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Satchu's Rich Wrap-Up
Tuesday 07th of July 2015

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Macro Thoughts

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Statement by IMF Managing Director Christine @Lagarde on Greece Press Release No.15/318 July 6, 2015

Ms. Christine Lagarde, Managing Director of the International Monetary
Fund (IMF), made the following statement today:

"The IMF has taken note of yesterday’s referendum held in Greece. We
are monitoring the situation closely and stand ready to assist Greece
if requested to do so."

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Pope Francis ‏@Pontifex Jul 2 A great challenge: stop ruining the garden which God has entrusted to us so that all may enjoy it.

“The world belongs to those who let go.” ― Lao Tzu, Tao Te Ching

“Water is fluid, soft, and yielding. But water will wear away rock,
which is rigid and cannot yield. As a rule, whatever is fluid, soft,
and yielding will overcome whatever is rigid and hard. This is another
paradox: what is soft is strong.” ― Lao Tzu

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Izzat ad Douri and ISIS
Law & Politics

Izzat Ibrahim ad-Douri, Saddam Hussein’s long-time deputy, was
reported dead (again) on April 17. An audio message on May 15
disproved this. Douri was the implementer of the Saddam regime’s
Islamization program in its later years and a key architect of the
insurgency after the regime was overthrown, which helped pave the way
for the Islamic State (ISIS).


Iraq was the Petri Dish. Isis is the Bacteria.

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China and Russia: the world's new superpower axis?
Law & Politics

Forget euro summits and G7 gatherings: for the countries that like to
style themselves as the world’s rising powers, the real summitry takes
place this week in central Russia, where Vladimir Putin will hold

Leaders of the Brics countries (Brazil, India, China and South Africa)
will meet Putin in Ufa on Wednesday, then make way for the Asian
powers grouped in the Shanghai Cooperation Organisation.

Russia and China are the common denominators, as in so much
geopolitics these days. The UN security council, Apec, the G20 -
Russia and China are the ever-presents, a powerful pairing whose
interests coincide more often than not.

Moscow and Beijing have lots in common apart from a 2,500-mile border,
economies dominated by state-run firms and oligarchies that can enrich
themselves as long as they play by the prevailing political mood of
the day.


The Pivot to kiev pushed Vladimir into Xi's embrace.

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Greece ‘48 Hours Away From Unrest’
International Trade

Greek Prime Minister Alexis Tsipras probably has 48 hours to resolve a
standoff with creditors before civil unrest breaks out and ATMs run
out of cash, hedge fund Balyasny Asset Management said.

Fund managers are questioning how the International Monetary Fund and
Europe’s leaders can seal a deal with Athens following the “no” vote
in a Greek referendum on Sunday. Sixty-one percent of voters rejected
austerity, increasing the likelihood of an exit from the euro area.

“I don’t see a good resolution any time soon,” Colin Lancaster, senior
managing director with Balyasny, a $9 billion fund based in Chicago,
said in an e-mailed statement. “The big question is whether the EU
adopts a strategy of waiting them out. The hope would be that the
unrest leads to a unity government or change in government.”

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Alexis Tsipras ‏@tsipras_eu Jul 5 #Greferendum #democracy #Greece
International Trade

@SvenssonNikolaj  Greece's creditors: @Angie_Merkel & @fhollande
account for € 122 billion of the debt @JeffDSachs #ECB


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29-JUN-2015 Greece to Unravel Faster After Referendum Call @TheStarKenya
International Trade

If Greece exits the Euro, it might well prove a Trojan Horse with
respect to Russia. China might lean in as well.

This situation has some very interesting geopolitical angles as well.
Tsipras has visited Vladimir Putin at least twice over the last four
weeks. If Greece exits the Euro, it might well prove a Trojan Horse
with respect to Russia. China might lean in as well.

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U.S., concerned that failing to keep Greece satisfied would ruin the European consensus on sanctions against Russia @bv
International Trade

U.S., concerned that failing to keep Greece satisfied would ruin the
European consensus on sanctions against Russia, has lobbied Merkel to
find a way to keep Greece in the euro.

Greece is a North Atlantic Treaty Organization member protecting the
alliance's southern flank, where Russia has been active lately, and
Tsipras has been well-received in Moscow.

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12-JAN-2015 The Year of G2 as Europe Off Balance @TheStarKenya
International Trade

@Schuldensuehner  #Greece's 10yr yields jump >18% as Grexit is now
the base case of most investors.


Merkel warns #Greece time Is Running Out to Save Place in #Euro as
Greek 2y yields jump >51%.


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Currency Markets at a Glance WSJ
World Currencies

Euro 1.1031
Dollar Index 96.44
Japan Yen 122.63
Swiss Franc 0.9439
Pound 1.5590
Aussie 0.7479
India Rupee 63.385
South Korea Won 1131.31
Brazil Real 3.1390
Egypt Pound 7.7351
South Africa Rand 12.3944

Dollar Index 3 Month Chart INO 96.441 [100.00 then 110.00]


Euro versus the Dollar 3 Month Chart 1.1031


Last year, the bank returned $675 million to the United States
Treasury, mostly from the fees and interest it charges on loans.


The deals it underwrote helped create more than 160,000 jobs. The
default rate was less than 1 percent.

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Oil prices stabilize after massive selloff Reuters

Front-month U.S. crude futures CLc1 were trading at $52.97 per barrel
at 0332 GMT (11.32 a.m. EDT), up 44 cents from the settlement on
Monday, when an almost 8 percent drop pulled the contract down to
levels last seen in April.

Brent crude LCOc1 was up 63 cents at $57.17 a barrel, following a more
than 6 percent drop in the previous session.

"Crude oil prices hit a two-month low amid mounting concerns over
economic stability in Europe and Asia. On the supply side, an increase
in Iranian supply is expected to compete with Russian sales when the
new supply hits the market," ANZ bank said on Tuesday.

Major global powers and Iran are negotiating a nuclear compromise that
could end sanctions against Tehran and open up oil exports into an
already oversupplied market, although diplomatic sources told Reuters
on Monday that important issues remain unresolved.

"Prices (for Brent) are effectively capped below $70 per barrel in the
near term. Structurally, the market is about 1

million barrels per day oversupplied through end 2016," consultancy
FGE energy said.

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06-JUL-2015 stock market crash represents probably the biggest political risk to the ‘’neo-totalitarian’’ [via @qz] Xi Jinping. @TheStarKenya
Emerging Markets

Over in China, the bull market is now being mauled by the bears. The
Shanghai Composite Index capped its steepest three-week decline since
1992 last Friday. Bloomberg reported that the benchmark equity measure
fell 5.8 per cent to 3,686.92 at the close, extending losses to 29 per
cent since the June 12 peak. Chinese shares have erased more than $2.8
trillion of value in three weeks. The Shanghai gauge has tumbled more
than twice as fast as any other index worldwide. Now consider that
there are more individual investors in the Chinese stock market than
there are communist party members and you will appreciate that this
stock market crash represents probably the biggest political risk to
the ‘’neo-totalitarian’’ [great description via Quartz] Xi Jinping.

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"Mr. Nkurunziza is fooling no one" - @washingtonpost's op-ed on #Burundi

In fact, Mr. Nkurunziza is fooling no one. Unquestionably, it is his
determination to baldly violate his country’s constitution and flout
the Arusha peace agreement of 2000 that has plunged his country, and
the Great Lakes region around it, into crisis. His reckless attempt to
stay in power must peacefully come to an end, and soon.

The escalating unrest is spilling over into neighboring countries. The
United Nations estimates that up to 200,000 Burundians who have fled
into Rwanda, Tanzania and Congo will need humanitarian assistance. On
Friday, the U.N. High Commissioner for Refugees appealed for $207
million for people escaping the crisis.

In Burundi, meanwhile, violent clashes continue in the capital of
Bujumbura. At least 15 people have died. On Saturday, Zedi Feruzi, an
opposition leader critical of Nkurunziza’s third-term bid, was gunned
down. As a result, opposition activists have suspended talks with the
government. The crisis is the worst that the landlocked country of 10
million has faced in the decade since the end of its war between the
Hutus and Tutsis, which left 300,000 dead.

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A woman arranges the small dried fish she sells at her market stall in the Musaga market.

The price of these fish has risen by 300%, market stall holders say

The protests have forced shops to close across the city, while
motorists have complained of a fuel shortage after queuing for hours
to fill their tanks

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Charted: South Africans haven’t been this reluctant to spend since the start of this millennium Quart Africa

South Africa’s consumer confidence is now at its lowest level since
2000. The index, released yesterday by First National Bank and the
Bureau of Economic Research, said confidence had nosedived to -15
points in June, from -4 in the previous quarter.

To put that into perspective, the index was at -6 points at the start
of the global recession in 2008. In 2000, when half a million jobs
were a lost as a result of a policy that didn’t favor job growth,
consumer confidence plummeted to -17 points. The worst ever was in
1985, when the index reached -33 as Western multinationals divested
from South Africa during Apartheid.

South Africa All Share Bloomberg +3.23% 2015


51,381.22 -585.86 -1.13%

Dollar versus Rand 6 Month Chart INO 12.3944


Egypt Pound versus The Dollar 3 Month Chart INO 7.7351


Egypt EGX30 Bloomberg -11.83% 2015  [big wobble lower -4.23% yesterday]


7,870.78 -347.4 -4.23%

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Investors will be hoping the sell-off doesn’t signal a collapse in that investor confidence.

Egypt’s benchmark stock index tumbled 4.2% on Monday as
foreign-exchange-related woes and violence in Sinai weighed on
investor sentiment.

The index crashed through some key support levels and is now down
nearly 12% for the year.

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Boko Haram’s Civilian Attacks in Nigeria Intensify

 The violent campaign by the Boko Haram militant group against
Nigerian civilians appeared to intensify late on Sunday with two
deadly attacks in Jos, a city in central Nigeria, underscoring the
challenge the country’s new president faces in trying to suppress the

The attacks killed at least 44 people, and possibly many more. Gunmen
and suicide bombers struck a popular restaurant and a mosque, shooting
worshipers who had gathered for Quranic readings during Ramadan. The
attacks brought the death toll from Boko Haram attacks in the last
week to more than 200.

The carnage in Jos was devastating. There was an explosion at the
Yantaya mosque, and worshipers began to flee. Umar Farouk Musa, a
spokesman for J.N.I., or Jama’atu Nasril Islam, the country’s main
Muslim organization, said that after the blast, “people emerged from
nowhere, five of them, holding sophisticated arms, shooting
sporadically into the crowd.”

Mr. Musa said he witnessed the mosque attack. “We saw these people
emerging from nowhere, covered with blankets,” he said in a telephone
interview from Jos, referring to the gunmen. “Before we knew it, they
disappeared into thin air. There were victims beyond what we could

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WE CANNOT afford to disappoint Nigerians, President @MBuhari told his party leaders at the weekend.

Last week, it emerged that Mr Buhari may not announce his new cabinet
before September — three months into his tenure and nearly six since
his election as president.

The information was greeted with dismay. The choice of the team is
expected to show the new administration’s economic direction and give
investors some comfort at a time of economic difficulty for Nigeria
brought on by a long period of low oil prices.

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Nigeria All Share Bloomberg -6.37% 2015

32,447.05 -91.29 -0.28%

Ghana Stock Exchange Composite Index Bloomberg +3.876% 2015


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Kenya’s New Central Bank Governor Hamstrung by Sliding Currency @Business
Kenyan Economy

Kenya’s new central bank governor Patrick Njoroge is hamstrung by a
sliding currency that’s challenging his ability to support an economy
hit by a collapse in tourism.

Njoroge, 53, chairing his first Monetary Policy Committee meeting on
Tuesday, is set to leave the benchmark interest rate unchanged at 10
percent, according to 14 of the 16 economists surveyed by Bloomberg.
Two predicted an increase of 50 basis points to 100 basis points.

Kenya’s shilling is struggling after a slump in tourism and lower tea
output reduced revenue from the nation’s biggest sources of foreign
exchange. Policy makers took action at an unscheduled meeting last
month to try and bolster the currency after it fell to a three-year
low, raising the interest rate by 150 basis points. That may provide
Njoroge, who took office on June 19, with some breathing space for

“Governor Njoroge has been handed a fireball because whatever action
he takes the shilling will continue to suffer,” because of external
pressures, Aly-Khan Satchu, chief executive officer of Rich
Management, an adviser to wealthy investors, said by phone from
Nairobi, the capital. “Raising rates will be a bullet in the head of
the Kenya-rising story. Economic growth slowed in the first-quarter
against wildly optimistic projections it would rise.”

East Africa’s biggest economy expanded 4.9 percent in the first
quarter from a year ago, down from 5.5 percent in the three months
through December, the statistics office said on July 1. The tourism
industry, Kenya’s largest foreign currency earner after tea exports,
contracted for a fifth consecutive quarter as a spate of violent
attacks by Somali militants kept visitors away from the nation’s
beaches and game reserves.

The central bank is scheduled to announce its decision on Tuesday
afternoon. Last month’s rate increase was the first since 2011 and
follows tighter monetary policy in African nations including Ghana,
Uganda and Angola as central banks attempt to protect their

The shilling fell 0.5 percent to 100.13 against the dollar as of 4:10
p.m. in Nairobi on Monday, taking its decline this year to 9.5
percent. Yields on the government bond due January 2024 climbed 110
basis points to 13.38 percent since it began trading on Jan. 21.

A weaker currency is adding to pressure on inflation, which
accelerated to 7 percent in June from 5.5 percent at the beginning of
the year. The government’s target is 2.5 percent to 7.5 percent.

Njoroge, who replaced Njuguna Ndung’u in an appointment that surprised
some analysts, was previously an adviser to a deputy managing director
at the International Monetary Fund in Washington.

In his first public comments last month about Kenyan monetary policy,
he told lawmakers that his priority will be to contain inflation to
help bring down commercial-bank interest rates in the country, which
he said were “very high.”

Kenya’s reputation as a stable investment destination has been damaged
since al-Qaeda-linked militants from Somalia began stepping up attacks
in neighboring Kenya, killing at least 516 people in the past 2 1/2
years. A pre-dawn raid by al-Shabaab on a university campus in Garissa
on April 2 killed 147 people.

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Kenyan Economy

Kenya's trade deficit has risen to 59 per cent in the first quarter of
the year. Meanwhile, the shilling continues to perform dismally
against the dollar. Aly Khan Satchu, CEO of Rich Management gives us a
perspective of these and other stories with CNBC Africa.

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Nairobi All Share Bloomberg -0.896% 2015
Kenyan Economy

Nairobi ^NSE20 Bloomberg -5.839% 2015 [+69.16 points since 6th June
when Index closed at a 2015 Low]


4,814.11 +1.54 +0.03%

Every Listed Share can be interrogated here


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

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