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Satchu's Rich Wrap-Up
 
 
Friday 02nd of October 2015
 
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Africa

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V.S. Naipaul, Miguel Street
Africa


“Look, boys, it ever strike you that the world not real at all? It
ever strike you that we have the only mind in the world and you just
thinking up everything else? Like me here, having the only mind in the
world, and thinking up you people here, thinking up the war and all
the houses and the ships and them in the harbour. That ever cross your
mind?”

read more



Flowering #jacaranda
Africa


“You have wakened not out of sleep, but into a prior dream, and that
dream lies within another, and so on, to infinity, which is the number
of grains of sand. The path that you are to take is endless, and you
will die before you have truly awakened.” ― Jorge Luis Borges

read more




Burkina Faso coup leader in custody
Africa


The general who recently took power in Burkina Faso during a
short-lived coup is in custody.

Gilbert Diendéré, who stepped down after about a week in power, has
been handed over to the gendarmerie, said Boureima Ouedraogo, a
spokesman for the defence ministry.

Diendéré, who led the September coup, sought refuge at the Vatican
embassy on Tuesday after the army opened fire on his supporters in the
presidential guard to force them to disarm, someone who works closely
with the clergy said.

Diendéré had called on his supporters in the presidential guard to lay
down their arms as part of the peace deal. He said that he was willing
to surrender to authorities.

“I am willing to turn myself over to face justice,” he said on
Wednesday. “I would like the people of Burkina Faso to find a solution
to this crisis through dialogue.”

The government vowed that Diendéré and his accomplices would receive a
fair trial. They are accused of trying “to stop the process to
democracy and liberty for the people of Burkina Faso”.

Conclusions

The Point is that the Putsch failed and that the Street repelled the
Putsch. Thats quite a moment and I think speaks to an infinitely more
powerful Street.

read more


10-NOV-2014 Ouagadougou's Signal to Sub-Sahara Africa The Star
Law & Politics


Therefore, the preeminent point to note is that protests in Burkina
Faso achieved escape velocity. Overthrowing incumbents is all about
acceleration, momentum and speed best characterised by the German word
‘Blitzkrieg’.

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





“We will chase terrorists everywhere'' 1999 describing his counter terrorism strategy
Law & Politics


“We will chase terrorists everywhere. If in an airport, then in the
airport. So if we find them in the toilet, excuse me, we’ll rub them
out in the outhouse. And that’s it, case closed,”1999, describing his
counter terrorism strategy.

read more



Russia in Syria: CIA-backed 'moderate' rebels struck by fresh air-strikes as Iranian troops 'pour into conflict'
Law & Politics


A military inferno is in the making in Syria after Russia unleashed
bombing raids on what it said were “terrorist” targets but which, on
early evidence, seemed to have included at least one CIA-backed rebel
group – and as reports surfaced of Iranian troops pouring into the
conflict.

In comments at the United Nations in New York, the Russian Foreign
Minister, Sergei Lavrov, sought to play down the notion of an
out-and-out confrontation with the United States in Syria, insisting
that Moscow saw “eye-to-eye” with the US-led coalition in wanting only
to combat Isis militants. But he declined to say that those targeted
might include groups explicitly backed by the US.

Mr Lavrov pushed back aggressively at the allegation made by US
Defence Secretary Ashton Carter that Moscow was “pouring gasoline on a
fire”, implying that American discomfort with Russia’s actions was
hypocritical.

“We know about many fires gasolined by the Pentagon in the region, and
we believe that our position is absolutely in line with international
law.”

Sources in Lebanon told the Reuters news agency that hundreds of
Iranian troops have entered Syria to bolster the beleaguered armed
forces of President Bashar al-Assad.  If confirmed, the combination of
that support from Iran and Russia risks not just strengthening Mr
Assad’s grip on  power but the conflict itself.

US officials corroborated the presence of Iranian soldiers but could
offer no numbers.

US Army Colonel Steve Warren told reporters: “We know the Iranians are
a part of this. We’ve known that since day one.”

In a statement, a Kremlin spokesman attempted to clarify matters,
saying Russia’s intervention was “really to help the armed forces of
Syria in their weak spots” as it combats extremists like Isis.

Mr Lavrov also made no bones, however, about Moscow coordinating its
attacks with the Assad forces, saying it is “recognised everywhere
that air strikes alone would not resolve the problem” of Isis. He
argued that Russia alone was acting legally because its actions were
invited by the regime. He said Moscow had no plans to extend it
anti-Isis strikes into Iraq, which had not invited Russia in.

However, the Iraqi Prime Minister, whose government recently signed an
intelligence sharing treaty with Russia, Syria and Iran, has said that
he would welcome Russian strikes against Isis within his country.

The week’s developments is growing into a full-blown political crisis
for President Barack Obama, who until just a few weeks ago was focused
solely on securing the nuclear deal with Iran, largely at the expense
of handling the growing Syria crisis.

Conclusions

Mr. Putin has intervened and tipped the Balance. Furthermore, he has a
bunch of non-Syrian Assets in his sights and thats why There is a lot
of squealing.

Mr. Putin's Model is evidently Chechnya.

read more







Currency Markets at a Glance WSJ
World Currencies


Euro 1.1175  this week's peak of $1.1282 struck on Tuesday
Dollar Index 96.25
Japan Yen 120.03
Swiss Franc 0.9780
Pound 1.5150
Aussie 0.7040
India Rupee 65.656
South Korea Won 1181.14
Brazil Real 4.0033
Egypt Pound 7.8308
South Africa Rand 13.8993

read more












Emerging Markets Set for First Annual Net Outflow in 27 Years
Emerging Markets


Investors are estimated to pull $540 billion from developing markets
in 2015, according to the Institute of International Finance based on
data for 30 nations. Foreign inflows will fall to $548 billion, about
half of last year’s level and below the amounts recorded during the
financial crisis in 2008. At the same time, local outflows are
accelerating amid heightened market volatility, pushing net flows into
negative territory.

Frontier Markets

read more


Playing for Time and Ultimate Power in Kabila’s Congo Foreign Policy JASON K. STEARNS SEPTEMBER 30, 2015
Africa


On Sept. 15, a crowd of several thousand rallied in Kinshasa, the
capital of the Democratic Republic of the Congo. Organized by
opposition parties, the demonstration was protesting what it perceived
as President Joseph Kabila’s attempts to postpone the country’s 2016
presidential elections. Albeit small and hardly a threat to Kabila,
the protests rankled his increasingly skittish government. Eventually,
a band of thugs — reportedly sent by the government — broke up the
protests, resulting in a bloody clash with opposition supporters. This
was no isolated instance: In January, government forces brutally
repressed opposition demonstrations. Authorities have also arrested
prominent youth activists and oppositions leaders over the past year.

The stakes of Congo’s upcoming elections are high. The country’s
constitution bars Kabila, who has ruled the country since 2001, from
running for a third five-year term. If he stands down in December 2016
at the conclusion of his current term, it would mark the first
peaceful transfer of executive power the country has seen in decades.
Under his rule, the Congolese economy has quadrupled in size, and the
country has largely emerged from a civil war (low-grade violence still
affects millions in the east). Senior officials, include some close to
the president, have also made a fortune thanks to the privatization of
the mining sector.

But the Congolese are bracing themselves for more unrest, as Kabila’s
onetime allies break with him and the streets of Kinshasa and other
major urban areas grow increasingly restless. Whether or not full-on
turmoil breaks out rests largely on the president’s decision about his
own political future. And so far, Kabila seems eager to extend that
future, indefinitely.

As a prerequisite for the November 2016 presidential election,
Kabila’s government has insisted on first holding local elections to
select mayors, local councilors, and administrators. But these
elections, slated for Oct. 25, will be the most complex the country
has ever attempted, with some 8,000 seats up for grabs. Election
officials agree, in private, that it will be impossible to hold the
polls this year due to their logistical complexity, cost — up to $1.1
billion — and a basic lack of resources. Kabila, however, seems intent
on forging ahead. On Aug. 26, he signed a law allocating seats for the
upcoming local elections, meaning that the government is determined to
proceed with risky polls that have a high likelihood of failure. If
they do fail, presidential elections will likely be delayed.

This fits with what Congo-watchers refer to as Kabila’s strategy of
glissement, French for slippage: creating a plethora of administrative
and political imbroglios requiring precious time and resources to
resolve. These imbroglios include the election scheduling issue, as
well as the administering of a national census, which has been shelved
for the moment. Another part of glissement is découpage, or cutting
up: the creation of at least 26 provinces to replace the current 11.
While the 2006 constitution called for this change, it was not until
last year that Kabila began to treat this as a priority, leaving many
to question his timing. Regardless of the rationale behind the
process, it will undoubtedly drain further resources from the state
budget and further delay the electoral process. Such is glissement.

If Kabila insists on staying on, it will almost certainly stir
trouble, both within Congo’s fractious political elite and on
Kinshasa’s unpredictable streets. On Sept. 14, seven political
parties, all members of the ruling coalition, wrote to the president,
denouncing his “unstated intention not to respect the constitution”
and suggesting that this was “a suicidal strategy.” The same day, all
seven signatories, including the national security advisor, the
minister of planning, and the vice president of the national assembly,
were promptly fired. According to officials close to this Group of
Seven, as these dissidents are now known, they are backed by Moise
Katumbi, governor of the mining-rich southern province of Katanga.

Alongside this political fracturing, Kabila also must manage the
mercurial tempers of Kinshasa’s 12 million people, most of whom are
desperately poor. Predicting an impending Congolese Spring is a common
pastime, but until recently there were few signs of sustained popular
mobilization. While the opposition managed to draw hundreds of
thousands of people to the streets in the run-up to the last
presidential polls in 2011 — an election widely believed to have been
rigged in Kabila’s favor — government forces quickly and brutally
suppressed unrest.

This time might be different. Under the leadership of Cardinal Laurent
Monsengwo Pasinya, the Catholic Church — one of the largest providers
of social services in Congo — has grown increasingly critical of
Kabila.

. Nonetheless, U.S. criticism of Kabila has grown increasingly
strident. During his tenure as the Obama administration’s special
envoy for Africa’s Great Lakes region, Sen. Russ Feingold called for
Kabila to step down at the end of his term on several occasions. His
Belgian, French, and British counterparts support this stance but have
been less outspoken.

But Kabila may be able to pivot away from Western support. Donor
contributions to Congo have declined in recent years, going from 42
percent of the country’s budget in 2010 to 19 percent in 2015, as
mineral production has increased dramatically. As of last year, Congo
is now Africa’s largest copper and cobalt producer, though the recent
commodity slump has dampened its ambitions somewhat. Still, though
global giants like Glencore have begun shutting down some mines, they
have sunk so much money into Congo that they are committed to toughing
it out.

While the $6 billion infrastructure-for-minerals deal concluded
between the countries in 2007 has been slow to reap dividends for both
sides, Kabila’s trip to Beijing in August and the recent sale of
lucrative mining concessions in Katanga to two Chinese companies —
Zijin Mining Group and Huayou Cobalt — confirm this eastward turn.

Critically, it appears that Kabila can still count on support from
influential neighbors on the continent, in particular Angola, which
shares (somewhat unequally, according to many Congolese) large
offshore oil fields with Congo, and South Africa, whose companies have
invested $865 million in Congo since 2006.

Conclusions

Kabila should not underestimate the Street because it is infinitely
more powerful today than ever before.

He can count on Angola and SA.

Moise Katumbi is a serious threat.

read more




Kinshasa Stock Exchange Africa The Frontier 2,073 days ago
Africa


This Photo is taken in a building about 100m from the Presidential
Palace in Kinshasa. It was a real learning experience for me to visit.

read more



Angola's c.bank plans further kwanza devaluations: sources
Africa


The kwanza traded officially at around 135 against the U.S. dollar on
Thursday but changed hands at around 250 per dollar on the black
market.

Angola's central bank devalued the kwanza by about 4 percent and
tightened U.S. dollar liquidity in September after a devaluation of 6
percent in June, but the currency has continued its decline on the
secondary market.

"The central bank is planning to devalue the currency again this year
and then gradually keep devaluing until the official rate is closer to
the parallel market," one banking source said.

The central bank was not immediately available for comment.

read more




10-AUG-2015 “The end is nigh’’ for crude oil and oil producers from Caracas to Luanda, from Riyadh to Abuja
Africa


The melt-down is coming.

Ryszard Kapuciski said: “If the crowd disperses, goes home, does not
reassemble, we say the revolution is over.”

The revolution is only just beginning.

read more




Nigeria All Share Bloomberg -9.92% 2015 [+4.509% over the last month]
Kenyan Economy


31,217.7 +392.77 +1.27%

Ghana Stock Exchange Composite Index Bloomberg -11.54% 2015

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

2,000.12 -9.40 -0.47%

read more


Strong Kenya GDP allays concerns on fragile public finances @johnaglionby @FT
Kenyan Economy


Strong second-quarter gross domestic product figures from east
Africa’s largest economy have failed to dim concerns that emerging
market turbulence and fragile public finances could dent the outlook
for one of the brighter spots in a continent seen as a global beacon
of growth.

On Wednesday, Kenya’s statistics bureau reported an annualised growth
rate of 5.5 per cent, a slight dip from the 6.0 per cent recorded in
the same period last year. On a quarterly basis, the economy grew a
seasonally adjusted 1.7 compared with 0.6 per cent in the first
quarter.

When set alongside Nigeria and South Africa — which recorded growth of
2.57 per cent and minus 1.3 per cent respectively in the same period —
Kenya is positively purring along.

“In the context of the global economy, which is in the slow lane,
we’re not doing that badly,” said Aly-Khan Satchu, a Nairobi-based
investment adviser. ”But from the inside you’d want to see more
activity.”

Kenya is somewhat insulated from global turbulence by being a net oil
and commodities importer. Its lack of exposure to the weakening
Chinese economy and its relatively strong currency also help. The
amount of foreign money invested in the bond market is also small, at
about 5 per cent, compared with many other emerging markets.

Agriculture, which accounts for 28 per cent of Kenya’s GDP, recorded a
big jump in growth, from 2.1 per cent to 5.4 per cent, led by maize,
fruit and vegetables benefiting from “good rains”, the statistics
report said.

Other standout sectors were electricity and construction, which grew
at 10.2 per cent and 9.9 per cent, respectively, on the back of heavy
public sector spending.

And the sixth successive quarterly contraction in the crucial tourism
sector was only 0.8 per cent — a marked improvement on the 19.3 per
cent in the second quarter of 2014.

On Tuesday, Patrick Njoroge, the central bank governor, said hotels
were reporting occupancy rates of 50 per cent, a significant increase
on last year.

John Ashbourne of Capital Economics champions Kenya as a “key regional
outperformer” this year and next.

“We believe that the economy should continue to accelerate,” he said
in a research note. “The country is benefiting from low oil prices,
accommodative fiscal policy, and surging Chinese investment in a
series of infrastructure projects.”

He forecasts growth of 6.7 per cent this year, more than double the
3.1 per cent forecast for sub-Saharan Africa as a whole.

Mr Satchu said the slowing effects of the central bank’s decision to
raise interest rates by 150 basis points in June and in July are
starting to be felt.

“All my forward indicators suggest the next quarters will be sub 5 per
cent,” Mr Satchu said, dismissing government and International
Monetary Fund full-year growth forecasts of about 6.5 per cent.

“I'm hearing, for example, that imports into the [region] in the third
quarter are 15 per cent down on a year ago.”

Mr Satchu also said the government should do more to pass on the
benefits of low oil prices to consumers. “Think what people could do
with an extra dollar a day in their pockets.”

The “good rains” are also not necessarily a cause for celebration.

Apurva Sanghi, the World Bank’s lead economist for Kenya, said the
impact of the weather “shows the need to manage the risk of excessive
flooding or droughts given the impending El Niño in the third and
fourth quarters”.

And while “there are some encouraging signs” in the tourism
statistics, Mr Sanghi said the sector “has yet to turn the corner”.

Security is also still very fragile with al-Shabaab, the terrorist
group, still active in Somalia and northeastern Kenya

The statistics bureau flagged up two other concerns, the balance of
payments and the current account deficit. The former went from a
surplus of Ks166bn in the second quarter of 2014 to a deficit of
Ks47bn ($450m) in the same period this year, while the current account
deficit deteriorated by 61.8 per cent to Ks151bn during the quarter.

Precarious government finances have also pushed short-term bond yields
higher — the cost of one-year debt is flirting with 20 per cent — and
President Uhuru Kenyatta has failed to resolve a five-week-long
teachers’ strike over pay.

If he caves to a court ruling ordering a pay increase of up to 60 per
cent then the public finances risk becoming even less healthy.

Razia Khan, chief Africa economist at Standard Chartered Bank, sees
“significant downside risks to growth” but is cautiously optimistic.

“I think Kenya is resilient,” she said. “It has been through a lot
worse in terms of its economy.”

read more


“This is definitely better than I expected,” said Aly-Khan Satchu, an independent analyst who runs Nairobi-based data vending firm Rich Management. @BD_Africa
Kenyan Economy


“It is a good outcome in light of the prevailing climate that is
underlain by turbulent exchange rate and rising interest rates.”

read more


Unga reports Full Year PAT +31.1% Earnings here
Kenyan Economy


Par Value:                  5/-
Closing Price:           43.75
Total Shares Issued:          75708872.00
Market Capitalization:        3,312,263,150
EPS:             5.27
PE:                 8.302

Unga Group Limited FY Earnings through 30th June 2015 vs. through 30th June 2014
FY Turnover 18.723250b vs. 17.002302b +10.1%
FY Operating profit 754.630m vs. 540.746m +39.6%
FY Other income 107.709m vs. 68.742m +56.7%
FY Finance costs [40.242m] vs. [26.003m] +54.8%
FY Foreign exchange losses [186.402m] vs. [15.750m]
FY Profit before taxation 635.695m vs. 567.735m +11.97%
FY Profit for the year from continuing operations 429.781m vs. 382.767m +12.3%
FY Profit for the year from discontinuing operations 192.085m vs.
91.727m +109.4%
FY Profit for the year 621.866m vs. 474.494m +31.1%
FY EPS 5.27 vs. 3.65 +44.4%
Final Dividend 1 shilling a share

Conclusions


Interesting business spanning Wheat, Fast Gro broiler feed range,
Amana range of Pulses. reentered bakery sector by acquiring a majority
shareholding in Ennsvalley Bakery.
Grain silo facilities being rehabilitated
increasing grain storage capacity at its Eldoret Plant
strong Earnings and on a single digit P/E

read more







 
 
N.S.E Today

The Shilling burst through 104.00 to trade at a fresh 1 month high of
103.95 last.
The Central Bank is burning Shilling short Positions via an ultra-high
interest rate regime.
This Ultra high interest regime has exerted downside Pressure on the
Equity Market.
I said the following to the John Aglionby of the Financial Times after
the 5.5% Q2 GDP Print.
“In the context of the global economy, which is in the slow lane,
we’re not doing that badly,” said Aly-Khan Satchu, a Nairobi-based
investment adviser. ”But from the inside you’d want to see more
activity.”
Mr Satchu said the slowing effects of the central bank’s decision to
raise interest rates by 150 basis points in June and in July are
starting to be felt.
“All my forward indicators suggest the next quarters will be sub 5 per
cent,” Mr Satchu said, dismissing government and International
Monetary Fund full-year growth forecasts of about 6.5 per cent.
“I'm hearing, for example, that imports into the [region] in the third
quarter are 15 per cent down on a year ago.”
Mr Satchu also said the government should do more to pass on the
benefits of low oil prices to consumers. “Think what people could do
with an extra dollar a day in their pockets.”
The All Share capped a torrid week by closing 1.709% lower at 143.16.
Big Cap Counters came under strong sell-side pressure.
The Nairobi NSE20 retreated 20.52 points to close at 4153.00.
Equity Turnover clocked 739.295m



N.S.E Equities - Agricultural

Sasini Tea and Coffee rebounded +4.83% to close at 16.25.



N.S.E Equities - Commercial & Services

Safaricom was the most actively traded share at the Securities
Exchange and retreated 3.34% to close at a 3 week Low of 14.45 and
traded 13.96m shares worth 202.273m. Safaricom rallied +12.63% August
27th through Sep 30th before correcting 4.62% this Thursday and
Friday.

WPP Scangroup slumped 8.33% to close at a 2015 closing low of 27.50.
Buyers were thin on the ground and Sellers outpaced Buyers by a Factor
of 6 to 1. WPP Scangroup has retreated 39.22% Year to date. Dyer and
Blair issued a bearish research note this week.



N.S.E Equities - Finance & Investment

Equity Group closed unchanged at 44.75 and traded good ticket size of
4.004m shares worth 179.406m. Equity Group has traded a 36.00-47.00
Price Range over the last 4 weeks.
Kenya Commercial Bank retreated 3.85% to close at 43.75 and traded
2.63m shares. Kenya Commercial Bank has corrected 10.71% lower since
closing at an 8 week high on Sep 29th.

Jubilee firmed +0.99% to close at 509.00 and traded 74,400 shares
worth 37.916m. Jubilee is +13.111% in 2015.

Pan Africa Insurance fell 6.97% to close at 20.00.



N.S.E Equities - Industrial & Allied

EABL closed 1.08% lower at a 4 week low of 274.00. EABL traded 362,900
shares. Some Folks are still investigating the sudden departure of the
CFO.



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