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Satchu's Rich Wrap-Up
Monday 16th of January 2017

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Macro Thoughts

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Cohen was a captivating figure on Wall Street. He was not the sort of
investor who, like Warren Buffett, took a large stake in a company and
held it for years, immersing himself in how the business worked. He
was a short-term speculator, who had built a vast personal fortune by
placing high-volume bets on small movements in stock prices; he was
often driven by earnings announcements and other such events, and
maintained high returns, against the odds, year after year. He was
short and thick, had a fierce mind and a quick temper, and he lived in
a thirty-five-thousand-square-foot mansion in Greenwich, Connecticut.
A passionate art collector, he would spend a hundred million dollars
or more on a single work.

Smiling his gap-toothed, kid-in-a-candy-store smile, Cohen arrived
right at the start of one of the season’s most hotly anticipated art
auctions—another assertion of power. He knew that the sale couldn’t
begin without him. Toward the end of the auction, Giacometti’s bronze
sculpture “L’Homme au Doigt” (“Pointing Man”) came on the block. It is
widely considered one of the artist’s greatest works. After several
rounds of aggressive bidding, Cohen placed the winning bid, paying in
total $141.3 million. It was the most anyone had ever paid for a
sculpture at auction

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THE EMPIRE OF EDGE "black edge" via New Yorker

In subsequent legal filings, S.A.C. has claimed that Munno and Slate
coined the term "black edge," as "humorous commentary." But, according
to subsequent filings by the Department of Justice, "black edge" was
"a phrase meaning inside information."

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Giacometti's bronze sculpture "L'Homme au Doigt" ("Pointing Man")

Home Thoughts

The object of art is not to reproduce reality, but to create a reality
of the same intensity. Alberto Giacometti

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Trump team rang EU and asked 'What country is leaving next?' @FT
Law & Politics

Donald Trump’s transition team have called EU leaders to ask “what
country is to leave next” with a tone suggesting the union “is falling
apart” this year, according to the outgoing US ambassador to the bloc.

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And that brings us once again to Henry Kissinger, the putative dalang - puppet master - of Trump's foreign policy.
Law & Politics

As leaked late last year in Germany’s Bild Zeitung newspaper,
Kissinger has drafted a plan to officially recognize Crimea as part of
Russia and lift the Obama administration’s economic sanctions.

The plan fits into Kissinger’s overall strategy — call it a
traditional British Balance of Power, or Divide and Rule, approach —
of breaking up the Eurasian front (Russia-China-Iran) that constitutes
the real “threat” to what Mattis defines as the “established world
order.” The strategy consists in seducing the alleged weaker top
“threat” (Russia) away from the stronger (China), while keeping on
antagonizing/harassing the third and weakest pole, Iran.

All of the above points to a very crowded chessboard. Trump will do
business and clinch deals with China, while his deep state-tinged
cabinet barks the usually explosive national security rhetoric, dalang
Kissinger plots a Russia-China split, and Moscow-Beijing secretly
concoct concerted moves.

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As Trump has indicated China is the main adversary To triangulate China, the US needs Russia on its side and not on China's
Law & Politics

As Trump has indicated China is the main adversary and its difficult
to understand why the US was seeking to send Vladimir into Xi
Jinping’s ready embrace. To triangulate China, the US needs Russia on
its side and not on China’s.

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Trump Wants to Hold Summit With Putin in Iceland: Sunday Times
Law & Politics

In eyeing Iceland’s capital, Trump’s team may be hoping to recreate
the optics of a Reagan-era nuclear agreement. Former President Ronald
Reagan and Mikhail Gorbachev, then general secretary of the Soviet
Union’s Communist Party, held a two-day summit in Reykjavik in October
1986 to work on what eventually became a major nuclear disarmament
treaty between the two superpowers in 1987.

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Vladimir Putin: behold, the other man of the moment
Law & Politics

During the 2012 US presidential campaign, Republican challenger Mitt
Romney referred to Russia as America’s most significant geopolitical
foe and Barack Obama pounced on it as a gaffe. “My opponent and his
running mate are new to foreign policy,” he quipped at the Democratic
national convention, with an ironic pause before the word “new”. “You
don’t call Russia our number one enemy – not al-Qaida, Russia – unless
you’re still stuck in a cold war mind warp.”

Even Obama wouldn’t dare to make that joke now.

Last week, we had to contemplate seriously the startling possibility
not only that Putin possesses a video of Donald Trump looking on while
Russian prostitutes urinate on a bed in a high-end hotel room, but
also that the president-elect co-ordinated his entire campaign with
the Kremlin leader. Trump, of course, slammed the dossier detailing
his alleged ties to Putin as “fake news – a total political
witch-hunt”, but no one in Washington now is dismissing Russia, as
Obama did two years ago, as a regional power. Russia is back and it is
all down to Putin.

If Russia’s security services have filmed Trump engaging in that kind
of behaviour, it would allow them to blackmail the leader of the free
world. That would mean Putin had scored an intelligence coup more
complete than anything any Soviet leader achieved. Even the fact we
are discussing this shows he has restored Russia as a country to be
reckoned with.

Within five months, Yeltsin had stepped aside to make Putin acting
president and he has dominated Russia ever since, his first priority
being to restore the prestige that his homeland enjoyed in his youth.
He relentlessly strengthened his grip on Russia, crushing first the
Chechens, then the media, then the oligarchs, then opposition parties,
to create what insiders have called “manual control”.

“Russia has been a great power for centuries,” Putin told parliament
during the hearings that confirmed him as prime minister in August
1999. “We should not drop our guard in this respect, neither should we
allow our opinion to be ignored.”

In that regard, if in no others, it’s mission accomplished. No one is
ignoring Russia’s opinion any more

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@IvankaTrump & @jaredkushner - the most powerful people in the court of King @realDonaldTrump @spectator
Law & Politics

Donald Trump will not find satisfaction as the 45th President of the
United States of America. He really wants to be king. Just look at the
gilded-bling madness of his penthouse on the 66th floor of Trump Tower
in Manhattan, or the sprawling exuberance of his holiday palace in
Mar-a-Lago, Florida: Trump aspires to be an American emperor, the Big
Mac Rex with triple cheese. Winning the White House is great, but it’s
not enough.

Trump now seems determined to treat the Oval Office as just one of his
courts — the principal court, perhaps, at least for four years, but
one of many. He wants to lord it over Washington DC in partnership
with his daughter princess, Ivanka, and her dashing husband, Mr Jared

Trump’s loyal third wife, Melania, intends to stay in New York to look
after Barron, their ten-year-old princeling, at least until he leaves
prep school. She will rule the roost from there. Jared and Ivanka, by
contrast, have severed their business ties in the Big Apple —
officially, at least — and are moving to Washington. They will quickly
become the capital’s most powerful couple. In Melania’s absence,
Ivanka will perform a lot of ceremonial first-lady duties, much as
Anna Roosevelt did for her father because FDR’s brilliant wife,
Eleanor, was too busy being a political operator.

In Donald’s head, Ivanka is far more than, as he puts it, ‘one of the
great beauties of the world’. He loves her brains, her poise, and her
personalised global brand. She is said to be his closest adviser, his
‘Svengali’ and supposedly played the part of ‘proxy wife’ during the
election campaign when Melania was unavailable. Trump believes she
would make a tremendous vice -president.

She’s popular, too, in a way that Donald can’t match. As a former
model turned mother of three, as a high-flying fashion entrepreneur,
and as executive vice president of Daddy’s real estate empire, Ivanka
is an American dreamgirl. She may come across in interviews as CEO
Barbie — ‘I’m always trying to leverage myself to the best of my
abilities,’ she says, when you press a button on her bottom — but
Americans like that. On her ‘Fashion, Family & Lifestyle’ website, she
offers not just yoga tips but life-enhancing epigrams such as ‘Success
doesn’t come to you: you go to it’, ‘Work smarter not harder’ and,
most instructive of all, ‘Fill the Void.’

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@thesundaytimes Theresa May calls for a clean and hard Brexit that will see Britain pull out of the single market
International Trade

Theresa May will announce that Britain is seeking a clean and hard
Brexit in a speech this week that will promise to create a “strong new
partnership” with the European Union.

The prime minister will finally lay her cards on the table, making
clear that the UK is set to pull out of the single market and the
European customs union in order to regain control of immigration and
end the jurisdiction of the European Court of Justice.

A Downing Street source said last night that May had “gone for the
full works”, although the prime minister’s staff admitted her words
were likely to cause a “market correction” that could lead to a fresh
fall in the pound.

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The pound slid below $1.20 for the first time since October's flash crash
International Trade

The pound slid below $1.20 for the first time since October’s flash
crash after the Sunday Times reported that May will prepare to
withdraw from tariff-free trade with the European Union in return for
freedom to curb immigration and strike commercial deals with other

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Currency Markets at a Glance WSJ
World Currencies

Euro 1.0607
Dollar Index 101.19
Japan Yen 114.26
Swiss Franc 1.0114
Pound 1.2032
Aussie 0.7474
India Rupee 68.245
South Korea Won 1181.51
Brazil Real 3.2213
Egypt Pound 18.9855
South Africa Rand 13.5513

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Military intervention to end Gambia impasse draws closer @FT

Premium Times, a Nigerian news website, reported earlier that the
Nigerian army had ordered more than 800 soldiers to report for
potential deployment in a regional force to Gambia. British military
personnel are in Nigeria training soldiers for operations against Boko
Haram militants in the north-east.

An intervention would not require UN approval if launched after Mr
Jammeh’s mandate expires, said western diplomats who are following a
crisis viewed as a test of west Africa’s commitment to democracy.

Adama Barrow, who defeated Mr Jammeh in the freest polls in the tiny
nation’s history, attended an African summit in Mali at the weekend
and met Francois Hollande, the French president, who said that
“everything must be done so that . . . effectively by January 19, [Mr
Barrow] can take office”.

Mr Barrow then went to Dakar, where Macky Sall, the Senegalese
president, will host him “until his inauguration”, Agence
France-Presse reported on Sunday.

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Trump Team's Queries About Africa Point to Skepticism About Aid NYT

WASHINGTON — President-elect Donald J. Trump’s views of Africa have,
until now, been a mystery. But a series of questions from the Trump
transition team to the State Department indicate an overall skepticism
about the value of foreign aid, and even about American security
interests, on the world’s second-largest continent.

A four-page list of Africa-related questions from the transition staff
has been making the rounds at the State Department and Pentagon,
alarming longtime Africa specialists who say the framing and the tone
of the questions suggest an American retreat from development and
humanitarian goals, while at the same time trying to push forward
business opportunities across the continent.

“How does U.S. business compete with other nations in Africa? Are we
losing out to the Chinese?” asks one of the first questions in the
unclassified document provided to The New York Times.

That is quickly followed with queries about humanitarian assistance
money. “With so much corruption in Africa, how much of our funding is
stolen? Why should we spend these funds on Africa when we are
suffering here in the U.S.?”

Some of the questions are those that should be asked by a new
administration seeking to come to grips with the hows and whys behind
longstanding American national security and foreign assistance
policies. But it is difficult to know whether the probing, critical
tone of other questions indicates that significant policy changes
should be expected.

On terrorism, the document asks why the United States is even
bothering to fight the Boko Haram insurgency in Nigeria, why all of
the schoolgirls kidnapped by the group have not been rescued and
whether Qaeda operatives from Africa are living in the United States.
And it questions the effectiveness of one of the more significant
counterterrorism efforts on the continent.

“We’ve been fighting al-Shabaab for a decade, why haven’t we won?”
poses one question, referring to the terrorist group based in Somalia
that was behind the Westgate mall attacks in Kenya in 2013.

But she also noted that “the framing of some of their questions
suggests a narrower definition of U.S. interests in Africa, and a more
transactional and short-term approach to policy and engagement with
African countries.”

Ms. Muyangwa said the queries could signal “a dramatic turn in how the
United States will engage with the continent.”

J. Peter Pham, who has been mentioned for the job of assistant
secretary of state for African affairs in a Trump administration, said
he does not expect Mr. Trump to do a complete U-turn in relations with

Mr. Pham, director of the Africa program at the Atlantic Council, said
he expects Mr. Trump will emphasize fighting extremism on the
continent, while also looking to enhance opportunities for American

In other questions, the Trump transition team challenges the benefits
of a trade pact known as the African Growth and Opportunity Act. “Most
of AGOA imports are petroleum products, with the benefits going to
national oil companies, why do we support that massive benefit to
corrupt regimes?” the questionnaire asks.

Yet Mr. Pham said he expected a Trump administration would support the
pact. “AGOA has created more than 120,000 jobs in the United States,”
Mr. Pham said in an interview.

A big unknown, though, is how a Trump administration will handle
foreign assistance to the continent and its 54 nations.

President George W. Bush quadrupled foreign assistance levels to
African countries, and President Obama largely maintained that, even
as his administration was making cuts elsewhere.

Even so, the amount of American aid in 2015 to other critical allies —
Afghanistan ($5.5 billion), Israel ($3.1 billion), Iraq ($1.8 billion)
and Egypt ($1.4 billion) — far exceeded the approximately $8 billion
for all of sub-Saharan Africa.

“We’ve been hunting Kony for years, is it worth the effort?” poses
another series of questions related to Joseph Kony, the warlord head
of Uganda’s violent guerrilla group the Lord’s Resistance Army, who
has eluded the authorities for three decades. “The LRA has never
attacked U.S. interests, why do we care? Is it worth the huge cash
outlays? I hear that even the Ugandans are looking to stop searching
for him, since they no longer view him as a threat, so why do we?”

The hunt for Mr. Kony and his fighters has generated a huge amount of
publicity around the world, in large part because of a video on his
elusiveness and brutality, “Kony 2012,” that has been viewed more than
100 million times on YouTube.

Rex W. Tillerson, Mr. Trump’s nominee for secretary of state,
complimented the program, calling Pepfar “one of the most
extraordinarily successful programs in Africa” during his Senate
nomination hearing.

But, in contrast, the Trump transition questionnaire asks, “Is PEPFAR
worth the massive investment when there are so many security concerns
in Africa? Is PEPFAR becoming a massive, international entitlement

“A strange attitude runs through this,” he said. “There’s a sort of
recurrent skepticism that Africa matters to U.S. interests at all.
It’s entirely negative in orientation.”

But the questions do appear to accurately reflect what Mr. Trump has
said publicly about Africa in the few times that he has mentioned the

For instance, during the Ebola crisis in 2014, Mr. Trump took to
Twitter to argue that Americans infected with Ebola should not be
allowed back into the United States. As two American health workers
became critically ill and were airlifted to Atlanta for treatment, Mr.
Trump had this to say via Twitter: “Stop the EBOLA patients from
entering the U.S. Treat them, at the highest level, over there. THE

The Ebola epidemic, which killed almost 10,000 people in Guinea,
Sierra Leone and Liberia (but no Americans), comes up once in the

“How,” the questionnaire asks, “do we prevent the next Ebola outbreak
from hitting the U.S.?”

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J. Peter Pham has been mentioned for the job of assistant secretary of state for African affairs in a Trump administration. (Photo: Atlantic Council)

As far as foreign assistance is concerned, Pham adds, “the arrival of
a new administration, especially one that is decidedly very much not
business-as-usual, affords a unique opportunity to seriously rethink
the US approach to both humanitarian assistance and international

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Paris sends Sahel signal 13TH JANUARY 2017 Africa Confidential

With US policy on Africa still a cipher and the UK in retreat from
Europe, France reaffirms its security commitments in the region

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South Africa All Share Bloomberg +4.23% 2017

Dollar versus Rand 6 Month Chart INO 13.526


Egypt Pound versus The Dollar 3 Month Chart INO 18.9855


Nigeria All Share Bloomberg -2.04% 2017


Ghana Stock Exchange Composite Index Bloomberg +2.75% 2017


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@MagufuliJP warns newspapers over dissent @The_EastAfrican

Tanzanian President John Magufuli said on Friday the "days were
numbered" for newspapers deemed to incite dissent

"We will not allow Tanzania to be a dumpyard for inciting (newspaper)
content. This will not happen under my administration," President
Magufuli told a rally in the northwestern town of Shinyanga.

He accused two newspapers, which he did not name, of seeking to cause
trouble. "Whenever you read them, they are full of inciting content
... their days are numbered," he said.

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Kenya Shilling versus The Dollar Live ForexPros
Kenyan Economy

Nairobi All Share Bloomberg -7.05% 2017 [40 month Low]


123.94 -0.81 -0.65%

Nairobi ^NSE20 Bloomberg -6.75% 2017


2,971.10 -43.26 -1.44%

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A brutal start to 2017 at the NSE @TheStarKenya
Kenyan Economy

It’s been a brutal start at the Nairobi Securities Exchange in 2017.
The Nairobi All Share Index has slumped -7.05 per cent since the start
of the year and closed Friday at a 40-month low. The Nairobi All Share
peaked at a record high of 176.00 on February 20, 2015, entered and
exited a bear market in October 2015, and again in January and July
2016 before firmly entering a bear market in August last year. A
classic bear market is one where an index has fallen 20 per cent from
a peak. The Nairobi NSE20 Index is -6.75 per cent in 2017 and closed
below 3,000 on Friday, a level not seen since 2008. The NSE20 Index
peaked on February 27, 2015, at 5491.37, entered a bear market on
August 28, 2015, and is -45.89 per cent since the February 2015 high.

For those who hold to the Efficient Markets Hypothesis, they would
argue that the market is a forward looking animal, and the securities
exchange is simply pricing in sharpened political risk (we are after
all in an election year). The market is further pricing, in that banks
(the banks constitute an outsize weighting at the securities exchange)
will no longer be able to shield the damage post the interest rate
cap, and 2017 earnings will naturally look poor in comparison with

My view is that just about everything negative is now baked into the
price. Baron Rothschild is credited with saying “the time to buy is
when there’s blood in the streets”. He should know. Rothschild made a
fortune buying in the panic that followed the Battle of Waterloo
against Napoleon. The world’s second wealthiest person Warren Buffett
has warned: “You pay a very high price in the stock market for a
cheery consensus.” So my first overarching point is that valuations
are at rock-bottom levels, and it is at these moments that the smart
investor sits up and takes notice.

In these kinds of bearish conditions, it’s important to pick your
spots. Just buying the index is not an optimal strategy. We have
witnessed serious divergences in price performance. It’s therefore a
more Darwinian environment. Steer entirely clear of companies that
have had a history of corporate governance challenges except for Kenya
Airways where the chairman, Michael Joseph, is on a ‘’personal
legacy’’ ‘’national interest’’ type mission and will not be denied.
Buy Safaricom at these discounted levels. Safaricom is an outstanding
machine and on the radar of every investor across the world. The only
banking share to produce a positive return in 2016 was Standard
Chartered. I expect that outperformance to continue. KCB and Barclays
Bank also look good value. KenolKobil was a big outlier in 2016 and a
gently rising oil price is a gentle tail-wind for 2017.

This is a moment to be agile.

Let me leave you with French cultural theorist Paul Virilio: “We are
facing the emergence of a real, collective madness reinforced by the
synchronisation of emotions: the sudden globalisation of affects in
real time that hits all of humanity at the same time, and in the name
of progress. Emergency exit: we have entered a time of general

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Airtel's second layoff in a year turns focus on turnaround bid
Kenyan Economy

The telecommunications firm on Friday sent home 100 of its staff, in
what it termed a “strategic organisational restructuring to improve
efficiency across function.”

The latest redundancy adds to the 60 others that the telco let go in
January 2016.

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

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