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Satchu's Rich Wrap-Up
Friday 09th of September 2016

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Prompt Board Next day settlement
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The Latest Daily PodCast can be found here on the Front Page of the site


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My Draghi quote of the day: It's difficult to judge adequate amount of world liquidity. @Schuldensuehner

Home Thoughts

“A screaming comes across the sky.” ― Thomas Pynchon, Gravity's Rainbow

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Frank Sinatra - New York, New York.@Youtube

I want to wake up in a city
That doesn't sleep
And find I'm king of the hill
Top of the heap

These little town blues
Are melting away
I'll make a brand new start of it
In old New York

If I can make it there
I'll make it anywhere
It's up to you
New York, New York

And If I can make it there
I'm gonna make it anywhere
It's up to you
New York, New York, New York

The First time I visited New York it was for Credit Suisse First
Boston and I stayed in a suite in the Ritz-Carlton.

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The Ritz-Carlton New York, Central Park, New York City -

I spent the entire Saturday just walking the City and it was Puerto Rico day.

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29-11-2010 The Hermit Kingdom @TheStarKenya
Law & Politics

They all have had tiny little hands like the Elves in the Elves and
the Shoemaker. And this country has nuclear weapons and on its border
with its neighbour South Korea sit 25,000 American soldiers.

FAR away in distant lands lies the Hermit Kingdom. This land is ruled
by The House of Kim and its capital is Pyongyang. The first and
‘Eternal’ President was Kim Il-sung and his successor Kim Jong-il
whose designated successor is Kim Jung-un. They all have had tiny
little hands like the Elves in the Elves and the Shoemaker.And this
country has nuclear weapons and on its border with its neighbour South
Korea sit 25,000 American soldiers. Last week the North shelled the
South and issued all kinds of threats. “The DPRK (North Korea) will
deal a merciless military counter-attack at any provocative act of
intruding into its territorial waters in the future.’’ President Obama
sent the USS George Washington to the Yellow Sea and now here we sit
watching developments and trying to model what is happening and what
might happen? In reality, we are actually navigating in uncharted
waters. The media keeps chanting like a mantra, China will rein North
Korea in. It is not in their Interests to have a mad dog like North
Korea as an ally. And whether its the BBC, The New York Times or Radio
France. I venture this is an embedded narrative fallacy and that most
Western commentators are apparently popping Qaaludes. Let me tell you
why. China is taking a much more forward position and particularly in
Asia, its near abroad. I believe North Korea is the perfect instrument
[the Attack Dog] for China to show those who choose to operate outside
their sphere of influence [and by extension, in the US’] that there
will be a very heavy price to pay.I venture that the Chinese are quite
happy to see those 25,000 US soldiers run right into the sea and we
need to grow up [as does the media] and see it for what it is. North
Korea and China see a weak and tottering President Obama and this
flashpoint represents the beginning of a roll back of US Power. And
you know the battlefield is not just the military one. Its a financial
one as well. Did you know the South Korean President has a military
war room and an economic war room and they say he spends more time in
the economic war room. Think about that for a moment. Not one
commentator has connected those dots. Just because China does not flex
its ability does not mean it cannot. If you have the power to do
something and have not that does not make you less powerful.

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The Russian president on the future of Europe, why he's bullish on Gazprom, and the coming U.S. election. Interview by John Micklethwait / September 8, 2016
Law & Politics

Putin, the longest-ruling Russian leader since Leonid Brezhnev,
weighed in on the U.S. election, as well as his relationship with
Turkey’s Recep Tayyip Erdogan and Syria’s Bashar al-Assad. Here are
excerpts from their conversation.

John Micklethwait: There seems to be the beginnings of a political
deal with Japan where you might give up one of the Kuril Islands in
exchange for greater economic cooperation. Are you open to a deal of
that sort?

Vladimir Putin: We don’t trade in territories, although the problem of
a peace treaty with Japan is, of course, a key one. And we would very
much like to find a solution to this problem with our Japanese
friends. We had a treaty signed in 1956, and, surprisingly, it was
ratified both by the Supreme Soviet of the USSR and by the Japanese
Parliament, but then the Japanese side refused to adhere to it, and
then the Soviet Union basically nullified all the agreements within
this treaty.

I’ve been critical, but I’ll repeat: We hold 40 percent of our
reserves in euros, and it’s not in our interest for the euro zone to
collapse. Although I don’t rule out that there could be some decisions
made that would consolidate a group of countries with equal levels of
development and thereby, in my opinion, strengthening the euro.

By the way, we are the world’s leader in terms of natural gas exports,
with a global share of about 20 percent. In the export of liquid
hydrocarbons, we’re also among the leaders. We’ve been first in liquid
hydrocarbon exports. … On the whole, Gazprom is in great shape and is
increasing exports to its traditional partner countries.

Would you still be in favor of a production freeze if the Saudis and
Deputy Crown Prince Mohammed bin Salman want that?

He is a very energetic statesman, and we really have struck up a
friendly relationship. This is a man who knows what he wants and knows
how to achieve his goals. But at the same time, I consider him a very
reliable partner with whom you can reach agreements and can be certain
that those agreements will be honored.

But still, we weren’t the ones who rejected the idea of freezing
output levels. It was our Saudi partners who, at the last moment,
changed their view and decided to take a pause in taking this
decision. But I want to repeat: Our position hasn’t changed, and if
Prince Salman and I speak about this, then I shall, of course, put
forward our position again. We believe that this is the right decision
for world energy. That’s the first thing. The second thing is that
everyone knows what the dispute was about. The dispute was that if
production were to be frozen, then everyone should do it, including
Iran. But we understand that Iran is starting from a very low level,
related to the well-known sanctions against this country. It would be
unfair to leave it at this sanctioned level. I think that from the
viewpoint of economic sense and logic, then it would be correct to
find some sort of compromise. I am confident that everyone understands
that. The issue isn’t economic, it’s political.

There is an American election on the way, and as you well know there’s
a choice between Hillary Clinton and Donald Trump. Who would you
rather have at the other end of the telephone if there is a
geopolitical situation—Donald Trump or Hillary Clinton?

I would like to work with a person who can be accountable for
decisions made and implement any agreements that we reach. Surnames
don’t matter at all. Of course, that person must enjoy the trust of
the American people, so that they won’t just have the desire but also
the reinforced political will to fulfill all those agreements. That’s
why we never interfered, aren’t interfering, and don’t plan to
interfere in domestic political processes.

Turkey recently sent troops into Syria, and you did not protest too
loudly. Do you think Turkey has now moved closer to your idea that the
future of Syria has to involve President Assad staying in some way, or
have you changed your mind about President Erdogan? A little bit ago,
you were complaining that you were stabbed in the back and about the
problems to do with the jet being shot down.

First off, we’re operating on the basis that Turkey apologized for the
incident that took place and for the death of our people. It did it
directly, without any reservations, and we value that. President
Erdogan took this step. We see a clear interest on the part of
Turkey’s president in restoring full-scale relations with Russia.

We have many common interests in the Black Sea region, and more
globally and in the Middle East. We very much expect that we’ll be
able to establish a constructive dialogue. We have many big projects,
including Turkish Stream [a proposed gas pipeline from southern Russia
across the Black Sea to Turkey] in the energy sector.

It’s the same with Syria. When we hear that Assad should go for some
reason someone peripheral thinks so, I have a big question: What will
it lead to? Will it be in line with international legal standards, and
what will it lead to? Wouldn’t it be better to be patient and
facilitate changes to the structure of the society itself, to muster
this patience, allowing changes to the structure of the society,
waiting for when these changes happen naturally within the country?

I think the root of Western distrust is the idea that you want to
expand Russian influence, in some cases geographically.

I think all sober-minded people who really are involved in politics
understand that the idea of a Russian threat to, for example, the
Baltics is complete madness. Are we really about to fight NATO? How
many people live in NATO? About 600 million, correct? There are 146
million in Russia. Yes, we’re the biggest nuclear power. But do you
really think that we’re about to conquer the Baltics using nuclear
weapons? What is this madness? That’s the first point, but by no means
the main point.

As far as expanding our zone of influence is concerned, it took me
nine hours to fly to Vladivostok from Moscow. This is a little less
than from Moscow to New York, through all of Western Europe and the
Atlantic Ocean. Do you think we need to expand something?

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5 OCT 15 :: Putin is a GeoPolitical GrandMaster @TheStarKenya
Law & Politics

Putin has always been considered a grandmaster of geopolitics, but of
late has been placed under tremendous pressure by the oil warfare
specialist –President Barrack Obama of the US.

The wrestling of the oil price from above $100.00 to below $50.00 a
barrel, was always intended to wither Russia’s power, and send it into
a tailspin.

What remains interesting is how what is perceived as external pressure
can actually create a situation where the people rally behind their

Putin’s popularity held rock steady throughout this period, as the
stock market and the Russian Ruble crashed. The resilience around his
domestic popularity seemingly confounds many.

Putin has been on the back-foot big time. The body language between
President Obama and Putin is also another avenue worthy of study.
Obama has a barely concealed, evidently visceral dislike of Putin. You
see this in the frozen handshakes and a number of other interactions.

Putin fancies himself the fly-catcher and syria the fly-trap. The
speed of execution confirms that Russia is once again a geopolitical
actor that will have to be considered. It is a breath-taking rebound.

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Mr Trump is the leading exponent of "post-truth" politics-a reliance on assertions that "feel true" but have no basis in fact. @theeconomist
Law & Politics

CONSIDER how far Donald Trump is estranged from fact. He inhabits a
fantastical realm where Barack Obama’s birth certificate was faked,
the president founded Islamic State (IS), the Clintons are killers and
the father of a rival was with Lee Harvey Oswald before he shot John
F. Kennedy.

Mr Trump is the leading exponent of “post-truth” politics—a reliance
on assertions that “feel true” but have no basis in fact. His
brazenness is not punished, but taken as evidence of his willingness
to stand up to elite power. And he is not alone. Members of Poland’s
government assert that a previous president, who died in a plane
crash, was assassinated by Russia. Turkish politicians claim the
perpetrators of the recent bungled coup were acting on orders issued
by the CIA. The successful campaign for Britain to leave the European
Union warned of the hordes of immigrants that would result from
Turkey’s imminent accession to the union.

But post-truth politics is more than just an invention of whingeing
elites who have been outflanked. The term picks out the heart of what
is new: that truth is not falsified, or contested, but of secondary
importance. Once, the purpose of political lying was to create a false
view of the world. The lies of men like Mr Trump do not work like
that. They are not intended to convince the elites, whom their target
voters neither trust nor like, but to reinforce prejudices.

Feelings, not facts, are what matter in this sort of campaigning.
Their opponents’ disbelief validates the us-versus-them mindset that
outsider candidates thrive on.


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"One of the defining bifurcations of the future will be the conflict between information masters and information victims." 17-SEP-2012
Law & Politics

This information warfare will not be couched in the rationale of
geopolitics, the author suggests, but will be "spawned" - like any
Hollywood drama - out of raw emotions. "Hatred, jealousy, and greed -
emotions, rather than strategy - will set the terms of [information
warfare] struggles".

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How Selfies and Wearables Are Transforming Hajj @business
Law & Politics

More than a million people have flown into Saudi Arabia so far to
perform Hajj, an annual pilgrimage that starts this week. Every Muslim
who can make the journey is required to do so at least once in his or
her lifetime.

Saudis are among the world’s most active people on social media, so
Snapchat and Instagram have been teeming with images of Mecca and the

Scholars have warned that taking a selfie during pilgrimage is akin to
boasting and thus sacrilegious, while Saudis complain that the
proliferation of pilgrims taking selfies while circling the Kaaba is
causing dangerous congestion.

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Mark Zuckerberg accused of abusing power after row over 'napalm girl' photo
Law & Politics

Norway’s largest newspaper has published a front-page open letter to
Facebook CEO Mark Zuckerberg, lambasting the company’s decision to
censor a historic photograph of the Vietnam war and calling on
Zuckerberg to recognize and live up to his role as “the world’s most
powerful editor”.

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El Nino and La Nina
Law & Politics

Here’s what can happen when the surface of the equatorial Pacific gets
just a little warmer: Thousands of people die as the weather changes
from India to Florida. Some economies lose billions of dollars; others
enjoy respite from weather-related losses. Prices of commodities
ranging from nickel to coffee jolt skyward. Then when the waters cool,
patterns shift, with areas previously spared often experiencing
calamitous hurricanes, floods or drought, and others getting a break
from such buffeting forces. The whole cycle is known as El
Nino-Southern Oscillation. It is made up of El Nino, the Pacific's
warm phase; La Nina, the cold side; and a neutral phase in between.
The whole thing tends to play itself out every two to seven years.

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Currency Markets at a Glance WSJ
World Currencies

Euro 1.1278
Dollar Index 94.85
Japan Yen 102.15
Swiss Franc 0.9719
Pound 1.3320
Aussie 0.7644
India Rupee 66.545
South Korea Won 1097.55
Brazil Real 3.2163
Egypt Pound 8.8815
South Africa Rand 14.1276

Dollar Yen 1 Year Chart INO 102.15


Sterling 6m Chart INO 1.3315 [Buy just below 1.3300]


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EAC pushes back free trade pact with Europe to Jan @BD_Africa

President John Magufuli who chaired yesterday’s extraordinary heads of
state summit said the bloc would continue to discuss the Economic
Partnership Agreement (EPA) with the aim of concluding it at the start
of next year.

“We have given ourselves three months to discuss further the signing
of the EPA agreement and we will meet in January 2017 over this
issue,” Mr Magufuli, who is also the East African Community chairman,
said during the extraordinary summit in Dar es Salaam.

“We appeal to the EU not to punish Kenya by denying it access to the
European market,” he said in a statement. Tanzania had earlier
indicated it would not sign the EPA during yesterday’s summit.

The EU had given the region up to September 30 to sign and ratify EPA.
Sources said it later asked EAC to show commitment by November 30
after Kenya’s Industrialisation secretary Adan Mohamed and his
Rwandese counterpart Francis Kanimba asked EU parliament for more time
few days ago “to prove region’s commitment.”

Kenya, the only state classified as developing country among the EAC’s
six members, ships close to 32 per its exports to Europe. Last year,
it exported a total of 1.577 trillion to different parts of the world.

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Zimbabwe will sink into horror and depravity unless Mugabe quits now @OborneTweets The Spectator

The economic crisis is so vicious and acute he cannot save himself
even if he resorts to violence again

Last week rumours swirled round Zimbabwe that Robert Mugabe, the
92-year-old president, had either died or been incapacitated. The
government banned demonstrations after Mugabe’s-presidential aircraft
had been diverted in mid-air to Dubai during a scheduled journey to
Singapore. Then the man himself turned up alive (though far from well)
at Harare-airport, where he made a reasonably good joke about his

The president, who has ruled his country throughout its 36-year
history, is nevertheless mortally wounded. We are entering the last
few months of the Mugabe era. His health is not the real problem.
Zimbabwe is now-spiralling downwards into an economic-crisis so
vicious and acute that it leaves no possibility that the president,
for all his famed-political skills and notorious readiness to resort
to violence, can save himself. The situation is more serious than the
hyperinflation of 2008, which was solved by switching to the dollar.
This time there is no way out.

The GNU, a coalition between Zanu PF and the MDC, had done well.
The-crucial-figure was Tendai Biti, one of the greatest-ever African
finance ministers. He did not just rescue his country from the 2008
economic crisis. Through good sense, honesty and careful financial
management he lifted government revenues from US $280 million in 2008
to US $4.3 billion in 2013, an incredible fourteen-fold increase in
just five years.

Biti’s Zanu PF successor, Patrick Chinamasa, has wrecked this fine
legacy, and in record time. He returned to the old Zanu habit of using
public spending as a source of patronage, for instance allowing the
near-doubling of the civil service. To begin with he funded the
deficit by issuing treasury bills. But that source had dried up by the
end of last year as the money market realised they were next to
worthless. Since then Chinamasa has resorted to devious and probably
illegal alternatives.

First he plundered the Reserve Bank’s cheque-clearing system.
Zimbabwean firms and individuals signed cheques in good faith, only to
discover that the payment had not arrived at its destination.
Exploitation of the clearing system is thought to have raised about
$800 million dollars. But this short-term ruse has had dreadful
consequences. The system is now paralysed, while Zimbabwean banks are
in practice bust.

A desperate Chinamasa (who received a mysterious visit from former
cabinet minister Peter Mandelson, inappropriately accompanied by the
British ambassador,-earlier this year) has been forced to look
elsewhere. Back in May several exporters were informed, without
notice, that part of their foreign earnings would be received in the
shape of electronic transfers, which could not be used to make dollar
payments. At the same time Chinamasa announced that Zimbabwe planned
to return to a local currency, backed by the Afro Exim Bank in Egypt —
an idea which lacked an ounce of credibility and was in effect a
return to the worthless Zimbabwe dollar abandoned eight years ago.

With the financial system frozen because deposits are liable to be
grabbed by the state, a galloping monetary contraction is under way.
Less than a year ago a Zimbabwe citizen could remove as many US
dollars as he or she wanted from the bank. At the start of 2016 a
$10,000 limit was imposed. This was reduced to $2,000 in March and has
since fallen to $300, and even that amount is not often available.
During three weeks in Zimbabwe, I could not find an ATM which would
issue money. Long queues outside banks are a common sight.

Zimbabweans now take dollars outside the country if they can, and
hoard them if they cannot. Businesses suspected of hoarding may soon
be raided. Some of the country is returning to barter. Elsewhere an
informal financial system has emerged. Businesses employ ‘runners’ to
take cash to suppliers, avoiding both banks and the government. Of
course this has a further knock-on effect on state finances because
goods paid for in this way are not susceptible to VAT, duties, customs
or taxation. Crucially, however, such payments are not subject to the
delays involved in using the official system.

Because subsistence farming is widespread in Zimbabwe, the
disappearance of the formal banking system has not had the effect it
would have in advanced countries like Britain, where public order
would swiftly break down.

However, the effect on government finances has been profound. Many
civil servants now get paid in worthless electronic transfers,
supposing they get paid at all — an important reason why officials are
joining the anti-government riots. Meanwhile the police make good
their salary arrears by setting up road-blocks and extorting money
from passing traffic (travelling round the country I was stopped
numerous times and asked to make payments for road offences I had not
committed). Once again this is a short-term expedient, because it
deters commerce and frightens away tourists.

With the commercial sector in free-fall and government finances
broken, President Mugabe and Zanu PF have only one asset left — their
monopoly of violence. This means the army must get paid in full and in
US dollars — hence Chinamasa’s unremitting desperation to get his
hands on dollars. Even that is a close-run thing. Soldiers received
their latest salary two weeks late.

Mugabe could perhaps stagger on for a little while. That would mean a
hideous future as Zimbabwe takes a fresh step downwards towards the
levels of horror and depravity experienced in Congo — violence borne
of desperation leading ultimately to civil war.

But Zanu PF is now irrevocably split and the president may no long be
able to enforce his will. Vice-President Emmerson Mnangagwa, the man
who oversaw the Matabeleland genocide 30 years ago, is nonetheless
seen by Britain and the West as a man who can push through the
economic and political reform the country so badly needs and thus open
the way to fresh World Bank funding. New elections, and some hope of
fresh politics, loom in 2018.


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"The outlook suggests government may not be able to meet its payroll obligations" Patrick Chinamasa.

Zimbabwe may not be able to keep paying government workers as their
wages consumed 96.8 percent of government revenue in the first half of
this year, Finance Minister Patrick Chinamasa said.

“The outlook suggests government may not be able to meet its payroll
obligations,” he said as he presented a mid-term budget on Thursday.
Government has been staggering civil service and armed forces pay days
in an effort to meet its obligations.

The southern African nation is experiencing its worst economic crisis
since the hyper-inflationary period that peaked in 2008, when
inflation soared to 500 billion percent, according to the
International Monetary Fund. Now, after it switched to use of the U.S.
dollar in 2009, a shortage of currency, deflation and unemployment of
about 90 percent have plunged the country back into crisis.
Zimbabwe owes foreign and domestic institutions about $9.6 billion and
failed to make a $1.8 billion payment due to lenders in June.
Chinamasa said he expects the economy to expand about 1.2 percent this

The government is considering cutting 25,000 state jobs, deferring
civil service bonuses for 2016 and 2017 and closing some embassies in
an effort to save money, The Source reported, citing Chinamasa. The
moves could save Zimbabwe at least $335 million annually during the
next two years, the Harare-based news website said.

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@PresidentABO Bongo won't go and a 99.93% turnout in his home province @TheEconomist

And Mr Bongo heads a country in a deep economic crisis, thanks to the
fall in the price of oil. The country ran a 2.5% of GDP surplus in
2014, but that swung into deficit last year. This year, the deficit is
likely to be wider still, thanks to spending for the African Cup of
Nations next year. The government admits it will have to borrow to
make up the difference this year or early next—quite probably from the
IMF. Mr Bongo’s strategy so far has been to tout for foreign direct
investment to make up for oil. That has had some success. Oil has
fallen from half of GDP in 2008 to less than a third now. But with his
reputation now in the drain, will that still work?

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Libreville - Go to court or take to the streets: that's the decision opposition leader Jean Ping must make Thursday afternoon in his efforts to reverse Ali Bongo's disputed reelection in Gabon.

Any appeals of the results of the August 27 presidential election,
which gave Bongo a razor-thin lead over Ping, are supposed to be
lodged at the Constitutional Court by 16:00 (1500 GMT).

The court has the power to delay this deadline by a few hours, while
Bongo himself has said he will contest a number of results attributed
to his rival.

Ping, who believes Bongo has the court in his pocket, seems to be
waiting until the last moment before showing his hand.

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Report: The revolutionary nature of growth (2016) Charlie Robertson

There’s some really interesting data on Africa in this report –
including the 96% annual chance that Nigeria retains the democracy
label it won after the important 2015 elections (and that “failed
state” risk is very low indeed), and the 97% chance that SA remains a
democracy despite fears of many that it may end up following
Zimbabwe’s path to greater poverty and less democracy.  Both look more
solid countries than many think.  Political risks are three times
higher in other African countries than Nigeria – as we highlight
below, from Ivory Coast to Mozambique.

The best dancer at a wedding I attended last month was an open-minded
member of China’s Communist Party who I tested this report out on. He
thinks it’s wrong. China’s communist party will be in power for
another 100 years he reckoned, as we have yet to see the third
generation of family rule – and Chinese dynasties don’t only last two
generations.  Data tells me that China is changing because of rising
income levels, and that he is making the same mistake as those Turkish
military officers who in July said that military coups have generally
succeeded in Turkey, so will succeed in 2016.  They are trapped by
their understanding of history, and their lack of understanding of the
power of the middle class.

But one conclusion we would highlight is that EM and Frontier markets
are more politically stable than we might think – and the risks some
of us remember from the 1990s when Russia’s military was shelling its
parliament and Turkish tanks provoked the fall of a government – are
now risks that are concentrated in beyond frontier markets like
Zimbabwe, rather than larger markets. 

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South Africa All Share Bloomberg +5.04% 2016

Dollar versus Rand 6 Month Chart INO 14.1276


Egypt EGX30 Bloomberg +16.87% 2016


Nigeria All Share Bloomberg -3.73% 2016


Ghana Stock Exchange Composite Index Bloomberg -10.21% 2016


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Ghana Angola Zambia Eurobond Yields @Business

Ghana’s Eurobonds have returned 5.9 percent since the beginning of
August, compared with the average of 4.3 percent for dollar debt of 17
sub-Saharan African nations, Bloomberg indexes show. Yields on the
nation’s $1 billion of notes due August 2023 have dropped 120 basis
points in the period, reaching a one-year low of 9.22 percent on Aug.

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Ghana raised $750 million selling Eurobonds at a yield of 9.25 percent in an auction that was more than five times oversubscribed

The country received orders exceeding $4 billion for the bond that
will be repaid in three equal installments between September 2020 and
the same month in 2022, the Ministry of Finance said in an e-mailed
statement on Thursday. The proceeds will be used to refinance existing
debt and fund capital investments, the ministry said earlier in the

The oversubscription indicates a “high appetite for Ghana’s credit,”
the ministry said. “The transaction is a vindication of the decision
taken in August not to issue immediately.”

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An Explorer's Guide to Mozambique

I often describe the province where I live in Mozambique as the marine
Serengeti of Africa. Our ocean is teeming with some of the largest
fish in the sea like whale sharks, manta rays, and Mola mola, or ocean
sunfish. It is also home to some of the most threatened species of
marine wildlife, like sawfish and dugong. In fact, the last viable
population of dugongs lives in the Bazaruto Archipelago. From humpback
whales to leatherback turtles, the coast of Mozambique is not just
stunningly beautiful but is also a refuge to some of the most iconic
and threatened marine wildlife in the world. It is the blue heart of
coastal East Africa—an unspoiled stretch of coastline that must be
protected at all costs—for our ocean heritage.

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Tanzania Q1 GDP growth slows to 5.5 pct

Tanzania's gross domestic product grew 5.5 percent in the first
quarter of 2016 compared with 5.7 percent in the same period a year
ago, weighed down by slumps in construction, transport and
manufacturing sectors, official data showed on Thursday.    The
state-run National Bureau of Statistics said in a statement the
construction sector grew 4.3 percent in January to March, compared
with 23.2 percent a year ago due to low investment in the activity
during the period under review.

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"As drafted it just doesn't make sense," Sonal Sejpal, a director at Anjarwalla & Khanna
Kenyan Economy

A new Kenyan law that imposes limits on the amounts commercial banks
can charge their customers for loans is unenforceable and requires an
amendment to be clarified, according to lawyers.

The Kenya Bankers Association, a lobby group for the industry, has
sought clarification from the central bank about whether it should use
the Central Bank Rate or the lower Kenya Banks Reference Rate because
a new law published on Sept. 1 is unclear. The wording of the law has
also been questioned because it stipulates that banks should set their
lending rates at “no more than four percent, the base rate set and

Kenya’s biggest lenders have interpreted the legislation to mean they
should set their loans at 400 basis points above the CBR, currently at
10.5 percent, instead of the KBRR at 8.9 percent. Central bank Deputy
Governor Sheila M’Mbijjewe declined to comment because the matter is
in court after an activist demanded that banks use the KBRR.

“As drafted it just doesn’t make sense,” Sonal Sejpal, a director at
Anjarwalla & Khanna Advocates, said by phone from Nairobi on Thursday.
“If they try to impose this on banks who do not comply, they’re not
going to be able to get a judgment against them because it just
doesn’t make sense as drafted. Unless it is clarified, it is not

Kenyans frustrated by the cost of credit and poor savings rates.
Average commercial lending rates in Kenya stood at 18 percent in June.
Shares of KCB Group Ltd., the country’s largest bank by assets, have
fallen 15 percent since the announcement, while Equity Group Holdings
Ltd., the biggest lender by market value, has slumped 27 percent.

Central bank Governor Patrick Njoroge had opposed the proposal by
parliament to cap interest rates, warning in February that regulating
loan costs would be “damaging to the economy and regressive to
growth.” He has yet to comment publicly on the new law.

“The law is poorly drafted, that is for sure,” said John Ohaga,
managing partner at TRIPLEOKLAW Advocates LLP in Nairobi. “It just
needs the central bank to state the applicable base rate.”

The new law doesn’t specify whether further guidelines are necessary,
IMF country representative for Kenya Armando Morales said.

“Parliament issued a law, and the law does not say who the
implementing party is,” he said by phone. “The law only talks about
the banks, so the only mandate in the law is to the banks. So it does
not need the central bank to do anything.”


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"We are still in this period of ambiguity and a lack of clarity," said Aly-Khan Satchu, chief executive officer of Rich Management @business
Kenyan Economy

“We are still in this period of ambiguity and a lack of clarity,” said
Aly-Khan Satchu, chief executive officer of Rich Management, a
Nairobi-based adviser to companies and wealthy individuals. “It’s not
a positive situation really. There are a number of key issues that are
outstanding: the base rate, who’ll set it, what it is, among a number
of other issues.”

“My impression remains that this was a very populist decision,” Satchu
said. “I suspect the government wants to send a very strong message
and there is still more negotiation to come around how to implement
this properly.”

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This Gotham City-style web video thriller is set in Kenya and scripted by viewers Quartz Africa
Kenyan Economy

“Tuko Macho,” which means “We are watching” in Kiswahili, is a new
Kenyan web series that presents that question to its viewers. In the
pilot episode, a well-known carjacker is kidnapped by a vigilante
group, who then straps him to a chair and streams his capture online.
A masked man then asks the public to vote on the fate of the criminal,
and whether he should live or die for his crimes.

Since its launch in June 2016, the slick and well-produced series has
struck a chord with Kenyans and has garnered over a million views. The
show is the work of The Nest, an arts collective based in Nairobi.

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Kenya Shilling versus The Dollar Live ForexPros 101.306
Kenyan Economy

Nairobi All Share Bloomberg -10.18% 2016 [+0.93% since closing at a 35
month low 5th Sep]


130.87 +0.12 +0.09%

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.@Safaricomltd share price data here
Kenyan Economy

Par Value:                  0.05/-
Closing Price:           19.00
Total Shares Issued:          40065428000.00
Market Capitalization:        761,243,132,000
EPS:             0.95
PE:                 20.000

FY Service revenue 177.784089b vs. 156.246631b +13.784%
FY Handsets and other revenue 8.621317b vs. 7.117490b +21.129%
FY Total revenue 195.685224b vs. 163.364121b +16.681%
FY Voice Revenue 90.8b versus 87.37b +3.93%
FY MPesa Revenue 41.5b versus 32.63b +27.18%
FY SMS Revenue 41.50b versus 32.63b +10.59%
FY Mobile Data Revenue 21.15b versus 14.82b +42.71%
FY Direct costs [62.310003b] vs. [56.708576b] +9.878%
FY Other expenses [41.260953b] vs. [36.039990b] +14.487%
FY EBITDA 83.066273b vs. 71.191159b +16.681%
FY Depreciation, impairment and amortisation [27.942546b] vs.
[25.570159b] +9.278%
FY Profit before taxation 55.762505b vs. 46.149545b +20.830%
FY Total Comprehensive income for the period 38.104290b vs. 31.871303b +19.557%
Basic & diluted EPS 0.95 vs. 0.80 +18.750%
Dividend per share 0.76 vs. 0.64 +18.750%
Shareholders funds 116.738947b vs. 104.276531b +11.951%
Cash & cash equivalents at the end of the period 6.109493b vs.
11.916371b -48.730%

Accompanying Commentary

19.8% increase in 30 day active MPesa Customers to 16.6m
Safaricom has a 64.7% subscriber market share
Service Revenue +13.8% grew +15.2% in 2nd Half
Voice Revenue 51.1% of Service Revenue
NonVoice Revenue +26.3% now represents 48.9% of service revenue from
44.1% last year
Mobile Data Customers 14.1m +21.5%
7.9m Customers on 3G and 4G [0.7m on 4G Handsets]
Zero Gearing
FY 17 Guidance we expect EBITDA for FY17 to be in the range of 89b-92b.

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

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