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Satchu's Rich Wrap-Up
Friday 14th of October 2016

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I am reading Peter Frankopan's The Silk Roads

“So widespread was slavery in the Mediterranean and the Arabic world
that even today regular greetings reference human trafficking. All
over Italy, when they meet, people say to each other, ‘schiavo’, from
a Venetian dialect. ‘Ciao’, as it is more commonly spelt, does not
mean ‘hello’; it means ‘I am your slave’.” ― Peter Frankopan, The Silk
Roads: A New History of the World

Dad is coming home today. I have to commend Aga Khan Hospital. A sick
Father brings a lot of things into a sharper perspective.

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No Brexit Cakes for You, Only Salt and Vinegar: Tusk Warns May
Law & Politics

“Hard Brexit" or “no Brexit," take your pick. That was the message
European Union President Donald Tusk fired at the U.K. as he signaled
the process of disentangling from the bloc may take longer than two

In a Brussels speech stressing Europe’s red lines in the Brexit
negotiations set to start before April, Tusk said it’s time British
Prime Minister Theresa May realized that the withdrawal "will be
painful for Britons."

The hard-line stance reflects the European view that the U.K. should
not get concessions for leaving the 28-member bloc to avoid more
secession talks. The ratcheting up of the rhetoric may fan concern in
financial markets that Britain is set to lose the benefits of being a
member of Europe’s single market if it continues to focus on curbing

Tusk said Brexit will feature “no cakes on the table, for anyone” but
rather “only salt and vinegar.”


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Flight of the Brexit Bankers BBG
Law & Politics

Where in Europe will they go? If London loses its luster, Dublin and
Frankfurt look like winners, but places like Warsaw—yes, Warsaw—stand
to gain, too.

After the British stiff-armed Europe this summer, sterling plummeted,
London-traded shares quavered, consumer confidence took a dive, and
businesses shelved expansion plans. But within a few weeks, Britons
saw that the shops were still open, the Tube was running, and the fish
and chips remained as crisp as before the June 23 vote.

So, is that it? Has Britain endured all the pain it’s likely to feel
over its vote to leave the European Union? Probably not. The
repercussions will echo through the City of London’s glass canyons and
walnut-paneled boardrooms for years. London, a trading center since
Roman times that’s become the world capital of foreign exchange
trading and the No. 1 international banking center, has a lot to lose.
Consulting, financial, insurance, legal, and related services account
for 12 percent of the U.K.’s gross domestic product. They pay more in
taxes than any other sector and support an estimated 2.2 million
British jobs.

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Trump Said to Block Campaign's Requests to Do Self-Opposition Research
Law & Politics

Republican presidential nominee Donald Trump rebuffed political aides’
requests to research his past, people familiar with the matter said, a
decision that contributed to his campaign being caught unprepared for
the past week’s barrage of claims he mistreated women.

Corey Lewandowski, Trump’s first campaign manager, requested that
Trump submit himself to a forensic evaluation that is traditional for
any public figure seeking office, according to people granted
anonymity to speak freely about the campaign’s start-up days last
year. Opposition research would allow Trump’s new political team to
prepare for potential attacks on his candidacy.
Paul Manafort and his team made a similar request when they took over
the reins after Lewandowski, who was ousted this June.

Trump declined, the people said, and the issue became a point of
contention among his closest political advisers and some long-time
employees at the Trump Organization. Trump spokespeople Jason Miller
and Hope Hicks didn’t immediately respond to requests for comment.

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China and Russia are finding common ground - against the U.S. @Markets
Law & Politics

This is the point I have been making for a while. Essentially I
thought the Pivot to Asia was the main Gig and that the US was better
off triangulating China rather than being itself triangulated.

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"You have to keep cleaning this area and to push the terrorists to Turkey to go back to where they come from, or to kill them. There's no other option'"
Law & Politics

“You have to keep cleaning this area and to push the terrorists to
Turkey to go back to where they come from, or to kill them. There’s no
other option. But Aleppo is going to be a very important springboard
to do this move.”

Assad also told the Russian newspaper that the country’s civil war had
become a conflict between Russia and the west.

“What we’ve been seeing recently during the last few weeks, and maybe
few months, is something like more than cold war,” Assad said.

“I don’t know what to call it, but it’s not something that has existed
recently, because I don’t think that the west and especially the
United States has stopped their cold war, even after the collapse of
the Soviet Union.”

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The UN estimates that there are 8,000 rebel fighters in Aleppo
Law & Politics

The proposal put forward to shoot down Russian and Syrian aircraft
over Eastern Aleppo in a bid to end the bombardment of this part of
the city is wholly unrealistic. The West is not going to risk a war
against a nuclear power and its Syrian ally in order to help the
250,000 to 275,000 civilians trapped there. To pretend anything else
is empty bombast detached from the realities on the ground. The danger
of such wild schemes is that they divert attention from more realistic
plans to save the besieged from further suffering and death.

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Currency Markets at a Glance WSJ
World Currencies

Euro 1.1027
Dollar Index 97.78
Japan Yen 104.07
Swiss Franc 0.9876
Pound 1.2199
Aussie 0.7583
India Rupee 66.845
South Korea Won 1134.92
Brazil Real 3.1792
Egypt Pound 8.8784
South Africa Rand 14.2603

Dollar Yen 5 day Chart INO 104.05


Sterling 1 Year Chart INO 1.2199


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XTX Markets Ltd. has emerged as a foreign-exchange powerhouse
International Trade

XTX Markets Ltd. has emerged as a foreign-exchange powerhouse, relying
on programmers and mathematicians to fuel its rise into the global top
five earlier this year. Now, after becoming a formidable player in
currencies, XTX has its sights set on growing in stocks, commodities
and bond markets.

But in a world where the difference between profit and loss can be
tiny fractions of a second, XTX says it relies more on smarts than
speed. Instead of building microwave networks to ferret out prices a
microsecond before anyone else, XTX uses mathematical models that are
tuned with massive data sets. It says its technology has computing
power comparable to some of the world’s top supercomputers.

XTX’s rise comes amid a market shift: In an arms race where just about
anyone can lease ultra-fast trading systems, it’s harder than ever to
get an advantage simply by being fast. That may have opened up an
opportunity for firms with sophisticated statistical models, says
Greenwich Associates. As XTX co-chief Zar Amrolia sees it, a key trial
for the London-based firm comes when it competes in even more markets
that are dominated by high-frequency traders, particularly in the U.S.

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Ethiopian Premier Expects Economic Rebound When Emergency Ends

Ethiopia’s six-month state of emergency could be called off before
that period is over, allowing the economy to recover quickly after
months of violent protests and attacks on businesses, said Prime
Minister Hailemariam Desalegn.

“I think it can quickly settle down and we don’t even need six months
of the emergency period that’s been set,” Hailemariam said in an
interview Tuesday in the capital, Addis Ababa. “We are pretty sure
that we can regain it very quickly because Ethiopia has a solid
ground, a solid foundation, it cannot be shaken by these kind of

Germany is prepared to support Ethiopia on its “road toward
democratization,” Merkel told reporters. “When you have a vibrant
democracy, you need an opposition, you need a free media,” she said.
“You have to see to it there’s a proper debate on the different

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The downside of authoritarian development Ethiopia cracks down on protest Economist

IT WAS meant to have been a time for celebration. When on October 5th
the Ethiopian government unveiled the country’s new $3.4 billion
railway line connecting the capital, Addis Ababa, to Djibouti, on the
Red Sea, it was intended to be a shiny advertisement for the
government’s ambitious strategy for development and infrastructure:
state-led, Chinese-backed, with a large dollop of public cash. But
instead foreign dignitaries found themselves in a country on edge.

One factor in the government’s decision was a spate of attacks on
holiday lodges at Lake Langano, and on Turkish textile factories in
Sebeta, both in the restive Oromia region south of the capital, on
October 5th. The attackers were well-organised and armed, some of them
reportedly mounted on motorbikes. These acts, officials suggest, were
the final straw.

The government is rattled by the prospect of capital flight. An
American-owned flower farm recently pulled out, and it fears others
may follow. After almost a week of silence, the state-of-emergency law
was a belated attempt to reassure foreign investors, who have hitherto
been impressed by the economy’s rapid growth, that the government has
security under control.

Still, the future is troubling. Over 500 people have been killed since
last November, and tens of thousands have been detained. What began
nearly a year ago as an isolated incidence of popular mobilisation
among the Oromo people, who make up at least a third of the population
and opposed a since-shelved plan to expand Addis Ababa into their
farmland, has spread. It is now a nationwide revolt against the
authoritarianism of the EPRDF and the perceived favouritism shown to a
capital whose breakneck development appears to be leaving the rest of
the country behind.

The young are frustrated. They feel that growth has yet to bring the
broader prosperity promised by the government in return for their
political obedience. Thanks in large part to foreign aid, expansive
public spending supported by Chinese loans and an uptick (from a very
low base) in foreign investment, Ethiopia was Africa’s fastest growing
economy in 2015—a remarkable feat for a still largely agrarian
country. But the expectations of an increasingly educated population
have grown even faster. Despite big strides, a third of Ethiopians,
who now number nearly 100m, still live on less than $1.90 a day.

This time Ethiopians are calling just as fiercely for regime change,
and not just reform. Ethiopia, until recently a darling of Western
donors and security hawks alike, is edging closer to the brink.


Repression is a sub-optimal Regime strategy.

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Missing in inaction Malawi's president disappears @theeconomist

AFRICA’S leaders are not known for their youthful vigour. So it is not
surprising that their absence from the public eye, especially in a
Western country with an abundant supply of good hospitals, tends to
spark lurid rumours of illness and even death. Malawi’s president has
certainly been doing his best impression of a missing person: having
landed in New York on September 16th, Peter Mutharika has not been
heard from since the UN General Assembly, which ended on September

Malawians have taken to Twitter with the hashtag #BringBackMutharika
(a play on #BringBackOurGirls, which was used to rally support for
Nigerian schoolgirls kidnapped by Boko Haram). One tweeted the
presidents of America and Rwanda to ask if they had any news of the
missing head of state. Speculation swirled that Mr Mutharika, who is
in his mid-70s and whose brother died of a heart attack while
president in 2012, was undergoing some kind of medical treatment.

Eventually the Malawian government put out an ill-tempered press
release on October 9th, harrumphing that Mr Mutharika was in “very
good and robust health” and still carrying out his duties while in
America. It also reminded Malawians that spreading such “baseless,
malicious and sickening” rumours was criminal. Then, at last, on
October 11th it put a date on the dear leader’s return: October 16th,
a full month after he left Malawi.

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Japan to expand Djibouti military base to counter Chinese influence

Japan will lease additional land next year to expand a military base
in Djibouti, eastern Africa, as a counterweight to what it sees as
growing Chinese influence in the region, three Japanese government
sources said.

China is seeking closer ties with African nations that could help it
gain access to natural resources and provide new markets. Beijing said
late last year it would pump $60 billion into development projects on
the continent, cancel some debt and help boost agriculture.

"China is putting money into new infrastructure and raising its
presence in Djibouti, and it is necessary for Japan gain more
influence," said one of the sources, with knowledge of the plan.

China in February began construction in Djibouti of its first overseas
military facility, a coastal logistics base that will resupply naval
vessels taking part in peacekeeping and humanitarian missions.

Djibouti, which is about the size of Wales, is strategically located
at the southern entrance to the Red Sea on the route to the Suez
Canal. The tiny, barren nation sandwiched between Ethiopia, Eritrea
and Somalia, also hosts U.S. and French bases.

Since 2011, a Japanese Self Defence Force contingent of 180 troops has
occupied a 12 hectare (30 acre) site in Djibouti, next to Camp
Lemonnier, the U.S. base at the country's international airport.

From there, the SDF have operated maritime patrol aircraft as part of
an international force, including China, that hunts pirates in the
seas of the Gulf of Aden and off the coast of Somalia.

A Japanese Defence Ministry spokesman confirmed discussions were taking place.

"In addition to the land Japan has borrowed, it is considering leasing
the neighboring land to its east," the spokesman said in response to a
Reuters query. "Japan is now in negotiations with Djibouti

Japan is considering deploying C-130 transport aircraft, Bushmaster
armored vehicles and extra personnel to the base but has not yet
decided on how many, the sources said.

A month earlier Japan sent three C-130 aircraft from Japan to stand by
in Djibouti for the evacuation of Japanese citizens trapped by
fighting in South Sudan's capital, Juba.

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28-AUG-2016 And if you think about it The Indian Ocean is an appendage of the South China Sea. @thestarKenya TICADV1

"Japan bears the responsibility of fostering the confluence of the
Pacific and Indian Oceans" said the Prime Minister.

So I do foresee Japan [alongside the US and India] seeking to contain
and triangulate China in the Indian Ocean.

Another issue post Fukushima is Japan's Energy Security. Here too I
expect Japan to seek a serious Foothold in the nascent East African
Energy supplies which run from Mozambique through Tanzania up to Kenya
and inland. Japan's Energy Security is a key Issue. Interestingly if
you look at the Japanese Investments, there are concentrated in
Energy, Ports, logistics, and what I would call choke-points.

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South Africa "is not business as usual": S&P Africa head Reuters

The Africa head of ratings agency Standard & Poor's said on Thursday
the current situation in South Africa was "not business as usual,"
citing "political turmoil and tension" as worrying signs ahead of a
ratings decision on Dec. 2.

Addressing the Thomson Reuters Africa summit in Cape Town, Konrad
Reuss also said S&P would be closely looking at South Africa's
economic growth trajectory and fiscal targets.

Reuss was speaking two days after the national prosecuting authority
said it planned to charge Finance Minister Pravin Gordhan for fraud, a
ploy widely seen as an attempt by President Jacob Zuma to take control
of the Treasury by removing the respected technocrat.

"This is not about political noise. We have political turmoil,
political tension that can undermine structural reforms," Reuss said.

He also said that any attempts to undermine South African state
institutions would be negative for the rating.

S&P rates South Africa at BBB-, the lowest investment grade rating one
notch above junk, and it maintained that rating in June while keeping
its outlook negative, citing slow economic growth and political

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#SouthAfrica's Zuma asks court to block anti-graft report: media Reuters Africa

South Africa's opposition EFF leader Julius Malema issued with
summons by police #BBCAfricaLive BBC Africa ‏@BBCAfrica


South Africa All Share Bloomberg -0.39% 2016 [touched a 3 and 1/2 month Low]


Dollar versus Rand 6 Month Chart INO 14.2603


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Dividend or disaster? Nigeria grapples with demographic conundrum FT

Two years ago, the rapid growth of Africa’s — and Nigeria’s —
population was touted as one of the attractions drawing investors and
multinationals to the continent. With the number of Africans forecast
to double to 2bn by 2050, chief executives and economists talked up
the potential of an aspirant, youthful populace wanting to open bank
accounts, buy the latest smartphone and splurge on consumer goods.

But the fall in commodity prices and resulting economic slowdown in
many nations has refocused attention on the risks associated with a
swelling youthful population, which is jobless, trapped in poverty and

“Our people are an asset but we have to have the wherewithal to invest
in them — without that, it’s a tragedy,” says a Nigerian government
minister who did not want to be named. “It’s frightening.”

Africa’s population is growing at 2.6 per cent, while birth rates are
slowing or stabilising in most parts of the world. But its economic
growth has dipped to its lowest pace in more than two decades, with
the World Bank forecasting that gross domestic product will expand by
1.6 per cent this year.

In Lagos, the commercial capital, the average is 4.1, less than half
the average in Zamfara state, according to a 2013 US government-funded

“People still do not see the connection between being poor and having
four wives, 14 kids, and a limited plot of land and resources,” says
Lamido Sanusi, emir of the northern state of Kano.

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10 NOV 14 ::Ouagadougou's Signal to Sub-Sahara AfricaThe Star

During the Arab Spring [now in the bleak mid-Winter], nearly all
commentators spoke of how this North African wildfire could not leap
the Sahara and head to sub-Saharan Africa. The reasons were that the
State [incumbents] had a monopoly on the tools of violence and would
bring overwhelming force and violence to bear.

We need to ask ourselves; how many people can incumbent shoot stone
cold dead in such a situation – 100, 1,000, 10,000? This is another
point: there is a threshold beyond which the incumbent can’t go. Where
that threshold lies will be discovered in the throes of the event.

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

Out of a population of 17 million people in Burkina Faso, over 60 per
cent are aged between 17 and 24 years, according to the World Bank,
and this is another point to note. The country’s youth flexed their
muscles. What’s clear is that a very young, very informed and very
connected African youth demographic [many characterise this as a
‘demographic dividend’] – which for Beautiful Blaise turned into a
demographic terminator – is set to alter the existing equilibrium
between the rulers and the subjects, and a re-balancing has begun.

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Kenya Airways to Halt Ticket Sales Ahead of Pilot Walkout
Kenyan Economy

Kenya Airways will stop selling tickets unless a pilots union calls
off a seven-day strike to protest against Chief Executive Officer
Mbuvi Ngunze as Africa’s third-largest airline strives to minimize
losses from the walkout.

“The threatened action is already costing Kenya Airways significant
losses as passengers have begun to make cancellations,” the airline
part-owned by Air France-KLM said in an e-mailed statement on
Thursday. The costs associated with selling flights and then not
carrying passengers will be too great a financial burden, the carrier

KALPA, as the union is known, is demanding the resignation of Ngunze
and Chairman Dennis Awori, saying they aren’t capable of executing a
turnaround of the unprofitable carrier. Similar industrial action by
KALPA in April cost Kenya Airlines $2 million in a day, the airline
said. The strike is due to start Oct. 18.

Halting ticket sales “means management would be preparing for an
extended strike period,” Eric Musau, an analyst at Standard Investment
Bank, said by phone in Nairobi. “The best case is for them to agree on
some sort of settlement. I’m not really sure it is for the pilots
union to say whether management should go or not.”

Kenya Airways first-half earnings to be released at the end of this
month will show a reduction in net loss to 5 billion shillings ($49.3
million) from 12 billion shillings, the airline said, without
referring directly to the CEO. In that context, the strike is
“unjustified and uncalled for,” it said. The company, which reported a
wider full-year loss to 26.2 billion shillings on soaring finance
costs, plans to cut 600 jobs and reduce the fleet by almost a third to
return to profitability.

“Financing is the main headache,” Musau said. “Operationally they are
turning around.”

KALPA’s position hasn’t changed since the strike was called on Oct. 11
and “there’s room for negotiations about those two people going,”
union Secretary-General Paul Gichinga said by phone from Nairobi.

“With every passing day, it becomes very clear that Kenya Airways’s
leadership lacks a clear vision, the right synergies and the willpower
to lead the airline’s recovery efforts,” Gichinga said in an Oct. 11
statement. “A team with vital credentials in commercial aviation and
business transformation urgently needs to be put in place to oversee
Kenya Airways recovery.”

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Kenya Shilling versus The Dollar Live ForexPros 101.405
Kenyan Economy

Nairobi All Share Bloomberg -5.87% 2016


Nairobi ^NSE20 Bloomberg -19.76% 2016


3,242.32 -4.79 -0.15%

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

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