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Satchu's Rich Wrap-Up
 
 
Wednesday 13th of January 2016
 
Morning
Africa

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Macro Thoughts

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I do not believe any of it and would instead say we are simply receiving a global margin call.
Africa


Now, the margin call comes. Now comes the great unwind! “Collateral”
of all sorts will be questioned. The questions will be of the
“strength, liquidity, ownership and even whether the collateral even
exists”. Everything will be questioned and nothing taken for granted
or even at face value. The issue of “trust” and even “who” can you
trust will come forward. Institutions who have traded with each other
for decades will suddenly be looking at each other with different
eyes. Questions like “will I get paid” or “will I receive what I paid
for” will be an everyday exercise.

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Thompson’s subsequent memorial, when his ashes were fired into the sky by a cannon.
Africa


The contraption cost thousands of dollars, which Johnny Depp paid for,
and was followed, appropriately, with a long and raucous party.

“The Edge... There is no honest way to explain it because the only
people who really know where it is are the ones who have gone over.” ―
Hunter S. Thompson,
Hell's Angels: A Strange and Terrible Saga

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AJE News ✔ @AJENews Obama in his final #SOTU address dismissed idea of ISIL as existential threat to the US
Law & Politics


Conclusions

I am an Admirer of @Potus. I disagree with him in terms of the Drone
Program [which he turned into an Assassination Program on steroids]
and with the Price of his Regime Change Program in Libya and Syria.
He has proven an extraordinarily sharp Oil Warfare Specialist and
advanced the US National Interest by leaps and bounds.
The Economy is the Come-Back Kid.
And I do think he has shown leadership continuously and on Key Issues
[Gun Control, Fear of Terror, as evidenced in his Final #SOTU Address

read more








The Fars News Agency in Iran reports that the boats illegally entered Iranian waters and the US sailors were “arrested.”
Law & Politics


Members of the Islamic Revolutionary Guards Navy confiscated GPS
equipment and accused the servicemen of “snooping.”

White House officials said that they are aware of the situation and
are working to return the sailors home safely.

Deputy National Security Adviser Ben Rhodes told reporters that the
administration was optimistic about the situation, according to
Reuters.

Conclusions


Neither side is an adversarial frame of mind.

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A riverine command boat from Riverine Detachment 23
Law & Politics


A riverine command boat from Riverine Detachment 23 is shown with the
amphibious transport dock ship USS New York. US Navy photo by Mass
Communication Specialist 2nd Class Zane Ecklund/Released

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Beautiful Sunset in SultanAhmet Square / Istanbul by bulentbey
Law & Politics


We stayed in that very Square when we visited Istanbul

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Currency Markets at a Glance WSJ
World Currencies


Euro 1.0828
Dollar Index 99.13
Japan Yen 118.27
Swiss Franc 1.0048
Pound 1.4464
Aussie 0.7035
India Rupee 66.775
South Korea Won 1203.48
Brazil Real 4.0277
Egypt Pound 7.8301
South Africa Rand 16.5264

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03-NOV-2014 The Commodity Super-Cycle is Dead in the Water
World Currencies


This is a major turning point and represents a major shift away from
commodity producing countries and towards global consumers and
consumer countries.

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Gold 5 day Chart 1083.75
Commodities


West Texas Intermediate crude tumbled to the lowest since December 2003.

http://www.bloomberg.com/news/articles/2016-01-12/wti-oil-falls-below-30-for-first-time-since-dec-2003

WTI for February delivery fell $1.28, or 4.1 percent, to $30.13 a
barrel at 2:07 p.m. on the New York Mercantile Exchange. The contract
touched $29.93, the lowest intraday price since December, 2003. Prices
lost 30 percent last year.

Brent for February settlement decreased $1.05, or 3.3 percent, to
$30.50 a barrel on the London-based ICE Futures Europe exchange. It
touched $30.34, the least since April 2004.

read more


Saudi Debt Risk on Par With Junk-Rated Portugal as Oil Slides
Emerging Markets


Saudi Arabia’s finances are under pressure as it fights a war in Yemen
at a time when crude prices are languishing at the lowest level in
almost 12 years. The country, which counts on energy exports for 70
percent of government revenue, sold bonds for the first time since
2007 last year to help fund a budget deficit that may have been the
widest since 1991. Net foreign assets dropped for 10 straight months
through November, the longest streak since at least 2006, to $627
billion.

“They have huge reserves and extremely low debt, but the question is,
how long are oil prices going to stay at this level?” said Anthony
Simond, an investment manager who helps oversee about $10 billion of
emerging-market debt at London-based Aberdeen Asset Management.

The bonds of state-controlled Saudi Electricity Co., used as a proxy
for the government in the absence of any international sovereign debt,
have tumbled as oil has retreated. The yield on the company’s $1.5
billion securities due April 2024 has surged 49 basis points since the
start of the year to a record 4.6 percent on Monday. The extra yield
investors demand to buy the debt instead of U.S. Treasuries of similar
maturity rose to an all-time high.

Frontier Markets

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United Nations Ready to Back Update of Congo Voter Register
Africa


The United Nations offered to help the Democratic Republic of Congo
update its electoral list as the country’s opposition threatens
protests over the government’s failure to publish a revised election
calendar and begin voter registration.

“The partners are ready to support the revision of the voter
register,” the head of the mission, Maman Sambo Sidikou, said Monday
in an e-mailed statement after meeting the country’s electoral body.
“It is a prerequisite, a technical exercise that must come first, time
should not be wasted politicizing it. We must find a solution quite
quickly.”

About 7 million new voters between the ages of 18 and 22 need to be
registered, according to a November report by the Organisation
Internationale de la Francophonie, commissioned by Congo’s electoral
body, the CENI. Work on registering new voters hasn’t begun, with some
members of the ruling coalition proposing the country should instead
organize a national census, which would take longer and cause further
delays.

Conclusions


The UN is triangulating President Kabila

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Torture rife in Burundi, opposition claims DW
Africa


"They beat us as if we were snakes," a woman, who also does not want
to be named, remembers. "Some of us were beaten more severely than
others. It depended on which police officers caught you and perhaps
what they accused you of," she said quietly.

The accusations against the government, the army and Burundi's police
are severe and precise. In August 2015, the rights group Amnesty
International reported that the police and intelligence agents had
tortured suspects in order to crush the protests.

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African Sunshine Can Now Be Bought and Sold on the Bond Market @business
Africa


Africa’s off-grid solar industry has been turned into an asset class
for the first time, bundling contracts for thousands of the
sun-powered rooftop electricity systems to sell as bonds.

Dutch investor Oikocredit International and Persistent Energy Capital
LLC, a New York-based merchant bank, jointly decided to try to
replicate the U.S. model of securitizing residential solar panels.
They are working with the London-based developer BBOXX Ltd.

“I worked in commercial banking in the U.S. for several years and was
involved in the securitization of residential solar, specifically
SolarCity,” said David ten Kroode, renewable energy manager at
Oikocredit, which is based in Amersfoort, Netherlands. “We thought it
was an interesting model that could be replicated in Africa.”

The U.S. solar bond market has attracted about $560 million in
investment, according to Bloomberg New Energy Finance. SolarCity was
the first company to securitize a portfolio of solar leases in 2013.
The second-largest U.S. solar company by market value has raised $450
million from sales of notes backed by monthly payments for its rooftop
solar systems, data compiled by Bloomberg showed.

Oikocredit, BBOXX and Persistent Energy are working in Kenya and
Rwanda, with plans to expand to Pakistan and Nigeria next. The first
issue bundled 2,500 active contracts for solar energy in rural Kenya,
raising 52 million Kenyan shillings ($500,000). The notes have an
interest rate of 21 percent and an average maturity of 2.5 years.

South Africa All Share Bloomberg -4.53% 2015

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

48,396.18 +73.50 +0.15%

Dollar versus Rand 6 Month Chart INO 16.4865

http://quotes.ino.com/charting/index.html?s=FOREX_USDZAR&v=d6&t=c&a=50&w=1

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South Africa’s rand rebounded from seven days of declines [Trims loss this year to 7 percent, most among 31 currencies]
Africa


The currency of Africa’s most developed economy gained 0.8 percent to
16.6407 per dollar by 12:38 p.m. in Johannesburg on Tuesday, reversing
an earlier decline of as much as 1 percent. That trimmed losses this
year to 7 percent, the biggest retreat among the 31 emerging-market
and major currencies tracked by Bloomberg.

Volatility in the rand versus the dollar surged toward the highest
level in four years, while a measure of global currency price swings
climbed to the most since October. The difference between prices at
which traders are willing to buy and sell the rand, used as a gauge of
liquidity, was about 1.5 times wider on average in the past six months
than it was during the first half of 2015, according to data compiled
by Bloomberg.

Conclusions


As long as @SAPresident Zuma is in the cock-pit, the discount applied
to the Rand will remain egregious.

read more


Egypt Pound versus The Dollar 3 Month Chart INO 7.83
Africa


Egypt EGX30 Bloomberg -7.74% 2016

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

6,463.92 -171.06 -2.58%

Nigeria All Share Bloomberg -9.10% 2016

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

26,034.9 -315.25 -1.20%

Ghana Stock Exchange Composite Index Bloomberg +0.70% 2016

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

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EIB Considers Funding 70-Megawatt Unit for Kenyan Geothermal
Kenyan Economy


The European Investment Bank is considering to finance an extension to
a geothermal plant in southwestern Kenya, lending 72 million euros
($78 million).

The Luxembourg-based development bank said the Olkaria I power station
in Kenya is under appraisal in a release on its website. The unit was
first built in 1981 and is Africa’s first geothermal power plant,
according to the Kenya Electricity Generating Co Ltd. who owns and
operates it.

The extension would raise its capacity from 140 megawatts to 210
megawatts. The total cost of the project is estimated to be 288
million euros.

read more



Kenya Shilling versus The Dollar Live ForexPros
Kenyan Economy


Nairobi All Share Bloomberg -1.91% 2015

http://www.BLOOMBERG.COM/quote/NSEASI:IND

142.91 -1.32 -0.92%

Nairobi ^NSE20 Bloomberg -3.23% 2016

http://j.mp/ajuMHJ

3,910.14 -19.78 -0.50%

Every Listed Share can be interrogated here

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

read more



 
 
N.S.E Today


Global stocks are rising for a second session after a six-day losing streak.
Chinese exports unexpectedly rose 2.3 percent in yuan terms in
December, ending a five-month stretch of declines.
On Tuesday the Bloomberg Commodities Index sank to a 1991 low. Crude
oil's bounce from below $30 has also helped the gauge. Yesterday it
fell as low as $29.93, a level not seen since November 2003.
The International Markets have been a ''white-knuckle'' ride in 2016.
Currency Volatility has spiked off the charts with the Rand falling
just under 10% in the early morning at the start of the week.
The Oil Producers are in No Man's Land now - The Angola Kwanza
devalued at the start of the Year.
The Nigeria Naira will either become a non-convertible currency
entirely or devalue. The Risk of a disorderly Naira devaluation is
growing.
The Shilling has been rock-solid for a few months now and sits just
below a 5 month High and was last at 102.395.
As of this morning, SSA Gauges in 2016 read as follows. Nigeria's All
Share is -9.10% YTD, Egypt EGX30 Index -7.74%, South Africa's All
Share -4.53%.
The Nairobi All Share edged 0.13% lower to close at 142.71. The All
Share is -2.05% in 2016 and as you can see outperforming its SSA
Peers.
The Nairobi NSE20 retreated -0.76% to close at 3880.13 The NSE20 Index
has retreated -3.23% in 2016
I expect Kenya to outperform the rest of Africa in 2016.
The Inflexion Point in the Current Account Deficit is behind us.
Equity Turnover clocked 620.958m.



N.S.E Equities - Commercial & Services


Safaricom firmed +0.63% to close at 16.10 and traded 1.534m shares.
The Price is underwritten at 16.00+. Buyers outpaced Sellers by a 4 to
1 margin and a market turnaround will lift the price to 17.00.

Nation Media turned +1.69% better to close at 180.00 and the incoming
CEO was a positive Catalyst for a positive price recovery in Q4 2015.
Banks



N.S.E Equities - Finance & Investment


Equity Group rallied +1.29% to close at 39.25 and traded 8.484m shares
worth 333.011m.
CFC Stanbic Bank traded 506,300 shares and the bulk of them at 80.00 -5.88%.
COOP Bank closed unchanged at 17.10 and traded 2.048m shares.
Barclays Bank ticked 0.8% better to close at 12.50 and traded 474,900 shares.

Jubilee Insurance surged +5.84% to close at 489.00.
BRITAM EA could not snap its losing streak and -4.633% at 12.35.



N.S.E Equities - Industrial & Allied


EABL ticked -1.4545% lower to close at 271.00 and traded 275,300
shares worth 74.785m.

Bamburi Cement traded 293,500 shares worth 51.362m at an unchanged
175.00. Q3 2015 Data confirmed a strong double digit Year on Year
percentage increase in Cement consumption [The SGR refers]
ARM Cement [which is the subject of a large Preference share
investment and the Business Daily linked an Indian Co. Ultratech
Cement to that story though ARM have not confirmed] closed unchanged
at 35.50 and traded 232,100 shares.

KenGen turned 0.72% better to close at 6.90. The P/E Ratio is less
than 2 and that is a Price in disequilibrium. The long awaited Rights
Issue will be a positive catalyst for a powerful price rebound.

Home Afrika surely exhibits the highest price beta of any share at the
Exchange and rebounded +8.82% to close at 1.85.



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