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Satchu's Rich Wrap-Up
Monday 25th of April 2016

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0930-1500 KENYA TIME
Normal Board - The Whole shebang
Prompt Board Next day settlement
Expert Board All you need re an Individual stock.

The Latest Daily PodCast can be found here on the Front Page of the site

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We serve Breakfast from 0930 @InterConNairobi #Mindspeak

We wil be hosting @KenyaBankers CEO @HabilOlaka, @KCBGroup CEO
@JoshuaOigara and NIC Bank MD John Gachora

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The Inspiration for #Mindspeak came via these words which were written at the Entrance to the Mevlana's Mausoleum in Konya which I visited

“Come, come, whoever you are. Wanderer, worshiper, lover of leaving.
It doesn't matter. Ours is not a caravan of despair. come, even if you
have broken your vows a thousand times. Come, yet again , come ,

Macro Thoughts

Home Thoughts

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Dancing to Prince

We’re all excited
But we don’t know why
Maybe it’s ’cause
We’re all gonna die
And when we do
What’s it all for?
You better live now
Before the grim reaper come knocking on your door

“A deception that elevates us is dearer than a host of low truths.” ―
Alexander Pushkin

I still recall the wondrous moment
When you appeared before my eyes,
Just like a fleeting apparition,
Just like pure beauty's distillation...”
― Alexander Pushkin

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Emilia Pechinkova, a Bulgarian Pomak (Bulgarian-speaking Muslim) bride poses

Emilia Pechinkova, a Bulgarian Pomak (Bulgarian-speaking Muslim) bride
poses following the “gelina” or face-painting ceremony carried out by
female guests and relatives in preparation for her three-day wedding

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Prince Mohammed
Law & Politics

Prince Mohammed is today the power behind the world’s most powerful
throne. Western diplomats in Riyadh call him Mr. Everything. He’s 31
years old.

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The private entrance of the prince's weekend house in Riyadh. Photographer; Luca Locatelli for Bloomberg Businessweek
Law & Politics

To interview the deputy crown prince, you don’t check in with the
receptionist. The perimeter begins at a downtown Riyadh hotel,
awaiting the call from the office of palace protocol. The evening of
March 30 is spent on standby; the word comes at 8:30 p.m. Three
Mercedes-Benzes arrive. Even headed to an interview about thrift,
there’s no escaping decadence: The cars appear brand-new, with seats
wrapped in plastic and safety belts that have never been used.

The caravan heads to the royal compound in Irqah, a cluster of palaces
surrounded by high white walls where the king and some of his
relatives live, including Prince Mohammed. Armed guards, checkpoints,
and metal detectors are all bypassed. No one even checks IDs

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Exclusive Interview: Seymour Hersh Dishes on Saudi Oil Money Bribes and the Killing of Osama Bin Laden
Law & Politics

Seymour Hersh: The Saudis bribed the Pakistanis not to tell us [that
the Pakistani government had Bin Laden] because they didn’t want us
interrogating Bin Laden (that’s my best guess), because he would’ve
talked to us, probably. My guess is, we don’t know anything really
about 9/11. We just don’t know. We don’t know what role was played by

KK: So you don’t know if the hush money was from the Saudi government
or private individuals?

SH: The money was from the government … what the Saudis were doing, so
I’ve been told, by reasonable people (I haven’t written this) is that
they were also passing along tankers of oil for the Pakistanis to
resell. That’s really a lot of money.

KK: For the Bin Laden compound?

SH: Yeah, in exchange for being quiet. The Paks traditionally have
done security for both Saudi Arabia and UAE.

One of the things that comes across just in the current stories about
all the travails we’re having about ISIS allegedly running all these
terror teams in Brussels and in the suburbs of Paris… it’s very clear,
ironically, that one of the things France and Belgium (and a lot of
other countries) did was after the Syrian civil war began, if you
wanted to go there and fight there in 2011-2013, ‘Go, go, go…
overthrow Bashar!’

So they actually pushed a lot of people to go. I don’t think they were
paying for them but they certainly gave visas. And they would spend
four or five months, come back and do organized crime and get in jail
and next thing you know they’re killing people. There’s a real pattern

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So why is @POTUS even bothering coming to the Gulf? Does he have any friends left among the kings, emirs and princes
Law & Politics

The real problem is that – after years of fantasy in which, against
all the evidence, the Americans persuaded themselves that the Saudis
were a ‘force for moderation’ in the Middle East – the Obama
administration has decided that Shiite Iran and the huge influence it
exerts over the Shiite governments of Iraq and Syria (and over the
Shiite Hizballah in Lebanon) is a better bet than the Sunni Salafists
of Arabia. Hence the nuclear deal with Tehran’s new leaders, the end
of sanctions against Iran and the slowly-dawning realisation among
Sunnis that Washington is going to tolerate the continuation of Bashar
al-Assad’s rule in Damascus.

Iran may, as it was under the Shah, become the policeman of the Gulf.
The Saudis will have to share power with them. The US wants no more
“free riders” (as Obama snottily described the Saudis) supporting

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Currency Markets at a Glance WSJ
World Currencies

Euro 1.1240
Dollar Index 94.96
Japan Yen 111.11
Swiss Franc 0.9769
Pound 1.4427
Aussie 0.7701
India Rupee 66.665
South Korea Won 1148.58
Brazil Real 3.5679
Egypt Pound 8.8691
South Africa Rand 14.4528

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Gold 6 month INO 1233.97 [1,250 remains key]

But Silver might be signalling we are going to pierce 1,250 for good
at some time.

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Africa's Longest-Serving President Set to Extend 37-Year Rule @business

Equatorial Guinea's Obiang faces six opponents on Sunday
Obiang captured 95% of vote in last presidential election

Equatorial Guinea President Teodoro Obiang, Africa’s longest-serving
leader, is poised to extend his almost 37-year rule over the oil-rich
nation in elections on Sunday that the opposition and observers say
won’t be free.

Obiang, 73, will probably win by a landslide because he controls every
aspect of the government and society, said John Bennett, the former
U.S. ambassador to the West African nation from 1991 to 1994. Obiang
captured more than 95 percent of the votes in the last election in
2009. He faces six opponents.

“He has managed to keep power in his hands,” said Bennett by phone
from Springfield, Virginia. “The election is held at his whim and it’s
a government by his whim.”

Freedom House ranked Equatorial Guinea as the 11th most oppressive
country in the world, with a rating shared by countries like Syria,
Somalia and North Korea, in its latest annual index. Obiang came to
power in 1979 through a coup, overthrowing his uncle, and became
president in elections three years later.

Crude exports account for 80 percent of gross domestic product and the
price lull caused the economy to slump by 9.5 percent last year,
according to the International Monetary Fund. The economy will
probably contract or barely grow for the medium term, it said.


"The oil is only for the Obiang family," said Moto by phone from
Madrid. “No one can win this election but Obiang. He has made sure he
was the winner before, the winner during and the winner after the

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.@tomfriedman Out of Africa

But there is an even bigger abnormality in Ndiamaguene, a farming
village of mud-brick homes and thatch-roof huts. The village chief
gathered virtually everyone in his community to receive us, and they
formed a welcoming circle of women in colorful prints and cheerful
boys and girls with incandescent smiles, home from school for lunch.
But the second you sit down with them you realize that something is
wrong with this picture.

There are almost no young or middle-aged men in this village of 300.
They’re gone.

It wasn’t disease. They’ve all hit the road. The village’s
climate-hammered farmlands can no longer sustain them, and with so
many kids — 42 percent of Senegal’s population is under 14 years old —
there are too many mouths to feed from the declining yields. So the
men have scattered to the four winds in search of any job that will
pay them enough to live on and send some money back to their wives or

This trend is repeating itself all across West Africa, which is why
every month thousands of men try to migrate to Europe by boat, bus,
foot or plane. Meanwhile, refugees fleeing wars in Syria, Iraq and
Afghanistan are doing the same. Together, these two flows pose a huge
challenge for the future of Europe.

Tell these young African men that their odds of getting to Europe are
tiny and they will tell you, as one did me, that when you don’t have
enough money to buy even an aspirin for your sick mother, you don’t
calculate the odds. You just go.

“We are mostly farmers, and we depend on farming, but it is not
working now,” the village chief, Ndiougua Ndiaye, explained to me in
Wolof, through a translator. After a series of on/off droughts in the
1970s and 1980s, the weather patterns stabilized a bit, “until about
10 years ago,” the chief added. Then, the weather got really weird.

The rainy season used to always begin in June and run to October. Now
the first rains might not start until August, then they stop for a
while, leaving fields to dry out, and then they begin again. But they
come back as torrential downpours that create floods. “So whatever you
plant, the crops get spoiled,” the chief said. “You reap no profits.”

The chief, who gave his age as 70 but didn’t know for sure, could
remember one thing for certain: When he was young he could walk out to
his fields any time during the planting season “and your feet would
sink into” the moist earth. “The soil was slippery and oily and it
would stick to your legs and feet and you would have to scrape it
off.” Now, he said, picking up a fistful of hot sand, the soil “is
like a powder — it is not living anymore.”

The lucky few find ways to get smuggled into Spain or Germany, via
Libya. Libya was like a cork on Africa, and when the U.S. and NATO
toppled the Libyan dictator — but did not put troops on the ground to
help secure a new order — they essentially uncorked Africa, creating a
massive funnel through chaotic Libya to the Mediterranean coast.

Africa has always had migrants, but this time is different. There are
so many more people and so much less natural capital — Lake Chad alone
has lost 90 percent of its water — and with cellphones everyone can
see a better world in Europe.

Gardens or walls? It’s really not a choice. We have to help them fix
their gardens because no walls will keep them home.

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Mozambique's Key Rate at Four-Year High as Inflation Surges @business

Inflation accelerated to 12.2 percent in February compared with 2.2
percent six months earlier, according to the National Statistics
Institute. The economy grew 5.6 percent in the fourth quarter of 2015,
compared with 4.6 percent a year earlier, the statistics office said
in February.

The International Monetary Fund last week canceled a mission to the
coal-producing nation after it discovered around $1 billion of
undisclosed debt and said it changes the fund’s assessment of
Mozambique’s macroeconomic outlook. Yields on $727 million of notes
due in January 2023 climbed 169 basis points since April 13 to 14.36

The country is at “high risk” of debt distress and may have to repay
$119 million it borrowed as part of a $286 million emergency facility
signed with the Washington-based lender last year, according to Anne
Fruhauf, senior vice president at Teneo Intelligence.

The metical has lost 38 percent against the dollar since the start of
last year. The currency traded 1.6 percent stronger at 52,65 per
dollar at 8:15 a.m. in Maputo.

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Mozambique comes clean on $1.35 bln of debt: IMF source

Mozambique has given the IMF an "avalanche of documents" and owned up
to as much as $1.35 billion of undeclared sovereign borrowing that may
have tipped it into an unsustainable debt trap, a Fund source said on

The borrowing is in addition to an $850 million 'tuna bond' issued in
2013 that had to be restructured last month because the war-scarred
southeast African nation was struggling to meet repayments.

The International Monetary Fund (IMF) said last week it had got wind
of more than $1 billion of undisclosed borrowing, although Finance
Minister Adriano Maleiane dismissed the allegations and put it down to
"some confusion".

Prime Minister Carlos Agostinho do Rosario then led a delegation to
the United States to see IMF Managing Director Christine Lagarde and
explain the borrowing and patch up tattered relations with the
international lender.

"We're confident that we're not going to find anything else," the IMF
source told Reuters, adding that Rosario's visit had gone some way to
mending relations. "But we can't just go back to where we were. That
takes time."

Mozambique's debt situation was now "very close to unsustainability,"
the source added.

Proindicus, a state firm owned by the Ministries of Interior and
Defence and the State Security and Intelligence Service, had been lent
$504 million by Credit Suisse and $118 million by Russia's VTB, the
source said.

According to a February 2013 Credit Suisse document obtained by
Reuters, the money was to be spent on high-speed naval interceptors,
radar stations, off-shore patrol vessels and aircraft. Credit Suisse
has declined to comment on the document.

Another loan of $535 million went to Mozambique Asset Management,
another state company set up to build a shipyard in the northern city
of Pemba, the source said. Pemba is near vast off-shore natural gas
fields being explored by Anadarko and Eni.

In addition, the Interior Ministry had borrowed $130-$200 million from
an unidentified bilateral lender, the source added, without providing

The failure of Mozambique, Credit Suisse and VTB to disclose the extra
borrowing during negotiations to reschedule the tuna bond has
infuriated investors, some of whom have threatened to sue.

However, the IMF source urged them to be patient, saying that
reigniting tensions would be more likely to trigger a serious default


In 2 Years from the #Africarising Darling to a Pariah.

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Burundi Sliding towards anarchy Economist

The most immediate problem is that people are beginning to starve.
Insecurity has plunged the economy into a tailspin—GDP contracted by
7% in 2015, according to the IMF

This year, Joseph Kabila, Congo’s president, seems likely to try his
own version of Mr Nkurunziza’s three-term gambit. The result could
well be similar to what has happened in Burundi. And Congo is
dramatically larger.

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Julius Malema says will remove Jacob Zuma through 'barrel of a gun'

“They beat us up in Parliament and they send soliders to places like
Alexandra where people are protesting. We will run out of patience
very soon and we will remove this government through the barrel of a

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Nigeria Economics Loses to Politics as Buhari Takes Naira Stand

“Changing his position would make him seem like a spineless leader,”
said Manji Cheto, an analyst at Teneo, a global advisory firm, who
predicts there won’t be a move on the currency until at least the
second half of this year. “Buhari is seen as the man who will stand up
to foreigners. He ran a campaign as a strongman, someone who would put
Nigerian interests ahead of foreign ones.”

Buhari “just doesn’t get it,” Kato Mukuru, the London-based head of
equity research at Exotix Partners LLP, said in an interview. “When he
was last in power in the ’80s he was also told to devalue the
currency. He refused until he was sent out in a coup. Clearly he
didn’t do the same economics as I did. There comes a point where you
need to understand that the whole country has already devalued.”

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Guinness Nigeria's Profit Tumbles During Economic Downturn

Guinness Nigeria Plc, the country’s second-biggest brewer, said profit
fell 83 percent in the nine months through to the end of March during
a downturn in Africa’s largest economy.

Earnings after tax were 864 million naira ($4.35 million) in the
period, compared with 5.2 billion naira a year earlier, the local unit
of Diageo Plc said in a statement on the Nigerian Stock Exchange’s
website. Revenue dropped 18 percent to 69.6 billion naira.

While the company didn’t comment on its results, Nigeria has been
hammered by oil prices falling 60 percent since mid-2014 to about $45
a barrel. The economy grew 2.8 percent last year, the slowest pace
since 1999. The International Monetary Fund said last month it will
probably drop further to 2.3 percent this year.

Guinness Nigeria’s shares fell 1.8 percent to 98 naira by 1:04 p.m. in
Lagos, the commercial capital. The stock is down 42 percent since the
start of 2015, compared with 28 percent for the Nigerian All Share
Index. Nigerian Breweries Plc, the biggest beer maker and controlled
by Heineken NV, has fallen 36 percent in that period.

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Price of tea rises at Mombasa auction as volumes decline @BD_Africa

On average a kilogramme of tea fetched Sh209, a 4.5 per cent rise on
previous trading at the weekly auction.

The volumes offered for sale dropped from 5.9 million kilogrammes in
the previous sale to 5.4 million kilos in last week’s sale.

“The week’s average price increased to Sh209 when compared to last
week’s auction where it fetched Sh203,” said Edward Mudibo, managing
director of the East African Tea Traders Association.

Mr Mudibo said that out of 147,839 packages (9,680,000 kilos)
available for sale, 133,585 were sold with 9.64 per cent going unsold.

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25-APR-2016 :: @KCBGroup cuts to the @ChaseBankKenya @TheStarKenya

The news that Chase Bank would reopen this Wednesday under the
management of KCB and that account holders would be able to access up
to $10,000 of their deposits, is first and foremost a plain optimal
outcome given the circumstances. It’s an outcome that is in the
national interest (there were a lot of account holders who had been
TKO’d (technical knock out) and from Wednesday they will be back in
the game). The CEO of KCB (whom I consider a friend) is a catalytic
leader who believes we are now in a catalytic moment, having KCB play
a catalytic role, and might well be characterised as the

Secondly, Kenya should be proud that the solution is homegrown and
being led by an indigenous regional champion. This is another
important point. We have been arch proponents of a pan-African agenda
and KCB fits neatly into that agenda. “We were also impressed by the
indicated speed that they were willing to move with in reopening this
bank, inspire confidence and even provide liquidity to the
depositors,” the sourcetoldtheEastAfrican.KCBhas shown it is agile and
that it can move with speed of thought and execution.

It represents a coming of age for the bank.Thereareplentyofinstancesof
shareholder value destruction (and unfortunately this might well prove
the case for shareholders at Chase), but this is not the case at KCB.

Rencap said: “It is important to highlight that KCB has simply been
appointed as manager and none of its funds or capital will be
committed to Chase during this period.”

KCB is the price-setter for any future transaction. KCB shareholders
should surely be cheering the chairman, Ngeny Biwott, and the CEO,
Joshua Oigara, at the AGM later in the week.

United States secretary of the Treasury Andrew Mellon during the Great
Depression advised his President (Herbert Hoover) to “liquidate
labour, liquidate stocks, liquidate farmers, liquidate real estate...
it will purge the rottenness out of the system. High costs of living
and high living will come down. People will work harder, live a more
moral life. Values will be adjusted, and enterprising people will pick
up from less competent people.”

Momentarily, and I think this was why the inestimable Patrick Njoroge
held his Sunday presser not too long ago – we were facing a whole-sale
liquidation. We remain in the moment of consolidation but the Central
Bank and KCB are confirming they have the wit and wherewithal to
manage this process in an orderly and effective manner.

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@KCBGroup share price data here

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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N.S.E Today

The Shilling remains locked at an 8 month high versus the Dollar and
was last trading at 101.192.
FX Reserves scored a Record all time high of $7.56b [4.92 months of
import cover].
The Nairobi All Share retreated 1.30 points off a 20 month closing
High to close at 146.25.
The Nairobi NSE20 pushed 9.03 points higher to close at 4019.85.
Equity Turnover was subdued and clocked just 214.466m for one of the
slowest sessions of the Year.

N.S.E Equities - Commercial & Services

Safaricom will report its Full Year Earnings 11th May 2016. I expect
an All Time High Print ahead of that Release. Safaricom reached a 2016
closing high of 17.50 20th April. Safaricom eased back -0.88% on low
ticket size [just 1.060m shares] to close at 16.95. The Ignition Key
will turn imminently.

Kenya Airways edged -1.23% lower following on Fridays steep -7.95%
slump to close at 4.00 a 2016 Low. Kenya Airways traded 2.16m shares.
Talk of Government converting into Equity has hit the stock on
concerns about further dilution.

Nation Media was high-ticked +5.95% to close at 178.00 and traded 300
shares only.

N.S.E Equities - Finance & Investment

KCB Group CEO had a Tweetchat today answering Questions on the Chase
Bank situation, which is very c21st and as expected of the
''Algorithmic'' Banker Joshua Oigara. Kenya Commercial Bank closed
unchanged at 42.50 [0.58% below a 2016 closing High] and traded
674,100 shares. KCB sits in Pole Position at this moment of
consolidation and the share price has yet to bake that fact into the
I&M Bank limited [where CDC Group snaffled up a 10.68% stake this
month, firmed +1.19% to regain a 2016 Closing High of 107.00 and
traded 600,000 shares worth 64.5m. I&M is +7.00% Year To Date and
reported a +23.545% acceleration in its FY 2015 Profit before income
Standard Chartered Bank which turned ex-bonus today retreated -10.44%
to close at 223.00 on 9,200 shares of business. The Reaction is

N.S.E Equities - Industrial & Allied

Athi River Cement surged +5.38% to close at 34.25 that caps a +18.10%
rebound this month. ARM traded 64,400 shares and Buyers are
anticipating the imminent announcement of a strategic equity Investor.

KenGen eased -0.57% off a 2016 High to close at 8.65 and traded
125,500 shares. There were Buyers for 5x the volume traded today
signalling corrections will be shallow. KenGen has rallied +21.83% in
2016 admittedly from a position of price of disequilibrium.
KPLC traded +3.63% better to close at 11.40 and traded 46,800 shares.

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

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