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Satchu's Rich Wrap-Up
 
 
Thursday 29th of January 2015
 
Morning
Africa

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0930-1500 KENYA TIME
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
http://www.rich.co.ke

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@alykhansatchu Dear @modiba_tshepo Thank You for having me on your @CNBCAfrica Buy Africa Show
Africa


I am looking forward to being the Speaker on Saturday 31st January
@InterConnairobi

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#Mindspeak @YouTube
Africa


We serve Breakfast from 0930 @InterConNairobi

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@Ramah_Nyang Missed my conversation with @alykhansatchu on why - if at all - the ECB's QE matters to Africa? @CCTVNewsAfrica
Africa


Macro Thoughts

A 25 basis Points Rate hike from the FED could prove the maraschino
Cherry atop @BarackObama's sophisticated c21st #Oil and Currency
Warfare

Home Thoughts

"I am somewhat allergic to explanations that divide men and women into
frozen categories and attribute to each sex its characteristic virtues
and shortcomings." -- Mario Vargas Llosa

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@dorothyofisrael BREAKING: These are the IDF vehicles hit by Hezbollah earlier. (Photo: Channel 10).
Law & Politics


Conclusions


Hezbollah is in fact Israel's only serious Adversary [asymmetric, of course]

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Fed Raises Assessment of Economy While Staying Patient on Rates
International Trade


Conclusions

"The door is open for the first rate hike in June," said Jim
O'Sullivan, chief U.S. economist at High Frequency Economics in
Valhalla, New York

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Currency Markets at a Glance WSJ
World Currencies


Euro 1.1284
Dollar Index 94.66
Japan Yen 117.69
Swiss Franc 0.9097
Pound 1.5150
Aussie 0.7866
India Rupee 61.49
South Korea Won 1093.58
Brazil Real 2.5767
Egypt Pound 7.4721
South Africa Rand 11.6065

Dollar Index 3 Month Chart INO 94.66

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

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

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12-JAN-2015 The US economy is the 'come-back kid' of 2015.
World Currencies


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.

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Euro versus the Dollar 3 Month Chart 1.1284 [Target 1.000]
World Currencies


@nanexllc  What the first 15 seconds of $AAPL looked like today:

pic.twitter.com/hjFNUdNANP

@ReutersJamie  Update: Greek bank stocks not liking Syriza's
victory, -38.5% this week, on track for biggest weekly fall ever:

pic.twitter.com/fsectnGMMt

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Commodity Markets at a Glance WSJ
Commodities


The Bloomberg Commodity Index slid to a 12-year low this week, with
crude, hogs and copper leading losses in 2015.

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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 over- shoot, 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.


In its monthly oil market report, OPEC said output increased by
402,000 barrels a day in September to 30.47 million, representing the
biggest monthly gain since November 2011.

Iran and Saudi Arabia are offering their oil at the deepest dis-
counts since 2008. Essentially, the global system is awash in oil and
the US has displaced a lot of imports and these displaced barrels are
being offered at fire sale prices.

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 disruptions 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.
It is not too difficult to calculate who are the biggest losers in
this new price normal, and Vladimir Putin's Russia springs to mind
first.

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Gold 6 month INO 1282.97 [Toppy]
Commodities


Emerging Markets

Frontier Markets

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.@Lagarde Says African Nations Should Consider Oil-Subsidy Cut @IMFNews @Bloomberg
Africa


African nations should consider cutting fuel subsidies and oil
exporters must curb spending as a slump in crude prices takes its toll
on government revenue, International Monetary Fund Manging Director
Christine Lagarde said.

An almost 60 percent drop in oil prices since June has forced policy
makers in Nigeria, Africa's biggest crude producer, to devalue the
currency, raise interest rates to a record and consider shaving the
2015 budget by 8 percent. As President Goodluck Jonathan seeks
re-election on Feb. 14, he's avoided further cutting fuel subsidies
that cost as much as $7 billion a year, after an attempt to do so in
2012 sparked protests.

Subsidizing countries "should think about reducing and phasing out the
oil subsidies, taking advantage of the oil price and using public
finance more wisely than in undifferentiated energy subsidies,"
Lagarde said in an interview on Wednesday in the Rwandan capital,
Kigali. "For the exporting countries that are clearly taking a hit on
both accounts of reduced trade revenues and reduced public revenues,
they have to be very cautious with public spending, and reduce what
can be reduced and use whatever is left over as buffers."

Fuel subsidies in Nigeria cost as much as $7 billion a year, while in
Angola, Africa's second-biggest oil producer, the government is
seeking to lower subsidies to 1 percent of gross domestic product from
4.5 percent.

The IMF last week lowered its 2015 economic-growth outlook for
sub-Saharan Africa to 4.9 percent from a previous estimate of 5.8
percent in October, citing "shocks" to oil-producing economies from
falling prices. The growth forecast for Nigeria, the continent's
largest economy, was lowered to 4.8 percent from 7.3 percent.


"Shortly after the elections the authorities will have to reassess the
situation in view of the continued decline of oil prices to see if
more needs to be done," said Lagarde. "They may have to take more
measures."

Negotiations with Ghana over a loan program are continuing in order to
resolve "a few issues" before a proposal can be submitted to the IMF
board for approval, said Lagarde.

The West African nation is seeking as much as $1 billion in aid from
the lender to help ease a crisis sparked by a depreciation in the
currency and soaring public debt. The government expects to enter the
loan program by the end of February, according to Deputy Finance
Minister Cassiel Ato Forson.

In the Ebola-stricken nations of Liberia, Sierra Leone and Guinea, the
IMF will probably propose additional support valued at $130 million,
along with considering debt relief through, at least in part,
"re-purposed funding," she said. The viral illness killed at least
8,785 people in the three West African countries since an outbreak
began in Guinea in December 2013, according to the Centers for Disease
Control and Prevention.

A precautionary credit line for Kenya, East Africa's largest economy,
will probably be concluded by next month, said Lagarde. The IMF said
in November it had reached a preliminary agreement with Kenya for a
$750-million standby loan to help protect the economy against possible
market shocks.

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Dollar versus Rand 6 Month Chart INO 11.608
Africa


Egypt Pound versus The Dollar 3 Month Chart INO 7.4710

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

Egypt EGX30 Bloomberg +10.54% 2015

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

9,863.73 -82.85 -0.83%

Nigeria All Share Bloomberg -13.7% 2015

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

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Ghana Stock Exchange Composite Index Bloomberg -4.17% 2015
Africa


Ghana's cedi will be much more stable this year, after slumping 31
percent against the dollar in 2014, as it will be supported by robust
interventions, a senior central bank official said on Wednesday.

http://af.reuters.com/article/investingNews/idAFKBN0L11UN20150128

Yao Abalo, head of treasury at Bank of Ghana, told Reuters that the
central bank viewed the current pressure on the cedi as seasonal and
temporary, and had begun boosting liquidity support to calm market
nerves.

"We have started increasing our support for the market and we will
continue to do so vigorously this year, in addition to other plans to
ease foreign exchange uncertainties," he said. He did not give details
of what those plans were.

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.@Afren_PLC lost as much as 69 percent of its value to 5.365 pence, the lowest on record
Africa


''They're fighting for survival at the moment," Thomas Martin, an
analyst at Canaccord Genuity Ltd., said by phone. "There is still hope
for Afren shareholders with the potential Seplat offer and talks with
lenders, but it's a small hope."

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17-NOV-2014 Dwindling Oil Fortunes Not Good For Kenya
Africa


Madagascar could lose battle against locusts if funds don't come, UN warns

http://www.theguardian.com/global-development/2015/jan/27/madagascar-locusts-united-nations-food-agriculture-organisation?utm_content=bufferb0343&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer

Ethiopia expects to open a new railway line linking the capital Addis
Ababa with the Red Sea state of Djibouti in early 2016

http://www.reuters.com/article/2015/01/28/ethiopia-railway-idUSL6N0V74Z920150128

In the capital, a new $475 million light railway system will be tested
in the next few weeks before scheduled services start. It will be the
first city metro to operate in Sub-Saharan Africa.

For now, logistical difficulties such as poor roads and an old fleet
of trucks mean transporting goods from the capital to Djibouti can
take days. The new railway line will cut the journey time to about
eight hours.

"It is a game-changer for us," said Getachew. "It will be one of the
most vibrant economic corridors in the world."

Stanbic Bank Uganda (SBU) has signed an $85 million, 18-month loan to
fund its general business activities, the first time it has borrowed
from international loan markets, the main arranger of the facility
said on Wednesday.

http://af.reuters.com/article/investingNews/idAFKBN0L10K420150128

The lender joins a flurry of sub-Saharan African banks that have
tapped loan markets in recent weeks, as local institutions look to
increase their funding bases and international lenders seek higher
returns in emerging economies compared with the low interest rate
environment back home.

SBU will use the funds to back lending for trade-related finance in
chosen sectors such as energy, manufacturing, and infrastructure among
others.

It is paying an interest rate of 250 basis points over the London
interbank offered rate (Libor), a statement from Dubai's Emirates NBD
said.

The loan was originally targeting $75 million but was increased due to
interest from banks wanting to back the deal. The final list of
participants included Al Ahli Bank Kuwait, Al Khaliji Commercial Bank,
Commercial Bank of Qatar and Standard Chartered.

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US exports to East Africa's largest economy rose to $1.5 billion from $594.5 million the previous year -- representing a 165.3% growth US Department of Commerce. @BD_Africa @BobGodec
Kenyan Economy


The growth, which was the highest among America's top 10 trading
partners in Africa, enabled Kenya to dislodge Ghana from position
eight by value of imports.

Conclusions


@KenyaAirways was responsible for a great deal of this.

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M&A activity is 'pretty much done' in East Africa. old Mutual
Kenyan Economy


According to Old Mutual, insurance penetration in Kenya, which is the
largest and most advanced East African market, is a low 3.16% of GDP.
Gross written premiums are predicted to grow at a compound annual
growth rate of 18% through to 2020.

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@Safaricomltd share price data here +0.7117% 2015 [Price Target 20.00 in 2015]
Kenyan Economy


Par Value:                  0.05/-
Closing Price:           14.15
Total Shares Issued:          40044601000.00
Market Capitalization:        566,631,104,150
EPS:             0.57
PE:                 24.825

First Half Earnings through Sep 30 2014 versus through Sep 30 2013
H1 Revenue 79.335723b versus 69.201287b +14.6%
H1 Profit Before Taxation 21.106521b versus 15.908812b +32.7%
H1 Profit After Tax 14.711449b versus 11.260242b +30.6%
H1 EPS 0.37 versus 0.28 +32.1%

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EABL share price data here +1.948% 2015 [Minimum Price Target 400.00+ in 2015]
Kenyan Economy


Par Value:                  2/-
Closing Price:           314.00
Total Shares Issued:          790774976.00
Market Capitalization:        248,303,342,464
EPS:             8.83
PE:                 35.561

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@KCBGroup share price data +2.6315% in 2015 [Minimum Price Target 80.00 in 2015]
Kenyan Economy


Closing Price:           58.50
Total Shares Issued:          2984137017.00
Market Capitalization:        174,572,015,495
EPS:             4.82
PE:                 12.137

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Nairobi ^NSE20 Bloomberg +1.85% 2015
Kenyan Economy


5,207.04 -2.80 -0.05%

Every Listed Share can be interrogated here

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

@alykhansatchu  Thika Road at 630 am This is #Nairobi #Africa

pic.twitter.com/SV9okm5Lqu

@BillGates There are more mobile money accounts than adults in Kenya.
Here's why that's a good thing: 
http://b-gat.es/1D1pkar
https://twitter.com/BillGates/status/560310102994223104?s=03

Global consultancy McKinsey & Co has launched the search for its
Nairobi point man, who will be charged with scouting for advisory
deals in the East African region.

http://www.businessdailyafrica.com/Corporate-News/McKinsey-searches-for-Kenya-dealmaker/-/539550/2605290/-/16hll3/-/index.html

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