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Monday 10th of October 2016 |
Morning Africa |
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Sterling pound has become a prisoner of the hard-edged rhetoric. Africa |
Given that FT Africa conference was held in London, it is worth turning to some tectonic shifts in sterling asset prices. e catalyst for the sell-off in the pound were comments by the Prime Minister eresa May at the Conservative Party’s conference .
“We should not let things drag on too long; having voted to leave, I know that the public will soon expect to see, on the horizon, the point at which Britain does formally leave the European Union,” May said last Sunday. “ There will be no unnecessary delays in invoking Article 50. We will invoke it when we are ready. And we will be ready soon. We will invoke Article 50 no later than the end of March next year.”
These comments coupled with hard-line comments on immigration sent sterling into a tail-spin. this tail-spin culminated in the early hours of Friday morning (when most of us were tucked up in bed and in the blissful land of nod), when the pound fell as far as 1.1200 on some electronic trading platforms – though most financial news wires are talking about a low around 1.1800. It is still a matter of speculation as to what could have led to such a precipitous fall. Some are blaming automated algorithm trading systems (which buy and sell enormous amounts of foreign exchange on the basis of word counts and so on), fat fingers and all kinds. e point is sterling ‘’flash-crashed’’ big. Thee United Kingdom runs a near 100b current account deficit and debt-to-GDP is somewhere around 90 per cent. And here again we can see that Prime Minister Theresa May has nailed her colours to the ‘’Brexit’’ mast. Thee language of ‘’Brexit’’ is hard-edged and is not considering the impact on the financial markets at all. Sterling pound has become a prisoner of the hard-edged rhetoric.
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Inside Trump Tower, an Increasingly Upset and Alone Donald Trump Law & Politics |
It has been his pride and his palace, a soaring black skyscraper overlooking Manhattan that seemed to match Donald J. Trump’s ambition and ostentatiousness.
But Trump Tower, since Friday afternoon, has become a kind of lonely fortress for its most famous occupant, who holes up inside, increasingly isolated and upset, denounced almost every hour by another Republican official.
Mr. Trump was asked to stay away from a party gathering Saturday afternoon in Wisconsin, where Speaker Paul D. Ryan and other state luminaries took the stage, a striking rebuke that left the Republican nominee for president with no place to go on a Saturday 31 days before the election.
So he remained inside his enormous penthouse apartment on the 66th floor, and his corporate suite 40 stories below, for almost all of Friday and Saturday.
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10-OCT-2016 The falcon cannot hear the Falconer - Losing control of the Narrative @TheStarKenya Africa |
One of my favourite poets is the Irishman WB Yeats, and one of my favourite poems is called The Second Coming. And that Poem begins thus:
Turning and turning in the widening gyre the falcon cannot hear the falconer; Things fall apart; the centre cannot hold;
According to Google analytics, this poem has seen a parabolic surge in ‘’mentions’’ – and I am sure you will understand why when you read the poem in full.
Last week, I attended the Financial Times Africa Summit at Claridge’s in London. Hannah was impressed that the lift had a sofa, and of course very little beats a really grand hotel, especially one as venerable as Claridge’s. e president of the African Development Bank, the very dapper Akin Adesina said ‘’Africa is not falling apart’’. Pravin Gordhan, who described himself as more of an activist than a Finance Minister in South Africa, admitted he was just one phone call away from being fired. FT editor Lionel Barber checked whether his phone was off for the duration of the interview. Overall, with the exception of, Mr Ibrahim, Mr Collymore and myself – it still felt like everyone was still singing from the same ‘’Africa Rising’’ hymn sheet.
When it was my turn – and bear in mind I had Tito Mboweni ( e ex-South African Central Banker) on my left – I said: ‘’SSA is predicted at its slowest rate since the early 1990s. the challenge now is that you can drive a truck through the chasm between the ‘’Africa Rising’’ rhetoric and the reality (slowest GDP expansion in more than 25 years).’’
If you want a market measure of the chasm, look at the official foreign exchange rates and compare them with the black market rates in so many countries. In Nigeria, the official rate is around 311.00, but the black market rate is close to 500.00. Look at Angola. these black market rates are a real time temperature gauge, and they are clearly emitting a signal. The point is that policymakers have now lost control of the narrative and they need to adjust the rhetoric, otherwise credibility starts sliding. It’s a mystery to me how there is even a shred of credibility left in Nigeria. It is clear now that the denouement is not being side-stepped, but instead is being hurtled towards.
Given that FT Africa conference was held in London, it is worth turning to some tectonic shifts in sterling asset prices. e catalyst for the sell-off in the pound were comments by the Prime Minister eresa May at the Conservative Party’s conference .
“We should not let things drag on too long; having voted to leave, I know that the public will soon expect to see, on the horizon, the point at which Britain does formally leave the European Union,” May said last Sunday. “ There will be no unnecessary delays in invoking Article 50. We will invoke it when we are ready. And we will be ready soon. We will invoke Article 50 no later than the end of March next year.”
These comments coupled with hard-line comments on immigration sent sterling into a tail-spin. this tail-spin culminated in the early hours of Friday morning (when most of us were tucked up in bed and in the blissful land of nod), when the pound fell as far as 1.1200 on some electronic trading platforms – though most financial news wires are talking about a low around 1.1800. It is still a matter of speculation as to what could have led to such a precipitous fall. Some are blaming automated algorithm trading systems (which buy and sell enormous amounts of foreign exchange on the basis of word counts and so on), fat fingers and all kinds. e point is sterling ‘’flash-crashed’’ big. Thee United Kingdom runs a near 100b current account deficit and debt-to-GDP is somewhere around 90 per cent. And here again we can see that Prime Minister Theresa May has nailed her colours to the ‘’Brexit’’ mast. Thee language of ‘’Brexit’’ is hard-edged and is not considering the impact on the financial markets at all. Sterling pound has become a prisoner of the hard-edged rhetoric.
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Economic growth in Sub-Saharan Africa this year is set to to drop to its lowest level in more than 20 years. Transcript of African Department Press Briefing @IMFNews Africa |
MR. SELASSIE: Good afternoon. Thank you very much for joining us today. I'll be -- I'll try and be as brief as I can. Before I take your questions, I just want to lay out the economic outlook for Sub-Saharan Africa, our assessment of what the policy requirements are to address the current challenges facing the region and how promote strong, durable and inclusive growth, that's very much needed.
Economic growth in Sub-Saharan Africa this year is set to be -- to drop to its lowest level in more than 20 years. We are, at the moment, projecting close to the order of 1.4 percent as you will have seen, lower than last year's 3.5 percent and indeed, much below the 5 percent and more that the region was enjoying between 2010 and 2014. Two broad factors explain this development. The external environment facing the region has deteriorated. Notably, commodity prices, of course, but also financial market conditions have tightened. The policy response in many of the countries that have been mostly affected by these shocks has also been delayed and unfortunately, incomplete, raising uncertainty, deterring private investment and stifling new sources of growth.
The full picture that we see is one of multi-speed growth in which the regional aggregate number of 1.4 percent growth this year considerably masks the diversity that prevails across the region. In particular, close to half the countries in the region -- about 19 out of 45 odd countries in Sub-Saharan Africa continue to enjoy robust growth, including the likes of Côte d’Ivoire, Ethiopia, Senegal, and Tanzania with economic output set to expand by 6 percent or more by this year.
It is, however, the commodity exporters that are under severe economic strain. This is particularly the case for oil exporters, notably, Angola and Nigeria and five of the six countries in the central African monetary -- economic and monetary union. The near-term prospects have worsened significantly in recent months.
Conditions are also particularly difficult in South Africa at the moment, another country which relies on -- to a significant degree on commodity exports with outputs expansion expected to be (inaudible) this year or next year. There are, of course, also, as you may know, challenges. With these challenges are compounded in some country cases by a -- the failure of acute drought in the Lesotho, Malawi, Zambia and Zimbabwe.
This implies allowing exchange rates to fully absorb the external pressures that these country -- that those countries particularly outside monetary unions are facing, coupled with strong and orderly adjustment to contain fiscal deficits and a tight monetary stance focused on containing inflation.
let me stress here that for these countries that are being impacted by low commodity prices, adjustment is unavoidable given the scale and persistent nature of the shock. The options rather are between disorderly and the more orderly adjustment process. Further delays in grappling with the elevated macro imbalances are certain to undermine near-term growth and delay robust and job rates recovery.
Wrapping up, I would like to stress that we view Sub-Saharan Africa as a region of immense economic potential, but in some cases, this potential has been stymied at the moment by elevated macroeconomic imbalances and rising policy uncertainty. Addressing these challenges promptly and forcefully will be important in the coming months.
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Ethiopia declares state of emergency amid protests Africa |
Declaring the state of emergency, Ethiopian Prime Minister Hailemariam Desalegn said in a televised address: "We put our citizens' safety first. Besides, we want to put an end to the damage that is being carried out against infrastructure projects, education institutions, health centres, administration and justice buildings."
The state of emergency will last for six months.
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Ethiopian protesters attack factories in Africa's rising economic star Reuters Africa |
Fana Broadcasting, which is seen as close to the state, reported on its website that 11 companies ranging from textile firms to a plastics maker to flower farms had been damaged or destroyed, while more than 60 vehicles had been torched.
Dutch firm FV SeleQt said its 300-hectare vegetable farm and warehouse had been plundered. Another Dutch firm, Africa Juice, said its factory had been partially destroyed.
The manager of one of the Turkish companies, textile firm Saygin Dima, told Reuters this week at least a third of his factory was burned down.
Fana's website showed images of burned-out trucks on the road side, blaming the damage on "perpetrators of violence", echoing the line taken by the government, which accuses local rebel groups and dissidents based abroad for stoking the unrest.
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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.
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Zanzibar Trouble in paradise The Economist Africa |
THE young woman’s voice is flat, as she describes a group of masked men breaking down the door while she slept in March this year. She says she was then forced into a car, beaten and gang-raped. Afterwards a passer-by found her abandoned on the roadside, unable to walk unsupported. “It was so painful,” she says, staring into the middle distance. “When I remember it, it’s a trial.” The woman is one of dozens of people on the archipelago of Zanzibar who claim to have been attacked by plain-clothes militiamen, known as “zombies”, since March 2015. Their crime: supporting the main opposition party.
In the West, Zanzibar conjures up images of sugary white sands, warm breezes and turquoise waters. But Tanzania’s islands have a darker side. From the 18th century an Arab elite grew rich there trading ivory, spices and slaves. The mainly Muslim archipelago gained independence from Britain in December 1963, though only very briefly: the sultan was overthrown a month later and the island was merged with Tanganyika on the mainland in April 1964.
Tanzania has been lauded for its stability since independence. But this is partly because the CCM’s hold on the mainland has been relatively unchallenged, at least until now. Its response to the political challenge on Zanzibar, however, is typical of ruling parties in the region: tilt the playing field and allow extra-legal violence during election campaigns; then rig the vote and keep a lid on the ensuing discontent.
After the re-run election in March the “zombie” attacks died down. But in the past couple of weeks the militia has again been harassing people and burning down houses in Zanzibar town, says Ismail Jussa Ladhu, a CUF politician. Meanwhile in the past few months dozens of opposition party officials and supporters in the northern island of Pemba have been arrested.
Zanzibar has most of the ingredients for unrest: a population of mostly young, often unemployed Muslims that “view the mainland as a colonial master”, as a local journalist puts it, and could be tempted by Islamist extremism. Elsewhere that has been a recipe for disaster. But with the instruments of state power at its command, the CCM, like so many other ruling parties on the continent, is for now successfully tightening its grip over a divided society.
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Free-Float Flounders as Nigerian Naira Hits Black-Market Low Africa |
The float is anything but free, according to investors including Aberdeen Asset Management Plc and Duet Asset Management Ltd., with the central bank holding the naira in a tight range around 315 per dollar since the beginning of August. Most local businesses and Nigerians going abroad can’t get foreign-exchange from their banks and have to turn to the BDCs, which have more leeway in setting prices, and black-market street-traders openly plying their services across the country. They sell each dollar for around 475 naira, compared with 425 in mid-September.
“Back in January, we never knew the naira would head toward a staggering 500,” Mohammed said. “This is not the real value. But because the liquidity is not there, the pressure keeps mounting and the naira keeps depreciating.”
Naira forwards have soared to records, suggesting foreign investors see another devaluation coming. Contracts maturing in six months trade at 384 per dollar, their highest-ever level, while those due in a year have climbed to 422 from 325 since the end of June. The naira’s spot price climbed 1.7 percent to 304.99 by 1:48 p.m. in Lagos.
Even though foreign investors, for compliance reasons, typically have to use the interbank market if they bring dollars into Nigeria, they still watch the black market closely. For the latest rates, they monitor websites such as abokifx.com, which collates prices from traders in Lagos each day, and everdonbdc.com.
“However small the volumes, it’s a rate that’s out there and it gives you an idea of the pressures on the naira,” Ayodele Salami, who manages about $450 million of African equities as chief investment officer at Duet Asset Management in London, said by phone Oct. 5. “It undermines confidence in the interbank market. You can’t have a gap like this. It should never be more than five or 10
Duet has reduced the proportion of its African assets invested in Nigeria to 12 percent from 40 percent in the past two years. The dollar shortage has meant Nigerian custodians have only been able to repatriate about 20 percent of the money Salami has asked for since the beginning of August.
“We’re in a queue,” he said. “It’s not an academic issue for us. It’s real.”
“We believe black-market parallel exchange rates are a good guideline for where a freed-up currency could initially move,” he said. “Despite the introduction in June of what was touted as a new ‘floating’ FX regime, the Nigerian naira remains tightly controlled.”
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N.S.E Today |
The IMF's Africa head MR. SELASSIE said the following at the end of last week in Washington.
''Economic growth in Sub-Saharan Africa this year is set to drop to its lowest level in more than 20 years. We are, at the moment, projecting close to the order of 1.4 percent as you will have seen, lower than last year's 3.5 percent and indeed, much below the 5 percent and more that the region was enjoying between 2010 and 2014''
''Wrapping up, I would like to stress that we view Sub-Saharan Africa as a region of immense economic potential, but in some cases, this potential has been stymied at the moment by elevated macroeconomic imbalances and rising policy uncertainty. Addressing these challenges promptly and forcefully will be important in the coming months''
Kenya is project to grow at 6% in 2017.
Sterling is trying to find a footing after a precipitous Fall last week to trade just above the 1.24 level versus the Dollar.
New York Crude Oil pushed through the $50.00 a barrel level to trade at 50.52 last.
The Nairobi All Share eased a marginal 0.02 points to close at 138.15. The Nairobi NSE20 edged -2.41 points lower to close at 3258.93. Equity Turnover was muscular and clocked 1.010b with Safaricom transacting 75% of that,
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N.S.E Equities - Commercial & Services |
Safaricom saw heavy volume action and traded 37.949m shares worth 777.246m and closed unchanged at 20.25. The weighted average closing price was 20.48 signalling prices are biased higher. Safaricom has posted a +32.69% Total Return through 2016 and remains on a rock-solid growth Trajectory.
.@safaricomltd share price data here +32.69% 2016 http://www.rich.co.ke/rcdata/company.php?i=NTU%3D
Kenya Airways firmed +3.7% to close at a Fresh 3 month High of 4.20. Kenya Airways traded 47,200 shares. Kenya Airways has rallied +20% over the last 4 weeks.
Deacons was marked down limit down to close -9.94% at 7.70 on light trading of 3,700 shares.
TPS Serena was up-ticked +4.419% to close at 18.90. Tourism remains a gently sloping upwards curve which is supportive for a share price that is egregiously priced.
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N.S.E Equities - Finance & Investment |
Equity Group shaved off -0.833% to close at 29.75 but interestingly was trading session highs of 32.25 +7.25% at the closing Bell. Equity traded 4.414m shares worth 132.040m. Equity is -20.625% on a Total Return basis and has rebounded +16.66% off a 2016 Low from last month. KCB Group closed unchanged at 27.75 and traded 554,700 shares. COOP Bank firmed 25cents to close at 12.65 and was lightly traded with just 33,100 shares changing hands.
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N.S.E Equities - Industrial & Allied |
EABL firmed +0.71% to close at 282.00 and traded 219,600 shares. Safaricom and EABL are ''must-haves'' for International Investors, in particular.
KPLC firmed +2.777% to close at 9.25.
Trans-Century bounced a further 75cents to close at 9.65
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