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Satchu's Rich Wrap-Up
Monday 21st of March 2016

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Macro Thoughts

Home Thoughts

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August 19 2013 I have no doubt that the Indian Ocean is set to regain its glory days. @TheStarKenya

Professor Felipe Fernández-Armesto explains why ‘The precocity of the
Indian Ocean as a zone of long-range navigation and cultural exchange
is one of the glaring facts of history’, made possible by the
reversible escalator’ of the monsoon.’

I have no doubt that the Indian Ocean is set to regain its glory days.

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Chilling Effect of Mass Surveillance
Law & Politics

Now research suggests that widespread awareness of such mass
surveillance could undermine democracy by making citizens fearful of
voicing dissenting opinions in public.

A paper published last week in Journalism and Mass Communication
Quarterly, the flagship peer-reviewed journal of the Association for
Education in Journalism and Mass Communication (AEJMC), found that
"the government’s online surveillance programs may threaten the
disclosure of minority views and contribute to the reinforcement of
majority opinion.”

“It’s the minorities who are most at risk” from the impact of mass
surveillance, Snowden said. “Without privacy there is only society,
only the collective, which makes them all be and think alike. You
can’t have anything yourself, you can’t have your own opinions, unless
you have a space that belongs only to you.”

Europe’s most wanted man, Salah Abdeslam, has been arrested in
Brussels after a police raid Friday.


The 26-year-old Belgian national is the only known living suspect in
the Paris terrorist attacks that killed 130 people last November — and
he has been on the run ever since.

According to the British newspaper the Independent, Abdeslam's
professional résumé includes a two-year stint as a railway mechanic,
in addition to working for family businesses, and a personal
reputation as a hard-partying gambler, drinker and smoker. A childhood
friend who recalled Abdeslam's interest in football and motorcycles
told the Independent, “I didn't see any sign of hatred in him

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Salah Abdeslam
Law & Politics

What kind of encryption remains unknown, and is among the details that
Mr. Abdeslam’s capture could help reveal.


According to the police report and interviews with officials, none of
the attackers’ emails or other electronic communications have been
found, prompting the authorities to conclude that the group used
encryption. What kind of encryption remains unknown, and is among the
details that Mr. Abdeslam’s capture could help reveal.

The French police later traced Abdeslam’s mobile phone to a Paris
neighborhood, where, inside a dumpster, they found an abandoned
suicide vest.


The French police later traced Abdeslam’s mobile phone to a Paris
neighborhood, where, inside a dumpster, they found an abandoned
suicide vest. The vest is assumed to be his, but, according to the
Paris prosecutor, he backed out of his mission at the final moment.

“Tonight, we are celebrating a victory,” Michel announced at a press
conference. President Obama called both leaders to offer his
congratulations, despite the fact that, for a hundred and twenty-five
days, Abdeslam had vanished in the city that knew him best.

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Currency Markets at a Glance WSJ
World Currencies

Euro 1.1270
Dollar Index 95.06
Japan Yen 111.43
Swiss Franc 0.9695
Pound 1.4444
Aussie  0.7586
India Rupee 66.525
South Korea Won 1162.18
Brazil Real 3.6247
Egypt Pound 8.8790
South Africa Rand 15.3218

Dollar Index 3 Month Chart INO 95.083


Euro versus the Dollar 3 Month Chart 1.1270


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Tensions rise in Congo ahead of Sunday's presidential poll

Tension rose in Congo Republic ahead of a presidential election on
Sunday after the government ordered phone companies to suspend
services for security reasons and police summoned the main opposition
candidate for questioning.

Opposition figures said the order on Saturday to phone companies MTN
Congo and Airtel Congo to halt communications would impede the work of
election monitors.

"The state wants them to cut off communication on March 20 and 21 for
reasons of security and public tranquillity," a government source told

There was no immediate comment from MTN.

President Denis Sassou Nguesso is expected to extend his long rule in
the oil-producing nation by defeating eight opponents, including
retired General Jean-Marie Mokoko who is seen as the strongest

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Residents of Stone Town in Zanzibar mill around a corner decorated with opposition campaign posters, October 23, 2015.

Zanzibar is rerunning elections on Sunday after they were
controversially nullified by the electoral commission.

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Politics and Development in Tanzania: Shifting the Status Quo Chatham House

These political upheavals come at a time when planning for the
socio-economic future of the country is at a crucial stage, as
Tanzania’s population of 53 million is set to double in the next 15

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Burundi gripped by terror, on brink of 'massive' violence -U.N

UNITED NATIONS (Reuters) - Burundi is gripped by terror amid continued
human rights abuses and the small central African state is on the
brink of a sudden escalation of violence to "massive proportions," the
United Nations human rights chief told the Security Council on Friday.

"Continued human rights violations and impunity for perpetrators mean
that many of Burundi's people live in terror," Zeid said. "The country
remains on the brink of a sudden escalation of violence to even more
massive proportions."

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4 MAY 15 :: Eyes on Burundi::Spill-over Risks From Debacle Loom, The Star.

Burundi | Présidence ‏@BdiPresidence  Mar 1  SE @pnkurunziza a
reçu en audience le nouvel Ambassadeur de l'Australie au #Burundi , M.
John Fakes


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Zambia says budget deficit unsustainable, started IMF talks

The government hopes to conclude negotiations on an IMF programme
during the lender's annual meetings in April, against the background
of the yawning budget deficit which widened to 8.1 percent of GDP in
2015 compared to a target of 6.9 percent.

"We are both of the view the current levels of the budget deficit are
unsustainable, as it leads to increased future requirements for debt
repayment," Treasury secretary Fredson Yamba said at the end of an IMF
mission to Zambia.

“The NEC is unlikely to risk dismissing Zuma at this point, but it is
clear his position is becoming increasingly untenable,” Ruth
Bookbinder, Verisk Maplecroft, said by e-mail.


“The president is unlikely to see out the end of his term.”

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Dollar versus Rand 6 Month Chart INO 15.3218

The EGX 30 entered a bull market this month and is now up 31 percent
from a two year-low in January, even after the biggest interest rate
increase in at least 10 years on Thursday.

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Egypt EGX30 Bloomberg +6.56% 2016 and in a Bull market

The #ramfighting crowd in Lagos keeps growing, w/Fuji musician X
Saheed Osupa set to take the stage


Nigeria All Share Bloomberg -10.29% 2016


Ghana Stock Exchange Composite Index Bloomberg -3.51% 2016


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21-MAR-2016 :: Eurobond Tales and The Noise Around it, @TheStarKenya
Kenyan Economy

In 2014, The Government of Kenya issued two Eurobonds. The First Bond
was the KENINT 5.875% [Coupon] 24-JUN-2019 [Maturity Date] and the
second the KENINT 6.875% 24-JUN-2024.  This First Offering drew bids
of $8.8 billion and the GOK sold $500m of the 5 Year and $1.5b of the
10 Year Bond. Subsequently the Government ''tapped'' both issues
added $250 million to the five-year tranche of the Eurobond, paying a
5.0 percent yield and $500 million to the 10-year tranche at 5.9
percent. Its worth noting that the Treasury received a higher price in
the Tap i.e they sold Bonds for more than a 100.00 [the price was
around 106.00 for the 10 Year Bond] but will be redeeming those same
bonds at 100.00 making a Turn, which Few Commentators noted at the
time. The Tap was a slick piece of work by The Treasury. [Remember a
simple Lesson when it comes to Bonds - Prices rise Yields go down -
Prices Fall Yields go up]

The 10 Year Bond Price traded a high Price around 106.00 through April
2015. Subsequently from April 2015 through January 2016 The Price of
our Eurobond fell from 106.00 to a low price of 84.00 in December 2015
/ January 2016. That 84.00-106.00 Price Range equates to a 9.80%-5.9%
Yield Range. At a rate of 9.80% we were essentially shuttered out of
the Capital Markets, momentarily. Now its worth overlaying the News
Flow over the Time-Frame I have outlined and you will recall that the
High Yield coincided with the political Furore around the Eurobond. I
recall being at a Farewell party for the then outgoing British High
Commissioner and coming across the Opposition Leader and I could not
help saying

''Mpira Mpira You are scoring Goals.''

And credit is due for what was a seriously effective ''political''
onslaught. Subsequently, the same Opposition Leader held a News
Conference with the Foreign Correspondents Association of East Africa.
And in that News Conference, it was alleged that the Federal Reserve
Bank was complicit in the Eurobond Heist. Such an accusation was just
not credible it was incredible. It was a comment that spoke to a
complete lack of understanding about how Central Banks operate and
impugning the Bona Fides of the Federal Reserve was also
mind-boggling. And it speaks to how we are in a domestic Bubble but
simply extrapolating our Hot-House into the International Sphere was
seriously naive.

It turns out that the Press Conference was a Buy Signal. International
Investors understood at that moment that There was no ''Beef'' in the
Propaganda. Since hitting a high yield of 9.8% and a low price of
84.00, the Bond has rallied practically in a straight line and the
Yield was last at the 7.65% level with the Price just a whisker away
from 95.00. Thats a stunning rebound and our Bond has outperformed all
its SSA Peers in 2016.

The IMF have further boosted this Rally, by approving New Arrangements
for Kenya Totaling US$1.5 billion, which is the biggest commitment by
the IMF for an arrangement of this nature, in Africa. Kenya has an
outstanding relationship with the IMF as evidenced when Madam Lagarde
visited in 2014. We are a Poster-Child right now [and lets keep it
that way] in Africa for the IMF.  Madam Lagarde tried to cajole
President Buhari earlier in the Year into relaxing his intransigence
over the Naira unsuccessfully. South Africa's Zuma must have a limit
short Position in the South African Rand because he is seemingly
determined to crash it. The President of Zambia dialled up the IMF
last week.

What we see around Africa today is a lot of irrational Actors. We look
a lot more rational in the comparison.

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Slowdown in Eurobond talk lifts Kenya credit prospects
Kenyan Economy

“Around January, Kenya’s 10-year Eurobond hit a high yield of 9.8 per
cent. The bond has rallied and now yields 7.719 per cent and has been
one of the best performing bonds world-wide since the sell-off. The
capital markets are open to Kenya and at a competitive level and the
Cabinet secretary surely can call on them again,” Nairobi-based
analyst Aly Khan Satchu told the Nation.

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

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