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Satchu's Rich Wrap-Up
Friday 08th of April 2016

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Macro Thoughts

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Almond and Chocolate Cake With Strawberries and Lightly Whipped Cream

Mum used to make the most glorious Desserts. Her Brandy Snaps, Banana
Cake [where you would smell the Banana percolate the House]. I was
telling Hannah how much I regret they never met because like Aysha and
Layla They would have been the best of Friends.

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Today they press the brown wine. Wide open are the chambers of the dead And full of the most beautiful sunshine

“Because now there's time enough not to hurry, to light the lamp and
open the window to the moon and take a moment to dream of a great and
broken city, because when the day starts its business I'll have to
stop, these are night-time tales that vanish in the sunlight like
vampire dust” ― Jeet Thayil, Narcopolis

“The world is on fire; time is a bomb.
Ten thousand years are not enough
When so much remains to be done”
― Jeet Thayil, Narcopolis

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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.


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

"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…"


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02-DEC-2013 The Pivot to Asia bares its Fangs
Law & Politics

Given that the trajectory is one of gradual erosion of that decisive
advantage leads me to the view that this pivot to Asia has a logic and
momentum of its own. Therefore, I see the US being increasingly
determined to press its advantage.

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Reuters UK Fidel Castro makes rare public appearance after Obama visit
Law & Politics

I began revolution with 82 men. If I had to do it again, I do it with
10 or 15 and absolute faith. It does not matter how small you are if
you have faith and plan of action. Fidel Castro

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Fidel Castro in New York in 1959
Law & Politics

A revolution is not a bed of roses. Fidel Castro

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Currency Markets at a Glance WSJ
World Currencies

Euro 1.1363
Dollar Index 94.63
Japan Yen 108.70
Swiss Franc 0.9569
Pound 1.4067
Aussie 0.7535
India Rupee 66.679
South Korea Won 1152.65
Brazil Real 3.6806
Egypt Pound 8.8773
South Africa Rand 15.1442

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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.


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It's a Great Time to Buy a Diamond, But Fewer People Want One

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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"You then see a stampede now, they will be saying the president is dying. 'I am not dying, shame on you'," Mugabe said during the first ever such meeting with the veterans.

"I am there at the mercy of the people. If the people say no, go, I
go. But if the people say no, we still want you, I stay on," said
Mugabe at a sports centre in Harare.

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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

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

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

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

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

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

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"It is clear that momentum is building up against Zuma," Keith Gottachalk, a political scientist at the university of Western Cape in Cape Town, said by phone

“However, up until now Zuma’s supporters have been able to to outvote
his detractors by two to one in ANC structures. There is no real sign
of him going yet.”

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South Africa All Share Bloomberg +0.89% 2016

51,146.82 -37.50 -0.07%

Dollar versus Rand 6 Month Chart INO 15.1442


Egypt Pound versus The Dollar 3 Month Chart INO


Egypt EGX30 Bloomberg +6.75% 2016


7,478.74 +18.90 +0.25%

Nigeria All Share Bloomberg -11.43% 2016


25,369.52 -95.42 -0.37%

Ghana Stock Exchange Composite Index Bloomberg -4.36% 2016


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@KCBGroup announcement re Final Dividend for the Year ended Dec 2015 and Issue of Scrip Dividend to Shareholders
Kenyan Economy

Dividend of 2/= a share 1/= will be paid out as scrip dividend.
The conversion Price of 38.00 shillings a share has been determined
Listing and trading of newly issued scrip shares on the NSE - Friday
July 22nd 2016

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@KCBGroup has closed at a 2016 High share data and FY 2015 Earnings here
Kenyan Economy

Par Value:                  1/-
Closing Price:           42.50
Total Shares Issued:          2984227692.00
Market Capitalization:        126,829,676,910
EPS:             6.086
PE:                 6.983

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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

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

“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

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

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

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@National_Bank has closed at a Fresh 2003 closing Low of 9.90 share data here -37.14% in 2016
Kenyan Economy

Barclays Bank Kenya share data here -20.588% in 2016


Wazua @wazua Busy coming days for @CbkKenya. Meanwhile many in KE
checking themselves, who's my banker?


Kenya Shilling versus The Dollar Live ForexPros


Nairobi All Share Bloomberg +1.19% 2016


147.44 +0.56 +0.38%

Nairobi ^NSE20 Bloomberg +0.34% 2016 [6 month High]


4,054.29 +24.29 +0.60%

Every Listed Share can be interrogated here


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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

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


Better than the previous Year. The land Portfolio has a lot of Value.

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

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