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Friday 08th of April 2016 |
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Macro Thoughts |
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US Russia Said to Team Up to Draft New Syria Constitution @business Law & Politics |
Russia and the U.S are working on drafting a new constitution for Syria, according to three Western and Russian diplomats, in the clearest sign yet of the two powers’ determination to broker a solution to a five-year civil war that has sent a wave of refugees toward Europe.
The joint efforts are at an early stage, and Russia’s current proposals are closer to the Syrian government’s position, said one Western diplomat. The two countries are continuing to exchange ideas, a Russian diplomat said. All three envoys spoke on condition of anonymity because the discussions are confidential.
Conclusions
The Rapprochement is the Point.
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South China Sea Conflict Points to US Push for Chinese Regime Change Law & Politics |
"The strategy for a regime change in China is vastly different from the kind of regime change the United States has brought to much smaller and relatively weaker countries, be it Syria, Libya, Iraq, or what have you," Draitser says.
"What they’re trying to do in China is to slowly chip away at the political edifice of the Chinese Communist Party and to try to exacerbate whatever divisions do exist to try and drive wedges into the political leadership and thereby fracturing it."
He cites the example of a recent letter released anonymously online that heavily criticizes President Xi of overreach and media censorship.
"There’s a lot of jockeying, political and propaganda jockeying going on right now, and I think the United States is intimately involved in that," Draitser says.
"We know from the history of how the US conducts this sort of what I would call 'cyber subversion,' that is precisely how they operate. Whether it’s using social media, such as we saw in Libya, Syria, and elsewhere; whether it’s using hacking or cyber weapons like we’ve seen in Iran…"
Conclusions
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The yen advanced to 107.67 on Thursday, the strongest since before the central bank expanded monetary stimulus in October 2014, despite efforts by officials to talk it down. Law & Politics |
It was at 108.61 as of 12:17 p.m. in Tokyo on Friday.
The last time Japan sold the yen to restrain gains was in 2011, in a multilateral intervention following an earthquake and tsunami that devastated the country’s coastline. Abe’s commitment on the currency this week echoed the communique of the G-20 meeting in February, where finance chiefs promised to consult closely on foreign exchange and refrain from competitive devaluations.
“As long as Japan belongs to G-7, any intervention will require approval from the U.S.,” Ikeda, the head of Japan foreign-exchange research at Nomura Securities, said at a media event Thursday. Until 105, that would be “unjustifiable,” even though the speed of the yen’s advance suggests it’s driven by speculators, he said.
Conclusions
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It's a Great Time to Buy a Diamond, But Fewer People Want One Commodities |
Diamonds are now cheaper than they were in 2006, data from PolishedPrices.com show. Over the same period, the price of luxury items like cars, shoes and fine foods have risen at above-inflation rates, according to a Forbes index. Demand for luxury jewelry rose just 1.9 percent a year from 2004 to 2013, trailing high-end beauty products, tobacco and watches, according to De Beers’s 2014 Insight Report on industry trends.
Efforts by producers including De Beers and Alrosa PJSC to push prices higher in the past five years unraveled in 2015. Polishers who buy the raw gems and sell to wholesalers and retailers were unable to pass on the higher costs as consumers balked. A threat to boycott auctions of rough gems by buyers in India, where almost 90 percent of the stones are cut, ended with De Beers lowering prices 15 percent for the year and another 7 percent in January.
In one early positive omen, De Beers managed to raise rough prices by as much as 2 percent in a sale this week, the first increase in more than a year.
“It’s got to come down to ad-spend,” said Ben Davis, a mining analyst at Liberum Capital Ltd. “They just need to bite the bullet.”
Emerging Markets
Frontier Markets
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Djibouti began voting Friday in a presidential election that incumbent Ismail Omar Guelleh looks certain to win, extending his 17-year rule Africa |
Home to about about 906,000 people, Djibouti is smaller than the U.S. state of Massachusetts yet hosts the largest U.S. military base in Africa. Its $1.6 billion economy relies on services related to its strategic location on the Red Sea, one of the world’s busiest shipping lanes, with the country serving as the only access to the sea for neighboring landlocked Ethiopia. China has begun work on a military facility, while Saudi Arabia in March expressed interest in building one.
Guelleh has led Djibouti since 1999, succeeding Hassan Gouled Aptidon, who was the country’s first president after it gained independence from France in 1977. In March 2010, Guelleh amended the constitution to allow him to extend his rule by two more six-year terms. At his swearing in after elections in 2011, Guelleh said he was taking his oath of office for the “third and final time.”
Zakaria Abdillahi, chairman of the Djiboutian Human Rights League, said the elections “will neither be free nor transparent” because the government hasn’t established an independent electoral commission.
“The current commission is composed exclusively of senior officials appointed by the president,” he said in an e-mailed response to questions from the capital, Djibouti City. “Djibouti has no free media. Everything is controlled by the regime.”
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Africa's $30 Billion Rail Renaissance Holds Ticket for Trade @business Africa |
On a sweltering Kenyan morning on the outskirts of a national wildlife park, Chinese and local workers maneuver a massive concrete rail bridge structure onto towering support piers. In the distance, trucks loaded with shipping containers rumble down a highway.
The bridge at Voi, northwest of the port of Mombasa, is the latest construction frontline for the initial 327 billion shilling ($3.2 billion) stretch of an ambitious railway project to link the East African country with landlocked neighbors including Rwanda and Uganda. As a faster alternative to the trucks clogging the only road running inland to the capital, the Chinese-built and -financed standard-gauge railway, known as the SGR, has the potential to transform trade in the region.
Kenya’s rail line, the country’s biggest investment since independence in 1963, is among the most advanced of the more than $30 billion of African rail projects planned or under way. Together, they span more than 11,000 kilometers (6,835 miles), enough to connect Cape Town to Copenhagen. It’s one of the bright spots on the world’s least developed continent, where governments are wrestling with drought-induced food shortages, weakened currencies and shrinking budgets following the plunge in commodity prices.
“Infrastructure constraints are one of the major things holding back Africa and this standard-gauge railway will make a big difference,” said Bloomberg Intelligence Africa and Middle East economist Mark Bohlund.
Also in West Africa, Senegal signed an agreement in December with China Railway Construction for the renovation of 645 kilometers of railroads. Projects are also planned in Tanzania, Mali and Egypt, while Ethiopia recently completed a line connecting Addis Ababa to Djibouti and has another 4,000 kilometers of projects planned.
Rail infrastructure is vital to improve trade between African countries, which stood at just 13 percent of the total last year, according to the African union.
Kenya, which moves about five percent of freight by rail, predicts the new project will add to economic growth. The government sealed agreements in March with Chinese partners to build the rest of the track up to the border with Uganda, which itself has signed construction agreements for the first phase.
Kenya’s initial stretch, from Mombasa to Nairobi, will be ready to start operating by June 2017, Kenya Railways Corp. Managing Director Atanas Maina said in an interview at the Voi bridge. The line will have daily capacity for eight freight trains in each direction, each with the ability to carry the equivalent of more than 100 containers. It’ll also run as many as two daily passenger trains each way.
Besides the often-clotted Mombasa-Nairobi road, the only other land transportation option is the century-old railway completed by the British colonial authorities in 1901. The line operates at a leisurely pace of about 30 kilometers per hour, compared with the 120 kilometers per hour for passengers and 80 kilometers per hour for freight that Kenya Railways is predicting for the SGR.
China has a history of successful railway projects in Africa. The 1,870-kilometer Tazara railway, which linked landlocked Zambia to Tanzania’s Dar es Salaam port, was funded and built by China in the 1970s. Nigerian President Muhammadu Buhari plans to visit China to get funding for railway projects, Vice-President Yemi Osinbajo said this week.
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Implications of shake-up in the banking sector By ALY KHAN SATCHU The Star Kenyan Economy |
The news that the Central Bank of Kenya had put Chase Bank into receivership for 12 months follows hot on the heels of the National Bank report (which has sent the bank’s share price into a tail-spin as it is now at a 13-year low), the Imperial Bank and Dubai Bank is shuttering. The issue at Chase Bank was evidently compounded by a surge in loans to employees and directors this year amounting to Sh13.6 billion versus the Sh3.24 billion reported last week (according to Bloomberg), that figure is bigger than the core capital of the bank.
Deloitte qualified the accounts which is the first qualification I can recall. Essentially, since Imperial Bank was placed under receivership last year, depositors have removed their deposits from tier-three banks and transferred them to tier-one banks in a move which is called a ‘Flight to Quality’ the world over. This movement of deposits has undercut tier-three banks and essentially made them into ‘’zombie’’ banks. They are too thinly capitalised to sustain the non performing loan ratios (that the market has determined – the market no longer places much credence on their numbers as declared), they have had their legs cut from beneath them, so we are now watching a market-led consolidation process.
Patrick Njoroge, the new sheriff in town, is highly regarded but has a fiendishly difficult Brief in keeping this whole consolidation process orderly. Regime change at the apex bank has brought a more rules-based enforcement system into play. There is a sense that some folks have been flying by the seat of their pants and these folks are not going to make the cut. The Central Bank governor is to be commended for seeking to clean out the Augean stables. We are going to end up with fewer better capitalised banks. The old tier-three model is broken.
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'Malicious' Twitter Posts Blamed for Fanning Kenyan Bank Run @business Kenyan Economy |
#KOT, or Kenyans on Twitter, are being blamed for a run on deposits that resulted in Chase Bank Kenya Ltd. being placed under creditor protection by the East African country’s regulators on Thursday.
Central Bank of Kenya Governor Patrick Njoroge said “malicious comments” on social networks including WhatsApp Inc. were part of the reason the lender was placed under receivership.
“We had some individuals that shouted fire in a crowded theater room; to me there is nothing as reckless as that,” he told reporters in the capital, Nairobi. “If one made such horrendous statements, you can cause a run, some crisis. Indeed the bank was under serious pressure.”
Chase Bank on Wednesday sought to assure customers that it was operating normally as a flurry of comments on social-media sites speculated on the financial health of the company. Rumors on the safety of deposits and investments mounted following the resignation of Chairman Zafrullah Khan and Managing Director Duncan Kabui, and concern over a qualified opinion expressed by auditors on earnings that had been restated to show a surge in loans to employees and directors.
“Rumors have been rife on social media which is turning out to be a pre-eminent early warning system,” Aly-Khan Satchu, chief executive officer of Rich Management, an adviser to companies and wealthy individuals, said in response to e-mailed questions.
Kenya had the highest number of tweets in Africa after Egypt, Nigeria and South Africa in 2015, London-based Portland Communications said in a report released April 6.
Among the tweets on the lender, Nation FM radio presenter Mumbi Seraki on Wednesday posted that alleged fraud that had been discovered at Chase Bank with funds missing on its books. She followed that up with a tweet on Thursday saying that “It’s not the #PowerOfKOT that brought #ChaseBank down but poor financial decisions & abuse of office!” in reference to the hashtag used to describe Kenyan Twitter users. Seraki declined to comment beyond her Twitter remarks when contacted by mobile phone on Thursday.
“Inaccurate social-media reports” caused liquidity difficulties for Chase Bank, with the central bank having to step in on Wednesday and work through the night to try and save the lender, the governor said. There were no signs of fraud, which will make it easier to nurse the company back to health, with the support of its shareholders, Njoroge said.
The company wants to return back to operations as soon as possible, Njoroge said. It’s shareholders will inject liquidity into the bank and are committed to working with regulators to reopening quickly, he said.
Investors in Chase Bank include Amethis Finance SAS, a Paris-based company focused on investing debt and equity in Africa, and KfW, the German development-finance group, according to an April 2015 document published on the lender’s website. responsAbility Participations AG, a Swiss investment company known as rAP, holds a 3 percent minority equity share in Chase Bank, rAP Chairman Klaus Tischhauser said in an e-mailed response to questions, declining to comment on future developments at the lender to avoid more speculation.
Chase Bank is the third lender be taken over by regulators since Njoroge was appointed as governor of the central bank in June as the country’s smaller financial institutions struggle for liquidity against larger peers and non-performing loans climb, with not enough money set aside to cover potential losses.
In June, the lender raised 4.8 billion shillings in bonds due in June 2022 as part of a 10 billion-shilling Medium-Term Note Program. Global Credit Ratings, a Johannesburg-based company, in July assigned Chase Bank an A-(KE) rating with a stable outlook.
The African Development Bank last month granted Chase Bank a $50 million loan for onward lending to small- and medium-sized enterprises. The loan hadn’t been taken up yet, Njoroge said.
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The statement indicated, for instance, that one director lent himself Sh7.9 billion mostly without registered collateral and beyond regulatory limits. Kenyan Economy |
The director gave himself more than the 25 per cent of the total capital limit set in the Banking Act.
The actions of the director — whom the auditors called a significant shareholder — have now made it uncertain as to whether the more than Sh95 billion deposits would be refundable to their owners, mostly small and medium-sized enterprises.
Central Bank Governor Patrick Njoroge said that apart from the Sh7.9 billion lent to the director, there were doubts as to whether additional Sh8.7 billion could be recovered, given that large segments of it were not being serviced or lacked documentation.
“What we have seen at Chase Bank is a situation where the auditor has expressed major concerns regarding recoverability of loans and unsecured insider lending,” Dr Njoroge told a press conference in Nairobi.
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Sameer Africa reports FY PBT 2015 5.69m Earnings here Kenyan Economy |
Par Value: 5/- Closing Price: 3.50 Total Shares Issued: 278342393.00 Market Capitalization: 974,198,376 EPS: -0.06 PE:
FY Revenue 3.363976b vs. 3.777146b -10.939% FY Cost of sales [2.402462b] vs. [2.840635b] -15.425% FY Gross profit 961.514m vs. 936.511m +2.670% FY Other operating income 10.123m vs. 44.934m -77.471% FY Operating expenses [0.916123b] vs. [1.007069b] -9.031% FY Operating profit/ [loss] 55.514m vs. [25.624m] +316.648% FY Net finance cost [56.742m] vs. [43.537m] +30.331% FY Profit/ [loss] before income tax 5.690m vs. [69.457m] +108.192% FY Loss for the year [15.652m] vs. [66.929m] -76.614% FY Foreign currency translation differences for foreign operations [39.742m] vs. 12.510m -417.682% FY Total comprehensive income for the year [43.997m] vs. [59.666m] -26.261% EPS [0.06] vs. [0.24] -75.000% Equity 2.492447b vs. 2.536444b -1.735% Cash & cash equivalents at the end of the year [36.709m] vs. [249.492m] -85.287%
Company Commentary
Revenue declined by 11% in line with [a] ever increasing competition from subsidised tyres from the East [b] the continued influx of unaccustomed tyres into all our markets and [c] management efforts to reduce credit extension in markets where we experienced a general tightening in liquidity. Sales into our export markets were also adversely affected by civil unrest in some and acute hard currency shortages in others.
Net Cash generated from operations in 2015 at 307m was significantly up from the 148m generated in 2014
Outlook 2016
Other Strategic initiatives will include the following Expansion of the Summit brand product offering Opening of additional retail outlets Unlocking the value of our land Portfolio
Conclusions
Better than the previous Year. The land Portfolio has a lot of Value.
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