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Monday 04th of April 2016 |
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Macro Thoughts
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One&Only Ocean Club WSJ Africa |
Revisit the most revered destination in the Bahamas now that it has opened its new 125-foot infinity pool and adjoining Ocean Grill, serving fresh seafood and other snacks.
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Congratulations Mr. and Mrs. @bobCollymore Africa |
“Have a heart that never hardens, and a temper that never tires, and a touch that never hurts.” ― Charles Dickens
“A wonderful fact to reflect upon, that every human creature is constituted to be that profound secret and mystery to every other.” ― Charles Dickens, A Tale of Two Cities
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"Years ago I used to think it was possible for a novelist to alter the inner life of the culture," the novelist in Mao II says. Africa |
“Now bomb-makers and gunmen have taken that territory. They make raids on human consciousness.”
“Powerful events build their own networks of chaos and ambiguity,” DeLillo wrote in a 2004 essay on Oswald; the mass of facts that accumulated on these events has its own interconnections, missing pieces, buried meanings. The Tsarnaevs’ story is a grand banquet for conspiracy theorists, involving the FBI, the Russians, terror cells in Dagestan and Chechnya, the unsolved murder of Tamerlan’s best friend and two others in 2011. Within hours of the bombing you could find pictures online that claim to show government agents standing near the site of the first bomb right before it went off. Tamerlan himself frequented conspiracy websites—did he anticipate the endless conspiracy-theorizing that his bombing would give rise to? Conspiracy thinking is similar, in a way, to a terror plot; both lend structure to ambiguous reality. The more demonstrably false the theory, the more powerfully it serves as a protest against reality.
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The Panama Papers: what you need to know Law & Politics |
What is Mossack Fonseca? It is a Panama-based law firm whose services include incorporating companies in offshore jurisdictions such as the British Virgin Islands. It administers offshore firms for a yearly fee. Other services include wealth management.
Where is it based? The firm is Panamanian but runs a worldwide operation. Its website boasts of a global network with 600 people working in 42 countries. It has franchises around the world, where separately owned affiliates sign up new customers and have exclusive rights to use its brand. Mossack Fonseca operates in tax havens including Switzerland, Cyprus and the British Virgin Islands, and in the British crown dependencies Guernsey, Jersey and the Isle of Man.
How big is it? Mossack Fonseca is the world’s fourth biggest provider of offshore services. It has acted for more than 300,000 companies. There is a strong UK connection. More than half of the companies are registered in British-administered tax havens, as well as in the UK itself.
How much data has been leaked? A lot. The leak is one of the biggest ever – larger than the US diplomatic cables released by WikiLeaks in 2010, and the secret intelligence documents given to journalists by Edward Snowden in 2013. There are 11.5m documents and 2.6 terabytes of information drawn from Mossack Fonseca’s internal database.
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North Korea says under Leningrad-style siege from US Law & Politics |
North Korea's top military body has accused US-led "hostile forces" of laying siege to the country like Leningrad in World War II and Cuba during the Cold War missile crisis.
In a statement carried Monday by the North's official KCNA news agency, a spokesman for the National Defence Commission (NDC) also said the latest UN sanctions imposed on Pyongyang over its nuclear weapons programme were "anachronistic and suicidal" and could trigger a nuclear strike on the US mainland.
The UN Security Council adopted its toughest economic sanctions to date on North Korea after Pyongyang conducted its fourth nuclear test in January and a space rocket launch a month later that was widely viewed as a disguised ballistic missile test.
The NDC spokesman said the sanctions were the work of "the US and other hostile forces" who were intent on attacking North Korea "in a flock to swallow it up."
"The Leningrad blockade which struck terror into the hearts of people ... and the Caribbean crisis in the Cold War era can hardly stand comparison with the situation," the statement said.
Far from breaking the North, such treatment would only strengthen its resolve, it said, adding that Washington was engineering a crisis that could see the North "make a retaliatory nuclear strike at the US mainland any moment".
Conclusions
The Arrival of the THAAD has made China fall into line and undercut North Korea.
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How an underground hip hop artist and his book club threaten Angola's regime Africa |
On Monday, 17 Angolan activists received sentences ranging from two to eight-and-a-half years in jail for participating in a book club that was discussing Gene Sharp’s “From Dictatorship to Democracy”. Far from being just an isolated act of dissent, their book club was actually an escalation of a decade-plus conflict between Africa’s second-longest-serving president Jose Eduardo dos Santos and young Angolans seeking a brighter, more democratic future.
The conflict was sparked on November 26, 2003, when a car washer in the capital city of Luanda was caught singing a politically defiant tune by popular Angolan rapper MCK. Presidential guard soldiers seized the young man, Arsénio Sebastião. Against the cries of onlookers, they tied his arms behind his back and marched him out to the Atlantic Ocean.
While the presidential guard soldiers had intended to cultivate a climate of fear in the Luanda population, they may have done quite the opposite. The drowned Sebastião’s martyrdom continues to fuel the flames of a growing citizens’ movement in his homeland.
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Perinod CEO's Late Foray Into Africa Takes Him to Soweto Taverns Africa |
Alexandre Ricard’s smile didn’t waver as he entered a tavern in the South African township of Soweto and saw one of Pernod Ricard’s most popular whiskies -- shelved behind steel grates capped with iron shards.
The chief executive officer took a picture of the security precautions and the meager layout on his iPhone, thanked the woman behind the bar for her welcome and stepped out into the unpaved street.
“We have to be here,” said Ricard, 43, during a visit last month to the slums to see two of the more than 2,000 makeshift taverns, called “shebeens,” that Pernod sells to.
The world’s second-largest distiller is targeting Africa as the next big market for its Jameson Irish whiskey and Absolut vodka, more than 50 years after what is now competitor Diageo Plc began producing there. Continental spending on consumer goods is projected to reach $1.4 trillion by 2020, according to the McKinsey Global Institute. Africa has the potential to become as important as Asia, currently Pernod Ricard’s largest region for revenue, the company says.
The timing isn’t optimal. Consumer confidence is eroding in South Africa as the nation nears economic collapse under President Jacob Zuma, whose tenure has been marred by corruption scandals and a selloff in the country’s bonds and currency. Conditions for business in Angola and Nigeria have deteriorated as the value of oil exports -- the single-largest contributor to economic development in West Africa -- has declined by almost 70 percent since 2012. Pernod opened subsidiaries in both countries that year.
“It would have been better to invest earlier as the environment in Africa is very mixed at the moment,” Victor Lopes, Africa economist at Standard Chartered bank in London, said by phone. The oil-price crash has hurt such countries as Angola, while others, like Ivory Coast and Ethiopia, are “doing very well,” he said.
Pernod Ricard SA also faces a tough opponent in Diageo, the London-based maker of Johnnie Walker scotch and Smirnoff vodka. World leader Diageo already sells to over 20,000 shebeens in South Africa alone and dominates sales of spirits on the wider continent. Its market share for spirits by volume in Africa plus the Middle East is 23 percent, versus Pernod’s 5 percent, according to researcher Euromonitor.
“If Pernod wants to take over Diageo globally, they need to close the gap in Africa,” Trevor Stirling, an analyst at Sanford C. Bernstein, said by phone.
Pernod says it’s in for the long haul, seeking the kind of growth that let it expand from a merger between two family businesses in the south of France into a drinks conglomerate with a market value of 26 billion euros ($30 billion). It’s invested 420 million euros in Africa and the Middle East since 2010, less than Diageo’s $1 billion, and has hired over 500 staff on the continent. These efforts have done little to lift Pernod shares, which are lagging behind the benchmark European food and beverage index. They’re curbed by slower growth and a corruption crackdown that crimped demand for high-end cognacs and whiskies in China, Pernod’s largest market after the U.S. The shares fell 2.8 percent to 95.22 euros at 3:14 p.m. in Paris, pushing them down 9.3 percent this year.
The company’s Africa initiative comes as its competitor is facing a reality check. Diageo Chief Executive Officer Ivan Menezes signaled a slowdown in Africa to investors in January, a year after he said the continent could one day account for 20 percent of sales. The same month, the International Monetary Fund cut its economic-growth forecasts for sub-Saharan Africa for this year to 4 percent and reduced next year’s estimate to 4.7 percent.
“It’s a tough part of the curve at the moment,” John O’Keefe, the president of Diageo’s Africa division, said by phone. “We’ve been in Africa a long, long time, and we’ve learned what it takes to operate through the economic cycles.”
In South Africa, Pernod’s strategy is twofold. In places like Soweto, it’s trying to lure low-income residents now in order to retain their loyalty when they join a rising middle class later -- a phenomenon that led CEO Ricard to call it the “Brooklyn of Johannesburg.”
At the same time, the company is targeting the wealthy, and has seen an increase in demand for its so-called prestige brands at high-end venues such as the Arque Champagne Crescent bar in Johannesburg’s affluent Sandton district.
“These are the places where we really want to target the emerging, high-net-worth black consumer,” said Paul Scanlon, managing director for Pernod’s South Africa division. He was speaking at the Wine Bank, a private club in Sandton where members pay to keep millions of dollars worth of fine wine in climate-controlled vaults.
On a back road in Tembisa, a slum on Johannesburg’s outskirts where the company pays local bikers to festoon shebeens with branded table mats and pennants, field sales manager Werner Vosloo agreed. “When millionaires born in the slums return to the townships in Maseratis and Ferraris on the weekend, they sit at a table with a bottle of Jameson,” he said from behind the wheel of his Range Rover.
“The liquor players, especially Pernod Ricard, entered the African market very late,” Stefano Niavas, a Johannesburg-based partner in Boston Consulting Group’s consumer practice, said by phone. “But you can’t wait for it to be rosy, wade in and expect to make a lot of money. Otherwise it’ll be later and later and you’ll miss the next boom.”
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KPMG Cuts Ties With Zuma-Linked Guptas Amid Influence Probes Africa |
KPMG Southern Africa, a member of the global advisory network, has ended a 15-year stint auditing companies controlled by the Johannesburg-based Gupta family, after the ruling party and the national graft ombudsman announced investigations into its alleged influence over the state.
KPMG Southern Africa Chief Executive Officer Trevor Hoole said the “association risk is too great” following the recent “media and political interest in the Gupta family,” Johannesburg-based Fin24 reported in a story carried on the website of Engineering News, citing an internal e-mail.
“Our very clear understanding is that this was a very reluctant decision on their behalf,” the Gupta family’s Oakbay Investments said in an e-mailed response to questions on Friday. “KPMG confirmed to Oakbay that no audit reason whatsoever contributed to this development.”
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Time for South Africa's Jacob Zuma to Step Down NYT Africa |
In its ruling, the Constitutional Court said that in refusing to pay back the millions spent on his home, Mr. Zuma had “failed to uphold, defend and respect the Constitution as the supreme law of the land.” That has been the story of Mr. Zuma’s leadership. The president of South Africa is elected by Parliament, with is dominated by the A.N.C., so a withdrawal of support by the A.N.C. national executive committee would be tantamount to a demand that Mr. Zuma resign. It’s time.
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Egypt's exchange bureaus investigated for hoarding dollars Africa |
Egypt's General Prosecution is investigating around 15 exchange bureaus after the central bank reported them for hoarding dollars and contributing to Egypt's currency crisis, two prosecution sources told Reuters on Sunday.
Central Bank Governor Tarek Amer is battling against a black market which is sucking up hard currency liquidity from the banking sector and hurting the pound, which has weakened to record lows of 10 per dollar versus an official rate fixed at 8.78 per dollar.
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Jostling for Djibouti The World's superpowers are competing for global influence in this tiny, impoverished county in the Horn of Africa FT Africa |
Thirty per cent of all shipping in the world passes this point on the north-east edge of Africa, where the water narrows to a few kilometres opposite Yemen. A former French colony that became independent only in 1977, Djibouti sits at the southern entrance to the Red Sea, en route to the Suez Canal — a waypoint between Africa, India and the Middle East. Over the past 15 years, the country has set about capitalising on its location at the nexus of international trade: once completed, the Doraleh Multi-Purpose Port will be the largest of eight ports that together will handle containers, livestock, oil, phosphates and more.
But the geostrategic ambition of the small, authoritarian state — which at 23,200 sq km (8,950 sq miles) is only slightly larger than Wales — does not stop there. The US, several European countries and Japan have all pinned global military ambitions on Djibouti. Now China is set to do the same.
China is planning its first overseas military base at Doraleh, within a few kilometres of America’s largest military outpost in Africa. As superpowers jostle for strategic influence, this impoverished state, home to fewer than a million people, is helping to shape a new world order.
One US soldier who served here describes it as “a hot hell box in the armpit of Africa”. Temperatures reach into the mid-40s for nearly half the year. Government offices shut down at 12.30, and an entire nation of men, and many women, take up the national pastime: chewing for hours on khat, a bitter leaf so renowned for its amphetamine-like properties that it is banned in Britain and the US.
“If Djiboutians stopped chewing khat for seven days, they would overthrow the government,” says one port worker. He is only half joking. Eccentric and appealing as it is, Djibouti is authoritarian and brittle too. President Ismaïl Omar Guelleh, a former head of the secret police who has run the country since 1999, will seek re-election for his fourth term on April 8, having altered the constitution in 2010 to allow him to extend his rule. The opposition complains regularly of illegal security crackdowns and the impossibility of free and fair elections.
Amid the boom in construction, Djibouti’s growth rate is likely to surpass 7 per cent this year. But the investments are having “limited trickle-down effects”, according to the International Monetary Fund. Nearly two-thirds of the population lives in poverty, and half the labour force is unemployed. In the absence of many skilled domestic workers, Chinese labourers have been flown in.
Djibouti is now the active centre for what US soldiers at the camp refer to as “g-wot”: the global war on terror.
Nightlife. While parts of the city and many Muslims are dry, drinking is common. ‘Everyone here drinks, and if they don’t, they drink in private,’ one Djiboutian jokes © Nichole Sobecki https://next.ft.com/content/8c33eefc-f6c1-11e5-803c-d27c7117d132
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The Forgotten Mountains of Darfur BY ALEXIS OKEOWO Africa |
Photographing the Sudanese presents its own set of challenges. Many of the non-Arab residents of Sudan have skin that ranges in tone from deep brown to pitch black. They are shades found everywhere on the African continent, but the people of Sudan in particular have not always been photographed with a sensitivity that captures their true likenesses. In too many pictures from the region, they are dim figures in the background, unlit to the point of being shadows, their faces blank or distorted. When the camera does capture their expressions, they are often inscrutable, hinting at despair yet kept at a remove. But the American photographer Adriane Ohanesian, who spent time with some of the thousands of Darfuri women and children who have escaped ground and aerial government attacks by hiding in Darfur’s Marra Mountains, has produced photos that are striking in their closeness to the people at the conflict’s center.
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Africa watches as Kenya prepares to test Eurobond waters Kenyan Economy |
Back in January investors were demanding record premiums of 620 basis points to hold African bonds rather than U.S. debt. That has now fallen back to 550 bps, with oil importers Kenya and Ivory Coast topping the list of winners as this chart shows: reut.rs/1MZUrYz .
An investor-friendly debt swap by Mozambique's state-run fishing firm has also helped sentiment, as has struggling metal miner Zambia starting talks with the International Monetary Fund.
Now some countries could leverage the improved mood. Kenya's presentation, led by finance minister Henry Rotich, is billed as a 'non-deal' roadshow but it is likely to be at least a test of the waters.
"(Kenya) could probably issue. Aside from the 8 percent budget deficit, it's a pretty good story," said Kevin Daly, a portfolio manager at Aberdeen Asset Management. "The currency is stable, domestic rates are coming down, inflation is starting to fall and growth is in the 5-6 percent range."
The World Bank this year singled out Kenya as an African bright spot, with economic growth accelerating thanks to cheaper oil, a solid agriculture sector, and infrastructure investment.
The yield on its existing 2024 dollar bond is down to around 7.75 percent from it 9.8 percent January high. But to warrant the extra cash, any new 10-year bond will need to have a premium of up to 50 basis points on that, investors say.
But other African countries will have to pay much more.
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UK government now turns its guns on Moi-era looters Kenyan Economy |
The British government has offered to help Kenya trace and recover assets looted by Moi-era power men named in the Kroll Report even as the risk consulting firm said it has only completed a quarter of the job.
UK authorities said they are currently in touch with Nairobi to help identify and seize the more than £1 billion (Sh145 billion) looted from taxpayers and stashed in offshore bank accounts and prime real estate purchases in the UK.
The Kroll report uncovered systematic looting of public resources that were subsequently hidden in more than 40 countries and tax havens around the world in the form of cash in banks, land, ranches, and shares in blue-chip companies.
“The UK continues to work closely with the Kenyan authorities, and has asked for information necessary to take this forward,” said a spokesperson at the British High Commission in Kenya.
The British High Commission said recent asset seizures and repatriation, as was the case in the so-called Chickengate scandal and confiscation of former Kenya Power boss Samuel Gichuru’s offshore account funds, show that the UK is committed to the fight against graft.
“Recent times have demonstrated we’re keen to support Kenya in this area,” the spokesperson said.
Conclusions
The Key Triangulator is overseas.
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04-APR-2016 :: The Bifurcation at @NSEKenya @TheStarKenya Kenyan Economy |
According to the dictionary, bifurcate means to divide into two parts or branches, or forked or into two parts, as the Y-shaped styles of certain flowers. What is clear is that the Nairobi Securities Exchange has bifurcated and this trend has accelerated during the recent earnings announcement season. The Nairobi All Share is up 1.19 per cent this year and at a 17-week high. The Nairobi NSE20 Index is 1.09 per cent down and at an 11-week high. However, these benign year-to- date returns are veiling a big bifurcation. Winners are winning big and the losers are losing their shirts.
Bloomberg carried a report last week which was headlined: ‘In the new emerging markets, alpha comes in the form of politics.’ “Situations like that require being more on the ground, to be there to understand what’s happening,” the report stated. ‘’The result is a dramatic shift: firms now have analysts, learn the names of politicians, prosecutors and supreme court justices, double the number of trips, scan prices at foreign supermarkets, track footprints at stores, and read facial expressions of policy makers. Global fragility, they say, is unveiling institutional weakness, graft, poor governance, and low labour productivity - and they need to track them all.’’ Now back to the bourse and lets sift through the winners and the losers starting with the big winners, the outliers. Standard Chartered Kenya has soared by 26.66 per cent so far this year. That’s 22 times better than the benchmark index. Co-operative Bank is plus 16.66 per cent, DTB 14.43 per cent up. Other big winners are KenolKobil which rose by 18.22 per cent, Bamburi Cement up by 10.85 per cent, BAT higher by 8.15 per cent. Safaricom is up 3.36 per cent year-to-date but I have a plus 37.61 per cent price appreciation target (22.50) for the year. For KCB I have a 37.14 per cent price appreciation target (60.00). If you are clustered in these stocks, then you have ‘alpha’ this year.
On the flip side, we have had some dramatic price slumps. Let’s start with National Bank which was planted in the headlines last week. It is down 23.59 per cent in 2016 and worryingly on Friday there was not one single buyer showing at the closing bell. NBK is trading at 13- year lows. Barclays Bank Kenya is down by 19.485 per cent and slumped to a 2011 low Friday. High frequency social media commentary is signalling a franchise under pressure and stress. Uchumi has declined by 53.42 per cent. TransCentury is down 40.571 per cent and at an all- time low. I have to admit I missed some big clues. I remember being face to face with an erstwhile grocer, the share price was riding high at 21 and not one facial expression synchronised with what I was hearing. I give a shout-out to Sunil Sanger who spotted the NBK fiasco about nine months ago.
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