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Satchu's Rich Wrap-Up
Thursday 15th of June 2017

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Macro Thoughts

Fed raises rates for second time in 2017

Central bank defies weak inflation figures to maintain forecast for
one further lift this year

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"The curve is behaving as though there's a chance they follow through on their dots," said John Herrmann

“The curve is behaving as though there’s a chance they follow through
on their dots,” said John Herrmann, director of rates strategy at MUFG
Securities Americas Inc. “It signals investors think there’s some
credibility of the Fed doing another hike this year and possibly one,
two or maybe more in the next year or two.”

The yield spread between two- and 10-year notes narrowed to about 79
basis points, the least since September and bringing it within range
of the lowest levels since 2007. The two-year yield, at 1.33 percent,
is among the most sensitive to impending Fed policy decisions. Spreads
between five-year yields and longer maturities also shrank.

The narrowing began earlier in the day after a weaker-than-forecast
inflation report bolstered confidence in long-dated debt. A flatter
yield curve can be a sign of diminished confidence in the economic

Herrmann said he sees the spread between two- and 10-year Treasuries
flattening to 71.2 basis points, particularly if the Fed hikes again
in September, as he predicts.

The benchmark 10-year yield, at 2.13 percent, posted its lowest
closing level of 2017. The note held most of its gains after the core
consumer price index fell to a 1.7 percent year-over-year rate in May,
the lowest since 2015, according to Labor Department data released

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Freediving is the lung-crushing, mind-altering path to inner peace @business

looking forward to visiting the Samburu tomorrow with Hannah

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Samburu National Reserve is a game reserve on the banks of the Ewaso Ng'iro river in Kenya

The Samburu National Reserve is a game reserve on the banks of the
Ewaso Ng'iro river in Kenya. On the other side of the river is the
Buffalo Springs National Reserve. The park is 165 km² in size and is
situated 350 kilometers from Nairobi. It ranges in altitude from 800
to 1230m above sea level.[1] Geographically, it is located in Samburu

In the middle of the reserve, the Ewaso Ng'iro flows through doum palm
groves and thick riverine forests. It provides water, without which
the game in this arid region could not survive.

The Samburu National Reserve was one of the two areas in which
conservationists George Adamson and Joy Adamson raised Elsa the
Lioness made famous in the best selling book and award winning movie
Born Free.

The Samburu National Reserve is also the home of Kamunyak, a lioness
famous for adopting oryx calves.

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Special counsel is investigating Trump for possible obstruction of justice, officials say @washingtonpost
Law & Politics

The special counsel overseeing the investigation into Russia’s role in
the 2016 election is interviewing senior intelligence officials as
part of a widening probe that now includes an examination of whether
President Trump attempted to obstruct justice, officials said.

The move by special counsel Robert S. Mueller III to investigate
Trump’s conduct marks a major turning point in the nearly year-old FBI
investigation, which until recently focused on Russian meddling during
the presidential campaign and on whether there was any coordination
between the Trump campaign and the Kremlin. Investigators have also
been looking for any evidence of possible financial crimes among Trump
associates, officials said.

Trump had received private assurances from then-FBI Director James B.
Comey starting in January that he was not personally under
investigation. Officials say that changed shortly after Comey’s


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That fawning Cabinet meeting was part North Korean Politburo rah-rah session and part "The Godfather" opening scene @NewYorker
Law & Politics

Donald Trump is the first President in history to have a Cabinet
meeting go viral. If you haven’t seen it yet, you must watch the video
on Monday morning and eliciting gushing testimonials and expressions
of loyalty from his own appointees.

Mike Pence set the tone, saying, “The greatest privilege of my life is
to serve as Vice-President

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Trump's incoherent foreign policy is upending the world @business
Law & Politics

In the beginning, it was almost possible to believe Donald Trump had a
coherent worldview. There were those, like Walter Russell Mead in
Foreign Affairs, who argued that the president had a purposeful,
Andrew Jackson-inspired “America First” policy. Alliances and
treaties, especially trade deals, would be measured according to a
narrow definition of national interest rather than long-term global
stability. This was a simplistic, nearsighted strategy, but at least
it made some political sense. It was what his constituency wanted. The
primacy of domestic electoral considerations has certainly been
notable in Trump’s world. His withdrawal from the nonbinding Paris
climate accord is a lot more popular in places he won, like southern
Ohio and western Pennsylvania (with the exception of Pittsburgh), than
it is in California, where there are more people working in solar
energy than there are coal miners left in the entire nation.

But there is more—or, perhaps more accurately, less—to Trump’s foreign
policy than that. There have been at least two other complicating
factors. There is the suspicion that aspects of Trump’s global
actions, especially his curious relationship with Russia, are tangled
up with his personal business interests, including his debts. And, of
course, there is the mix of ignorance, personal pique, toxic
narcissism, and conspiracy theory that is the hallmark of Trumpery,
both foreign and domestic.

But he’s squandered whatever promise he may have had. His America
First populism has devolved into a distressing comfort with autocrats
such as Vladimir Putin, Xi Jinping, and the Philippines’ Rodrigo
Duterte. As he demonstrated on his recent Middle East trip and at his
summit with the Chinese, Trump succumbs too easily to pomp and
flattery. It was good that he took the opportunity to promote the
emerging Israeli-Sunni détente; it was bad that he did it at the
expense of Iran, where recent elections have strengthened democratic
opposition to the military-religious dictatorship. (There are now more
women than mullahs in the Iranian Parliament.) His melodramatic
concern about jihadi terrorism apparently stops at the border of Saudi
Arabia, which has funded radical madrasas and terrorist groups
throughout the region. He’s also had nice things to say about the
Pakistanis, even though their intelligence services harbor and fund
the Haqqani Taliban network, which was allegedly responsible for the
recent massive bombing in Kabul.
His China policy is particularly strange. Unwittingly, he’s probably
done as much to empower China as George W. Bush did to bolster Iran.
Trump’s opposition to the Trans-Pacific Partnership, which would have
created a strong trading—and, implicitly, security—bulwark against
China, was particularly misguided. With American markets restricted,
countries such as Taiwan, Vietnam, and Myanmar will more easily
succumb to Chinese economic hegemony. And Trump’s faith that China
will be able to restrain North Korea’s lethal puerility remains to be


read more

Law & Politics

WASHINGTON (The Borowitz Report)—An Alabama man whose brain was
ravaged by severe amnesia is somehow able to function in an extremely
demanding legal job, leading neurologists reported on Tuesday.

The man, whom neurologists are calling a “medical mystery,” has
performed highly exacting tasks in one of the country’s top legal
positions despite having virtually no short- or long-term memory.

Dr. Davis Logsdon, the chairman of the neurology department at the
University of Minnesota Medical School, said that the Alabaman’s brain
“defies explanation.”

“In all the medical literature, we have never seen an example of
someone capable of holding down such a high-powered job while having
no memory whatsoever of people he met, things he said, places he has
been, or thoughts he has had,” Logsdon said. “It’s the stuff of
science fiction.”

Logsdon said that his team of neurologists was studying video of the
man in the hopes of understanding the paradoxical functioning of his
brain, but Logsdon acknowledged that such a task was challenging.
“After listening to him talk for hours, your own brain starts to
hurt,” he said.

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Currency Markets at a Glance WSJ
World Currencies

Euro 1.1189
Dollar Index 96.95
Japan Yen 109.57
Swiss Franc 0.9712
Pound 1.2729
Aussie 0.7600
India Rupee 64.285
South Korea Won 1124.28
Brazil Real 3.2741
Egypt Pound 17.9997
South Africa Rand 12.6829

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08-MAY-2017 :: a Crude Oil Price Target of $32.00 a Barrel. @TheStarKenya

The OPEC “Go-Go” days of Sheikh Yamani, his prayer beads and delphic
pronouncements belong to yesteryear. Mohammed Sanusi Barkindo, the
current OPEC secretary-general, is a poor imitation of Yamani and is
playing with a set of cards that is stacked against him. Reserves have
been depleted from Abuja to Riyadh, from Luanda to Caracas and in all
the oil producing capitals in the world. So many capitals are fiddling
while sitting on a tinderbox and playing with matches.  e deputy Crown
Prince was quoted on Al-Arabiyya about Iran: “How can I communicate
with them while they prepare for the arrival of al-Mahdi al-Montazar?”

We have experienced a precipitous downside move and, in my opinion,
the exponential recent momentum is signalling there is further to go.
My price target is $32.00 a barrel. Crude oil prices in extremis move
exponentially.  is move has all the ingredients for turning
exponential. Some thought they found a floor Friday, but I expect them
to be rudely awakened.

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THE world appears to have passed peak booze @TheEconomist

The volume of alcoholic drinks consumed globally fell by 1.4% in 2016,
to 250bn litres, according to IWSR, a research firm. It is the second
consecutive year of decline, and only the third since data started to
be collected in 1994. The drop-off is caused by people drinking less
beer, which accounts for three-quarters of all alcohol drunk by
volume. Worldwide beer consumption shrank by 1.8% to 185bn litres last
year. Yet because the drinking-age population of the world grew by 1%
in that time, beer consumption per drinking-age adult declined even
more, by 3.2%. The overall decline is almost entirely because of
downturns in three of the five biggest markets. China, Brazil and
Russia accounted for 99.6% of the global decrease in the volume of
beer drunk in 2016.

Both economics and changing tastes play a part. China overtook America
to become the world’s biggest market for beer by volume in 2001. It
now quaffs a quarter of all beer. But consumption per person peaked in
2013 and dropped further last year. One reason is that Chinese
drinkers are turning away from cheap local brews towards premium
products and imported beers. Beer’s appeal is also waning among older
drinkers. Over-30s are moving to wine and over-40s favour baijiu, the
national spirit. Elsewhere, recessions have hit beer-drinkers’
pockets. In both Brazil and Russia, consumption by the average adult
fell by 7%.

Beer-drinking patterns also change as countries grow richer. In a
study in 2016, Liesbeth Colen and Johan Swinnen of the University of
Leuven examined the effects of income growth and globalisation on beer
consumption in 80 countries between 1961 and 2009. They found that as
GDP per person increased in poorer countries, beer became more
popular. But when it reached around $27,000 per person, consumption
began to fall again, probably as people became more aware of the
dangers alcohol poses to health. Consumers may also start to opt for
more expensive drinks, such as wine, once they can afford them. And
beer consumption rises as countries become more globalised, the
authors found. When international drinks companies move in, punters
may find a new favourite tipple.

For decades, consumers in emerging markets have driven beer sales ever
upwards. The latest figures suggest that the froth is coming off.

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Qatar signs $12 billion deal to buy F-15 jets from U.S Reuters

Qatar's Ministry of Defense said on Wednesday the country signed a
deal to buy F-15 fighter jets from the United States for $12 billion.

The deal was completed despite the Gulf country being criticized
recently by U.S. President Donald Trump for supporting terrorism.

U.S. Defense Secretary Jim Mattis and representatives from Qatar were
set to meet Wednesday to seal the agreement, a source familiar with
the deal told Reuters. Bloomberg News reported the deal was for 36

The sale will increase security cooperation and interoperability
between the U.S. and Qatar, the Pentagon said in an emailed statement
on Wednesday.

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12-JUN-2017 :: Rolling Over Qatar @TheStarKenya

Returning to the Riyadh Summit where the kingdom committed fifth of
its remaining forex reserves [which will fall off a cliff when Oil
slumps towards $32.00 a barrel] to a purchase of ‘’beautiful’’
American arms speaks to a heist. The House of Saud’s protector has
always been the US but this time an American president has excelled
himself at extracting a mindbogglingly egregious price.I have to
surmise that the emir of Qatar baulked at the price and that his
adversaries are saying OK, we can always do it by force because this
looks like a mugging in a dark alley, now.

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Shabab Kill 17 and Take Hostages in Somalia's Capital

MOGADISHU, Somalia — An assault by militants in the Somali capital,
Mogadishu, began Wednesday evening with a car bombing at the gates of
a hotel popular with foreigners and continued with gunfire at a nearby

At least 17 people were killed and dozens of others were taken
hostage, according to local officials and the emergency services.
Special forces rescued more than 50 hostages, according to the state
news media.

The attack occurred less than a week after militants from the Shabab
extremist group killed dozens of people — both soldiers and civilians,
including children — when they stormed a military base in northeastern

read more

Investors Snap Up Assets of Nation Where Defaults Are New Normal

For a country that has missed several debt payments this year,
Mozambique’s assets are performing remarkably well.

The southern African nation’s currency has posted the world’s biggest
gain in 2017, while the price of its overseas bonds, which the
government defaulted on in January, has soared about 30 percent,
making them among the best-performing sovereign notes in emerging

While policy makers have yet to start restructuring talks, investors
have been encouraged by two things: the completion of an independent
audit into Mozambique’s foreign debts and a $7 billion project signed
off by an Eni SpA-led consortium to exploit one of the biggest natural
gas discoveries in a generation. Interest rates that almost tripled
since the start of 2016 have also helped lure yield hunters.

“The currency has rallied massively, which has helped the debt burden,
and the deal with Eni is also positive,” said Phillip Blackwood, a
managing partner at EM Quest Ltd., which advises Sydbank A/S on about
$2.5 billion of emerging-market assets. The Danish lender bought
Mozambican bonds after the default and sold some about a month later
at a profit, Blackwood said.

The metical, which has strengthened about 20 percent this year to
60.295 per dollar, will probably appreciate further as coal exports
increase and the audit by U.S. corporate investigation firm Kroll Inc.
may entice international organizations, including the IMF, to resume
aid packages, analysts at Standard Bank Group Ltd., including Penny
Byrne and Walter de Wet, said in a note last month.

The bonds traded at about 76 cents on the dollar on Wednesday, up from
as low as 50 cents in mid-January.

What’s buoyed them is investors refocusing on the fact that the
country “sits on a crown jewel” when it comes to gas, said Aly-Khan
Satchu, the chief executive officer of Nairobi-based Rich Management,
an adviser to companies and wealthy individuals.

read more

Rand Merchant Bank (RMB) business confidence index fell to 29 points in the second quarter from 40 points

South Africa sank into recession for the first time in eight years in
the first quarter, hit by weakness in consumer sectors such as
wholesale, retail and accommodation.

The latest survey results suggest seven out of every 10 respondents
are downbeat about prevailing business conditions, suggesting
year-on-year economic growth slowed even further in the second
quarter, RMB said.

read more

South Africa All Share Bloomberg +1.65% [3 month lows]

Dollar versus Rand 6 Month Chart INO 12.6829 [SELL THE ZAR]


Egypt Pound versus The Dollar 3 Month Chart INO 12.6829


Nigeria All Share Bloomberg +25.02% 2017 [2 year Highs]


33,598.20 +456.02 +1.38%

Ghana Stock Exchange Composite Index Bloomberg +13.83% 2017


read more

Kenya Opposition Links President's Family to Ballot Contract Bloomberg Politics
Kenyan Economy

Kenya’s main opposition party linked President Uhuru Kenyatta’s family
to a Dubai-based company awarded a tender to print ballot papers for
this year’s elections, as it demanded the contract be canceled.

Kenyatta’s brother, Muhoho, “is the local contact for Al Ghurair and
possibly a shareholder” in Al Ghurair Printing & Publishing Ltd.,
Musalia Mudavadi, a leader of the opposition National Super Alliance,
told reporters on Wednesday in the capital, Nairobi. He also accused
the president of influencing the award of the tender “in collusion
with some technical staff” at Kenya’s electoral body.

read more

State warns diplomats against interfering with elections
Kenyan Economy

The government on Wednesday evening issued a veiled warning to
diplomats and foreign entities against interfering with the elections,
even as debate on the electoral commission’s tendering for ballot
papers gathered steam.

At a scheduled briefing for envoys accredited to Nairobi, Foreign
Affairs Principal Secretary Monica Juma invited them to support and
audit the elections, but insisted there should be “space” for Kenyans
to choose their leaders.

“Our election is the reaffirmation of the deepening governance on our continent.

We express our commitment, as had been repeatedly expressed by the
President, to an election that is free, fair, transparent and
credible; and most fundamentally, that will reflect the will of the
people,” she told the ambassadors gathered at Intercontinental Hotel
on Wednesday.

read more

Chinese investment in Africa: Beijing's testing ground @FT
Kenyan Economy

On Pate Island, off the coast of northern Kenya, there are
light-skinned Africans with Chinese features, fragments of ancient
Chinese porcelain, and even a place named “New Shanga”. All lend
weight to a local story that shipwrecked sailors from the fleet of
Zheng He, the 15th-century Chinese explorer, settled on the island
many years before Columbus set foot in the US.

in Kenya, records show that huge ships reached the east African coast
more than 500 years ago, swapping Chinese treasures for exotica such
as ivory, ostriches and zebras. Indeed, there is a long if tentative
history of contact between China and Africa, cemented under Mao Zedong
in the 1960s with anti-colonial solidarity and the construction of
engineering works, notably the 1,860km Tanzam railway linking Zambia
with the Tanzanian coast.

The China-Africa relationship — partly spontaneous and partly the
fruit of an orchestrated push from Beijing — is shifting the
commercial and geopolitical axis of an entire continent that many
western governments had all but given up on. While Europeans and
Americans view Africa as a troubling source of instability, migration
and terrorism — and, of course, precious minerals — China sees
opportunity. Africa has oil, copper, cobalt and iron ore. It has
markets for Chinese manufacturers and construction companies. And,
perhaps least understood, it is a promising vehicle for Chinese
geopolitical influence.

“To have 54 African [nations as] friends is very important for China,”
says Jing Gu, director of the Centre for Rising Powers and Global
Development in East Sussex, who contrasts Beijing’s mostly good ties
with African governments with the tense relationship it has with
neighbours from Tokyo to Hanoi.

Many, including some Africans, are suspicious of what they see as a
neocolonial land grab, in which companies acting as proxies for the
Chinese state extract minerals in return for infrastructure and
finance that will saddle governments with large debts. The behaviour
of Chinese actors in Africa, in common with those from the west, has
often fallen short of the exemplary. There have been legitimate
complaints about Chinese companies employing few locals, mistreating
those it has and paying scant regard to the environment.

Nevertheless, there is a begrudging recognition that China has mostly
benefited Africa and that the country’s participants on the continent
have learnt lessons.

Beijing’s engagement with Africa is more multi-layered than is often
recognised. China, Ms Jing says, has used Africa almost as a testing
ground for its growing international ambitions, whether through
peacekeeping missions or construction of the roads, ports and railways
intended to bind much of the developing world, via a new Silk Road, to
the Middle Kingdom.

Howard French, whose book China’s Second Continent charts the
experience of about 1m Chinese entrepreneurs who have settled in
Africa, agrees. “Africa has been a field where China can try various
things in a very low-risk environment,” he says. “Africa has been a
workshop of ideas that now have a much bigger scale and strategic

A few numbers illustrate the shift. In 2000, China-Africa trade was a
mere $10bn. By 2014, that had risen more than 20-fold to $220bn
according to the China Africa Research Initiative at Johns Hopkins
School of Advanced International Studies in Washington, though it has
fallen back because of lower commodity prices. Over that period,
China’s foreign direct investment stocks have risen from just 2 per
cent of US levels to 55 per cent, with billions of dollars of new
investments being made each year. China contributes about one-sixth of
all lending to Africa, according to a study by the John L Thornton
China Center at the Brookings Institution.

Certainly, China has been attracted by Africa’s abundant resources:
oil from Angola, Nigeria and Sudan, copper from Zambia and the
Democratic Republic of Congo, and uranium from Namibia.

In recent months, Chinese companies appear to have made an effort to
corner the market for cobalt, crucial for the production of electric
car batteries, with multibillion-dollar purchases of stakes in mines
in Congo, the world’s biggest producer. From Libya and Zambia to Ghana
and Mozambique, Chinese businesses have gained a reputation for
unbridled extraction, whether of old-forest timber, oil, gold or
illegal ivory.

Yet the emerging China-Africa relationship goes well beyond
commodities. One of the top destinations for Chinese investment in
Africa is Ethiopia, a mostly resource-poor country of 100m people that
is pursuing Chinese-style state-led development. Ethiopia has few
resources of interest to China other than its strategic location and
potentially large market, should its fast growth of the past 15 years
prove sustainable.

Since 2000, Ethiopia has been the second-biggest recipient of Chinese
loans to Africa, with financing for dams, roads, rail and
manufacturing plants worth more than $12.3bn, according to researchers
at Johns Hopkins. That is more than twice the amount loaned to
oil-soaked Sudan and mineral-rich Congo. In fact, a far larger portion
of US direct investment — 66 per cent vs 28 per cent for China — goes
into mining.

China-Africa ties have proliferated in other areas. Beijing has 52
diplomatic missions in African capitals against Washington’s 49. Of
the UN Security Council’s five members, China has the most
peacekeepers on the continent, with deployments of more than 2,000
troops in Congo, Liberia, Mali, Sudan and South Sudan.

From Africa’s perspective, although China presents risk it brings
tangible benefits in finance and engineers. More importantly, it
brings choice. That is welcome for African governments that have, for
decades, been locked in often unproductive relationships with foreign
donors who have brought billions of dollars in aid, but also, in the
1980s and 1990s, brought what many view as the ruinously prescriptive
Washington consensus of market-based development and reform.

“The narrative of donor and recipient has changed considerably with
China,” says Dambisa Moyo, a Zambian economist whose 2009 book Dead
Aid questioned the aid-based ties of Africa to Europe and the US.
“African countries need trade and they need investment. To the extent
that China, or anybody else — India, Turkey Russia or Brazil — bring
new trading and investment opportunities to Africa, that’s good news.”

Jeffrey Sachs, director of the Earth Institute at Columbia University,
calls China’s newfound enthusiasm “the most important single
development for Africa in this generation”.

Beijing, he says, can help transform the continent. “They know how to
build big projects,” he says, referring to the dams, ports, airports,
railways, telecommunications networks and roads that Chinese groups
are building in even the most obscure corners of the continent. “They
know how to get them done.”

Throughout Africa, people on the streets and in power echo these
sentiments. Beijing’s official policy of non-interference makes it an
attractive partner to African leaders in countries from Angola to
Zimbabwe fed up with lectures from former colonial powers about human
rights or democracy.

A 2016 Afrobarometer survey of 36 African countries found that 63 per
cent of Africans found China’s influence “somewhat” or “very”
positive. Asked which countries provided the best development model
for Africa, 30 per cent said the US and 24 per cent China, placing
them number one and two. Yet there is disquiet about the rise of
Chinese influence. “I think the Chinese know what they want. It is the
Africans who don’t know what they want,” says PLO Lumumba, director of
the Kenya School of Law. “China wants to control. China wants to be a
world power,” he says, adding that African governments are taking on
so much Chinese debt that they will be in economic and political hock
to Beijing.

Godfrey Mwampembwa, a cartoonist better known as “Gado” whose
political satire is syndicated all over Africa, says something
similar. “It’s the same old story: now you have the Chinese conquering
Africa, but what is Africa getting out of it?” In one of his cartoons,
Lilliputian African leaders shake the hand of a towering Chinese
figure. The caption reads: “We are equal partners.”

In an interview with the Financial Times last month, Uhuru Kenyatta,
the Kenyan president who has used Chinese billions and engineering
know-how to mount a huge infrastructure push, expressed concern at the
fact that Africa has moved into trade deficit with China. Beijing he
says, is “beginning to appreciate that, if their win-win strategy is
going to work, it must mean that, just as Africa opens up to China,
China must also open up to Africa”.

Mr French says Africans’ view of China “is still positive, but not as
exuberant as it was”. People welcome the infrastructure, he says. But
they insist their governments should not be taken for a ride, either
by overpaying, accepting shoddy work or allowing Chinese companies to
use all their labour and materials. Africans resent it, he says, when
corrupt governments inflate the price of projects — as has been
alleged with the $4bn Mombasa-Nairobi railway, inaugurated this month
— to make space for kickbacks.

Still, he adds, Chinese companies have become more attuned to such
issues than critics suggest. A decade ago, they thought that dealing
with the government was enough. Now they realise, they also need to
engage civil society and international non-governmental organisations
on issues from local skills to the environment.

Chinese companies like to be seen to be transferring skills. Huawei,
which earns 15 per cent of its global revenue in Africa, trains 12,000
students in telecoms a year at centres in Angola, Congo, Egypt, Kenya,
Morocco, Nigeria and South Africa. According to Johns Hopkins
researchers, 80 per cent of workers on Chinese projects are African,
even if many are in low-skilled jobs such as trench-digging.

“I give the Chinese a fair amount of credit,” says Mr French. “They
have been mounting quite a steep learning curve from almost no
knowledge to becoming very sophisticated players.”

Ms Jing of the Centre for Rising Powers says China wants the
relationship to be seen as mutually beneficial. “China is actively
pursuing an African industrialisation strategy,” she adds. “It is
hoping to transfer low-wage production to Africa in the next 10

The crucial thing for African governments, says Ms Jing, is to take
control of their relationships, whether with the west or China. That
means setting priorities, ensuring skills are transferred and
negotiating with foreign partners on their own terms. “It is up to the
Africans. They need to be clear about who can play what role,” she
says. “It is not for outsiders to decide.”

The evolving China-Africa relationship is not monolithic, but
conducted by multiple players with different agendas. On the one hand,
there are 54 African countries and, on the other, various Chinese
banks, state-owned enterprises, provincial governments, private
companies and individuals.
“When you look at what China is doing in totality you see chaos, not
coherence,” says Minxin Pei, a Chinese scholar, who rejects the idea
of a grand Chinese strategy for Africa.

Uwe Wissenbach, an expert on Chinese projects in Africa, also cautions
against the idea of a Beijing “master plan”. The construction of the
$4bn railway from Mombasa to Nairobi was Kenya’s idea rather than
China’s, he says. Even though the railway may be extended to Uganda
and possibly Rwanda, it is not a Beijing strategy to link east Africa.
Rather, it was an opportunistic bid by state-owned China Road and
Bridge Corporation for a lucrative contract, he says.

The absence of a sweeping strategy does not mean there is no state
influence. Chinese leaders have been active in courting African
governments. In 2015, Xi Jinping, China’s president, pledged $60bn for
African projects over three years despite the downturn in commodity
prices. Beijing has consistently encouraged Chinese companies, many
with huge surplus capacity at home, to win contracts in Africa. “When
the government says: ‘This is the new frontier; it’s lucrative and
people should go there,’ then people do go there,” says Mr Wissenbach.
Policy directives from Beijing come with cheap finance and an implicit
state guarantee should African governments default on loans.

Rather than Beijing carving up the world, he suggests, what has
emerged is a scramble for Chinese state funds. “In that sense, it is
strategic but it’s also very opportunistic.”

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Kenya's opposition leader wants to dismantle white-owned ranches Quartz Africa
Kenyan Economy

The Kenyan opposition leader, Raila Odinga, has announced that he will
dismantle white-owned ranches in Kenya if he wins in August’s general
elections. Odinga said the violence that has engulfed the restive
Laikipia region in central Kenya has been due to mismanagement by a
handful of large-scale ranchers.

“These ranches are too big and the people don’t even live there,”
Odinga told The Times newspaper. “They live in Europe and only come
once in a while.”

read more

The storm clouds gathering over Narok are partly national @crisisgroup @mutigam
Kenyan Economy

The county is a key battleground in the contest between the ruling
Jubilee Party and the opposition National Super Alliance (Nasa). Both
are investing heavily in the presidential and governorship races.

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Kenya Shilling versus The Dollar Live ForexPros
Kenyan Economy

Nairobi All Share Bloomberg +10.57% 2017


152.05 -0.88 -0.58%

Nairobi ^NSE20 Bloomberg +10.06% 2017 [11 month closing High]


3,506.90 +19.45 +0.56%

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MPs stall Treasury's plan to bail out Kenya Airways
Kenyan Economy

Kenya Airways’  quest to have Parliament approve a Sh77.3 billion
($750 million) loan guarantee the Treasury has granted it was
Wednesday left hanging in the balance after a House committee failed
to agree on its legality.


This Proposed Re-Structuring is not going to fly. The Banks especially
cannot get away with what is a heist.

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N.S.E Today

The FED raised US interest rates a 1/4 point yesterday.
The Price of Crude Oil tumbled to a 7 month Low.
Global currency markets whiplashed bigly before the Dollar found its
footing and then began to strengthen.
The Nairobi All Share rallied +0.585% to close at 152.94 a fresh 23 month High.
The Nairobi NSE20 Index +0.45% to close at a Fresh 11 month high of 3522.79.
We are seeing better breadth in the market but one suspects the
rebound is now maturing especially ahead of the August elections and
heightened and adversarial politics.

N.S.E Equities - Commercial & Services

The Stumble lower in Kenya Airways shares was triggered by a Genghis
Capital report which spoke of the Local Banks ending up with about 33%
of the Equity and an exponential dilution of existing shareholders. It
is egregious and inconceivable that Banks who lent to Kenya Airways
with their eyes wide open and at commensurate interest rates should
end up with the Lion's share of the equity in the NEWCO. It is also a
perfect example of self-harm to dilute long suffering shareholders by
such a crazy amount and speaks to the fact that minority shareholders
[79,000] had no representation at the negotiations whilst the Banks
were surely well represented. The Banks now have a GOK guarantee and
that should be it. The GOK has to revisit the ratio structure. Kenya
Airways which had stumbled -30.93% in June through this morning
rebounded by the daily maximum of +9.38% to close at 5.25 with 384,700
shares traded and unserviced Buy Side Demand of just shy of 2m shares.
The raison d'être for this rebound was Investors began to factor in
that the current proposal will not fly.

Safaricom was the most actively traded share at the Exchange and firmed
+1.09% to close at 23.25 and traded 16.061m shares worth 377.093m. I
expect a continued re-rating higher in the share price and my target
is 28.00. Safaricom is +21.4% in 2017 and underpins the Bull Market
here in Nairobi.

Standard Group firmed +1.39% to close at 36.50 and is + a
mouth-watering +121.21% in 2017 and the best performing counter at the
NSE in 2017.

N.S.E Equities - Finance & Investment

National Bank has been on a tear this week [since the news broke that
KCB was looking at an all share deal acquisition]. National Bank
rallied a further +10% to close at 9.35 and that caps a +38.15% rally
this month.

Equity Bank firmed +0.62% to close at 40.00 and score a 2017 closing
high. Equity traded 5.419m shares worth 217.035m and is +33.33% in
KCB Group eased -0.65% to close at 37.75 and traded 2.216m shares. KCB
has corrected -5.625% since the National Bank story leaked.

Centum bounced +2.58% to close at 39.75 on strong volume action of
1.106m shares. On a PE of less than 4.00, this share has upside head

N.S.E Equities - Industrial & Allied

EABL rallied +1.63% to close at 249.00 the highest closing price in
2017. EABL has lagged the market rally and is playing catch up.

Mumias Sugar rallied +4.76% to close at 1.10 and as rallied +46.66% in
June and tis late cycle rally speaks to the maturity of the bull
market rally.

KenGen closed unchanged at 8.50 a 2017 closing High and sits pretty at
+46.55% in 2017.


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

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