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Monday 10th of October 2016
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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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