told reporters.

Conclusions


He has a point.

read more




Owners of $4 Trillion of Bonds Pay to Lend to the Government and Say They're No Fools @Bloomberg
International Trade


Bond prices are now so high that yields on more than $4 trillion of
the developed world's sovereign debt have turned negative. That means
investors effectively pay a dozen countries from Germany to France and
Japan to borrow.

Tan purchased German five-year notes when yields plunged to zero this
month. The debt has since rallied, pushing yields to an all-time low
of minus 0.06 percent last week. The rate was minus 0.017 percent at
9:25 a.m. London time.

All around the world, bond yields have hit one low after another.
Benchmark yields in all 25 developed nations tracked by Bloomberg have
fallen this year. In Switzerland, investors are paying the government
to borrow for longer than a decade.

For euro-area nations, average yields tumbled to a record 0.68
percent, data compiled by Bloomberg show.

"We're back to this return of capital and not return on capital time,"
said Chris Ahrens, director at Charlotte, North Carolina-based hedge
fund Round Table Investment Management.

Last week alone, 30-year bonds issued by Greece and Portugal, which
yield 7.71 percent and 3.35 percent, rallied by most among developed
countries tracked by Bloomberg. Demand for U.S. Treasuries sent the
30-year yield to a record low of 2.33 percent Monday.

Conclusions

read more


12-JAN-2015 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'.
International Trade


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'.

read more


Currency Markets at a Glance WSJ
World Currencies


Euro 1.1244
Dollar Index 94.90
Japan Yen 118.27
Swiss Franc 0.9029
Pound 1.5099
Aussie 0.7944
India Rupee 61.404
South Korea Won 1080.97
Brazil Real 2.5831
Egypt Pound 7.4389
South Africa Rand 11.4554

 The U.S. Federal Reserve starts a two-day policy meeting on Tuesday
and investors are keen to hear its take on the rash of policy easings
from the euro zone to Canada and Switzerland.

Dollar Index 3 Month Chart INO 94.90 [Target 100.0000]

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

read more


Peter Ng'eno (@PKANgeno) tweeted @FT: Dollar rally only just getting started
World Currencies


A typical dollar rally lasts roughly six to seven years, suggesting
this one is just getting started

read more





Data may show prices in the euro area are falling at close to the fastest pace since the shared currency was introduced 16 years ago.
World Currencies


Days after the European Central Bank president announced a 1.1
trillion-euro ($1.2 trillion) stimulus plan, data may show prices in
the euro area are falling at close to the fastest pace since the
shared currency was introduced 16 years ago.

read more





@GoldmanSachs Cohn Says Oil Prices May Hit $30 in Extended Slump
Commodities


Oil prices will probably continue to decline and could reach as low as
$30 a barrel, according to Gary Cohn, president of Goldman Sachs Group
Inc.

"We're probably in the lower, longer view," Cohn, a former oil trader,
said Monday in an interview with CNBC.

West Texas Intermediate for March delivery fell 44 cents to close at
$45.15 a barrel on the New York Mercantile Exchange, the lowest
settlement since March 11, 2009.

read more





Russia downgraded to 'junk' by S&P @FT
Emerging Markets


S&P said the downgrade, the first time in a decade that Russia has
been assessed as below investment-grade by one of the major credit
rating agencies, was a reflection of its belief that "Russia's
financial system is weakening and therefore limiting the Central Bank
of Russia's ability to transmit monetary policy".

The Russian central bank still holds plentiful reserves of $379bn, but
the combination of falling oil prices and western sanctions is rapidly
eroding them. The bank's reserves have tumbled $132bn since the start
of 2014 as it has intervened to slow the rouble's decline last year
and to bail out struggling banks.

Economists are anticipating a painful recession in Russia this year,
with the IMF predicting a 3 per cent contraction followed by a 1 per
cent drop in 2016.

Mr Szabo said that thanks to the drop in oil prices "the growth model
is lost for Russia".

"If the oil price continues to fall, Russian assets will continue to
lose value," he said. "Once oil price bottoms, then Russia will be
quite a good buying opportunity."

Conclusions

read more



Congo protests expose weakness of Kabila's coalition @Reuters
Africa


Protests that blocked a reform which could have extended Congo
President Joseph Kabila's rule have exposed deep rifts in his ruling
coalition and galvanized opposition, increasing the chance of further
unrest ahead of elections due next year.

Kabila took power in Democratic Republic of Congo in 2001 following
the assassination of his father, and won disputed elections in 2006
and 2011 in Africa's largest copper producer. But he is
constitutionally barred from seeking a third term.

A government bill to require a national census before the vote, which
the opposition said would have delayed it by years, led to four days
of street protests last week, in which rights groups said more than 40
people were killed by security forces.

With Western powers and the influential Catholic Church calling for
the reform to be scrapped, legislators bowed to public pressure at the
weekend and abandoned the census requirement in a dramatic climbdown.

With constitutional term limits looming for several presidents in the
region, not least in neighboring Congo Republic, the outcome of the
crisis is being closely watched across the continent.

For Philippe Biyoya, politics professor at the University of Kinshasa,
the most significant outcome of the showdown was the gaping divisions
exposed within the president's governing coalition.

Kabila's majority has been rocked in recent months by high-profile
defections, including the popular governor of his home province,
copper-rich Katanga, and Jean Claude Muyambo, head of a party which
withdrew from Kabila's coalition and was arrested in Kinshasa last
week as he helped organize demonstrations.

Several current members of coalition parties spoke out against the
census provision following the protests. The Senate, which typically
aligns with the government, voted unanimously to remove the measure
after the unrest.

"[The rifts] are almost irreparable ... The damage is too great. They
won't ever again be together," Biyoya said of the coalition of
Kabila's People's Party for Reconstruction and Democracy and a number
of smaller parties.

South African-based economic research group NKC said the blocking of
the provision could signal the "start of scheming and backstabbing"
among Kabila's allies who think that he will step down in 2016 and may
seek to succeed him.

"And the public mood continues to simmer with rage against the
president," it said. "We think there will be more trouble when the
intentions of Mr Kabila and his possible successors become clearer."

The withdrawal of the census provision also marked a major triumph for
opposition parties that have struggled to present a cohesive front
against the government or mobilize large numbers in the streets. And
it came without the presence of veteran opposition leader Etienne
Tshisekedi who has been in Europe for health treatment since August.

"This is the first time that you've seen popular pressure in the
streets of Kinshasa have a dramatic impact on policy," said Jason
Stearns, a Congo analyst at the Rift Valley Institute.

"The question of Kabila's term limits is turning out to be something
that a broad swathe of Congolese opinion can rally against regardless
of political affiliation, regardless of ethnic belonging."

Significantly, the opposition's calls for street demonstrations were
given a huge boost by student protesters at the University of
Kinshasa, where hundreds clashed on campus with police and members of
the military's elite Republic Guard.

While students played a significant role in an uprising in Burkina
Faso that toppled President Blaise Compaore in October when he tried
to scrap constitutional term limits, last week marked the first major
student protests against Kabila in years.

Opposition leaders, however, are wary of complacency, insisting that
the president and his inner circle remain committed to clinging to
power.

"I don't see this as being massive support for the opposition. Not
yet, from the perspective of 2016. I think it's more of a massive
opposition to Kabila staying in power."

read more



10-NOV-2014 Ouagadougou's Signal to Sub-Saharan Africa
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 Ouaga-
dougou 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.

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.

read more



Ivory mafia: how criminal gangs are killing Africa's elephants @AFP
Africa


Nairobi (AFP) - Shortly before 11 am on the last Saturday in May, a
heavily laden white Mitsubishi truck pulled into the Fuji Motors East
Africa car dealership in an industrial neighbourhood on the northern
edge of Mombasa.

The truck's cargo was not "household equipment" as declared, but 228
elephant tusks and 74 ivory pieces weighing a total of 2,152 kilograms
(4,700 pounds).

When Kenyan police officers raided the car lot five days later, they
refused a bribe of five million shillings ($55,000, 49,000 euros),
seized the ivory and arrested two men. The bust was one of the biggest
in the country's history but the suspected mastermind, Feisal Mohamed
Ali, aged 46, had escaped.

Ali was "alleged to be the ringleader of an ivory smuggling ring in
Kenya" according to Interpol, and in November the international police
organisation listed him among the world's nine "most wanted
environmental criminals".

"People who get apprehended are mainly the foot soldiers, the poachers
or foreign middlemen," said Mary Rice, executive director of the
London-based Environmental Investigation Agency, which recently
exposed the scale of ivory smuggling out of Tanzania.

"There hasn't been a single kingpin prosecuted," she said.

DNA tests on large ivory seizures over the last five years have shown
the vast majority is sourced from two areas: Tanzania's Selous Reserve
and Central Africa's Congo Basin rainforest. Almost all of it ends up
in large, consolidated stockpiles at the ports of Mombasa, Dar es
Salaam and Zanzibar.

Ivory is worth more than $2,100 per kilo at market but with arrests
rare, convictions infrequent and penalties low there are few
disincentives. "The profits make it worth doing even if you get
caught," said Roberts.

read more



Standard Chartered Sees Africa Future Amid Branch Network Review
Africa


Standard Chartered Plc (STAN), the British bank that has operated in
Africa for more than 150 years, said the continent remains part of its
consumer banking plans even as the lender reviews its global branch
network.

While the lender is considering closing branches as more customers
migrate to online and mobile transactions, it is still Standard
Chartered's "ambition to be the leading international retail bank
within our footprint in Africa, Asia and the Middle East," Diana
Layfield, Africa chief executive officer for the London-based lender,
said in an e-mailed response to questions on Jan. 23.

"With digital access comes a reduction in branch traffic, so it is
only natural for us to review our current branches and optimize our
digital platforms," she said.

Standard Chartered said last year it may close 80 to 100 out of more
than 1,200 branches globally and said this January it will cut about
4,000 jobs at its consumer operations to restore the bank's profit
growth. It hasn't said where the shutdowns or job reductions will be.
The lender rebuffed at least one potential buyer of its African
operations, according to two people with knowledge of the talks.

"As this is an ongoing process, we are unable to provide a geographic
breakdown at this stage," Layfield said. "The realignment of our
retail strategy is a global ambition to focus on cities that will
experience significant economic growth in the future."

About 100 jobs are under threat at the lender's Botswana unit,
Botswana Bank Employees Union General Secretary Lebogang Keabetswe
said last week.

Standard Chartered has offices in 16 African countries and has been
among the top three arrangers of syndicated loans in the sub-Saharan
region since 2010, according to data compiled by Bloomberg. Operating
profit at the Africa business fell 27 percent to $209 million in the
first six months of 2014 from the year-earlier period.

read more


South Africa All Share Bloomberg +1.22% 2015 [4 week Highs]
Africa


50,337.98 +521.41 +1.05%

The South [Johannesburg] had a very good run last week and it is ex-
pected that some of Draghi's 'free money' will flow into South Africa.

http://www.rich.co.ke/media/docs/038NSX2601.pdf

Dollar versus Rand 6 Month Chart INO 11.4541

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 7.4390

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

Egypt's pound weakened to 7.43 per dollar, from 7.39 at the last sale,
at a central bank auction, the weakest level it has been allowed to
reach since auctions began in December 2012 and the sixth consecutive
official depreciation.

Egypt EGX30 Bloomberg +10.21% 2015

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

Nigeria All Share Bloomberg -14.07% 2015

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

The unit closed at 191.10, a new record low against the U.S. dollar,
compared with Friday's record low close of 190.60 naira.

One dealer traded the naira at a one-off rate of 194.10 during mid-day session.

Over 100 people, mainly militants, died in fight for Nigeria's
Maiduguri: reporter @Reuters

http://www.reuters.com/article/2015/01/26/us-nigeria-violence-maiduguri-idUSKBN0KZ1LX20150126

Ghana Stock Exchange Composite Index Bloomberg -3.42% 2015

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

Tunisia begins marketing 10-year US dollar benchmark at 6% area

http://www.reuters.com/article/2015/01/26/tunisia-bonds-tunisia-idUSL6N0V530A20150126

read more



Old Mutual Plc said on Monday it had bought another 37.3 percent in UAP Holdings, taking its stake in the Kenyan insurer to 60.7 percent.
Kenyan Economy


The Anglo-South African financial services company will pay about
$155.5 million in cash for the stake bought from the Abraaj Group,
AfricInvest and Swedfund, it said in a statement.

Earlier this month, Old Mutual bought a 23.3 percent stake in UAP for
$97.6 million.

Old Mutual Spends Bulk of Africa War Chest on UAP Stake in Kenya

http://www.bloomberg.com/news/2015-01-26/old-mutual-spends-bulk-of-africa-war-chest-on-uap-stake-in-kenya.html

Old Mutual Plc (OML), which earmarked 4.3 billion rand ($374 million)
for acquisitions in Africa, increased its stake in Kenya's UAP
Holdings Ltd., meaning that the insurer has now spent more than half
of that war chest.

Old Mutual, which is expanding in Africa to profit from the
continent's fastest-growing economies, will now hold 60.7 percent of
UAP after purchasing a further 37.3 percent stake for $155.5 million
in cash, the London-based insurer said in a statement Monday. The
transaction takes its investment in UAP this month to $253 million.

"The majority stake we have secured in UAP, combined with the existing
Old Mutual businesses in Kenya, will provide the Group with the scale
and product breadth to capitalize on the significant growth expected
in the region."

Old Mutual said. UAP also has operations in Uganda, Rwanda, Tanzania,
South Sudan and the Democratic Republic of Congo. This deal follows
Old Mutual's acquisition of microfinance company Faulu Kenya DTM Ltd.

read more


26-JAN-2015 Kenyan Asset Markets have been Displaying a lot of Alpha
Kenyan Economy


AFRICA is now more interconnected to the world than ever before. The
mobile phone has been a silver bullet in connecting Africans to each
other and the world. The side effects of this increased and even hyper
connectivity in our cities is, I believe, directly responsible for
events in Ouagadougou, Burkina Faso, and now in Kinshasa, Democratic
Republic of the Congo. In Kinshasa, the Senate president Leon Kengo wa
Dondo said after the vote to discard the proposed census that:

 "We have responded to the street."

What is clear to me is that the street has a voice and has muscle.
This is a new development, in my opinion.

It was Pradeep Paunrana, chairman of the Kenya Association of
Manufacturers, who drew a parallel of the current events with the
2006/2007 period. You will recall that in the fourth quarter 2007,
Kenya grew at its fastest pace since independence. The boom [which
came horribly unstuck in 2008] then was built on the back of low fuel
and food prices and the wananchi having some money in their pocket. If
more than 41 million Kenyans have an extra dollar a day in their
pockets, on average, I venture this will represent a meaningful boost.
However, transmission of the low oil price is lag- ging big time
still, but it will catch up.

read more






Kenya Shilling versus The Dollar Live ForexPros
Kenyan Economy


Nairobi All Share Bloomberg +1.67% 2015

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

165.61 -1.07 -0.64%

Nairobi ^NSE20 Bloomberg +1.9% 2015

http://j.mp/ajuMHJ

5,209.84 -8.04 -0.15%

Every Listed Share can be interrogated here

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

Kenya's Rea Vipingo reports 18 pct fall in annual profit

http://www.reuters.com/article/2015/01/26/rea-vipingo-results-idUSL6N0V537F20150126

The producer of sisal, used to make rope, twine and other products,
said the profit decline was "wholly attributable to much lower
'theoretical' gains arising from the valuation of biological assets".

Rea said in November it would have to substantially lower the value of
its biological assets for the financial year to end-September. In 2013
a re-adjustment of those assets resulted in a net gain of 228 million
shillings.

read more



 
 
by Aly Khan Satchu (www.rich.co.ke)
 
 
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January 2015
 
 
 
 
 
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