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Satchu's Rich Wrap-Up
 
 
Friday 16th of September 2016
 
Morning
Africa

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"Life is not only full of sound and fury. It also has butterflies, flowers, art." -Claude Simon The Paris Review @parisreview
Africa


“What is that feeling when you're driving away from people and they
recede on the plain till you see their specks dispersing? - it's the
too-huge world vaulting us, and it's good-bye. But we lean forward to
the next crazy venture beneath the skies.” ― Jack Kerouac, On the Road

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"Nothing behind me, everything ahead of me, as is ever so on the road." - Jack Kerouac, On the Road
Africa


“The road must eventually lead to the whole world.” ― Jack Kerouac, On the Road

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My Favourite Robert Frank Photograph remains
Africa


Jack Kerouac described this Photograph as follows

In his introduction to The Americans, Kerouac describes this
photograph as "a long shot of night road arrowing forlorn into
immensities and flat of impossible-to-believe America in New Mexico
under the prisoner's moon."

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On The Road The Star January 7th 2013
Africa


My Christmas holiday ritual is to jump into a car and take the family
down to the Coast. The Nairobi-Mombasa road arrows 'into immensities
and is 'impossible-to- believe.' It retains a near mystical hold on my
imagination and connects me to my childhood and beyond. Dad used to
once own an Alfa Romeo [of which there were only three then in the
country] and my pilgrimage along that road started then, when we used
to come from Mombasa. Now, of course, we set off from Nairobi but the
road still has its hold. The landmarks still reach out to me. This
time we were swarmed by doves near Emali which was breathtaking. There
is still the eerie and deserted very Oscar Niemeyer building which
might have been a petrol station with a restaurant. We stopped at
Makindu which is like being teleported to Amritsar and on New Years
day was packed to the rafters. We always stop at Mackinnon road where
there is a shrine which houses the tomb of Seyyid Baghali, a Punjabi
foreman at the time of the building of the railway who was renowned
for his strength.

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Reports suggest China may seize Scarborough Shoal during the final weeks of the US presidential election as America's gaze turns inward
Law & Politics


Reports suggest China may seize Scarborough Shoal during the final
weeks of the US presidential election as America’s gaze turns inward.
President Obama has already warned China about the consequences and he
should remind its leaders that such an attempt would constitute a
challenge to the peace and stability of Asia and would force
Washington to rethink many areas of cooperation with Beijing.

The People’s Republic of China is headed on a tragic trajectory that
should be familiar to anyone with even cursory exposure to history.
Due to a complex composition of factors – a century of torment at the
hands of western powers and Japan as well as a toxic brew of
nationalism – the PRC is not content with its place as the world’s
second largest economy, or even largest when using purchasing-parity
power, or PPP, as the benchmark. Nor is China happy with its standing
as the planet’s second largest military armed with advanced weapons
like “carrier-killer” missiles, a budding hypersonic weapons program
and other top-tier offensive platforms. Beijing doesn’t even seem to
regard its undertaking of major initiatives like the “One Belt, One
Road” project and the Asian Infrastructure and Investment Bank as
signs of its rise to global superpower stature.

No, Beijing wants more, and could soon seek to transform the
status-quo in Asia, especially in the South China Sea, in its favor.
Indeed, recent reports suggest that Beijing’s surge for hegemony might
be around the corner, as its leaders take advantage of a window of
opportunity during the final weeks of the US presidential election as
America’s gaze turns inward.

“If China is going to strike in the South China Sea, mid-September
right until the November presidential election could not be a better
time,” explained a senior US Department of Defense official who agreed
to be interviewed if not identified. Or, put a different way, another
US defense official, again speaking on background, explained:
“Beijing’s best window to take advantage of certain trend lines and
cement its claims in the South China Sea is right after the G20.
American newspapers won’t give front-page status to a China story
during the heart of the election, well, unless they start shooting,
and they won’t be that stupid. For Beijing, the timing is perfect.”

Conclusions

President Xi Ji Ping is hard-edged. Thats a Fact.

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Trump Campaign Says He Believes Obama Was Born in the U.S
Law & Politics


Donald Trump’s campaign said Thursday that the Republican presidential
nominee believes President Barack Obama was born in the U.S., despite
years of questioning that biographical detail.

Trump campaign senior communications adviser Jason Miller said that
Trump is proud of the role he played leading up to Obama’s 2011
release of his long-form birth certificate -- which proved he was born
in Hawaii -- and blamed Democratic presidential nominee Hillary
Clinton as having first raised the issue.

"Mr. Trump did a great service to the President and the country by
bringing closure to the issue that Hillary Clinton and her team first
raised. Inarguably, Donald J. Trump is a closer," Miller said in a
statement. "Having successfully obtained President Obama’s birth
certificate when others could not, Mr. Trump believes that President
Obama was born in the United States."

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But the thesis was, as they said of Gaddafi, the old one: that nothing could be worse than Assad. Want to bet?
Law & Politics


Going to war is too easy, far too easy. That is the one clear message
from the Commons report on David Cameron’s 2011 war on Libya. It
presents that venture as an ill-conceived vanity project, to dust the
ingenu prime minister with some “Arab spring” glory. In reality it
brought untold misery to a country to which Cameron promised peace and
democracy.

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Assad's Death Warrant
Law & Politics


“Secret cables and reports by the U.S., Saudi and Israeli intelligence
agencies indicate that the moment Assad rejected the Qatari pipeline,
military and intelligence planners quickly arrived at the consensus
that fomenting a Sunni uprising in Syria to overthrow the
uncooperative Bashar Assad was a feasible path to achieving the shared
objective of completing the Qatar/Turkey gas link. In 2009, according
to WikiLeaks, soon after Bashar Assad rejected the Qatar pipeline, the
CIA began funding opposition groups in Syria.”

— Robert F. Kennedy Jr., Why the Arabs don’t want us in Syria, Politico

The conflict in Syria is not a war in the conventional sense of the
word. It is a regime change operation, just like Libya and Iraq were
regime change operations.

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Religion in US 'worth more than Google and Apple combined'
Law & Politics


Religion in the United States is worth $1.2tn a year, making it
equivalent to the 15th largest national economy in the world,
according to a study.

The faith economy has a higher value than the combined revenues of the
top 10 technology companies in the US, including Apple, Amazon and
Google, says the analysis from Georgetown University in Washington DC.

The Socioeconomic Contributions of Religion to American Society: An
Empirical Analysis calculated the $1.2tn figure by estimating the
value of religious institutions, including healthcare facilities,
schools, daycare and charities; media; businesses with faith
backgrounds; the kosher and halal food markets; social and
philanthropic programmes; and staff and overheads for congregations.

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Currency Markets at a Glance WSJ
World Currencies


Euro 1.1232
Dollar Index 95.31
Japan Yen 101.96
Swiss Franc 0.9721
Pound 1.3195
Aussie 0.7503
India Rupee 66.875
South Korea Won 1122.54
Brazil Real 3.3012
Egypt Pound 8.8794
South Africa Rand 14.2141

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For all the world's economic malaise, there's a bright spot above the clouds: Airline passenger traffic grew 6.4 percent last year, the most in five years.
World Currencies


Total passengers rose across all major regions to 7.2 billion, almost
the population of the planet, according to Airports Council
International, the industry’s Montreal-based trade association. And as
with the global economy, China is a dominant force for growth.

Asia-Pacific airports handled the most, with trips up 8.6 percent to
2.46 billion, while the Middle East increased the fastest, climbing
9.6 percent to 334 million.

“Growth in passenger traffic approached the pre-recessionary growth
levels that were seen in 2004 to 2007,” ACI said in its annual report.
“International tourism in particular was irrepressible in 2015, even
considering the geopolitical risks that persisted in certain parts of
the world, such as Eastern Europe and the Middle East.”

While the BRICS economies -- Brazil, Russia, India, China and South
Africa -- have faced their own varying challenges, they still posted
strong growth of 8.2 percent in passenger traffic last year and their
1.5 billion passengers accounted for 21.4 percent of global traffic,
ACI said.

One of the biggest driving forces has been China. There, Beijing's
airport held the No. 2 rank with passengers up 4.4 percent to 89.9
million last year, trailing Atlanta's 5.5 percent increase to 101.5
million.

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Commodities May End 2016 With Whimper After First-Half Rally
Commodities


The Bloomberg Commodity Index fell 6.5 percent since the end of June
to 83.08 as of Thursday. Losses were led by a 41 percent plunge for
most-active hog futures, followed by a 23 percent drop for soybean
meal. Crude oil in New York lost 9.1 percent.

From Dec. 31 to June 30, prices were pulled higher by a 25 percent
jump in gold prices and a similar advance in natural gas, the biggest
components of the Bloomberg Commodity Index. Money piled into
commodities on speculation that the Federal Reserve would be slow to
raise U.S. interest rates, weakening the dollar and making commodities
cheaper for holders of other currencies.

While precious metals remain among the top performers, copper and
corn, the fifth- and sixth-largest members of the Bloomberg index, are
dragging the measure lower. The U.S. Department of Agriculture
predicts American farmers will harvest a record crop of the grain.
Antofagasta Plc, a Chilean producer of the red metal, sees the glut
lasting another two to three years.

Big supplies are also weighing on the crude market. West Texas
Intermediate oil in September is heading for the third drop in fourth
months. Price risks remain “to the downside” amid a lingering surplus,
Jeff Currie, head of commodities research at Goldman Sachs Group Inc.,
said this week.

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.@McKinsey suggests that job creation is outpacing labour force growth at 3.8% a year versus 2.8% @FT @davidpilling [not credible]
Africa


The “Africa Rising” narrative gained momentum around 2010. As is the
way with these things, it arrived about a decade late — and just as
things were about to go pear-shaped. Investors, hungry for yield,
alighted on the only continent where living standards had not yet
visibly begun to converge on those in the west. Their bet was that
Africa had turned a corner. Were they wrong?

These days, the mood has darkened. Nigeria and South Africa, which
account for half of sub-Saharan Africa’s gross domestic product, are
at or close to recession. Nigeria has squandered its oil boom.
Long-sluggish South Africa has failed to meet the pent-up expectations
of its black majority. The hopes of other resource-rich countries —
including Angola, Mozambique and Zambia — have faded along with
commodity prices. A flawed election in Uganda, plus a cavalcade of
leaders clinging grimly on to power, from Zimbabwe to Burundi,
undermine the idea that governance is on the mend. Those who helped
change the Africa narrative, however, are sticking to the script.
Among the true believers is the consultancy McKinsey, whose 2010
“Lions on the Move” report did much to feed the original story. This
week it published a follow-up. Call it “Africa Rising: The Sequel”.

McKinsey bases its optimism on several factors, some more credible
than others. The story of Africa sinking, it says, is overdone. Strip
out Nigeria, South Africa and north Africa, and the rest of the
continent has not slowed. Growth in sub-Saharan Africa minus its two
biggest economies actually accelerated from 4.1 per cent in 2000-2010
to 4.4 per cent from 2010-2015. Countries such as Kenya, Tanzania,
Rwanda, Ethiopia and Ivory Coast are growing faster than that.
Granted, Nigeria and South Africa are pretty big lions to be refusing
to budge — unless going backwards counts as motion. But qualified
success in the rest of the continent suggests that other factors,
including demographics and technology, are having an impact.

By some reckoning, Africa is about to become the world’s
fastest-urbanising region. Over the next decade, nearly 190m more
Africans will be living in cities and, by 2034, Africa will have the
world’s biggest working-age population. More people can be bad news if
there are no jobs, but McKinsey’s research suggests that job creation
is outpacing labour force growth at 3.8 per cent a year versus 2.8 per
cent. Household spending, it predicts, will grow 3.8 per cent a year
to reach $2.1tn by 2025, with half of that occurring in just 75
cities. That gives the 400 African companies with annual revenue of
more than $1bn scope to consolidate and expand.

McKinsey also singles out technology. Mobile phone use in several
countries is already on a par with the US. By 2020, smartphone
penetration is expected to rise from 18 per cent today to 50 per cent.
The availability of mobile money in several countries is enabling new
businesses to set up on the back of secure payments systems. There are
also new forms of algorithm-derived credit and access to services,
paid for with electronic money, such as off-grid solar power. McKinsey
sees the potential for technology to transform health and education.

It is easy to pick holes. A lot of the “growth” comes through the
simple addition of people. Stubbornly high fertility could deprive
Africa of the demographic “sweet spot” — expanding workforce and low
dependency ratios — that propelled take-off in several Asian
countries. The transformational power of technology, too, can be
exaggerated. Unless governments provide basic infrastructure — from
roads and power to rule of law and public goods — technology will be
more of a scrappy fix than a productivity-enhancing miracle.

Still, step back and something is going on. Africa post-2000 is
reminiscent of China post-1979, when Deng Xiaoping’s pro-market
reforms began, and India post-1991, following the dismantling of the
Licensed Raj. In those countries, too, there was a lag between
inflection point and general recognition that something definitive had
changed.

The Africa story is necessarily messier. There is no single government
driving change. Yet growth has hardly been even in China or India
either. The difference in wealth between Bangalore and Uttar Pradesh
is probably no greater than that between Nairobi and the Liberian
forests, or between Mauritius and South Sudan. Africa’s growth will be
uneven and fitful. It may not even be helpful to talk about “Africa”
at all. Yet something changed, probably irreversibly, around 2000.
Give it another decade or so and we may be able to say that with more
conviction.

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Realizing the potential of Africa's economies Mckinsey
Africa


Between 2010 and 2015, Africa’s overall GDP growth averaged just 3.3
percent, considerably weaker than 4.9 percent a year between 2000 and
2008. But average growth hides a marked divergence, finds a new
McKinsey Global Institute report Lions on the move II: Realizing the
potential of Africa’s economies. A much less robust economic
performance by two groups of African economies dragged that average
down—oil exporters hit by the decline in oil prices and countries
affected by the political turmoil of the Arab Spring (Egypt, Libya,
and Tunisia). For the rest of Africa, growth actually accelerated to
4.4 percent in 2010 to 2015 from 4.1 percent in 2000 to 2010
(exhibit). In addition, long-term fundamentals are strong, and there
are substantial market and investment opportunities on the table.

Future growth is likely to be underpinned by factors including the
most rapid urbanization rate in the world and, by 2034, a larger
working-age population than either China or India. Accelerating
technological change is helping to unlock new opportunities for
consumers and businesses, and Africa still has abundant resources.

spending by Africa’s consumers and businesses already totals $4
trillion annually, and is growing rapidly. Household consumption is
expected to grow at 3.8 percent a year to total $2.1 trillion by 2025.
African businesses are an even larger spender. From $2.6 trillion in
2015, business spending is expected to increase to $3.5 trillion by
2025.

Africa could nearly double its manufacturing output to $930 billion in
2025 from $500 billion today, provided countries take decisive action
to create an improved environment for manufacturers. Three-quarters of
that potential could come from Africa-based companies meeting domestic
demand; today, Africa imports one-third of the food, beverages, and
other similar processed goods it consumes. The other one-quarter could
come from more exports. The rewards of accelerated industrialization
would include a step change in productivity and the creation of up to
14 million stable jobs over the next decade.

Africa is home to 700 companies with annual revenue of more than $500
million, including 400 with annual revenue above $1 billion, and these
companies are growing faster and are more profitable than their global
peers. But Africa needs more of them.

read more




A $31 million scandal with Nigeria's ex-first lady shows the scale of Buhari's anti-corruption battle
Africa


Patience Jonathan, the colorful wife of Nigeria’s ex-president,
Goodluck Jonathan, has become the latest high profile Nigerian
embroiled in a corruption-related scandal. Nigeria’s anti-graft
agency, the Economic and Financial Crimes Commission (EFCC), has
frozen accounts containing $31.4 million controlled by the former
first lady who claims some of the money was for payment of medical
bills.

In a bid to regain control of the accounts, Mrs Jonathan is suing the
EFCC, describing the blockage of access to the accounts as efforts to
“indirectly harass or harangue” her. Patience Jonathan’s corruption
scandal is the latest in a string of cases the EFCC has been involved
in since president Buhari took office last year.

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President Buhari shakes hand with Mr. B.J. Rewane @ retreat, VP & others in background. All great ideas on the table Laolu Akande @akandeoj
Africa


Nigeria All Share Bloomberg -3.20% 2016

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

Ghana Stock Exchange Composite Index Bloomberg -10.86% 2016

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

The Source ‏@TheSourceZW Bond notes to start circulating by end of October #MTMP

https://twitter.com/Jerusalem_Post/status/776365240552333312

"the drug trade in #Kenya brings in upwards of $400K a day, thanks to
healthy demand for #khat in #Somalia" Foreign Policy

http://foreignpolicy.com/2016/09/14/how-much-does-it-cost-for-somalia-to-ban-khat-for-a-week-millions/

#Spotted #Swaziland school brass band & students marching for
inclusive, equitable & quality education for all 🇸🇿 Sarah-Jane Boden
‏@sisiwami

https://twitter.com/sisiwami/status/776444429578174464

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"We pledged allegiance to the caliph of the Muslims, the Amir of the Believers, Abu Bakr al Baghdadi," handwritten Note
Kenyan Economy


In the note, written on the lined page of an exercise book, the women
called themselves Umm Maysarah, Umm Ma'bad and Umm Sa'ad, which the
officers said was believed to be their aliases. The officer said the
note was found in the house they stayed in.

"Know that Islamic State soldiers are everywhere," the note said

read more


Interest Rate Caps Boon for Big Kenyan Banks, @KeEquityBank CEO Says via @markets
Kenyan Economy


A decision to cap Kenyan interest rates may favor the biggest banks as
small lenders will struggle to raise cheap deposits to fund lending,
according to Equity Group Holdings Ltd. Chief Executive Officer James
Mwangi.

At least 30 of Kenya’s 42 lenders may have difficulty paying the
minimum for deposits as demanded by a new law on interest rates that
came into effect on Sept. 14. The legislation limits borrowing costs
at 400 basis points above the Central Bank Rate that’s currently at
10.5 percent, and compels banks to pay at least 70 percent of the CBR
on deposits.

“Tier II banks and those with low deposit rates will struggle to
attract deposits, will struggle to lend,” Mwangi told analysts at a
briefing in the capital, Nairobi, referring to mid-sized lenders.
Micro-finance institutions and savings and credit co-operative
societies, or Saccos, “will struggle to defend their market share.”

Kenya uses a weighted composite index that includes net assets,
deposits, capital and reserves to rank its banks. Large lenders have a
weighted index of 5 percent and above. Only seven financial
institutions, including KCB Group Ltd., Co-operative Bank of Kenya
Ltd., Diamond Trust Bank Kenya Ltd. and Commercial Bank of Africa Ltd.
qualified as large lenders in 2015, according to the Central Bank of
Kenya.

Some lenders intend to do away with savings accounts because of the
new legislation, Nairobi-based Cytonn Investments said last month, a
move that may prove fatal for them, according to Mwangi. Equity, which
introduced four fixed-deposit accounts on Wednesday, also has as much
as 100 billion shillings ($987.9 million) for additional lending,
mostly targeting companies rather than retail borrowers.

“Banks refusing deposits are shooting themselves in the head, not
leg,” he said. “Banks can only solve this problem by volumes.”

Equity has a 10 percent market share, 11 percent of the nation’s total
loan book and nearly a fifth of the industry’s profits, Mwangi said.
The lender’s share price has dropped 30 percent since President Uhuru
Kenyatta approved the new law on Aug. 24.

The bank is extending credit at 10.5 percent for its best clients and
paying as much as 10 percent for term deposits, Mwangi said, adding
that he expects an average 12 percent lending rate for the industry.
Borrowers paid an average 18 percent for debt in June, according to
the central bank.

Conclusions

Dr. James Mwangi of Equity Bank played an offensive game yesterday

Equity says mobile-based loans to be capped at 14.5pc - This is a
highly disruptive move on the part of Dr. Mwangi -

“Equity Bank has interpreted this [the new law] to include all credit
facilities extended to customers by such institutions. This includes
loans through mobile phones or through other third party platforms or
collaborations with mobile network operators (MNOs), credit card
facilities as well as micro finance loans,” said Mr Mwangi.

“You can’t partner with a non-bank institution - a fintech or telecom
– and pretend you can be outside this law" Dr. James Mwangi of Equity
via Kenyanwallstreet -

Dr. James Mwangi was quoted by Bloomberg as follows

At least 30 of Kenya’s 42 lenders may have difficulty paying the
minimum for deposits as demanded by a new law on interest rates that
came into effect on Sept. 14.

“Tier II banks and those with low deposit rates will struggle to
attract deposits, will struggle to lend,” Mwangi told analysts at a
briefing in the capital, Nairobi, referring to mid-sized lenders.
Micro-finance institutions and savings and credit co-operative
societies, or Saccos, “will struggle to defend their market share.”

“Banks refusing deposits are shooting themselves in the head, not
leg,” he said. “Banks can only solve this problem by volumes.”

KCB reacted

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29-AUG-2016 I called this a "Schumpeter moment" for banking a little while ago.
Kenyan Economy


According to Schumpeter, the “gale of creative destruction” describes
the “process of industrial mutation that incessantly revolutionises
the economic structure from within, incessantly destroying the old
one, incessantly creating a new one”. On  Thursday and Friday, a ‘’a
gale of creative destruction’’ blew through the banking sector.

read more


Within the first eight days of the enactment of the law, the investors with shares listed on the Nairobi Securities Exchange (NSE) lost Sh243 billion, that had improved to Sh215 billion loss as of yesterday.
Kenyan Economy


With the bourse valued at Sh1.895 trillion yesterday, the loss is a
fifth of the value relative to the Sh2.11 trillion hit on the day just
before the Banking (Amendment) Bill was signed into law by President
Uhuru Kenyatta. At its lowest recently, the market cap came down to
Sh1.867 trillion.

read more




Kenya Shilling versus The Dollar Live ForexPros
Kenyan Economy


Nairobi All Share Bloomberg -9.66% 2016 [+1.52% since closing at a
2014 low on the 5th of this month]

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

131.63 +0.29 +0.22%

Nairobi ^NSE20 Bloomberg -19.82% 2016 [+3.94% since closing at a 2011
Low on August 30th]

http://j.mp/ajuMHJ

3,239.80 +17.93 +0.56%

read more


.@WPPScangroup rallied +4.68% to close at 19.00 a 7 week High +13.43% in September share data here
Kenyan Economy


Par Value:                  1/-
Closing Price:           19.00
Total Shares Issued:          378865102.00
Market Capitalization:        7,198,436,938
EPS:             1.12
PE:                 16.964

read more


@serenahotels significantly elevated volume of late at -28.00% YTD share data [5 month volume chart]
Kenyan Economy


#Mombasa you took my heart away. The Whisky Whisperer ‏@samdave69

https://twitter.com/samdave69/status/776465375416426497

.@KenyaAirways firmed +1.28% to close at a 5 week high of 3.95.
+14.49% this month share data

http://www.rich.co.ke/rcdata/company.php?i=OA%3D%3D

.@KenGenKenya +1.48% closed at 6.85 a 16 week High +14.166% run higher
this month share data

http://www.rich.co.ke/rcdata/company.php?i=Mzc%3D

The parabolic Trajectory of @Transcentury 's price rebound
flattened yesterday +151.11% rally since 25th August

http://www.rich.co.ke/rcdata/company.php?i=NTg%3D

Golden sunrise over Lake Baringo. Photo by @rokasdarulis KENYA Pics ‏

https://twitter.com/kenyapics/status/776290777311895553

Every Listed Share can be interrogated here

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

read more


Ex-Uchumi CEO Ciano to record police statement @BD_Africa
Kenyan Economy


Former Uchumi Supermarkets chief executive Jonathan Ciano is this
morning expected to record a statement with the police explaining his
alleged role in the manipulation of the retail chain’s books during
his time at the helm.

Mr Ciano, who headed Uchumi for nearly 10 years, was forced out of
office in June last year alongside his chief finance officer, Chadwik
Okumu, who was taken into custody yesterday before being released.

He was not arraigned in court to face any charges, but sources
indicated that he would be brought to court once Mr Ciano came on
board.

Mr Ciano, however, said he was not being sought by the police and that
he had agreed to present.

himself to the Directorate of Criminal Investigations (DCI) this
morning. “No, the police are not looking for me, I already have an
appointment with them tomorrow afternoon. They want to find out about
what you have been writing in the papers and I will explain to them,”
Mr Ciano said.

Uchumi booked a Sh3.2 billion loss in financial year ending June 2016
after the retailer wrote off the Sh1.04 billion that had been included
in the supermarket’s books through manipulation.

It has been suggested that the company used a revaluation of its
properties to conceal losses it made in the preceding two years.
Uchumi would have been in the loss-making territory from 2013,
according to London-based Exotix and Kenya’s Equity Investment Bank.

The retail chain then hired audit firm KPMG to conducted a forensic
audit of its books between June 2013 and May last year. KPMG delivered
their findings early this month revealing fresh details of
unscrupulous dealings at the supermarket.

KPMG’s audit report indicated that the supermarket lacked an adequate
background and quality checks that led to the acceptance of conflicted
suppliers, substandard products and dubious trade agreements.

The report also showed that the retail chain’s top management may have
been involved in the cover up of the illicit financial transaction
that took place under their watch.

“Our review noted that a number of key pertinent issues, including
profitability of subsidiaries, creditors’ payments and cash positions
were identified and raised by internal audit at audit committee
meetings, but we did not find any evidence of further deliberations
and action plans on the same by the members of the committee,” KPMG
says.

It adds that Mr Ciano received a whistle blower’s email from Mr Peter
Waitara in 2014 claiming financial records were being manipulated to
confuse the board, bribes were being demanded from suppliers to
process payments and in turn the suppliers bribed staff for local
purchase orders.

read more



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