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Satchu's Rich Wrap-Up
 
 
Wednesday 03rd of February 2016
 
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Africa

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Feb. 01, 2016, 6:00 am George Soros Esquire is going to make another Killing and is set to skin the Bank of China
Africa


George Soros, the man who broke the Bank of England [and I had just
reached the Trading Floor at Credit Suisse First Boston and watched
this unfold in real time in front of my eyes],has been warned off
going to “war on the renminbi” by Beijing.

“Soros’s war on the renminbi and the Hong Kong dollar cannot possibly
succeed — about this there can be no doubt,” read a front-page opinion
piece in the overseas edition of the People’s Daily headlined
“Declaring war on China’s currency? Ha ha”.

The Problem is this and its likely that George Soros Esquire is going
to make another Killing and is set to skin the Bank of China.

“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.” [Bloomberg]

read more



29-SEP-2014 A Small Window for Sharks as Dollar Rises
Africa


Stanley Druckenmiller, who with George Soros bet the bank against the
Bank of England on September 16, 1992 and made off with a billion
pounds in the days when a billion was serious amount of stash said
this:

"As a macro investor, my job for 30 years was to anticipate changes in
the economic trends that were not expected by others - and therefore
not yet reflected in securities prices".

Home Thoughts

read more



Amboseli, Kenya: Convergence of the Tribesby Marie Wilkinson & Cyril Christo.
Africa


“I do not fear death. I had been dead for billions and billions of
years before I was born, and had not suffered the slightest
inconvenience from it.” ― Mark Twain


“Keep away from people who try to belittle your ambitions. Small
people always do that, but the really great make you feel that you,
too, can become great.” ― Mark Twain

“Don't part with your illusions. When they are gone you may still
exist, but you have ceased to live.” ― Mark Twain

read more



Putin and Assad
Law & Politics


Given that this was a manufactured rebellion and that the Rebels are
mercenaries - Wouldn't you just string it along if you were Putin and
Assad and wipe the floor once and for all otherwise these Folks are
going to re-group and be parachuted into Grozny or Xinjiang or
somewhere else.

read more


05-OCT-2015 :: Putin is a GeoPolitical GrandMaster @TheStarKenya
Law & Politics


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.

Let us return to UNGA, where Putin set out his stall and I quote: ‘’I
cannot help asking those who have caused the situation, do you realise
now what you’ve done?’’


With hundreds of thousands of refugees entering Europe, his question
was a sharp one.

Within 24 hours of delivering that speech, Russia instructed that the
US should vacate Syrian Air Space. This message was not delivered to
Ashton Carter by his Russian counterpart Shoigu.

It was delivered to the US Embassy in Baghdad. And pretty soon after
that message was delivered, Russia began its intervention on the side
of President Bashar Assad of Syria.

You could hear the squealing start immediately from Ankara to Riyadh,
from the GCC to Washington. All these capitals have assets on the
ground in Syria, and what is clear is that Russia is not making a
distinction between IS or the ‘’moderate opposition fighting Assad’’
[which really means ‘’our’’ terrorists].

Lavrov said: “If it looks like a terrorist, if it acts like a
terrorist, if it walks like a terrorist, if it fights like a
terrorist, it’s a terrorist, right?”

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.

President Obama is now probably considering how he can wrestle the Oil
price to $20.00.

read more


Putin’s Dragon Is the ruler of Chechnya out of control? New Yorker
Law & Politics


The center of Grozny, the capital of the Russian republic of Chechnya,
is unrecognizable to anyone who saw it during the country’s two most
recent wars against Russia. The First Chechen War, which began in
1994, was a war of nationalist resistance—Chechnya had declared
independence from Russia when the Soviet Union disintegrated—and ended
two years later, after a Russian bombing campaign killed thousands of
civilians and left the city in ruins. The Second Chechen War, which
the Russians launched in 1999, in an effort to curb not only Chechen
separatism but the threat of militant Islam, wound down a decade
later, with special operations carried out deep in the craggy, wooded
hills of the Caucasus. These days, the rubble is gone. The city’s
skyline is punctuated by the glass towers of Grozny-City, a collection
of skyscrapers that house offices, luxury apartments, and a five-star
hotel. Grozny is quiet and bland, with well-paved boulevards running
through its center; there is still a faint air of menace—men in black
uniforms stand with automatic rifles on many street corners—but the
city’s flashier attractions, like a man-made lake with a light show,
seem whimsical and family-friendly.

read more










18-JAN-2016 :: A Start To The Year That Goes Back Decades @TheStarKenya
International Trade


I, like Lefevre, have watched the markets for eternity and I have
never seen anything like this and thats saying something because I can
remember 1994, 1998 and those were big and seismic events.

read more



Currency Markets at a Glance WSJ
World Currencies


Euro 1.0915
Dollar Index 98.87
Japan Yen 119.59
Swiss Franc 1.0181
Pound 1.4405
Aussie 0.7016
India Rupee 68.195
South Korea Won 1218.63
Brazil Real 3.9871
Egypt Pound 7.8280
South Africa Rand 16.3063

read more




Commodity Markets at a Glance WSJ
Commodities


Gold 6 month INO 1128.68 [If the Chinese devalue and that looks
like a shoe-In then GOLD is set to soar]

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

Bloomberg Markets Oil falls below $30 a barrel

pic.twitter.com/EZVc8hhTQL

Crude Oil Chart INO 29.82 [Back on the Bear Trend]

http://quotes.ino.com/charting/index.html?s=NYMEX_CL.H16.E&v=dmax&t=f&a=50&w=1

Emerging Markets

Frontier Markets

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African Union's 'hot air' as it backpedals on Burundi; Nkurunziza pulls off a deadly diplomatic victor
Africa


WHEN the dust settles, it will be the small geopolitical lightweight
of Burundi that eventually showed up the soft belly of the African
Union, the continent’s 54-member bloc

read more


Angola pledges tighter bank regulation in face of dollar drought FT Subscriber
Africa


Angola’s central bank has pledged to tighten financial regulation and
step up anti-money laundering measures after two international banks
halted US dollar supplies to the southern African nation. Bank of
America and Standard Chartered decided to stop supplying greenbacks to
Angolan banks late last year, apparently over concerns about lax
regulation. The oil-dependent nation was one of Africa’s fastest
growing economies over the last decade, but it is now grappling with
the collapse in crude prices, which has led to a shortage of dollars
in the economy.

José Pedro de Morais, governor of the National Bank of Angola, told
the Financial Times that the central bank had conducted a “fundamental
revision of its regulatory framework” to ensure the financial system
complies with international standards. He said 41 new regulations had
been drafted since 2014, with 23 issued and the remainder to be
published this year, covering issues ranging from bank licensing,
external auditing, banks’ ownership structure and anti-money
laundering. Mr de Morais said dollar availability was a concern, but
insisted Angola had sufficient foreign reserves and external financing
— much of it from China — to last out the economic downturn triggered
by the slump in oil prices.

By the end of 2015, the country’s gross foreign reserves fell from
roughly $32bn in 2013 to $22bn — equivalent to about seven months of
imports — according to the International Monetary Fund. Angola is
Africa’s second-largest oil producer and attracted increasing
investment after the civil war ended in 2002, as billions of dollars
was spent on rebuilding the nation’s infrastructure. But it is highly
dependent on oil, which provides about 98 per cent of export earnings
and three-quarters of government revenues.

Under the rule of veteran President José Eduardo dos Santos, who has
maintained a tight grip on power since 1979, it has also been blighted
by allegations of rampant corruption, weak regulation and human rights
abuses.

Standard Chartered, which in 2014 became the first big international
lender to open a subsidiary in Angola, said it took the decision to
halt supplies of dollars to the country in the wake of a group-wide
review of its banking relationships.

“As a result of this review, and against the backdrop outlined above,
we have taken the decision to exit the USD clearing business and other
offshore business we offer to Angolan commercial banks,” Standard
Chartered said.

Bank of America declined to comment.

In response to the slump in oil prices, the government slashed last
year’s budget by roughly $15bn. It has raised about $10bn in external
financing for 2015 and $14.5bn for 2016. The central bank has also
increased interest rates and allowed the kwanza to devalue several
times, most recently on December 31. In all, it depreciated by about
31 per cent in 2015.

The official exchange rate, which is around Kw156 to the dollar, is
still far stronger than the informal market rate. Mr de Morais said
that in the informal market the kwanza has depreciated by about 120
per cent.

In a bid to deal with the dollar shortage the allocation of greenbacks
has been prioritised for strategic areas such as the oil, food and
health sectors. This has had a negative impact on companies’ ability
to pay foreign suppliers and foreign firms seeking to convert kwanza
into foreign currency.

The government is “rationing the supply of dollars to the system”, Mr
de Morais said, to manage the tight liquidity.

Angola is an import-dependent country and Mr de Morais is concerned
that if the kwanza depreciates “beyond a certain limit”, it would push
up prices and inflation, which he forecast to be about 15 per cent in
the medium term.

The central bank estimates the economy will grow 4 per cent in 2015
and 3.3 per cent this year — its lowest level since 2009.

The country’s economic woes have caused high job losses, delayed
government projects and raised concerns about social stability in a
society plagued by inequality.

“We continue to be vigilant in what happens in the economy — I think
we have reached a very reasonable level of price (of the kwanza) this
time around,” Mr de Morais said.

Mr de Morais said the government would continue investing in
infrastructure, a key driver of growth, even as Angola’s current
account deficit widens. The IMF is forecasting it would hit 7.6 per
cent of GDP in 2015 from 1.5 per cent of GDP the previous year, while
debt rises to 57 per cent of GDP.

The deficit would be financed mainly through external financing with
only a “small loss” to the reserves, said the finance minister. “It
will allow us to keep employment, to avoid social unrest and to make
this country continue to grow,” he said.

read more


11-JAN-2016 There are clearly winners and losers in Africa.
Africa


The big elephants in the room, Nigeria and South Africa [which
together make up considerably more than 50 per cent of sub-Saharan Af-
rica GDP] are getting mauled. Madam Lagarde [MD of the IMF] was in
Lagos and trying her elegant level best to cajole President Buhari
into devaluing the Nigeria naira and at a time of his choosing rather
than in a disorderly manner and at a time of the markets choosing. A
20-25 per cent devaluation of the naira is predicted and predictable.
In South Africa, the rand traded back above 16.00 0n Friday and within
a whisker of ‘David van Rooyen’ Lows. I have an admittedly outlier
call of 20 to the dollar in 2016. In a bear market the President Zuma
hair-cut is going to get deeper and deeper.

There is no Hail-Mary pass coming for the commodity producers, and
from Abuja to Luanda, from Lusaka to Johannesburg, the denouement is
still ahead and the risks of a disorderly break-down are spiking just
like the Chicago Board Options Exchange Volatility Index.

read more



Unrest in Ethiopia: the ultimate warning shot? Open Democracy
Africa


The Tigray Peoples Liberation Front (TPLF), the strongest component of
the ruling coalition, from the middle of 2014 has faced the highest
level of Tigrean popular discontent since its inception 40 years ago.
That came first. Now the unrest in the most populated region of
Ethiopia has sent to the regime as a whole the most shattering warning
shot since its arrival in power in 1991.

Despite Tigray’s marginality in terms of geography, population – 6% of
Ethiopians – and its economy, the TPLF had the strength to impose its
hegemony after its victory over the Derg military-socialist junta in
1991. This dominance has recently declined, but it remains the driving
force of the coalition between the four ethnic forces constituting the
near-single party – the Ethiopian People’s Revolutionary Democratic
Front (EPRDF) – with the Amhara National Democratic Movement (ANDM),
the Oromo People’s Democratic Organisation (OPDO) and the Southern
Ethiopian People’s Democratic Movement (SEPDM).

read more



SA’s rich splurge on luxury yachts
Africa


He described Cape Town as “the luxury doorway to Africa”, and said he
had sold a string of multimillion-rand sports fishing boats and yachts
to buyers in Kenya, Angola, Uganda and even Sierra Leone.

Presently, he is brokering two sales to tobacco tycoons in Malawi, he said.

Angolan oil shipping magnate Mauro Carvalho bought a brand new R26
million Fairline Squadron 65 yacht from Levy two years ago.

World Bank bank sees SA’s economy growing 0.8% this year from an
earlier forecast of 1.4%. The forecast for next year was revised to
1.1% from 1.6%.

http://www.bdlive.co.za/economy/2016/02/02/world-bank-downgrades-sas-growth-prospects

Conclusions

I think it will be 0%.

South Africa All Share Bloomberg -5.26% 2016

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

48,029.24 -1,026.30 -2.09%

Dollar versus Rand 6 Month Chart INO 16.3063 [That Sell with a 15
Handle worked a Treat]

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

Egypt Pound versus The Dollar 3 Month Chart INO 7.8201

http://quotes.ino.com/charting/index.html?s=FOREX_USDEGP&v=d3&t=c&a=50&w=1

Egypt EGX30 Bloomberg -14.23% 2016

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

6,008.85 +101.93 +1.73%

Nigeria All Share Bloomberg -16.78% 2016

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

23,834.87 +8.11 +0.03%

Ghana Stock Exchange Composite Index Bloomberg -0.37% 2016

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

1,987.52 -4.66 -0.23%

read more


“We are 65 per cent done with taking a carbon market live in Kenya, and are now looking to draft rules and the legal framework for the board.”
Kenyan Economy


KenGen sells its credits through the World Bank’s Emission Reduction
Purchase Agreements (ERPAs) while Mumias Sugar entered into a similar
agreement with the Japan Carbon Finance Limited in 2009.

KenGen said in its latest annual report it had registered under its
sale scheme six clean energy projects with a potential emission
reduction of 1.5 million tonnes of carbon dioxide equivalent a year.

These projects include three geothermal power plants, two hydro power
plants and one wind farm.

The power producer said it earned Sh270 million from three of the
projects which had 300,000 tonnes of certified emission reduction
between 2013 and 2015. The firm is on the lookout for a new market to
sell its credits however, given that its arrangement with the World
Bank expires this year.

read more


"We are going to invest a lot in growing in Rwanda, Burundi and eastern Democratic Republic of Congo," Ireland said.
Kenyan Economy


The company on Thursday posted a 67 per cent increase in first-half
profit to 7.73 billion shillings ($76 million) as revenue climbed 8.1
per cent.

EABL, as the company is known, plans to more than triple volumes in
Rwanda over the next three years, Ireland said. The company has
witnessed growth of 30 per cent in Rwanda "from a very small base".

"We are going to more than double the number of employees and triple
advertising spending in Rwanda," Ireland
said.

The DRC has good market prospects and the company is working on a
strategy to tap into that market. "The demographics for DRC are good,
there is lots of people entering the middle- income bracket, rapid
urbanization," Ireland said.


Diageo, the London-based maker of Guinness stout and Johnnie Walker
whisky, owns 50.03 per cent of EABL, East Africa’s biggest brewer by
sales and Kenya’s second-largest company by market value.

“We are going to be tactical in our approach to DRC. Some time in the
future we will move to a more operational structure.”

read more


EABL share price data here
Kenyan Economy


Revenue 37.513921b vs. 34.657876b +8.241%
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%
Cash and cash equivalents at the end of the period 5.801563b vs.
2.943064b +97.127%

read more



Nairobi All Share Bloomberg -4.15% 2016
Kenyan Economy


139.65 +1.62 +1.17%

The Nairobi All Share surged +1.17% to close at 139.65 and making that
a +2.075% move higher this week.

read more





 
 
N.S.E Today

The Nairobi All Share ramped +1.64% higher to close at 141.95 a 3 week High.
The All Share has rallied +3.75% so far this week. Safaricom has led
the All Share this week and is +10.231% over the same dates.
The Nairobi NSE20 rallied +23.79 points to regain the 3,800 level and
closed at 3805.15.
Equity Turnover was solid at 865.304m.
The Nairobi Securities is now outperforming all its African Peers and
I expect this outperformance to continue through 2016.
Nigeria is in danger of a disorderly breakdown because of President
Buhari's fixation with not devaluing the Naira.
South Africa will be lucky to grow at al in 2016.



N.S.E Equities - Commercial & Services


Safaricom has underpinned the All Share's muscular rebound this week.
Safaricom surged +4.375% today to close at a 2016 closing High of
16.70. Safaricom has surged +10.231% this week which is a meaningful
move anyway you wish to slice it.



N.S.E Equities - Finance & Investment


Kenya Commercial Bank firmed +0.65% to close at 38.50 and traded
3.298m shares worth 127.605m. I expect further upside Traction ahead
of the FY 2015 Earnings release. I am constructive the Big Cap Banks
which I feel are oversold versus a strong Kenya and EAC GDP curve in
2016.
Equity Bank closed unchanged at 38.75 and traded 4.471m shares worth 173.315m.

Housing Finance featured to the top side and closed +6.57% at 20.25.

Kenya Re rallied +2.79% to close at 20.25. Kenya Re was a Performer in
2015 and looks as if this Buy Side Demand can spill over into 2016.



N.S.E Equities - Industrial & Allied


EABL predictably pushed +1.503% higher to close at 270.00 and was
trading at session highs of 280.00 +5.26% at the closing Bell. EABL
traded 933,300 shares and as I said previously the H1 Earnings Release
justified a higher price and we are now getting that.

KenGen rallied a further +4.95% to close at 6.35 and traded 268,300
shares.KenGen has rallied +15.45% over 5 sessions and off an
admittedly deeply oversold position. There is plenty further to go
because the Price has been in a disequilibrium.

Unga was a big winner and closed +7.14% at 37.50 and traded 1,800 shares.



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