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Satchu's Rich Wrap-Up
 
 
Friday 29th of January 2016
 
Morning
Africa

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The Latest Daily PodCast can be found here on the Front Page of the site
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What is #Mindspeak? @Youtube
Africa


This Saturday #Mindspeak will be hosting the CS Treasury Henry Rotich.
My Co-Host is @KCBGroup CEO Joshua Oigara

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THE YEN
Africa


Home Thoughts

“If you don't like someone's story, write your own.” ― Chinua Achebe

“There is no story that is not true, [...] The world has no end, and
what is good among one people is an abomination with others.” ― Chinua
Achebe, Things Fall Apart

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“There is no story that is not true.” ― Chinua Achebe, Things Fall Apart
Africa


To be interested in the changing seasons is a happier state of mind
than to be hopelessly in love with spring. George Santayana

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T. S. Eliot, 1956; photograph by Cecil Beaton from Mark Holborn’s book Beaton: Photographs
Africa


“Silence,” which he never published, about an experience “for which we
waited,” one that overwhelms his consciousness of everything else. The
second stanza reads:

This is the ultimate hour
When life is justified.
The seas of experience
That were so broad and deep,
So immediate and steep,
Are suddenly still.
You may say what you will,
At such peace I am terrified.
There is nothing else beside.

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Zika ‘spreading explosively’, up to four million cases expected: WHO France 24
Law & Politics


WHO Director-General Margaret Chan said the spread of the
mosquito-borne disease spreading through the Americas had gone from a
mild threat to one of alarming proportions.

Chan said the virus - which has been linked to birth defects and
neurological problems – was "spreading explosively."

Chan told WHO executive board members at a special meeting in Geneva.
"As of today, cases have been reported in 23 countries and territories
in the (Americas) region."

Conclusions

read more






This is the full text of Enoch Powell's so-called 'Rivers of Blood' speech, which was delivered to a Conservative Association meeting in Birmingham on April 20 1968
Law & Politics


The supreme function of statesmanship is to provide against
preventable evils. In seeking to do so, it encounters obstacles which
are deeply rooted in human nature.

Above all, people are disposed to mistake predicting troubles for
causing troubles and even for desiring troubles: "If only," they love
to think, "if only people wouldn't talk about it, it probably wouldn't
happen."

I simply do not have the right to shrug my shoulders and think about
something else. What he is saying, thousands and hundreds of thousands
are saying and thinking - not throughout Great Britain, perhaps, but
in the areas that are already undergoing the total transformation to
which there is no parallel in a thousand years of English history.

In 15 or 20 years, on present trends, there will be in this country
three and a half million Commonwealth immigrants and their
descendants. That is not my figure. That is the official figure given
to parliament by the spokesman of the Registrar General's Office.

There is no comparable official figure for the year 2000, but it must
be in the region of five to seven million, approximately one-tenth of
the whole population, and approaching that of Greater London. Of
course, it will not be evenly distributed from Margate to Aberystwyth
and from Penzance to Aberdeen. Whole areas, towns and parts of towns
across England will be occupied by sections of the immigrant and
immigrant-descended population.

Let no one suppose that the flow of dependants will automatically tail
off. On the contrary, even at the present admission rate of only 5,000
a year by voucher, there is sufficient for a further 25,000 dependants
per annum ad infinitum, without taking into account the huge reservoir
of existing relations in this country - and I am making no allowance
at all for fraudulent entry. In these circumstances nothing will
suffice but that the total inflow for settlement should be reduced at
once to negligible proportions, and that the necessary legislative and
administrative measures be taken without delay.

Conclusions

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11. and 12. The Shipping News Says the World Economy Is Toast Mark Gilbert
International Trade


Here's a chart showing what's happening to the volume of goods being
shipped in containers from China's ports, one for the country and one
for Shanghai. Both indexes are compiled by the Shanghai Shipping
Exchange, and cover shipments to the rest of the world including
Europe, the U.S. and Africa; activity is down more than 40 percent
from its peak in mid-2012:

The traditional global shipping measure is called the Baltic Dry
Index. Shipping purists (who rival gold bugs in their dedication to
minutiae) will tell you it mostly reflects how many vessels are afloat
on the world's oceans; a glut of shipbuilding means more boats
available, which drives down the cost of shipping bulk raw materials
such as iron ore, steel and coal. But given the fragile state of the
global economy, it's hard to shake the feeling that the index has been
trying to tell us something important about global demand in recent
years:

There's a similarly contractionary pattern in the available data on
air freight. Here's a chart showing tons of goods shipped per mile
across U.S. skies since the start of the decade:

There's a scene in the film adaptation of Annie Proulx's Pulitzer
Prize-winning novel "The Shipping News": An old newshound explains to
newbie journalist Kevin Spacey how dark clouds on the horizon justify
the hyperbolic headline "Imminent Storm Threatens Village."

"But what if no storm comes?" Spacey asks. The veteran replies with a
second-day headline: "Village Spared From Deadly Storm."
Unfortunately, having survived the storm fanned by subprime mortgages
and the credit crisis, the clouds are gathering again over the global
village we live in; they are getting darker every day.

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In a 5-4 vote, the Bank of Japan’s board imposed a 0.1% fee on deposits left with the Bank of Japan, effectively a negative interest rate.
Law & Politics


“The BOJ will cut the interest rate further into negative territory if
judged as necessary,” the bank said in a statement.

“And the grand macro-economic elephant in the room is what happens if
China is forced into a major one-off devaluation in retaliation.
Markets are unlikely to react well to a big yuan devaluation, and the
further the ECB and the BOJ force their currencies down the more they
push China to act.”

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Currency Markets at a Glance WSJ
World Currencies


Euro 1.0906
Dollar Index 98.86
Japan Yen 120.75
Swiss Franc 1.0168
Pound 1.4401
Aussie 0.7132
India Rupee 67.985
South Korea Won 1203.40
Brazil Real 4.0712
Egypt Pound 7.8301
South Africa Rand 16.1093

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Oil futures set for second weekly gain on supply cut talk
Commodities


Brent futures LCOc1 have jumped over 25 percent since hitting an
intraday low of $27.10 a barrel on Jan. 20 and up to its Jan. 28 high
of $35.84.

Brent had risen 35 cents to $34.24 a barrel by 0429 GMT, after ending
up 79 cents, or 2.4 percent, at $33.89 on Thursday, and is heading for
its fourth straight session of gains.

U.S. crude CLc1 climbed 36 cents to $33.58 a barrel, having settled up
92 cents, or 2.9 percent, at $33.22 on Thursday. U.S. crude is also
set for a 4.6 percent weekly gain.

"Despite the unlikely scenario of supply cutbacks in the oil market,
prices have found some support above $30 a barrel. We believe this
basis is fragile, with fundamentals expected to weaken in the coming
weeks," ANZ said on Friday.

read more


Crude Oil 6 Month Chart INO 33.67
Commodities


Emerging Markets

Frontier Markets

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Satellite Images Indicate Burundi Used Mass Graves, Amnesty Says
Africa


The photographs are consistent with the testimony of witnesses who
said that graves were dug Dec. 11 after heavy fighting erupted when
gunmen attacked military camps in Bujumbura, the London-based group
said. At least 154 people died in that bout of violence, the
Paris-based Worldwide Movement for Human Rights and Ligue Iteka, a
local group, said that month.

“These images suggest a deliberate effort by the authorities to cover
up the extent of the killings by their security forces and to prevent
the full truth from coming out,” Muthoni Wanyeki, Amnesty
International’s regional director for East Africa, the Horn and the
Great Lakes, said in an e-mailed statement. Government spokesman Willy
Nyamitwe didn’t answer calls and a text message seeking comment on the
report.

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Africafrance 24 Ex-Ivorian leader Gbagbo pleads not guilty to crimes against humanity at ICC
Africa


Gbagbo and his co-accused, former militia leader Charles Ble Goude,
both denied charges of organising "a common plan" which led to
"widespread" murders, rapes, persecution and other "inhumane acts"
during post-election violence that wracked Ivory Coast five years ago.

The 70-year-old former president looked relaxed as the high-profile
trial got underway, shaking hands with his defence team.

The trial, which has been beset by several delays, is the first in
which an ex-head of state has stood in the dock at the ICC.

Prosecutors accuse the one-time west African strongman of devising a
plan to cling to power at all costs after being defeated by his bitter
rival Alassane Ouattara in a democratic election in November 2010.

"Nothing would be allowed to defeat Mr Gbagbo, and if politics failed,
violence was seen as politics by other means," chief prosecutor Fatou
Bensouda told a three-judge bench, saying her office would prove the
charges "beyond reasonable doubt".

read more


There are few things that people from Ivory Coast enjoy more than a night out with champagne, music, and big cigars.
Africa


Champagne sales have soared in the West African nation, making it the
fastest-growing market for bubbly in Africa. Sales almost tripled
between 2011 and 2014 to 211,103 bottles, according to the Comite
Champagne, a trade association based in Epernay, France. And judging
from the latest estimates, sales grew 65 percent again last year,
according to Taittinger SA, a champagne producer that recently
outlined its plans for African expansion at a festive reception in
Ivory Coast’s commercial capital, Abidjan.

A bottle of champagne in Ivory Coast starts at about 22,500 francs
($38) and can cost as much as about 120,000 francs ($200) — not
exactly a cheap buy in a country that had per-capita income of $1,319
in 2015, according to the International Monetary Fund. But that isn't
deterring consumers.

"Champagne is flowing like water in Ivory Coast," said Vincent Voisin,
Africa and Middle East export director of Grands Chais de France, one
of France’s leading exporters of wines and spirits. "Ivorians like to
party, and women are consuming more and more. It’s become an
affordable luxury, with a growing middle class that’s got the money to
have a good time," Voisin said in an interview in Abidjan.

read more


Foes From Mozambique's War Spar as Energy Windfall Looms
Africa


A bronze statue of a former president looms in Mozambique's capital,
but the likeness of Samora Machel — imposing in military uniform and
with pointed finger — is a symbol of division for some in a
resource-rich nation shadowed by a civil war legacy.

Far from history-steeped Maputo, dotted with faded Art Deco buildings
made by Portuguese colonizers and streets named after Karl Marx and
other revolutionaries, fresh reports of violence between old
battlefield adversaries suggest a 1992 peace deal never quite took
hold.

Several thousand people in Mozambique's Tete province, which has large
coal reserves, recently fled into neighboring Malawi, alleging violent
persecution by government troops — a charge that the government
denies. Last week, Manuel Bissopo, general secretary of the main
opposition movement Renamo, was seriously injured when gunmen fired on
his car in Beira city, Mozambican media reported.

The backstory is the rivalry between Frelimo, a former Marxist
guerrilla movement led by Machel that took power after independence
from the Portuguese in 1975, and Renamo, the force that fought Frelimo
for more than 15 years in a conflict that killed up to 1 million. They
are now rivals in the political arena, with Frelimo coming on top in
national elections.

A return to war seems remote: the two sides have engaged in dialogue,
and Renamo is no longer a formidable military power. Yet the fact that
Renamo, once backed by white-minority rulers in then-Rhodesia and
apartheid South Africa, still has weapons unsettles a country
expecting a financial windfall in coming years from natural gas finds
off the northern coast.

The tension between Renamo (the Portuguese acronym stands for
Mozambican National Resistance) and Frelimo (Mozambique Liberation
Front) partly reflects jockeying for cuts of the fledgling energy
industry, according to some analysts.

"Everybody is lining up to figure out how to get it," said Brigit
Helms, who advised on trade policy in Mozambique for the U.S. Agency
for International Development. Before leaving her post, she said in an
interview in her Maputo office in October that the benefits of an
expected "tsunami of money" in a decade or so could be undercut by
corruption, poor planning and protectionist policies that hurt free
trade.

Conclusions

Interesting times.

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4 JUN 12 'Maputo, Boom Town'
Africa


GREETINGS from the Serena Polana, Maputo. I can confirm that Maputo is
the land of wonderful and flavoursome tiger prawns.

The Architecture is also deliciously retro. By the way, the Polana was
built in 1922 and the flavour is fabulously Riviera and very swanky.
It is less than 4 hours by plane from Nairobi and surely set to be the
most of in things and places to visit.

Of course, Mozambique has popped large onto the global radar because
of gas reserves that have been discovered offshore and in the deep
sea.

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South Africa Raises Key Rate to 6.75% to Counter Rand Slump
Africa


South Africa’s central bank ramped up its policy tightening by raising
the benchmark rate by half a percentage point, worried that inflation
pressures from a weaker rand will spread more broadly in the economy.

The repurchase rate was increased to 6.75 percent, Governor Lesetja
Kganyago said in a speech Thursday in the capital, Pretoria. That was
in line with the forecasts of 17 of the 26 economists surveyed by
Bloomberg. Six had predicted a 25 basis-point increase.

The rand’s 15 percent plunge against the dollar since the last policy
meeting in November has forced the Reserve Bank to take more
aggressive action after limiting its rate increases last year to
quarter-point moves. Inflation risks are rising as the worst drought
in more than a century boosts food prices, threatening the central
bank’s 3 percent to 6 percent target range.

“In an environment where you’ve got waning liquidity, funding costs
have been going up, the rand has been weak, an inflation threat that’s
becoming a reality, you have got to respond to maintain macroeconomic
stability,” Arthur Kamp, chief economist at Sanlam Investment
Management, said by phone from Cape Town. “That response has to be a
combination of both a tightening of monetary and fiscal policy.”

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Egypt Pound versus The Dollar 3 Month Chart INO 7.83
Africa


Egypt EGX30 Bloomberg -14.55% 2016

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

5,986.78 +26.19 +0.44%

Nigeria All Share Bloomberg -17.61% 2016

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

23,598.85 +265.51 +1.14%

read more


Nigeria's Buhari against devaluing naira, sees recovery soon Reuters
Africa


"Likening devaluing the Naira to having it 'killed', President Buhari
said that proponents of devaluation will have to work much harder to
convince him that ordinary Nigerians will gain anything from it," his
office said in a statement titled "President Buhari rejects
devaluation".

Nigerian firms and foreign investors have complained that they cannot
get hard currency to fund essential imports such as food or machinery
spare parts.

Foreign stock and bond market investors have become reluctant to put
money into Nigeria because they assume the West African nation will
have to devalue its currency eventually.

Buhari also backed the central bank's decision to stop selling dollars
to foreign exchange bureaus, saying: "We don't have the dollars to
give to the BDCs (bureaux des change). Let them go and get it from
wherever they can other than the central bank."

"We had just 74 of the bureaux in 2005, now they have grown to about
2,800," Buhari said, decribing their business as a "scam and drain on
the economy," according to the statement.

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Nigeria’s economy Crude tactics Cheap oil is causing a currency crisis in Nigeria. Banning imports is no solution Economist Subscriber
Africa


MORE than 30 years ago, a young general swept to power in the fifth of
Nigeria’s military coups since independence in 1960. The country he
inherited was a mess: bled dry by pilfering politicians within and
hammered by falling oil prices without. Last year that general,
Muhammadu Buhari, became president again—this time in a democratic
vote. The problems he has inherited are almost identical. So are many
of his responses.

The sticky stuff directly accounts for only 10% of GDP, but for 70% of
government revenue and almost all of Nigeria’s foreign earnings.

Oil’s price has fallen by half, to $32 a barrel, in the months since
the new government came to power, sending its revenues plummeting.
Income for the third quarter of 2015 was almost 30% lower than for the
same period the year before, and foreign reserves have dwindled by $9
billion in 18 months. Ordinarily there would be buffers to cushion
against such shocks, but Mr Jonathan’s cronies have largely squandered
them. Growth was about 3% in 2015, almost half the rate of the year
before and barely enough to keep pace with the population. The
stockmarket is down by half from its peak in 2014.

Domestic oil producers are feeling the pinch worst. Many borrowed
heavily to buy oilfields when crude was worth more than $100 a barrel,
and are now struggling to pay the interest on loans, says Kola Karim,
the founder of Shoreline Group, a Nigerian conglomerate. This, in
turn, threatens to create a banking crisis. About 20% of Nigerian
banks’ loans were made to oil and gas producers (along with another 4%
to underperforming power companies). Capital cushions are plumper than
they were during an earlier banking crisis in 2009; but, even so, bad
debts are mounting and banks that are exposed to oil producers may
find themselves in trouble. “It wouldn’t surprise me if one or two
went down,” says a senior banker in Nigeria.

The government’s response to the crisis has been three-pronged. First,
it is trying to stimulate the economy with a mildly expansionary
budget. At the same time, it is trying to protect its dwindling
hard-currency reserves by blocking imports. Third, it is trying to
suppress inflation by keeping the currency, the naira, pegged at
197-199 to the dollar. Only the first of these policies seems likely
to work.

That seems reasonable. At 7%, Nigeria’s tax-to-GDP ratio is pitifully
low. Every percentage point increase could yield $5 billion of extra
cash for the coffers, reckons Kayode Akindele of TIA Capital, an
investment firm. Mr Buhari also plans to save some $5 billion-$7
billion a year by ending fuel subsidies—a crucial reform, if he sticks
with it. Even so he will be left with a deficit of $15 billion (3% of
GDP) that will have to be filled by domestic and foreign borrowing.

Nigeria is fortunate in having low levels of public debt (less than
20% of GDP), but it is not helped by high interest rates, which mean
that 35% of government revenue goes straight out of the door again to
service its borrowings. It would not take much to push it into a debt
crisis.

Frustratingly, this crunch is one that Nigeria has been through
before—under the then youthful Mr Buhari. Then, as now, he refused to
let the market set the value of the currency. Instead he shut out
imports, causing the legal import trade to fall by almost 50% and
killing much of Nigeria’s nascent industry in the process. Between
1980 and 1990, carmaking fell by almost 90%. Today, as in the 1980s,
the president is making a bad situation worse.

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Zambia Inflation Quickens Sixth Straight Month to 12-Year High
Africa


Prices rose by 21.8 percent year-on-year in January from 21.1 percent
a month earlier, the Central Statistical Office said in a statement
handed to reporters on Thursday in Lusaka, the capital. Prices rose
1.3 percent in January from the previous month, it said.

Inflation has in Zambia, Africa’s second-biggest copper producer,
climbed from 7.7 percent in September after the nation’s currency
plunged against the dollar as metals prices fell and the fiscal
deficit widened. An electricity shortfall that’s led to daily
rationing lasting as long as 14 hours for businesses has cut output
and increased costs. The central bank increased its key lending rate
to a record 15.5 percent in November to try contain prices.

read more



Reserve brands have grown net sales 65% in Africa, driven in particular by Johnnie Walker Blue via @Diageo_News
Africa


• Net sales grew 3% in Africa, with strong growth of beer (up net
sales 15%),
offset by a significant decline in Orijin following its
successful launch in the prior year, and decline of scotch in South
Africa and Angola given the challenging economic conditions.
• The beer performance was led by the roll back of excise duty
increase on Senator in Kenya, growth in Guinness and Malta Guinness in
Nigeria, and good performance in the growing value beer segment
with
Satzenbrau in Nigeria, and Balozi and Allsopps in Kenya.
Weaker demand for scotch was offset by stronger growth of vodka and
rum in both East Africa and South Africa.
• In Ghana, the successful launch of Orijin Bitters and ready to drink
formats drove 27% net sales growth.
• Reserve brands have grown net sales 65% in Africa, driven in
particular by Johnnie Walker Blue performance in Nigeria and Africa
Regional Markets.

read more




EABL reports H1 EPS +74.57% Earnings here
Kenyan Economy


Par Value:                  2/-
Closing Price:           265.00
Total Shares Issued:          790774356.00
Market Capitalization:        209,555,204,340
EPS:             11.31
PE:                 23.431

Revenue 37.513921b vs. 34.657876b +8.241%
Cost of sales [20.084503b] vs. [17.527170b] +14.591%
Gross profit 17.429418b vs. 17.130706b +1.743%
Selling and distribution costs [3.244707b] vs. [3.188071b] +1.776%
Administrative expenses [5.094642b] vs. [4.397458b] +15.854%
Other income/ [expenses] 191.841m vs. [447.624m] +142.858%
Finance income 187.589m vs. 11.553m +1,523.725%
Finance costs [1.547213b] vs. [2.193056b] -29.449%
Profit before income tax 7.922286b vs. 6.916050b +15.549%
Profit for the period from continued operations 5.484510b vs. 4.723614b +16.108%
Profit /[loss] from discontinued operations 2.249428b vs. 0.101497b +2,116.251%
Profit for the period 7.733938b vs. 4.622117b +67.325%
EPS 9.13 vs. 5.23 +74.570%
EPS (continuing operations) 6.28 vs. 5.37 +16.946%
Net assets 43.116692b vs. 42.009009b +2.637%
Cash and cash equivalents at the end of the period 5.801563b vs.
2.943064b +97.127%

read more


Company Commentary
Kenyan Economy


Net Sales growth of 8%.
Double digit growth in 5/8 product segments and recovery in Senator
Keg post the review in duty remission in Kenya
Kenya delivered 22% net sales growth
mainly driven by a good
performance from Senator Keg and spirits. Innovations led by Chrome
Vodka, Kenya Cane coconut and Allsopps Stout also led to the growth.
Net Sales in Uganda and Tanzania remained flat in local currency terms
We experienced a decline in export markets mainly due to the volatile
environment in South Sudan
Cash flow from operating activities increased by 51% to 11.4b
Total net borrowings decreased by 8.5b as a result of strong operating
cash flow and the sale of CGI contributing to a 38% decrease in net
finance costs in the period
Total Profit for the half grew by 67% to 7.7b inclusive of the
contribution from the disposal of CGI and netting off 1.0b of negative
impact from South Sudanese pound currency devaluation

Interim dividend 2.00 versus 1.50 +33%

EABL recorded strong growth of Senator Keg. PHOTO | FILE @BD_Africa

http://www.businessdailyafrica.com/Corporate-News/EABL-half-year-profit-hits-Sh7-7bn-/-/539550/3053078/-/ecol0mz/-/index.html

Senator Keg whose volumes more than doubled following a lowering of
excise tax mid-last year.

EABL, which is 50.02 per cent owned by multinational brewer Diageo,
saw its net sales from the South Sudan business decrease 74 per cent,
the Kenyan business grew 22 per cent while Uganda and Tanzania
registered seven and 12 per cent drop in net sales respectively.

Sales of mainstream beers, including Tusker, dropped by 10 per cent
while premium beers such as Tusker Malt and Guinness grew by a similar
margin.

The brewer recently launched a 300ml Tusker bottle targeting
lower-income consumers seeking to increase sales of its flagship beer.

Its spirits brands like Kenya Cane, Uganda’s Waragi and Kane Extra
reported net sales growth of 14 per cent while high-end brands like
Ciroc and Singleton recorded strong growth of 45 per cent.

Conclusions

Organic EPS accelerated +16.946%
Strong Turnaround in cash Position
Interim Dividend +33% is a strong signal.
Kenya evidently a stand-Out.

Full Year Revenue 64.420458b versus 60.748887b +6.00%
Full Year Cost of Sales [32.389041b] versus [30.586648b] +6.00%
Full Year Gross Profit 32.031417b versus 30.162239b +6.00%
FY Selling and Distribution Costs [6.038162b] versus [5.761488b] +5.00%
Full Year Administrative Expenses [7.871377b] versus [9.330026b] improved 16%
Full Year Other Income 103.746m versus [422.125m]
Finance Costs [4.074380b] versus [4.343869b] -4.00%
Full Year profit before Income Tax 14.151244b versus 10.389673b
Full Year Profit After Tax 9.574905b versus 6.858608b +40.00%
[underlying profit +16%]
Full Year EPS 11.31 versus 8.21 +37.775%
Full Year Dividend 6 shillings a share [+ Interim 1.50 a share] 7.50
versus 5.50 +36.36%

Liberty Kenya issues a FY Profits Warning here

http://www.rich.co.ke/media/docs/Liberty%20Kenya%20Holdings%20Ltd.-%20Profit%20Warning%20Announcement.pdf

marked-to-market Financial Instruments

read more


Smart Africa: Kenyan start-up M-Kopa lights remote areas FT
Kenyan Economy


It has taken less than a month for Peter Muinde to appreciate how much
M-Kopa has transformed his family’s life.

This motorcycle taxi driver who lives 8km from the nearest paved road
in Kenya’s Machakos County acquired his pay-as-you-go solar power
system from the Nairobi-based company in December. He now has
sufficient electricity whatever the weather for the two lights, torch
and radio that come with the kit as well as a mobile phone charge.

Kenya has been at the centre of tech innovations on the continent
during the past five years, leading the field in game-changing areas
such as mobile money and crowdsourcing. M-Kopa is among the
fastest-growing newer entrants to the market, providing power to
remote areas that might otherwise wait years for state-driven rural
electrification schemes.

The cost to Mr Muinde was a down payment of Ks3,500 ($34.25) and a
daily fee of Ks50 paid via M-Pesa, the mobile money platform developed
by Safaricom the country’s dominant telco. If he maintains payments
for a year he takes ownership of the system.

“I had been spending a lot more money to buy kerosene and there was a
lot of soot,” he said, while listening to his solar-powered radio.
“Now I don’t have to buy the kerosene, the house is clean and I’m
saving maybe 20 shillings [everyday].” His wife Winifred said they use
the saved money, which accounts for about 5 per cent of Mr Muinde’s
earnings, to buy books and stationery for their four children.

There are now 300,000 homes and businesses in Kenya, Uganda and
Tanzania using M-Kopa’s products and Jesse Moore, chief executive,
says the goal is to have 1m customers by the end of 2017, which means
signing up 4,500 people a week.

“The average Kenyan home will spend $200, slightly more, per year [on
energy] and that’s not even including the cooking fuel — it’s
lighting, charging up their mobile phones and radio batteries,” he
said. “So that was what caused us to realise you could create a $1bn
company doing this. It’s a multibillion-dollar market in east Africa.”

M-Kopa, which was started in 2010 by Mr Moore and Nick Hughes — a
former Vodafone executive who developed M-Pesa, does not see itself as
a solar energy company, however. The clue to its ultimate ambition is
in its name: Kopa is Swahili for borrow.

Customers who establish a good payment record are offered the chance
to remortgage their solar system to acquire other goods, with the
latest addition to the catalogue being an M-Kopa-powered television —
an attraction executives hope will become a catalyst for accelerated
sales.

So far, investors appear to have bought into M-Kopa’s growth story.
The company has raised about $30m in equity and $25m in debt, with the
latest round of $19m of equity funding completed in November. The lead
investor was London-based Generation Investment Management, founded by
former US vice-president Al Gore, with others including Sir Richard
Branson, Virgin Group founder, and Steve Case, the former AOL boss.

Aly-Khan Satchu, a Nairobi-based investment analyst, says M-Kopa is
“the first example of serious beef” among the hundreds of Kenyan tech
start-ups. “A lot of people have been drinking the start-up Kool-Aid
and there hadn’t been the traction till now,” he said. “M-Kopa is one
of those that is leading the charge. It has shown that you can take
nickels and dimes from the bottom of the pyramid and build a
substantial business.”

Mr Moore, a Canadian with an MBA from the University of Oxford, is
cagey about plans to list the company. “Some of our earliest investors
have already exited or partially exited as others have come in,” he
said.

“So you don’t have to see that happen but with all high-growth
companies I think there’s an opportunity to build a very valuable
business and investors who are of the venturesome variety and put
money in in 2012 will probably by 2020 want an opportunity to sell.”

read more







 
 
N.S.E Today


International Markets have been exhibiting extreme beta in January.
In a 5-4 vote, the Bank of Japan’s board imposed a 0.1% fee on
deposits left with the Bank of Japan, effectively a negative interest
rate which sent the Yen into a Tail-Spin Friday.
This was a relevant comment from a Bloomberg Article I read this morning.
“And the grand macro-economic elephant in the room is what happens if
China is forced into a major one-off devaluation in retaliation.
Markets are unlikely to react well to a big yuan devaluation, and the
further the ECB and the BOJ force their currencies down the more they
push China to act.”
Brent futures have jumped over 25 percent since hitting an intraday
low of $27.10 a barrel on Jan. 20 and up to its Jan. 28 high of
$35.84.
The Shilling has stayed ''Teflon'' though all this international
turbulence and was last at 5 and a 1/2 month highs of 102.30
South Africa raised rates 50 basis points yesterday.
African Equity indices have been in the red in January with South
Africa -3.93%, Nigeria -17.61% and Egypt -14.55 Year to Date through
this morning.
Extreme FX restrictions now apply in Nigeria and Angola.
As i said previously I expect Kenya and East Africa to be a bright
spot in a challenged SSA.
I am co-hosting a Mindspeak Session with Kenya Commercial Bank where
we will be hosting the Cabinet Secretary National Treasury Henry
Rotich tomorrow from 0900 at the InterContinental Nairobi.
You are welcome to attend in person or follow the event via a Live
Feed and this link - http://www.rich.co.ke/rctools/mindlive.php
The Nairobi All Share edged 0.11 points lower to close at 136.81
The Nairobi NSE20 firmed +9.81 points to close at 3773.17.
Both indices are trying to find their footing and are outperforming
their SSA Peers.
Equity Turnover was 778.063m and dominated by EABL which reported H1
Earnings last night.



N.S.E Equities - Commercial & Services


Safaricom closed unchanged at 15.15 and traded 2.959m shares.
Safaricom is set to rebound meaningfully in short order. Sell Side
Supply is thin at these levels and Buyers outpaced Sellers by a Factor
of 5 to 1 at the Finale.



N.S.E Equities - Finance & Investment


Banks have typically exhibited the highest correlation to GDP. I
expect GDP Expansion to clock 6% this Year and therefore, Big Cap
Banks look cheap to me on a fundamental valuation basis and I expect a
broad based rally from here and through the Full Year Earnings Release
season.
Kenya Commercial Bank firmed 0.65% to close at 38.25 and was trading
at 38.50 +1.32% at the closing Bell. Kenya Commercial Bank traded
4.915m shares and there is depth to the Buy Side Demand configuration
below 40.00.
CFC Standard Bank firmed +3.23% to close at 80.00 and traded 458,300 shares.

Liberty Kenya issued a FY Profits Warning and cited ''marked-to-market
Financial Instruments'' Liberty Kenya in fact turned +2.616% higher to
close at 17.65 but on odd-lot trading of just 2,200 shares.
Pan Africa Insurance Co was high-ticked +7.27% to close at 59.00 on
just 100 shares.



N.S.E Equities - Industrial & Allied


East African Breweries Ltd. reported First Half Earnings after the
market closed yesterday, where H1 Revenue expanded +8.241% to
37.513921b, H1 Profit before income tax accelerated +15.549% to
7.922286b, they booked a one-off gain from the disposal of CGI and had
to absorb a 1.00b shilling hit from the South Sudan Pound devaluation.
Organic EPS (continuing operations) accelerated +16.946% versus a
+74.57% acceleration when CGI was included. Net Sales growth clocked
8%. whilst Kenya which was the Outlier delivered 22% net sales growth
mainly driven by a good performance from Senator Keg and spirits.
Cash flow from operating activities increased by 51% to 11.4b and
Total net borrowings decreased by 8.5b as a result of strong operating
cash flow and the sale of CGI contributing to a 38% decrease in net
finance costs in the period. The Interim dividend was ratcheted +33%
higher and is a Signal of strength. Senator Keg volumes more than
doubled following a lowering of excise tax mid-last year. Sales of
mainstream beers, including Tusker, dropped by 10 per cent, however,
which makes the Kenya performance even more impressive. These were
strong Earnings plain and simple. EABL was heavily traded and closed
unchanged at 265.00 with 1.503m shares worth 398.285m changing hands.
The Results are deserving of a higher share price and I expect a push
higher over the next few sessions.

KenGen built on Thursday's +2.73% move higher and surged +6.19% to
close at 6.00 and traded 1.603m shares. The PE Ratio has a 1 Handle
and the share price has plenty of headroom because it remains in a
disequilibrium. Price Moves out of a disequilibrium can be dynamic.



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