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Satchu's Rich Wrap-Up
 
 
Thursday 23rd of June 2016
 
Morning
Africa

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Macro Thoughts

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The risk in the event of Brexit is so big it;s unhedgeable." said Fabrizio Florin
Africa


Home Thoughts

“She was terrific to hold hands with. Most girls if you hold hands
with them, their goddam hand dies on you, or else they think they have
to keep moving their hand all the time, as if they were afraid they'd
bore you or something. Jane was different. We'd get into a goddam
movie or something, and right away we'd start holding hands, and we
wouldn't quit till the movie was over. And without changing the
position or making a big deal out of it. You never even worried, with
Jane, whether your hand was sweaty or not. All you knew was, you were
happy. You really were.”
― J.D. Salinger, The Catcher in the Rye

At night and when Hannah does crawl into our Bed, then I like holding
hands with her as she sleeps.

read more



Gulzaar Satchu My Beloved Mother
Africa



Songs of #Kabir Between the Poles of the Conscious and the Unconcious
there has the Mind made a Swing. Songs of #Kabir Thereon hang all
Beings and all worlds, and that Swing never ceases it's Sway Songs of
#Kabir Millions of Beings are there The Sun and the Moon in their
courses are there Millions of ages pass Songs of #Kabir And The Swing
goes on. All Swing! The Sky and the Earth and the Air and the Water

read more


Before I left, I wanted one shot - visually strong, elemental & raw. Finally David Yarrow
Africa


“It was that kind of a crazy afternoon, terrifically cold, and no sun
out or anything, and you felt like you were disappearing every time
you crossed a road.” ― J.D. Salinger, The Catcher in the Rye

read more



"The U.S. picked the wrong target in playing this trick on China," the People's Daily
Law & Politics


China's top newspaper strongly criticized the United States on
Wednesday after it deployed two aircraft carriers on a training
mission in East Asia where military tensions have risen amid China's
growing assertiveness.

The U.S. carriers John C. Stennis and Ronald Reagan began joint
operations in seas east of the Philippines at the weekend in a show of
strength ahead of an international court ruling expected soon on
China's expansive territorial claims in the contested South China Sea.

"The U.S. picked the wrong target in playing this trick on China," the
People's Daily, the official newspaper of the ruling Communist Party,
said in a commentary.

"Behind this misjudgment is Washington's anxiety and arrogance, and it
is the true expression of its hegemonic nature," the paper added.

The U.S. Navy chief said on Monday the deployment was a signal of the
U.S. commitment to regional security, adding that he hoped it would
deter any attempts to destabilize the region.

Conclusions


US has to put up [bare its fangs] or shut up.

read more






B-52 Bombers Pounding Islamic State at Faster Pace, General Says @business
World Currencies


Cold War-era B-52 bombers -- best known for flying nuclear-armed
patrols and carpet- bombing in Vietnam -- have dropped almost 700
munitions on Islamic State targets since beginning operations in April
over territory the group claims, according to the U.S. Air Force’s
chief of staff.
“They’ve been operating at a pretty good battle rhythm -- kind of
settled into that routine,” General Mark Welsh said Tuesday in his
final scheduled interview before retiring at week’s end.

read more





Currency Markets at a Glance WSJ
World Currencies


Euro 1.1342
Dollar Index 93.44
Japan Yen 104.38
Swiss Franc 0.9592
Pound 1.4755
Aussie 0.7530
India Rupee 67.325
South Korea Won 1151.45
Brazil Real 3.3771
Egypt Pound 8.8789
South Africa Rand 14.5847

read more






Javier Blas @JavierBlas2 Vitol CEO says fall in US #oil output is "stopping"; not sure if it will start to recover
Commodities


Javier Blas ‏@JavierBlas2 #OPEC says #oil revenue plunged by $438
billion to a 10-year low last year

https://twitter.com/JavierBlas2/status/745740255727345665

Jan-2016 There is no Hail-Mary pass coming for the commodity
producers, and from Abuja to Luanda, from Lusaka to Johannesburg, the
denouement is still ahead

http://www.rich.co.ke/media/docs/038NSX1101.pdf

rude Oil 6 Month Chart INO 49.24

http://quotes.ino.com/charting/index.html?s=NYMEX_CL.Q16.E&v=d6&t=c&a=50&w=1

Emerging Markets

Frontier Markets

read more





Congo prosecutor seeks 5-yr prison sentence for opposition leader @moise_katumbi
Africa


A public prosecutor in Democratic Republic of Congo has asked a court
to sentence a leading opposition presidential candidate to five years
in prison after he was accused of selling a house that did not belong
to him, his lawyer said on Tuesday.

The candidate, Moise Katumbi, was indicted last month after he was
accused of hiring mercenaries in a plot against the state. He left the
country the following day with the permission of Congo's prosecutor
general to receive medical treatment and is currently in Europe.

Katumbi has denied the charges against him, which he has said are
aimed at derailing his bid to replace President Joseph Kabila in a
November presidential election.

Political tensions are high in Congo. The government has said that it
is unlikely it will be able to hold the election on time due to
budgetary and logistical constraints, a delay the United Nations
warned last week could trigger widespread unrest.

Kabila, in power since 2001, is barred by constitutional term limits
from standing again but opponents have accused him of plotting to
delay the vote in order to cling to power.

The public prosecutor said Katumbi sold a house in the southeastern
city of Lubumbashi that did not belong to him and recommended to the
court on Monday that Katumbi receive five years in prison, Katumbi's
lawyer King Kasongo Mushilanama told Reuters.

Kasongo said that Katumbi grew up in the house in the southeastern
city of Lubumbashi and that it is owned by his older brother Raphael
Katebe Katoto. He said Katumbi was being tried in absentia.

The president of the bar association in Lubumbashi, Rose Tumba,
confirmed that the prosecutor had requested a five-year prison term
but declined to discuss specifics of the case.

The prosecutor general could not be immediately reached for comment.
The government has repeatedly denied that the accusations are
politically motivated.

Conclusions

read more




06-JUN-2016 President Kabila, however, outwitted Katumbi by removing him from the street and the Congo entirely. is might well prove a cleverly administered technical knock-out.
Africa


"I am not a lobbyist. I am not a state capturer. As far as I am
concerned, I am a friend only,"  Ajay Gupta said SABC.

http://af.reuters.com/article/topNews/idAFKCN0Z81B8?utm_content=buffer425dd&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer

"Capture is when you are taking any advantage of anything."

The Economist ‏Can the Democratic Alliance defeat South Africa's
ruling ANC? It will be hard

https://twitter.com/TheEconomist/status/745870737433563136

South Africa All Share Bloomberg +5.65% 2016

http://www.bloomberg.com/quote/JALSH:IND

53,557.20 +602.02 +1.14%

By 1500 GMT the rand had firmed 0.4 percent to 14.6795 per dollar,
climbing to a new seven-week peak

http://af.reuters.com/article/investingNews/idAFKCN0Z822C

The rand has gained nearly 4 percent this week

Dollar versus Rand 6 Month Chart INO 14.5847 [Rand is top and frothy]

http://quotes.ino.com/charting/index.html?s=FOREX_USDZAR&v=d6&t=c&a=50&w=1

Egypt EGX30 Bloomberg +2.15% 2016

http://www.bloomberg.com/quote/CASE:IND

read more


#Naira devaluation closes gap with black market rate. Paul Wallace
Africa


Nigeria’s naira plunged 30 percent to a record 286 per dollar this
week, helping close the gap with the black-market rate, which has
strengthened from 370 to 340 since the central bank said it was
removing a 16-month-long currency peg. The spread’s still around 55
naira and will probably remain wide, as the monetary authority is
maintaining a ban on businesses using the interbank market to obtain
hard currency for a range of “non-essential” imports including glass,
textiles and rice.

read more


Nigeria All Share Bloomberg +5.19% 2016 [1st time above 30,000 since August 2015]
Africa


30,127.82 +705.11 +2.40%

Ghana's unadjusted gross domestic product growth rose to 4.9 percent
year-on-year in the first quarter of 2016

http://af.reuters.com/article/ghanaNews/idAFL8N19E22N

Ghana Stock Exchange Composite Index Bloomberg -10.91% 2016

http://www.bloomberg.com/quote/GGSECI:IND

read more


THE IMPACT OF MOZAMBIQUE'S HIDDEN DEBT SERVICE PAYMENT Transparency international
Africa


MozaMbique’s scandal regarding previously hidden public debt has
severely affected the MacroeconoMic variables of its econoMy. given
that debt service payMents are now coMing due in large aMounts that
had not been previously prograMMed, the governMent’s econoMic policy
is being thrown into disarray in the fiscal, Monetary, and real
sectors. this note traces the iMpact of this disaster on depreciation;
inflation; and issuing Money.

read more


4 JUN 12 'Maputo, Boom Town' [That was then]
Africa


GREETINGS from the Serena Polana, Maputo. I can confirm that Maputo is
the land of wonderful and flavoursome tiger prawns.

The Architecture is also deliciously retro. By the way, the Polana was
built in 1922 and the flavour is fabulously Riviera and very swanky.
It is less than 4 hours by plane from Nairobi and surely set to be the
most of in things and places to visit.

Of course, Mozambique has popped large onto the global radar because
of gas reserves that have been discovered offshore and in the deep
sea.

read more



Yields on the $727 million bond, which is due in January 2023, rose 69 basis points to 17.8 percent by 6:02 p.m. in London.
Africa


It’s the highest-yielding sovereign dollar-bond after Venezuela’s,
according to Bloomberg indexes.

read more



President warns oil fall leaves Angola short of foreign reserves
Africa


Angola is running short of foreign reserves to pay for imports because
its national oil firm has not contributed to state coffers since
January, President Jose Eduardo dos Santos said.

Remittances from Sonangol, which is now run by the president's
daughter Isabel, represented 60 percent of total government revenues,
but the firm halted payments after the price of oil fell, dos Santos
said on Wednesday.

"Our country lives upon imports, practically. Imports for food, for
raw materials to national manufactures, for industry, agriculture,
construction, for payments to expats and foreign workers," Dos Santos
said after meeting cabinet ministers.

Dos Santos, president since end of brutal civil war in 1979, said the
sharp fall in oil prices, which are down more than 20 percent from a
year ago, had led to cash flow problems for Sonangol, and Angola now
had to diversify its economy.

Oil output represents 40 percent of Angola's gross domestic product
and more than 95 percent of foreign exchange revenue.

"Above all, we need to make other goods to export, besides the oil.
And that is a strategic task," he said.

Angola has implemented a number of currency controls, including
cutting the amount of hard currency travellers are allowed to take
abroad, to cope with a foreign currency shortage that has led to a
flourishing black market.

The Angolan parliament passed a 6.4 trillion kwanza ($39 billion) 2016
budget in December based on an average oil price of $45 a barrel and
daily production of 1.8 million barrels. Its spending plan assumes
economic growth of 3.3 percent, a budget deficit of 5.5 percent and
inflation of 11-13 percent.

Conclusions

read more


AUG-2015 The end is nigh for crude oil and oil producers from Caracas to Luanda, from Riyadh to Abuja
Africa


Oil based economies are going to contract, currencies which have
already collapsed are going to be routed and Greek- style austerity
will be the order of the day. The melt-down is coming.

read more



"Pending hearing and determination ... conservatory orders do issue barring the respondents (CBK and KDIC) from transferring, assigning, disposing of, dissipating or alienating any of the assets of Imperial Bank," the judge ordered.
Kenyan Economy


Imperial Bank directors had rushed to court arguing that allowing NIC
Bank to take over a portion of Imperial Bank’s loan book and deposits
amounted to liquidating the bank despite an earlier order stopping it.

The NIC Bank deal is backed by Kenya Deposit Insurance Corporation
(KDIC) who have been the receiver managers of Imperial Bank since
October 13, 2015 when the lender collapsed. The matter was fixed for
hearing on Friday.

The court also ordered the CBK and KDIC not to implement the joint
agreement announced on Tuesday – effectively stopping NIC Bank from
making payments to depositors, taking over Imperial Bank branches and
staff as stated in the deal with the CBK.

Imperial Bank owners told the court that transferring assets and
liabilities to NIC Bank amounted to winding up the lender and would
nullify an ongoing court case where they are seeking to stop any
actions that may lead to liquidation of the bank.

“This act by the respondents (CBK and KDIC) is an enhancement of the
exclusion and transfer process commenced by them, which process
ultimately culminates in the liquidation of the bank,” the directors
said in an affidavit filed in court.

The list of shareholders who are battling the CBK in court includes
Imperial bank chairman Alnashir Popat, who controls a 14 per cent
stake in the lender through Imaran Ltd, Hanif Mohamed Amirali Somji
(10 per cent ), Jinit Shah (12.5 per cent), and Anwar Hajee (14 per
cent).

Judge Odunga’s orders nips in the bud NIC Bank’s plans to conduct a
due diligence and acquire Imperial’s ‘good bank’, which they planned
to separate from the ‘bad bank’.

NIC Bank was to resume disbursements to distraught depositors capped
at Sh1.5 million each, subject to the High Court lifting a freeze on
payments.

A High Court ruling on the freezing of payments to Imperial Bank
depositors is expected on July 4.

Acting KDIC boss Mohamud Ahmed Mohamud, who is Imperial Bank’s
receiver manager, responded to the latest suit, saying the bank’s
directors were aware of the grand heist at the bank but did nothing to
address the situation.

Mr Mohamud says in an affidavit that emails retrieved by FTI
Consulting - the American firm carrying out a forensic audit at
Imperial Bank - show that the bank’s directors were aware of a
whistleblower’s letters which lifted the lid on happenings at the
distressed lender but chose not to act.

“The forensic audit has since revealed that the said whistleblowing
emails were in March 2012 brought to the attention of inter-alia the
following directors, Abdulmalek Janmohamed, Alnashir Popat and Anwar
Hajee,” Mr Mohamud says in court papers.

“Facilitating and abetting tax evasion using fictitious accounts,
directors using clients deposits to engage in drug trafficking … CBK
inspectors have been given huge kickbacks, including and not limited
to unsecured loans to keep mum … financial results have been doctored
to impress but hide this,” reads the informer’s letter.

Conclusions


Applies to Imperial Bank Shareholders and their farcical defence.

read more


@ChaseBankkenya and the Story of the 3 Wise Monkeys Mizaru, Kikazaru and Iwazaru @TheStarKenya
Kenyan Economy


The entire Tale [that has been spun] took me back to the Story of The
three wise monkeys. Together they embody the proverbial principle "see
no evil, hear no evil, speak no evil" The three monkeys are Mizaru,
covering his eyes, who sees no evil; Kikazaru, covering his ears, who
hears no evil; and Iwazaru, covering his mouth, who speaks no evil.
You have to ask yourself What is the duty of a Board? Was there a
functioning Board at Chase Bank or even at Imperial Bank? Or Just a
Mizaru, Kikazaru and Iwazaru?

read more


Kenya Shilling versus The Dollar Live ForexPros 101.205
Kenyan Economy


Nairobi All Share Bloomberg -0.37% 2016

http://www.BLOOMBERG.COM/quote/NSEASI:IND

145.16 -1.21 -0.83%

Nairobi ^NSE20 Bloomberg -7.17% 2016 [22nd January 2016 Lows]

http://j.mp/ajuMHJ

3,750.98 -24.11 -0.64%

Every Listed Share can be interrogated here

http://www.rich.co.ke/rcdata/nsestocks.php

read more


Africa's largest wind farm set to power Kenya @AfricanBizMag
Kenyan Economy


The Lake Turkana Wind Power (LTWP) project is both the largest single
wind power project in Africa and the largest single private investment
in Kenya’s history. It is being developed in Marsabit County, 12km
east of Lake Turkana – the biggest permanent desert lake in the world
– approximately 530km north of Nairobi, the country’s capital. - See
more at:

The scorching sun is unrelenting, but the blowing winds are strong and
they become even stronger after sunset. The sandy soils do not support
much in the way of vegetation. Nothing grows here, except for thorny
acacia trees which are few and far between.

In this barren and harsh environment stands the village of Sarima,
hemmed in by a wire-mesh fence. It is home to 760 families, cobbled
together in traditional dwellings known as manyattas, which are made
of twigs and other materials.

Villagers derive their livelihood from livestock – sheep, goats and
camels – which are nowhere to be seen in the village because they have
been driven several kilometres away to look for pasture.

So, when the project came calling, villagers had great expectations
for jobs. However, their hopes have since been dampened, with only a
handful of jobs to go round. The feeling of bitterness and resentment
is widespread.

“I deferred my studies because I had inadequate fees to continue with
them,” says Laments Ekomwa, a 20-year-old former student of South
Eastern Kenya University.

“I came back to Sarima in January 2015 looking for a job so that I can
get money to go back to school but I haven’t gotten a job up to now.”

The speed and strength of the winds here place them among the best for
power generation in the world. The region has a maximum mean annual
speed of 8.47m/s and a minimum of 4.96m/s.

The project is set to generate up to 310MW of power when it comes
online towards the end of 2017, contributing 15–20% of Kenya’s energy
needs. Besides boosting the country’s power generation, the project
remains central to Kenya’s Vision 2030 – a blueprint for development
that aims to make Kenya a newly industrialising, middle income nation
by 2030.

With its 365 wind turbines, the project will save the country more
than $177m a year on fuel imports and benefit approximately 2.5m
Kenyans.

Local engagement is key

Land tenure issues are complicated in Africa. According to Aly Khan
Satchu, chief executvie officer of Rich Management, an investment
advisory service based in Nairobi, investors coming into Africa need
to do more to ascertain the risk they are exposing themselves to.

He cites yet another wind power project in Kenya – the 60MW Kinangop
Wind Park project, which had to close down due to similar issues
facing the LTWP.

“I think that what we find increasingly in so many different parts of
our economy is that a lot of international investors haven’t really
done their due diligence or they have not been able to measure this
kind of risk,” says Satchu.

As far as he is concerned, failure to engage with the local community
is a major impediment for investing on the continent.

read more




 
 
N.S.E Today


The Global Markets are increasingly transfixed by the BREXIT Vote in
the United Kingdom which is taking place today and whose result will
be known at about 5 am Kenya Time Friday.
As I write this The Prediction Markets have a Brexit at a less than
20% Probability.
The Pound has soared 245 pips to as high 1.4948 versus the Dollar as a
I write this for what must be its biggest gain in close to a Century.
I wrote on June 13 - ''If Prime Minister Cameron can pull this rabbit
out of the hat, it will be a famous political victory, it really
will''
Winning a Referendum on Europe and a majority in Parliament are
seriously as big a political scalp as you can get in this c21st World.
The Nairobi All Share retreated 0.83 points to close at 144.33
The NSE20 slid 6.4 points to close at 3744.58.
Equity Turnover clocked 727.447m with a big slice of that transacted
in Safaricom.



N.S.E Equities - Commercial & Services


Safaricom was the most actively traded share at the Exchange and eased
back -0.83% to close at 17.90 with 22.607m shares worth 405.493m
changing hands. Safaricom has been a muscular Performer in 2016 at the
Bourse serving up a +9.185% return vastly outperforming the All Share
which is in negative Territory over the same dates. Safaricom has
corrected -3.504% off a record high of 18.55 reached Friday last week
and Monday this week.

Kenya Airways traded its highest volume session of 2016 with 2.976m
shares changing hands. Kenya Airways closed -2.46% at 3.95 but
interestingly was trading at 4.30 +6.17% at the Closing Bell. I expect
a Pop higher on the news that Qatar Airways [among others] is taking a
good look.



N.S.E Equities - Finance & Investment


Kenya Commercial Bank closed unchanged at 35.75 and traded 805,200
shares. KCB is deeply oversold and the previous rights Issue presented
Investors with an outstanding Entry Opportunity and we have a deja vu
situation here in the run up to the Rights Issue.

NIC Bank [where the Court has ordered the CBK and KDIC not to
implement the joint agreement announced on Tuesday – effectively
stopping NIC Bank from making payments to depositors, taking over
Imperial Bank branches and staff as stated in the deal with the CBK]
rallied +2,72% to close at 37.75 and was trading session highs of
39.00 +6.12% at the Finish Line. The Reaction is counterintuitive but
speaks to how Shareholders have viewed these ''White Knight''
Operations as distracting.



N.S.E Equities - Industrial & Allied


BAT firmed +0.35% to close at a 12 week high of 860.00 and traded just
1,600 shares which was about all there was available for sale.

ARM which is the subject of an Equity Infusion by CDC traded 1.009m
shares at 32.00 unchanged.

KenGen closed unchanged at 6.65 and traded 4.058m shares. I expect a
recovery in the share price through 2016 and from here.



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