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Satchu's Rich Wrap-Up
 
 
Monday 26th of September 2016
 
Afternoon,
Africa

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Macro Thoughts

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Brent Oil and Dollar via @auaurelija
Africa

Home Thoughts

Dropping off my two Daughters at University in the United Kingdom,
this week. Quite an emotional moment.

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Jerusalem ["And did those feet in ancient time"] Related Poem Content Details BY WILLIAM BLAKE
Africa


And did those feet in ancient time
Walk upon Englands mountains green:
And was the holy Lamb of God,
On Englands pleasant pastures seen!

And did the Countenance Divine,
Shine forth upon our clouded hills?
And was Jerusalem builded here,
Among these dark Satanic Mills?

Bring me my Bow of burning gold:
Bring me my arrows of desire:
Bring me my Spear: O clouds unfold!
Bring me my Chariot of fire!

I will not cease from Mental Fight,
Nor shall my sword sleep in my hand:
Till we have built Jerusalem,
In Englands green & pleasant Land.

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Brexit outcome is a serious career path for pundits Sep. 26, 2016, By ALY KHAN SATCHU @thestarkenya
Africa


As I wrote this article from Nottingham England, the land of Robin
Hood and Sherwood Forest, the Poetry of William Blake came to mind:

And did those feet in ancient time,

Walk upon Englands (7) mountains green,

I will not cease from mental fight,

Nor shall my sword sleep in my hand,

Till we have built Jerusalem,

In Englands green & pleasant land

Beneath the poem, Blake inscribed a quotation from the Bible: “Would
to God that all the Lord’s people were prophets” – Numbers Chapter
11:29. Prophesying the outcome of the Brexit (notwithstanding the
extreme caution being exercised by the Prime Minister Theresa May
[pictured] in triggering Article 50) is becoming a serious career path
for the punditocracy. The city of London is not the United Kingdom,
though many would have you believe that the rest of the UK is hanging
on the city’s coat-tails. One hundred thousand jobs would be at risk
if clearing leaves the UK, said London Stock Exchange Group Plc chief
executive officer Xavier Rolet. “We estimate, conservatively, that at
a very minimum 100,000 jobs, in risk management, compliance, middle
office, back-office support functions – by the way not just in London,
up and down the country – are implicated in supporting this business
and clearly could be at risk,” Rolet said in an interview with
Bloomberg Television on Friday. “But the point is that there are very,
very few financial centres around the world that could accommodate
such a global business.” Rolet’s comments come after executives at
global investment banks in London said they expect France and Germany
will prevail in a tussle over the clearing of $570 billion of euro
derivatives a day. We are now three months down the road from the
Brexit vote. In that period, the sterling pound has corrected -12 per
cent. The FTSE 100 Index has rallied +10 per cent (a great number of
the FTSE 100 companies are export-facing, and the 12 per cent fall in
the pound has been a boon), the FTSE 250 Index is +4 per cent and the
10 Gilt Yield has crashed 65 basis points lower to 0.73 per cent. The
pound was last at 1.2960 versus a 1.2799 multi-year low struck in the
immediate aftermath of the vote.

I remain constructive about the pound from these levels. My reasoning
is that everything negative has been baked into the price and we are
set to see some positive surprises. In particular, inflation will
surely pick up and that Gilt Yields, which are being artificially
suppressed by the Bank of England, will be impossible to suppress once
we get a big inflation print. The BOE will lose control of the
narrative. Higher yields will translate into strong support for the
pound and the shorts will be burned alive. One could argue that we
have entered a new age of populist policy-making, that the Brexit
begat the interest rate capping bill and Donald Trump. The bill came
into play at a time when private sector credit growth had already
slumped from 21.4 per cent a year ago to 7.2 per cent in July this
year. This might well register negative growth by year end.

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Donald Trump Jr's cruel comparison of refugees to Skittles shows how useless we are at understanding risk
Law & Politics


Donald Trump Junior last week demonstrated that ignorant tweeting can
be a hereditary trait. “If I had a bowl of Skittles and I told you
just three would kill you, would you take a handful? That’s our Syrian
refugee problem,” explained Junior’s tweet, which was illustrated with
a small bowl of the multi-coloured sweets.

As an analogy it is not only offensive but catastrophically flawed
because, as many swiftly pointed out, the actual risk of an American
citizen being killed by an immigrant is miniscule. The best online
rebuttals involved depictions of 20-metre high bowls of skittles
containing some 10 billion sweets to illustrate the actual risk of
grabbing a poisoned piece of candy (ie of being killed by a refugee).

Yet, while deprecating its nasty and irrational message, it is also
worth recognising the sly way the tweet played to the way our brains
often evaluate risk. The truth is we tend to wildly overestimate the
incidence of terrible things such as terror attacks and also our
chances of being caught up in them. So why do we do this?

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VISUAL JOURNEYS BY SIX PHOTOGRAPHERS
Law & Politics


THE APPEAL OF the road trip, or the long through-hike, or the
pilgrimage, is that the ‘‘point’’ is so deliberately minimal — to
arrive at, you know, the end — and the decisions involved so banal
(stop for gas now, or in a bit?) that the distinction between signal
and noise is blurred. The point of a photograph of a trail, or some
billboard half-seen out the window of a bus, is that it could easily
be exchanged for the image taken immediately before or immediately
afterward. The random sample communicates in one unpremeditated frame
all the significance that particular person’s drive down that
particular road could possibly contain. This is the aspiration common
to road-trip literature and road-trip photography: The moment at the
gas station is held, insistently, to express as much about the total
experience as the shot of the Eiffel Tower.

THE DANAKIL DEPRESSION, ETHIOPIA

My birth as a photographer took place in Africa: The first assignment
I ever took was in the Democratic Republic of Congo. In the Danakil, a
desert in Ethiopia, I felt this very real sense of nowhere, as if I
were suspended in time. It is such a wild place, and feels like the
heart of Africa. It’s the region where Lucy, the famous hominin, was
found; it was the start of humanity, and it feels like it. But it is
also such an extreme place to visit, one of the hottest in the world.
You can really only go during three months of the year — between
December and February — and even then it was so hot, I couldn’t do
anything after the morning. I felt terrible at first, but then
something happens — you get used to it. The area feels prehistoric.
You have all this light: It’s white and dusty, and there becomes a
kind of charm to a place without colors. But then you go a little
farther from the salt plains, and the landscape becomes a psychedelic
experience, all greens and reds and veins of minerals. And then there
are these other moments that were very dark, almost black, because we
had to arrive in the middle of the night to see the volcano. This was
a visual journey, to go from white to color to dark. It’s the cycle of
photography. The landscape really took me out of my comfort zone. It
is an atmosphere like hell. The noise of the lava, the gurgling, is
incredible. It’s one of the only countries in the world that lets
people so close to the crater of the volcano. I could feel my feet
burning, and at one point one of the legs of my tripod was melting
from the heat of the ground. But there were moments so full of joy and
so pure, like when my guide Ali ran into his friend in the middle of
nowhere, this vast white desert, and they were so happy to see each
other. They did the keke dance, a dance of joy. He told me that when
you meet an old friend, you dance like this, with your hand in the
air. It was so beautiful, because it was so unexpected.

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Exactly 3 months since Brexit vote. So how have UK assets done? Jamie McGeever
World Of Finance


Sterling -12%
FTSE 100 +10%
FTSE 250 +4%
10y gilt yield -65 bps to 0.73%

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Currency Markets at a Glance WSJ
World Currencies


Euro 1.1227
Dollar Index 95.48
Japan Yen 100.97
Swiss Franc 0.9703
Pound 1.2978
Aussie 0.7619
India Rupee 66.745
South Korea Won 1108.84
Brazil Real 3.2459
Egypt Pound 8.8722
South Africa Rand 13.7184

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Your Morning Sip Will Cost More Thanks to Brazil's Weather Woes
Commodities


The buzz of the morning alarm might start to sound even more painful
thanks to topsy-turvy weather in Brazil that’s pushing up the cost of
commodities that find their way into your breakfast drink.

Across the country’s coffee belt, dry weather is hurting production of
arabica and robusta beans. At the same time, too much rain in citrus
areas hampered production of orange juice, while frost in
sugar-growing regions has cut yields. Brazil is the world’s biggest
producer and exporter of all three products, underscoring why supply
problems have prompted investors to increase bets on price gains -- a
combined measure for holdings in the three products is at an all-time
high.

Sugar and orange-juice futures in New York are already trading near
four-year highs. Arabica coffee, the variety favored by Starbucks
Corp., last week reached the costliest since February 2015. Brazil’s
weather problems are coming after El Nino spurred drought across Asia
earlier this year, reducing sugar and coffee supplies. In Florida, the
No. 2 orange-juice supplier, a disease-spreading bug has devastated
crops.

Money managers are positioning for higher prices. The net-long
position in sugar climbed 6.4 percent to 284,448 futures and options
in the week ended Sept. 20, Commodity Futures Trading Commission data
published three days later show. It was the biggest gain in six weeks.
Investors increased their bullish holdings of arabica coffee to the
highest since October 2014, while wagers on an orange-juice rally rose
for a fourth straight week. A combined measure for holdings in three
commodities reached the highest since the data starts in 2006.

Raw-sugar futures have climbed in the past three weeks, the longest
streak since June. Prices touched 23.88 cents a pound on Sept. 22, the
highest since July 2012. The sweetener has soared 49 percent this
year, the biggest gain among the 22 components of the Bloomberg
Commodity Index.

As robusta supplies grow scarcer, more roasters are increasing their
use of arabica beans and driving up those prices. Arabica futures in
New York are heading for a fifth straight monthly increase, which
would be the longest streak since 2010. They’re up 19 percent this
year.

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Hugo Chavez's Dream Is Dead but His Fanatics Refuse to Fade Away Bloomberg Businessweek
Emerging Markets


From a distance, Venezuela, with its crashing oil prices and alarming
shortages, appears on the brink of political upheaval. Almost 1
million people marched in Caracas on Sept. 1 to pressure President
Nicolás Maduro into allowing a referendum for his recall. The
overturning of leftist populism—sweeping across commodity-dependent
South America from Argentina to Brazil to Peru—seems on its way here,
the country where the movement had its most elaborate flowering.

But the infuriated judge illustrates something that’s been
insufficiently appreciated: The levers of power—the judiciary, the
military, the oil, the election commission that must decide on the
recall referendum—are firmly in the hands of the president. Among
analysts and Maduro’s opponents, there is a tendency to overstate how
near to collapse things are, out of understandable frustration and
wishful thinking. Can a government, no matter how much oil it has
underground, ignore the laws of markets, make a mockery of its
institutions, spin half-truths, and pay no price? A reckoning must be
due, these opponents insist.

Even as the suffering increases for the country’s 30 million
inhabitants, the government appears—for now—secure. Barring a
successful recall before the end of this year, the president won’t
face a vote until 2018. Maduro has factions to balance and appearances
to maintain. He faces open criticism. This isn’t a dictatorship like
Saddam Hussein’s Iraq. But the boundaries of candor remain
purposefully vague, and those who have profited from the revolution
are holding on firmly while the opposition flails, unable to grab hold
of a way to restore the ruling status many of its members enjoyed
before they lost power at the end of the 20th century.

Venezuela is a land of natural bounty. Oil fills its depths. Mango and
avocado trees grow along the side of the road. The Caribbean whispers
offshore. Venezuelans often say this abundance has led to a charming
if chaotic passivity. For two decades after the late 1970s, an oil
bust led to exceptional suffering for the poor. Then, Lieutenant
Colonel Hugo Chávez, with his Robin Hood promises, blew the doors off
elite control of the nation with a victory in the 1998 elections.
Psychiatrist Cecilia Carvajal recalled that she and the other doctors
in her large private Caracas clinic openly expressed alarm. Then she
noticed the happy faces of her department’s secretaries. “That was
when I realized we had no idea of the resentment,” she says.

Chávez did. He expropriated land and industries and replaced judges,
officers, and oil executives. He called it the Bolivarian revolution
and declared it would relieve suffering and inequality. Chávez died in
2013 after picking as his successor Maduro, a man with far less
charisma who has had to contend with plunging oil prices and a
radically shifting regional outlook. His popularity is barely 20
percent. In some ways, he’s the equivalent of Raúl Castro to Fidel,
but, unlike Raúl, he shows few signs of economic pragmatism.

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Citi sees an unprecedented Mexican rate increase to arrest a plunge in the peso triggered by Donald Trump @economics
Emerging Markets


Frontier Markets

Sub Saharan Africa


The court, in a ruling broadcast on state TV around midnight on
Friday, declared the request by opposition leader Jean Ping invalid on
technical grounds. Instead, the court honored Bongo’s request that the
results of 21 polling stations be canceled, awarding him a higher
percentage of votes.

Bongo received 51 percent of ballots cast, said Marie-Madeleine
Mborantsuo, president of the court, from 49 percent previously
announced by the electoral commission.

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19-SEP-2016 Its all about turnout (something Gabon's @PresidentABO worked out a while back)
Africa


Its all about turnout (something Gabon’s President Ali Bongo Ondimba
worked out a while back - Bongo’s stronghold Haut-Ogooue province
clocked a a 99.93 per cent turnout versus a countrywide average of
less than 50 per cent, with 95 per cent voting in favour of Bongo).

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Statement of the Prosecutor of the International Criminal Court, Fatou Bensouda, following the recent violence in the Democratic Republic of the Congo
Africa


My Office has been investigating in the Democratic Republic of the
Congo since 2004 and our work continues. If acts constituting crimes
within the jurisdiction of the Court are committed, I will not
hesitate to act and take all necessary steps to prosecute those
responsible, in line with the principle of complementarity.

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Congo's president must step down Washington Post
Africa


The window of opportunity is rapidly closing. Mr. Kabila is certainly
weighing his options and taking note that other African leaders have
treated democracy as a trifle. A last effort must be made to forestall
the making of another dictator for life.

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East Africa Oil Pipelines a Boon to Private Investors, AfDB Says
Africa


Oil pipelines planned in Kenya and Uganda to ferry crude from fields
to port present opportunities for private financiers keen to gain a
foothold in East Africa’s energy industry, the African Development
Bank says.

“Nobody has ever, ever lost money financing pipelines,” Gabriel
Negatu, the Abidjan-based lender’s regional director for East Africa,
said in an interview in Kenya’s capital, Nairobi, on Sept. 23. If
there is oil flowing, “it’s generally viable,” he said.

East African countries are in a race to start exploiting crude oil
reserves estimated at 1.7 billion recoverable barrels in Uganda and
750 million barrels in neighboring Kenya. Both nations are planning to
start construction on pipelines by 2018, even as oil prices are stuck
at less than half the level of three years ago, straining finances of
producers across the continent.


16-MAY-2016 :: The Geopolitics of Pipelines in East Africa @TheStarKenya
http://www.rich.co.ke/media/docs/PX_012NSX1605.pdf

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Armed with fintech and fuelled by data: Africa's banker of tomorrow Africa Report
Africa


HERE COME THE DISRUPTORS

Just as disruptors like Uber and Airbnb are shaking up the taxi and
hotel industry, new competitors want to eat the lunch of the banks in
core banking functions: payments, storing value and credit. They will
do it without bringing with them expensive ‘legacy’ infrastructure
such as brick and mortar retail outlets. And they will use ‘big data’
to swiftly gauge creditworthiness. “In 10 years’ time, the technology
will be so good,” says Andrew Nevin, chief economist at PwC
consultants in Lagos, “that when someone applies for a loan, the only
question you will ask is: ‘Can we access your data?’”

For Brett King, co-founder of United States-based banking app Moven,
by 2025 the dominant form of bank account will be mobile. “It won’t
even be close. Banks that are geared towards distribution of bank
products and services using physical branches will be in rapid
decline.”

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@Citi says rate caps to hit small banks hardest @BD_Africa
Africa


The capping of interest rates could force small Kenyan banks out of
business to the advantage of big lenders, researchers at Citibank have
predicted.

“Assuming that the top five to 10 banks, in a country with over 40,
are the best placed to drive this sort of strategy, one would expect
that many of the smaller banks could potentially be forced out of
business,” reads the Citi report.

Seven large banks, including KCB, Equity, and Co-op Bank, had a
combined market share of 58.2 per cent last year when 21 institutions
classified as small lenders had a market share of 9.24 per cent.

Citibank says consolidation of Kenya’s banking industry is likely to
be the biggest impact of interest rates regulation, with small lenders
teaming up or being acquired by their larger rivals.

Conclusions

The Small Banks are ''zombie'' Banks, now.

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CBK says foreign banks targeting local market despite new rate cap @BD_Africa
Africa


“I get a lot of banks which want to enter into our jurisdiction, from
at least eight jurisdictions among them Japan, as a result of the
TICAD conference, the United States, the UAE and South Africa,” said
CBK governor Patrick Njoroge.

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I&M is to raise Sh750 million from ordinary shareholders who will be offered new shares at a price that was yet to be determined as of Friday.
Africa


Another Sh600 million is to be raised specifically from the
development finance institutions (DFI), giving them an extra
investment opportunity that is expected to raise their ownership in
the company.

“Issue of new shares to DFI shareholder/(s) on such terms and
conditions as may be determined by the directors for up to an amount
not exceeding 40 per cent being Sh600 million of the entire proposed
capital raise amount,” I&M said in a notice ahead of its recent
extraordinary general meeting.

The company will also seek to raise Sh150 million from trustees of its
employee share ownership plan (ESOP).

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I&M share price data here -13.00% 2016
Africa


Closing Price:           87.00
Total Shares Issued:          392362035.00
Market Capitalization:        34,135,497,045
EPS:             17.12
PE:                 5.082

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Kenya Shilling versus The Dollar Live ForexPros
Africa


Nairobi All Share Bloomberg -7.95% 2016
http://www.BLOOMBERG.COM/quote/NSEASI:IND

134.12 +0.67 +0.50%

Nairobi ^NSE20 Bloomberg -21.45% 2016
http://j.mp/ajuMHJ

3,174.15 +4.51 +0.14%

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

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by Aly Khan Satchu (www.rich.co.ke)
 
 
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September 2016
 
 
 
 
 
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