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Satchu's Rich Wrap-Up
Thursday 16th of February 2017

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0930-1500 KENYA TIME
Normal Board - The Whole shebang
Prompt Board Next day settlement
Expert Board All you need re an Individual stock.

The Latest Daily PodCast can be found here on the Front Page of the site


It was good to catch up with H.E John Mahama last night before his
departure. Such an elegant Fellow.

I thank The Governor of the Central Bank Dr. Patrick Njoroge for the
time this morning

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Dining at @wolvesmouth - best food in LA. Hands down.

Hunter S. Thompson ‏@GonzoVice  We are living in dangerously weird times now.

There is no story that is not true. Chinua Achebe

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"Some of the most fundamental pillars of the West and of the liberal international order are weakening," warned Wolfgang Ischinger, chair of the Munich Security Conference
Law & Politics

“Citizens of democracies believe less and less that their systems are
able to deliver positive outcomes for them and increasingly favour
national solutions and closed borders over globalism and openness.”
Ischinger also warned that “liberal democracies have proven to be
vulnerable to disinformation campaigns in ‘post-truth’ international

“Mea culpa, mea culpa, mea maxima culpa.”

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Currency Markets at a Glance WSJ
World Currencies

Euro 1.0606
Dollar Index 100.90
Japan Yen 113.89
Swiss Franc 1.0034
Pound 1.2472
Aussie 0.7713
India Rupee 66.935
South Korea Won 1141.67
Brazil Real 3.0575
Egypt Pound 16.5017
South Africa Rand 12.9262

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Satellite TV Is Fueling Zimbabwe's Cash Shortage: Central Bank

Zimbabwe’s central bank said it is “illogical” and undermining efforts
to stem a cash shortage that the country is spending more on satellite
television subscriptions than on imports of the raw materials needed
to produce cooking oil.

Zimbabwe is facing its worst economic crisis since 2008 as a liquidity
squeeze has left companies unable to pay foreign suppliers and workers
in cash. The economy probably shrank 0.3 percent last year and is set
to contract 2.5 percent his year, according to the International
Monetary Fund.

Financial institutions used $207 million for the payment of satellite
television subscriptions during the last six months of 2016 through
accounts held in offshore currencies, the largest allotment of foreign
exchange after fuel in the period, the Reserve Bank of Zimbabwe said
in its monetary policy statement on Wednesday.

“Use of hard-earned foreign currency in this manner is not
sustainable,” the central bank said. Banks should “exercise discipline
and rationality in the distribution of foreign exchange among the
competing needs of the economy.”

Total foreign currency receipts fell 14 percent to $5.4 billion in
2016, while export proceeds shrank 13 percent to $2.96 billion, the
bank said. Remittances from Zimbabweans living abroad slumped 18
percent to $1.57 billion.

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South Africa watchdog seeks penalty against banks for FX rigging

South Africa's competition watchdog has recommended a fine equal to 10
percent of annual turnover for several banks, including Citigroup,
Nomura and Standard Bank, for rigging the rand currency, it said on

The Competition Commission said it had concluded an investigation into
whether banks colluded by using an instant messaging chat room called
"ZAR Domination", to coordinate their trading activities when giving
quotes to customers who buy or sell currencies.

ZAR is the code for the South African rand used in financial markets.

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Ailing President Abroad Leaves Nigeria With Sense of Deja Vu

A president who’s flown abroad to seek medical treatment and given no
firm date for his return: Nigeria has been here before.

Muhammadu Buhari, 74, traveled to the U.K. on Jan. 19 for medical
tests and was due back on Feb. 5. He’s yet to return and hasn’t
appeared or spoken in public for more than three weeks after asking
lawmakers for medical leave. On Monday, he talked by phone with U.S.
President Donald Trump, giving cheer to his supporters that he’s not
as ill as widely speculated. Yet his absence is heightening concern
about government paralysis at a time when the economy is in recession
and the stock market is sliding.

For many Nigerians the situation recalls former President Umaru Musa
Yar’Adua’s time in office. Like Buhari, Yar’Adua was a northern Muslim
with a southern Christian vice president in a country with often sharp
sectarian divisions.

Yar’Adua was flown in November 2009 to Saudi Arabia for treatment of a
heart condition. It took about three months for the legislature to
appoint then-Vice President Goodluck Jonathan acting president, as
Yar’Adua associates sought to cover up the severity of his condition.
Yar’Adua eventually died in office on May 5, 2010. Unlike Yar’Adua,
Buhari formally transferred power to his vice president, Yemi
Osinbajo, before departing.

“The experience of 2010 still hangs over Nigeria,” Antony Goldman,
head of London-based PM Consulting, said by phone from London. “Partly
as a result of that the government has undertaken all the efforts to
do what wasn’t done in 2010.”

Under the constitution, if Buhari can’t continue in office, Osinbajo
would become president and he would choose a new deputy.

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Tale of Two Currencies: A Devaluation Sets Apart Egypt, Nigeria

Back in early November, Egypt and Nigeria were in the same situation,
crying out for dollars to revive their sinking economies and trying to
curb rampant currency-trading on the black market.

Egypt’s tactic was to ditch a currency peg, leaving its pound open to
market forces. The move helped secure a $12 billion International
Monetary Fund loan for Africa’s third-biggest economy. This week,
Managing Director Christine Lagarde praised the government for
restoring “economic sanity.” Egypt is still short of dollars, but the
situation is changing, and investors are gradually returning.

Nigeria, in contrast, isn’t letting the naira trade at its market
value, insisting that’s the only way to protect the poor from a
15-month surge in inflation. Traders argue it’s left the currency
overvalued and say they’ll avoid Nigerian local markets until it
weakens. While the government managed to issue a $1 billion Eurobond
last week, its first in almost four years, it is struggling to raise
money from the likes of the World Bank, which first wants to see a
more flexible exchange-rate in place.


The Outcome is predicted and predictable in Nigeria - The open
question is timing.

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Foreign Investment in Ethiopia Slumps After Business Attacks

Foreign direct investment in Ethiopia dropped by a fifth in the first
half of the country’s fiscal year after violent anti-government
protests in which foreign-owned businesses were targeted.

The country attracted $1.2 billion in the six months through the end
of December, compared with $1.5 billion in the same period a year
earlier, Fitsum Arega, commissioner of the Ethiopian Investment
Commission, said in a phone interview Monday from the capital, Addis
Ababa. He said the government may miss its annual target of $3.5
billion, with $3.2 billion more likely to be attainable.

The government of Ethiopia declared a state of emergency in October to
deal with unrest accompanying protests by ethnic Oromo and Amhara
communities that began in late 2015 over the alleged dispossession of
their land, political marginalization and state repression. Businesses
including those owned by Nigerian billionaire Aliko Dangote and Dutch
fruit processors were attacked during the unrest. The security forces
killed at least 600 demonstrators, according to the Association for
Human Rights in Ethiopia.

Ethiopia, one of Africa’s fastest-growing economies, is expected to
expand 7.5 percent this year, compared with an average of 9.1 percent
over the past five years, according to the International Monetary

The government is paying out damages to foreign and domestic companies
deemed affected by the unrest, with 100 million birr ($4.4 million)
already disbursed and “more in progress,” Fitsum said. Claims were
received from at least 20 domestic companies. At least two foreign
businesses were successful in making claims from insurance companies,
while the government is also providing tax relief to operations that
sustained damages during the violence, he said.
While no foreign investors canceled planned projects, they have taken
a “wait-and-see attitude” to the country, Fitsum said.

“We already have big investors in the pipeline,” Fitsum said. “There
are also big textile-manufacturing companies we can expect to have in
the coming six months,” he said, referring to Ethiopia’s Hawasa
Industrial Park that opened in July and which the government says is
the largest in Africa.


Holding up [-20% Year on Year] is not a bad outcome in the circumstances.

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17 OCT 16 :: Ethiopia's Reputation Shattered by Political Tensions @TheStarKenya

I recall reading  e Emperor by Ryszard Kapuściński and in that book
Kapuściński recounts the tale of Lulu, Haile Selassie’s lap dog that
was allowed to piss on the shoes of dignitaries, and the courtier
whose job for 10 years was to wipe those shoes clean with a satin
cloth.  That book also speaks to how the cushion bearer [ The Emperor
was very short and therefore had to perched on cushions so as not to
be beneath his subjects] became an all-powerful figure at the Imperial
Court. Kapuściński was subsequently trashed for his poetic licence in
his reportage but I accept his mea culpa:

“You don’t understand a thing. I’m not writing so the details add up –
the point is the essence of the matter.”

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Imperial buys stake in Kenyan pharmaceutical distributor
Kenyan Economy

South African logistics group Imperial Holdings will buy a 70% stake
in Kenyan pharmaceutical distributor Surgipharm for R456 million ($35
million) in line with its African growth strategy, the company said on

Surgipharm, which is headquartered in Nairobi, is a leading
distributor of pharmaceutical, medical, surgical and allied supplies
in Kenya, with an annual turnover of about $70 million, the company
said in a statement.

It gave no further details.


Transactions have picked up clock speed.

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The 11 listed Kenyan banks dropped an average of 14 percent in January
Kenyan Economy

“The rate-cap legislation has been a massive own goal in terms of
stimulating growth,” Razia Khan, head of Africa macro research at
Standard Chartered Plc in London, said by phone. “The near-term
outlook for bank returns is not very positive at all. What’s happening
is draconian, but it’s unlikely there will be changes before the
August elections. ”

Kenyan President Uhuru Kenyatta approved the caps, against the advice
of the country’s central bank and the Treasury, to fulfill a campaign
pledge he made before coming to power in 2013 that he’d lower the cost
of loans. It’s failed to rejuvenate private-sector credit growth,
which slowed to a 16-month low of 4.3 percent in December from 18
percent a year earlier. The 56-year-old leader will seek a second term
in this year’s vote.

The cap was a “highly politicized decision,” said Robert Besseling, an
executive director at Exx Africa in Johannesburg. In addition to that
law, Kenya is now contemplating restrictions on commercial-bank
deposits by state-owned companies to improve the government’s cash

“The bigger banks believe they will benefit from a flight to quality
as the sector undergoes these fundamental changes. There is always
concern that the smaller banks will face difficulties.”

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Kenya Shilling versus The Dollar Live ForexPros 103.65
Kenyan Economy

Nairobi All Share Bloomberg -6.32% 2017


Nairobi ^NSE20 Bloomberg -7.34% 2017


2,952.33 +18.87 +0.64%

Every Listed Share can be interrogated here


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World's Biggest Tea Exporter Seeks to Double Sales to Russia
Kenyan Economy

Kenya, the world’s biggest black tea exporter, plans to double annual
shipments to Russia to 44 million kilograms within three years,
according to its Agriculture and Food Authority.

Russia bought more than 152 million kilograms of tea last year. Kenya
provided 18 million kilograms of that, almost a fifth lower than 2015
sales. About 1 million kilograms of the exports was orthodox tea.

“We are putting in place strategies for all our main markets,” said
Samuel Ogola, the interim head of Kenya’s tea directorate. “Russia has
been one of our major export markets and one of the world’s largest
importer of tea, but the values have been going down in the past few

Orthodox, which is popular in Russia, Iran and Western Europe, is a
specialty product made from black tea that’s processed by traditional
methods of withering, rolling and oxidization, while regular black tea
is manufactured through machines that crush, tear and curl the leaves.

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N.S.E Today

The MSCI All-Country World Index hit a record. World equities have
gained about $6tn since Trump's election equal to the combined GDP of
Germany & UK
The US Dow Jones has also closed at a fresh life-time high.
Ghana +7.07% in 2017 and South Africa +3.62% are outperforming.
The Rand has had a real muscular start to 2017 and is at 7 month highs
versus the Dollar as Investors start to view President Zuma and his
rogue brand of policy-making to have been triangulated by Pravin
Gordhan and others.
The South African logistics group Imperial Holdings will buy a 70%
stake in a Kenyan pharmaceutical distributor Surgipharm for R456
million ($35 million) in line with its African growth strategy,
Surgipharm, which is headquartered in Nairobi, is a leading
distributor of pharmaceutical, medical, surgical and allied supplies
in Kenya, with an annual turnover of about $70 million, the company
said in a statement. The Mergers and Acquisitions pipeline is juiced
at the moment [Sadolin Paints and Java refer] which is an interesting
development in an election year.
The Nairobi All Share closed +0.42 points at 125.33. The All Share is
+3.35% in February after a January swoon.
The Nairobi NSE20 Index rallied +19.16 points to close at 2971.50 and
is also in recovery mode this month
I actually believe that the Low for the Year was seen in January

N.S.E Equities - Commercial & Services

Safaricom eased -0.27% to close at 18.20 and traded 4.696m shares.
There is serious Buy Side Interest at 18.00.

Nation Media rebounded +5.55% to close at 85.50. Nation Media has
narrowed its YTLoss to -8.06%. Nation Media recently pronounced it was
seeking to position itself as a fully ''digital'' Company.

TPS Serena Hotels was up ticked +2.3% to close at 20.00 and traded 100 shares.

N.S.E Equities - Finance & Investment

The Banks came under strong selling pressure in January as Investors
fretted about the Interest rate Bill. Banks remain the softest
component at the NSE in 2017 and have been since the Bill was passed
into Law.
Equity Group firmed +0.93% to close at 27.00 and traded 3.735m shares
worth 101.015m. Equity is -10.00% Year To Date.
Stanbic Bank rallied +3.08% to close at 67.00 and traded 1.004m
shares. Stanbic Bank is -6.38% in 2017. Good sized volume has been
traded in this counter in 2017.

N.S.E Equities - Industrial & Allied

Mumias Sugar [has badly lagged a world-wide Sugar Futures rally which
saw Sugar rise just under 10% in January] rallied +4.76% to close at

ARM Cement closed unchanged at 19.25 and traded a large ticket of
10.156m shares worth 195.523m. ARM has retreated --24.50% in 2017 and
recall CDC Africa Cement became a material shareholder in October last

EABL closed unchanged at 225.00 and traded 338,700 shares worth 76.443m.


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

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