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Satchu's Rich Wrap-Up
 
 
Thursday 06th of October 2016
 
Morning
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12-SEP-2016 :: Mirrors on the ceiling, The pink champagne on ice @TheStarKenya
Africa


And she said “We are all just prisoners here, of our own device”
Last thing I remember, I was
Running for the door
I had to find the passage back
To the place I was before
“Relax,” said the night man,
“We are programmed to receive.
You can check-out any time you like,
But you can never leave! “

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"Everybody would like to find a way out of large-scale QE because it's obvious that the economy can't function like this forever," Adam Glapinski, governor of the central bank in Poland
Africa


"Everybody would like to find a way out of large-scale QE because it’s
obvious that the economy can’t function like this forever,” Adam
Glapinski, governor of the central bank in Poland, which is outside
the euro area, told reporters on Wednesday. “But after a junkie gets
hooked on various substances, he finds it hard to come clean and this
can only happen gradually, in fits and starts."

read more


12-SEP-2016 :: What is clear is that we are at the fag-end of this party @TheStarKenya
Africa


Therefore, my second trade of the year (my first was to be long, the
Yen from January) is to buy put options on 10-year bonds because this
is going to pop, and when it pops, the wizardry won’t work anymore,
and at that moment there is going to be one heck of a move.

Home Thoughts


“Nothing behind me, everything ahead of me, as is ever so on the
road.” ― Jack Kerouac, On the Road

read more


A Trump victory would 'upset the verdict of history' - professor
Law & Politics


The forces influencing the U.S. presidential election favour
Republican nominee Donald Trump to win the popular vote - but even
proven prediction models face "the most difficult election by far to
predict accurately," a political forecaster with a three-decade
winning streak said on Wednesday.

History Professor Allan Lichtman of American University in Washington
has accurately predicted the popular result in presidential elections
since Republican President Ronald Reagan defeated Democratic
challenger Walter Mondale in 1984.

read more


Confusion Over Trump Appeal Means Markets Risk Brexit-Like Shock
Law & Politics


Minutes into last week’s presidential debate, investors decided that
Donald Trump, a candidate many of them fear, was being outshone by
Hillary Clinton. This, they figured, would help stem his momentum, and
so they frantically bid up the value of the Mexican peso, a currency
that has become an election barometer. The next day, the S&P 500 Index
jumped 0.6 percent.

But the Trump candidacy is largely unaffected by policy debate skills,
and the failure to grasp that could lead markets into the kind of
misstep and turmoil that the U.K.’s vote to leave the European Union
did, according to a number of market analysts.

“This is an unusual juncture but we keep looking at it through the
same kinds of lenses,” said Tina Fordham, Citigroup Inc.’s
London-based chief global political analyst. “What if it’s all wrong
because society, technology, opinion polling methods, and everything
else don’t capture marginalized voters in the way they might once
have?”

Conclusions

read more




Battle of Aleppo is end of history in the Middle East BY M.K. BHADRAKUMAR
Law & Politics


Russia’s possible victory in Syria will mark the end of western
hegemony over the Middle East, and historians are bound to single it
out as the defining foreign-policy legacy of Obama’s presidency.

On Monday, Barack Obama administration fulfilled its week-old threat
to ‘suspend’ bilateral talks with Russia over Syrian crisis. Are the
dogs of war being unleashed?

The thought may seem preposterous but tensions are palpable.

The US spy planes are spotted ever more frequently in the Eastern
Mediterranean and the Black Sea over Russian bases, especially Tartus
and Hmeimim in Syria.

Russia has deployed SA-23 Gladiator anti-missile and anti-aircraft
system in Syria, first-ever such deployment outside Russia. The
western analysts see it as pre-emptive step to counter any American
cruise missile attack. Russia is not taking chances.

The Defence Ministry in Moscow said the deployment is intended “to
provide protection for the naval logistics facility in Tartus and the
Russian Navy’s task force”.

Moscow factors in that US may use some rebel groups to ensure that
Russian “body bags” are sent to Moscow, as threatened explicitly by US
state department spokesman John Kirby last week. Moscow suspects
American hand in the missile attack on the Russian embassy in Damascus
– “Brits and Ukrainians clumsily helped the Americans”, a Russian
statement in New York said on Tuesday.

Indeed, passions are running high. There could be several dozen
western intelligence operatives trapped with the rebel groups in east
Aleppo. This is one thing.

Clearly, the turning point was reached when the US and western allies
undertook a fierce air attack on the Syrian army base at Deir Ezzor
lasting an hour and killing 62 government troops. The US explanation
of that being an accident lost credibility, since within an hour of
the air strike, extremist groups of al-Qaeda followed up with ground
attack as if acting in tandem.

The point is, with the fall of Aleppo, Syrian war becomes de facto a
residual military operation to purge the al-Qaeda affiliate Jubhat
al-Nusra from Idlib province as well, which means regime forces would
secure control over the entire populous regions of Syria, all main
cities and entire Mediterranean coast. In a nutshell, Syrian war ends
with President Bashar al-Assad ensconced in power.

However, if Obama decides against the war option, three other reasons
can also be attributed. One, Washington’s equations with Ankara and
Riyadh are hugely uncertain at the moment and both regional allies are
key partners in Syria.

The US-Turkish ties remain volatile not only due to the attempted coup
in July but also because of the US’ tie-up with Kurds and growing
Turkish suspicions regarding its intentions in Syria.

On the other hand, Riyadh is mulling over the best way of drinking
from the chalice of poison that the US Congress prepared for King
Salman in the form of the ‘sue-the-Saudis-for-the-9/11’ bill.

Two, President Recep Erdogan is unlikely to gamble another
confrontation with Russia when Turkey’s legitimate interests in Syria
can be secured by working in tandem with President Vladimir Putin at
the negotiating table.

In fact, Putin is visiting Ankara shortly. Iranian Foreign Minister
Mohammad Javad Zarif also visited Turkey last week.

Above all, Turks are realists and their excellent intelligence
apparatus inside Aleppo would have reported back by now that the fall
of the ancient city is a fait accompli.

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Currency Markets at a Glance WSJ
World Currencies


Euro 1.1199
Dollar Index 96.22
Japan Yen 103.50
Swiss Franc 0.9753
Pound 1.2718
Aussie 0.7599
India Rupee 66.585
South Korea Won 1111.72
Brazil Real 3.2204
Egypt Pound 8.8794
South Africa Rand 13.7445

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USD/JPY breaks out out downtrend David Ingles 103.48 Last
International Trade


When having a "breakout" means something other than a bad case of
pimples. David Ingles ‏

read more


The Prime Minister claimed low interest rates and money printing by the Bank of England has had 'bad side effects' [TICK]
International Trade


“Because while monetary policy – with super-low interest rates and
Quantitative Easing – provided the necessary emergency medicine after
the financial crash, we have to acknowledge there have been some bad
side effects,” she told the conference hall.

“People with assets have got richer. People without them have
suffered. People with mortgages have found their debts cheaper. People
with savings have found themselves poorer.  A change has got to come.
And we are going to deliver it.”

read more



+ 9. Jamie Dimon Made One of the Year's Best Trades @Business
International Trade


It was perfectly timed.

Back on February 11 of this year, Jamie Dimon, the Chairman and Chief
Executive Officer of JPMorgan Chase & Co., made a highly publicized
purchase of 500,000 shares of his own company's stock, worth about
$26.6 million at the time. The stock ended up hitting a bottom that
day and has surged more than 25 percent since then.

Those 500,000 shares are now worth $33.85 million, gaining $7.25
million in value. The company's stock is now very close to a 52-week
high that was set last November.

read more


Commodity Markets at a Glance WSJ
Commodities


World's best-performing commodity so far this year - Sugar. #Sweet
David Ingles

https://twitter.com/DavidInglesTV/status/783818169278275585

Gold 6 month INO 1265.17 [Has definitively broken down]

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

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Zambian police said on Wednesday they had arrested the president and deputy leader of the country's main opposition party.
Africa


United Party for National Development president Hakainde Hichilema and
his deputy Geoffrey Mwamba were arrested on suspicion of sedition, the
police said.

"They have been arrested and detained for seditious practices and
unlawful assembly which occurred on Sept 26. They will appear in court
tomorrow," Copperbelt police chief Charity Katanga told Reuters.

read more


May 2015 '"The revolutionary contingent attains its ideal form not in the place of production, but in the street'"
Africa


PAUL Virilio (born 1932) is a French cultural theorist and urbanist.

In his book ‘Speed and Politics’ he says: “The revolutionary
contingent attains its ideal form not in the place of production, but
in the street, where for a moment it stops being a cog in the
technical machine and itself becomes a motor (machine of attack),
becomes in other words a producer of speed.’’

As we look around the world today, we can see a battle for the
‘street’ from the streets of Bujumbura to the streets of Baltimore. In
November last year, I wrote about Ouagadougou’s signal to sub-Saharan
Africa and concluded that: We need to ask ourselves how many people
can incumbent shoot stone cold dead in such a situation – 100, 1000,
10000?

This is another point: there is a threshold beyond which the incumbent
cannot go. Where that threshold lies will be discov- ered in the
throes of the event.

Therefore, the preeminent point to note is that protests in Burkina
Faso achieved escape velocity.

Conclusions

This is an issue that is facing a lot of Regimes from Ethiopia to the DR Congo.

read more


France moots DRC sanctions with elections delayed
Africa


France says it's seeking EU sanctions to press Congolese President
Joseph Kabila to make way for delayed elections. The US imposed
sanctions last month against two individuals, with the EU yet to act.

The French foreign ministry said Tuesday the EU should use "all means
at its disposal," including sanctions, to bring about a political
transition in the Democratic Republic of Congo (DRC).
Prosecution was also needed "against those guilty of human rights
violations," said ministry spokesman Romain Nidal, referring to the
deaths of dozens of people in recent clashes between protestors and
security forces.

read more


Business confidence in South Africa fell to its lowest in three decades in September
Africa


Business confidence in South Africa fell to its lowest in three
decades in September, reflecting uncertainty about the outlook for
Africa's most industrialised economy, a survey showed on Wednesday.

read more




Nigeria's economy is likely to shrink 1.3 percent in 2016, the National Bureau of Statistics executive said on Wednesday
Africa


The NBS had predicted the Nigerian economy to grow 3.8 percent in
2016, but low oil prices have hammered the OPEC member's government
income and the naira, and recession first appeared in the second
quarter with 2.1 percent contraction.

A contraction in 2016 would mark Nigeria's first year of recession in
25 years. NBS head Yemi Kale said the economy was likely to shrink in
the third quarter.

The International Monetary Fund (IMF) already predicted in July that
Nigeria's economy would contract 1.8 percent this year.

Nigeria's economy is likely to shrink 1.3 percent in 2016, the
National Bureau of Statistics executive said on Wednesday, a sharp
downward revision of its estimates he said was prompted by sharp falls
in the naira after dollar peg was dropped.

The NBS had predicted the Nigerian economy to grow 3.8 percent in
2016, but low oil prices have hammered the OPEC member's government
income and the naira, and recession first appeared in the second
quarter with 2.1 percent contraction.

A contraction in 2016 would mark Nigeria's first year of recession in
25 years. NBS head Yemi Kale said the economy was likely to shrink in
the third quarter.

The International Monetary Fund (IMF) already predicted in July that
Nigeria's economy would contract 1.8 percent this year.

read more



Bankers lobby on the defensive over illegal charges accusations
Kenyan Economy


The Kenya Bankers Association (KBA) said that the charges that
borrowers are complaining about have been in force and that some may
not have known about them due to a “lack of customer awareness.”

The association, which represents 45 banks, claims its members have
complied with the new law.

“We have aligned our members to ensure there is compliance,” said KBA
chief executive officer Habil Olaka in an interview Wednesday.

“If a bank has not got approval from the central bank for a new
charge, then the charge does not stand. However, if the charge has
been there and it has been approved by the central bank and only that
the customer has not been made aware and now he has been made aware
then that charge is legal.”

read more



Foreign-held shares at the NSE shoot up to an all-time high @BD_Africa
Kenyan Economy


The percentage of free float at the NSE held by foreign investors rose
to an all-time high of 37.2 per cent by mid this year, raising the
risk that mass share sell-off would have a negative spin-off on the
forex market and the economy.

Market analysis by HTM Capital shows that foreign investors have
increased their holding of the freely traded shares in large-cap
stocks such as Safaricom, BAT and Equity Bank and now hold Sh335
billion out of the Sh900 billion worth of free float shares at the
NSE.

The market’s total market capitalisation stands at Sh1.99 trillion.

read more


Nairobi ^NSE20 Bloomberg -18.71% 2016
Kenyan Economy


3,284.84 +2.20 +0.07%

Every Listed Share can be interrogated here

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

read more



 
 
N.S.E Today


The International markets remain edgy. Gold was last at $1,265.00 an
ounce having lost its $1,300.00+ perch this week. Crude has topped 3
months highs above $50.00 a barrel but a wall of [shale] supply will
be switch on above $55.00.
Interestingly Raw sugar +51% Year to date has been the best Commodity
performer in 2016 but this has not been a tail-wind for Mumias Sugar
which is -34.375% Year to date which represents an outsize divergence.
The pound was last trading with a 1.26 handle and is trading on the
basis of the ''negative rhetoric'' and is a Buy at these levels.
SSA [Nigeria in recession and SA just skirting one represent 50% of
SSA GDP] will post its slowest GDP expansion in 2016 going back to the
early 1990s.
The Nairobi All Share Index eased 0.21 points to close at 137.53. The
All Share Index is -5.6% Year to date and has rebounded +6.077% since
closing at a multi-year low on 5th September.
The Nairobi NSE20 Index retreated 20.82 points to close at 3264.03 The
NSE20 Index is -19.22% through 2016 and is +4.72% since closing at a
multi-year low 30th August
Equity turnover was 292.135m.
The percentage of free float at the NSE held by foreign investors rose
to an all-time high of 37.2 per cent by mid year, which was before the
outsize volatility hit the Banking segment [where foreign Shareholders
hold their largest cumulative position] post the Interest rate capping
Bill.
The biggest single position is probably in Safaricom as a % of its Free Float.
HTM Capital calculated that Foreign investors hold Sh335 billion out
of the Sh900 billion worth of free float shares at the NSE. The
market’s total market capitalisation stands at Sh1.99 trillion.



N.S.E Equities - Commercial & Services


Safaricom has more Buyers than Sellers at these levels [Ratio 1.5-1]
and closed unchanged at 20.00 and traded 3.648m shares. Safaricom has
served up a +31.16% Total Return in 2016 which is plan remarkable
versus the domestic Indices NSE All Share -6.00% in 2016 but that
performance would be much worse of Safaricom was removed from the
Index calculation.

Kenya Airways firmed +2.5% to close at a 3 month high of 4.10 and has
crossed the 4.00 Level which had previously proven strong resistance.
Kenya Airways traded 991,100 shares.



N.S.E Equities - Finance & Investment


Equity Group was the most actively traded share at the Exchange and
eased back -2.44% to close at 30.00 and traded 2.44m shares worth
73.249m. Equity Group has traded a 25.00-38.00 range since the
announcement of the Rate Capping Bill and sits +20% above its 2016 Low
of 25.00 from 14th through 16th September. Dr. Mwangi who issued a
rallying cry to the Diaspora last week in london to invest back home
has stated that Equity was sitting on a war-chest of 100b shillings
which they were ready to put to work.

Standard Chartered closed unchanged at 180.00 and traded 26,200
shares. I spoke with Standard Chartered's CEO Lamin Manjang today and
he quoted Andy Grove who said ''"Success breeds complacency.
Complacency breeds failure. Only the paranoid survive."  Stanchart is
+13.33% on a Total Return Basis and has vastly outperformed the NSE
Banking sub-index.

KCB Group eased back -1.73% to close at 28.25 and traded 935,700
shares. Joshua Oigara has made a series of announcements around KCB
Fintech and is self-evidently making a big and bold move into digital
finch Future.



N.S.E Equities - Industrial & Allied


Bamburi Cement rallied +2.64% to close at 155.00 and traded 5,300 shares.

Trans-Century [which has surely been the most volatile counter at the
NSE] rallied for the second session in a row to close at 8.10 and
making that a 20% two da



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