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Satchu's Rich Wrap-Up
 
 
Wednesday 08th of February 2017
 
Morning
Africa

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Matters #Geopolitical and @BarackObama from a #Frontier
Africa


very much looking forward to hosting H.E. John Dramani Mahama, Former
President of the Republic of Ghana (2012- 2017) at #Mindspeak This
Saturday

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The Inspiration for #Mindspeak came via these words which were written at the Entrance to the Mevlana's Mausoleum in Konya which I visited
Africa


“Come, come, whoever you are. Wanderer, worshiper, lover of leaving.
It doesn't matter. Ours is not a caravan of despair. come, even if you
have broken your vows a thousand times. Come, yet again , come ,
come.”

Macro Thoughts

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Trump called Mike Flynn at 3 a.m. to ask him whether a strong or weak dollar is good for the economy, HuffPost says
Law & Politics


WASHINGTON – President Donald Trump was confused about the dollar: Was
it a strong one that’s good for the economy? Or a weak one?

So he made a call ― except not to any of the business leaders Trump
brought into his administration or even to an old friend from his days
in real estate. Instead, he called his national security adviser,
retired Lt. Gen. Mike Flynn, according to two sources familiar with
Flynn’s accounts of the incident.

Flynn has a long record in counterintelligence but not in
macroeconomics. And he told Trump he didn’t know, that it wasn’t his
area of expertise, that, perhaps, Trump should ask an economist
instead.

Trump was not thrilled with that response ― but that may have been a
function of the time of day. Trump had placed the call at 3 a.m.,
according to one of Flynn’s retellings ― although neither the White
House nor Flynn’s office responded to requests for confirmation about
that detail.

read more





Good Morning World from Nairobi @serenahotels garden
Africa


Feels as if I have decamped to the Serena of late.

read more





Donald Trump, Paper Tiger @bv
Law & Politics


Oh, yes, Trump is clearly capable of tweeting all sorts of nasty
things about those he considers his enemies. He won't address their
arguments; he'll level petty, personal attacks. No doubt those aren't
any fun to deal with.

And yet, where's the evidence of serious political damage, either from
Trump attacks or from Trump voters rallying to their hero?

Contrary to Trump's braggadocio about revenge, the reality seems to be
that he doesn't have enough of an attention span to really pursue his
enemies, and he's so susceptible to flattery that anyone who really
wants to shake the president's anger can't find it very difficult to
do so.

read more



Twitter accounts really are echo chambers, study finds
Law & Politics


Political birds of a feather flock together, with Twitter users
tending to communicate with those whose views match their own, says
Demos research. Photograph: Jeff J Mitchell/Getty Images

read more


Currency Markets at a Glance WSJ
World Currencies


Euro 1.0659
Dollar Index 100.51
Japan Yen 112.40
Swiss Franc 0.9990
Pound 1.2495
Aussie 0.7626
India Rupee 67.305
South Korea Won 1148.53
Brazil Real 3.1204
Egypt Pound 18.3280
South Africa Rand 13.5040

read more










Crude Oil Chart INO 51.71
Commodities


Emerging Markets

Frontier Markets

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President Trump silent on Africa Trump's views on Africa remain largely a mystery @CNN @EleniGiokos
Africa


Two weeks into his presidency and Trump has rattled many
relationships, from upsetting Asian trading partners to rocky
relations with Mexico. And the latest – banning people from seven
countries from entering the United States – included three African
nations: Libya, Sudan and Somalia.

But the Trump administration’s views on Africa remain largely a mystery.

Ronak Gopaldas, Head of Country Risk for Rand Merchant Bank (SA),
says, “Africa is not likely to feature strongly on the priority agenda
unless there’s a return on investment, and we know Donald Trump is a
business man and that’s the paradigm he uses. Africa’s economic and
geopolitical value will depend on that perception.”

A different approach by his predecessor Barack Obama who initiated a
$7 billion Power Africa plan to bring electricity to the continent.
George W. Bush introduced PEPFAR, providing billions to fight AIDS and
tuberculosis. He also quadrupled assistance to sub-Saharan Africa.

It’s anticipated that President Trump will have other issues on his
mind, and this might just spell bad news for the continent.

Aly Khan-Satchu, CEO of Rich Management in Kenya, says, “Some African
leaders think it’s a get out of jail free card. Tillerson and Trump
won’t be focusing on human rights, they’ll be focusing on other
interests.”

There’s also the African Growth and Opportunities Act – AGOA – a
preferential trade pact allowing African countries to export thousands
of products to the U.S., tax-free. Trump can’t sign this pact away
easily like he did with Trans-Pacific Partnership; Congress signed
AGOA into legislation until 2025.

Khan-Satchu says, “We’re expecting Trump to be transactional, business
minded and all about counter-terrorism, but we want to see AGOA
remain”

U.S. – Africa trade totaled $37 billion in 2015 – down around 30% from
the previous year, falling behind China and Europe. Developmental aid
to sub-Saharan Africa in 2015 was $6 billion.

Ike Chioke MD from Afrinvest West Africa in Nigeria says, “It will be
a challenging time for Africa when Donald Trump goes ahead in putting
America first. Because that nationalistic, protectionist, approach has
multiple implications”

Kenyan Cabinet Secretary of Tourism Najib Balala says, “Africa needs
to reflect – it’s the right time with all the new challenges in the
world”

As the U.S. takes a more insular view – it seems Africa might do some
inward reflecting of its own.

Bob Collymore, CEO of Safaricom in Kenya, says, “Because of poor
leadership for decades and because businesses and governments have
colluded to leave people behind, that is why we’ve ended up with this
kind of leadership and Donald Trump is not the only one…Africa needs
to be more self-sufficient as a continent. We import everything. The
continent imports 30% of the food that it eats, despite having 60% of
arable land in the world”

Just as President Trump tries to spur jobs and growth – Africa too,
needs focus on shoring up local industries in an increasingly
uncertain global environment.

Eleni Giokos, CNN

read more


Fueled by Bribes, Somalia's Election Seen as Milestone of Corruption New York Times
Africa


Politicians have been peeling off wads of hundred dollar bills to buy
votes. Others have shown up for parliamentary races standing next to a
political nobody who was bribed or coerced into running against them,
to make the race look fair. In one case, the mysterious candidate was
the politician’s maid.

This week, Somalia, which has languished without a functioning central
government for more than 25 years and has been propped up by billions
of dollars of American aid, is holding an innovative, closely watched
presidential election that United Nations officials have billed as a
“milestone.”

But several analysts, investigators and some Western diplomats say the
election has turned out to be a milestone of corruption, one of the
most fraudulent political events in Somalia’s history — and that’s
saying something, given that the country is already ranked by
Transparency International, a global anticorruption organization, as
the most corrupt on earth.

Outside forces like Turkey, Sudan, the United Arab Emirates and Qatar
are widely believed to have been buying off presidential candidates to
land juicy business deals, spread a harsh version of Islam or spy on
American forces.

The entire process has been so bad, several analysts said, that the
Shabab militant group, one of the deadliest Islamist organizations in
the world, isn’t even trying to derail the vote because the corruption
free-for-all almost makes the militants look upstanding by comparison.

“This election has been awesome for the Shabab,” said Mohamed Mubarak,
who runs a Somali anti-corruption organization, Marqaati, which means
“witness.” “The government loses even more legitimacy and the Shabab
has a chance to buy a seat!”

“The Somali government has no authority, no popular support, no
monopoly on violence,” said Abdirahman Abdishakur Warsame, a former
minister of planning now running for president. “It’s a fake state.”

“The president’s a hyena,” said Mohamed Said Mohamed, a fish seller by
the crumbled seashore. “These guys are taking bribes of $100,000 when
most of us can’t afford a plate of spaghetti.”

Food is a big worry right now. Somalia is headed into a drought, which
could lead to a famine this spring.

Conclusions


The estimate is that $20m has been spent. I reckon its at least 10x
and probably a lot higher than even that.

read more




ReutersAfrica: #South Africa's #Zuma to deploy 400 soldiers at state address
Africa


South Africa All Share Bloomberg +3.02% 2017

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

Rand Daily Mail @rdm_za Zuma's three options as he confronts
Gordhan | TONY LEON

https://twitter.com/rdm_za/status/829210083473121282

This would be a step too far. The RAND has already softened.

Dollar versus Rand 6 Month Chart INO 13.5045

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

Egypt Pound versus The Dollar 3 Month Chart INO 18.3250

http://quotes.ino.com/charting/index.html?s=FOREX_USDEGP&v=d3&t=c&a=50&w=1

BBC Africa ‏@BBCAfrica  "The media advisor says he is sick. The VP
says he is hale and hearty. And now the senator says he's just tired."
📻

https://twitter.com/BBCAfrica/status/829212547790290944

read more


Buhari's Economic Plan Could Be Make or Break for Nigeria BBGAfrica
Africa


With discontent mounting and Nigeria seeking to raise international
debt, lenders and investors are waiting for President Muhammadu Buhari
to announce a plan that could determine whether he keeps his promises
to boost the economy and create millions of jobs.

Buhari’s economic blueprint for the next four years, due to be
released this month, will aim to lift West Africa’s biggest economy
from its worst slump in more than two decades and boost the annual
economic growth rate to at least 7 percent by 2020, Budget and
Planning Minister Udo Udoma told reporters and investors in the
capital, Abuja, on Feb. 6.

The recovery and growth plan for 2017 to 2020 comes after Buhari
forced the central bank to maintain a currency peg for more than a
year, curbing foreign investment, while the importers of certain raw
materials and equipment are still banned from accessing dollars,
denting manufacturing output. Buhari approved the 2016 budget almost
five months after the start of the year, causing delays in spending
and adding to the woes of an economy hurt by declining oil prices and
output.

“This is the last opportunity,” Ayodele Akinwunmi, head of research at
Lagos-based FSDH Merchant Bank Ltd., said on Tuesday. “If it has taken
them two years to develop a plan, I don’t want to believe it won’t
work, otherwise it will be total failure for this government.”

read more


Nigeria All Share Bloomberg -5.31% 2017
Africa


Ghana Stock Exchange Composite Index Bloomberg +5.83% 2017

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

A scenic view of Lake Kivu from Nyamasheke District. ‏@kagced

https://twitter.com/kagced/status/829006073747103744

read more


Ethiopian Airlines is unable to repatriate about $220 million held in local currency in Nigeria, Egypt and some other African states
Africa


tate-owned Ethiopian Airlines is unable to repatriate about $220
million held in local currency in Nigeria, Egypt and some other
African states because of foreign exchange shortages in those nations,
the company's chief executive said on Tuesday.

Tewolde Gebremariam told Reuters that this was partly because
countries such as Nigeria had been hit by recent falls in oil prices,
which was reducing foreign exchange inflows.

read more



"For Uhuru to win, he needs two key voting blocks -- one such block is facing a lot of antagonism, this is the Rift Valley"
Kenyan Economy


“For Uhuru to win, he needs two key voting blocks -- one such block is
facing a lot of antagonism, this is the Rift Valley,” said Ndung’u
Wainaina, a political analyst based in Nairobi, the capital. “In 2017,
it’s not looking like he will get this block the way he got it in
2013.”

While Ruto was able to deliver “a lion’s share” of the Rift Valley
vote in the 2013 election, his contribution this year will be reduced
by a material margin, said Dismas Mokua, an independent political
analyst based in Nairobi.

“This time his support will reduce significantly, by as much as a
third, because he has not been able to build a consensus among the
leaders of his community in the Rift Valley and he has created
unnecessary political enemies,” Mokua said. “There will be four
counties of the 14 in the Rift Valley that will cause a challenge for
the deputy president.”

“I foresee Moi’s son and Isaac Ruto finding some fusion in the south
Rift and working together against the deputy president,” said Barrack
Muluka, an independent political analyst based in Nairobi. “The
question is whether they will ultimately vote against Uhuru in the
election.”

Conclusions

The Opposition need to coalesce behind an Adama Barrow type figure and
leverage a type of 2008 Obama vintage strategy.

read more



Kansai Paint agrees to buy African businesses @FT
Kenyan Economy


Japan’s Kansai Paint has agreed to buy three east African paint
companies to tap into one of the world’s fastest-growing regions as
part of its global expansion.

The company’s South African subsidiary Kansai Plascon Africa is to
acquire Sadolin Kenya, Sadolin Uganda and Sadolin Tanzania, although
it would not reveal how much the deal would be worth. But people with
knowledge of the purchases said it was the largest corporate
acquisition in east Africa for more than two years.

Estimated 2016 combined revenues at the east African companies, which
are owned by a conglomerate of regionally based families, were $87m.
Kansai Plascon’s estimated 2016 revenues were R4.1bn ($309m). The
three companies pay royalties to the Sadolin Group, owned by Dutch
multinational Akzo Nobel, to use the name.

Amid slowing growth in Japan, Hiroshi Ishino, president of the
Tokyo-listed Kansai Paint since 2013, has promised to expand the
company through acquisitions into one of the top three coatings groups
in the world.

Farid Masood, chief executive of Kansai Plascon, said the company was
“very optimistic on the African growth story”.

“We’re looking at Africa’s growing middle class, increased
infrastructure spending and the paint business is relevant across all
sectors,” he said. “Yes, there will be short-term hiccups but we’re in
for the long haul.”

The purchases are part of Kansai’s strategy to diversify away from
auto-coating and into areas such as paints for trains and industrial
machinery, which are strong growth areas in emerging economies. It
acquired Austria’s Helios Group for $613m last year.

Kansai tried to buy the three east African companies several years ago
but the attempt got “lost in translation”, according to one person
with knowledge of the deal. Mr Masood said he “reignited Kansai’s
interest” when he took charge of Kansai Plascon last August.

Mr Masood said Kansai Plascon had also opened a business in Nigeria.
“We plan to use this as a platform to expand into Ghana, Senegal and
elsewhere in west Africa,” he said.

The acquisition comes as Shinzo Abe, Japan’s prime minister, looks to
raise Japan’s profile in Africa, particularly in the face of
increasing Chinese competition. He led a business delegation to
Nairobi last year for a Japan-Africa conference and promised tens of
billions of dollars of investment.

Aly-Khan Satchu, an investment consultant in Nairobi, predicted “more
of this kind of activity” in the region. “A lot of family-owned
businesses have maxed out and need investment to take them to the next
level,” he said.

Citi acted as financial adviser to Kansai Plascon.

read more


The Japanese have in my opinion made the decision to get in the deal now. That can only be a good thing for Africa. @AbeShinzo #TICADVI
Kenyan Economy


TICADVI the sixth iteration of the Tokyo International Conference on
African Development (TICAD-VI) Summit was held at the Kenyatta
International Convention Centre in Nairobi, Kenya on 27-28 August
2016. This was the first time ever a TICAD Summit was held in Africa
since its inception in 1993 and that of itself made it a Big Deal.

Prime Minister @AbeShinzo said "At long last and exactly as promised
#TICAD has come to Africa"

read more






Kenya Shilling versus The Dollar Live ForexPros 103.795
Kenyan Economy


Nairobi All Share Bloomberg -6.25% 2017

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

125.00 -0.06 -0.05%

Nairobi ^NSE20 Bloomberg -9.52%

http://j.mp/ajuMHJ

2,882.74 +15.35 +0.54%

read more





Kenya's retail spending hit Sh1.8 trillion in 2016 as the sector expanded by 13 per cent, a new survey by Procter & Gamble (P&G) shows.
Kenyan Economy


The survey, released on Tuesday, says the rapid expansion of the
retail sector is driven by several shopping dynamics including a
tendency by Kenyan consumers to shop for goods in bulk as opposed to
shopping for individual items when the need arises.

“The total cumulative figure for retail spending in 2016 is $17.62
billion (Sh1.8 trillion) which can be allocated across different
channels based on 30 per cent supermarkets, 67 per cent traditional
retail, and three per cent special channels. Overall, retail spending
accounts for 30 per cent of Kenya’s GDP,” said P&G, one of the biggest
manufacturers of consumer products.

read more




 
 
N.S.E Today


The Financial Times's John Aglionby  reported overnight that Japan’s
Kansai Paint has agreed to buy three east African paint companies. The
company’s South African subsidiary Kansai Plascon Africa is to acquire
Sadolin Kenya, Sadolin Uganda and Sadolin Tanzania, although it would
not reveal how much the deal would be worth. But people with knowledge
of the purchases said it was the largest corporate acquisition in east
Africa for more than two years. Estimated 2016 combined revenues at
the east African companies, which are owned by a conglomerate of
regionally based families, were $87m.
Aly-Khan Satchu, an investment consultant in Nairobi, predicted “more
of this kind of activity” in the region. “A lot of family-owned
businesses have maxed out and need investment to take them to the next
level,” he said.
“The total cumulative figure for retail spending in 2016 is $17.62
billion (Sh1.8 trillion) which can be allocated across different
channels based on 30 per cent supermarkets, 67 per cent traditional
retail, and three per cent special channels. Overall, retail spending
accounts for 30 per cent of Kenya’s GDP,” said P&G.
The Kenya Interbank Transaction Switch, which has been developed by
the Kenya Bankers Association (KBA), will, among other services,
facilitate real-time transfer of money between banks without going
through mobile money platforms that are owned by the three telecom
firms.
The Nairobi NSE20 rallied +0.90% to regain the 2900 level and close at
2908.87 to close at a 2 week High.
The NSE20 has been on a red hot streak in February and is +3.33% in February.
The Nairobi All Share firmed +0.03 points to close at 125.03.
The Kenya Shilling was well-behaved at 103.70



N.S.E Equities - Agricultural


Sasini Tea and Coffee was upticked +3.93% to close at 18.50 and on
good volume of 317,700 shares.



N.S.E Equities - Commercial & Services


The News around the Kenya Interbank Transaction Switch bore down on
the Safaricom share price which corrected -1.34% to close at 18.40 and
17.107m shares worth 315.25m. M-Pesa is a Phenomenon and I just do not
see its progress and or its position being meaningfully challenged.
Safaricom sits at -3.96% in 2017.

Deacons slumped by the daily maximum to close -9.67% lower at 4.20.
Deacons is -30.57% in 2017 which is a meaningful drop I am sure you
will agree.

News of cut-backs in the Media sector remain unremitting. Nation Media
shaved off 50 cents to close at 75.50 and is -18.81% in 2017 following
on an annus horribles for shareholders in 2016.
Standard Group did not trade and is actually +21.21% in 2017.



N.S.E Equities - Finance & Investment


What is absolutely clear to Banking Investors is that there is no
quick repeal of the interest Rate Bill and that this interest rate
corridor is the New Normal and this time for a FY in 2017. It was this
belated realisation which was the catalyst for the steep sell-off in
Banking shares in January to deeply oversold levels, from which we are
now rebounding. Bank shares remain in negative territory YTD.
Investors need to appreciate the shape of the Banking landscape and
its a Darwinian one so you have to pick the Winners and avoid the
Losers.
Barclays Bank was a big Winner at the Bourse and rallied an
eye-popping +4.97% to close at 8.45 and traded 2.138m shares. Barclays
Bank has in fact rallied +16.107% in February. I did say it was
egregiously priced below 8.00.
Equity Bank rallied +3.84% to close at 27.00 and on robust volume
action of 9.693m shares worth 261.71m narrowing its Year-To-Date
downdraft to -10.00%.
KCB Group rallied +2.97% to close at 26.00 and traded 6.607m shares
worth 171.781m. KCB has narrowed its Year-To-Date Loss to -9.56%.
Diamond Trust Bank firmed +1.89% to close at 108.00 and traded 420,700
shares worth 45.436m. DTB is -8.47% in 2017.
COOP Bank rallied +3.79% to close at 12.30 on light trading.
I&M went the other way and closed -1.97% at 74.50 and traded 379,200
shares. I&M is -17.22% in 2017.
National Bank closed at 6.00 and is -16.66% in 2017.

Centum firmed +2.20% to close at 34.75 and traded 1.067m shares.
Centum remains -6.08% through 2017.



N.S.E Equities - Industrial & Allied


The News that Japan's Kansai Paint had bought Sadolin Paints out [see
above] encouraged buyers into Crown Paints which closed +7.14% at
45.00 an 11 week High. Crown Paints is +7.14% in 2017.



by Aly Khan Satchu (www.rich.co.ke)
 
 
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February 2017
 
 
 
 
 
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