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Thursday 19th of January 2017 |
Morning, Africa |
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If you are tracking the NSE Do it via RICHLIVE and use Mozilla Firefox as your Browser. 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 http://www.rich.co.ke |
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Yellen trumps Trump on dollar Africa |
US Treasury yields rose too after Yellen said “waiting too long to begin moving towards the neutral rate could risk a nasty surprise down the road – either too much inflation, financial instability, or both.”
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17 DEC 12 :: The Future is not seen in the Rearview Mirror [said @vkhosla] Africa |
VINOD Khosla who famously bagged a few billion dollars in Silicon Valley was the fellow who said, ‘The future is not seen in the rear view mirror.’
The “Demographic arc of instability” outlined by these youthful populations covers all of Sub-Saharan Africa. Now I know the excitement about the demographic dividend is simply overwhelming but remem- ber this is a binary thing, the demographic dividend could easily morph into a time bomb.
Charles Dickens said the following in his book ‘A Tale of Two Cities’;
‘“It was the best of times, it was the worst of times . . . it was the spring of hope, it was the winter of despair . . . we were all going direct to heaven, we were all going direct the other way . . . ”
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12-DEC-2016 :: The demographic bulge is now arriving at voting age. This is that moment, its importance cannot be gainsaid. Law & Politics |
Africa is a very non-linear place but recent elections from President Buhari of Nigeria through president-elect Barrow in the Gambia through president-elect Akufo-Addo of Ghana (pictured below) is surely signalling a trend-change is at hand.
The big picture point is in fact a demographic one. Many commentators define the African population surge as a ‘’dividend’’ but what is clear is that if it is allowed a Free and Fair vote its going be a Terminator for a whole number of regimes. The demographic bulge is now arriving at voting age. This is that moment, its importance cannot be gainsaid.
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14-NOV-2016 :: Here comes President @realdonaldTrump Law & Politics |
Donald Trump won the US election all ends up and for the first time since 1928 won the Presidential vote, the Senate, the House and will decide the Supreme Court’s composition. It is a breath-taking win especially when you consider that Trump was an insurgent candidate and his Make America Great Again movement similarly an insurgent movement. Trump confounded the pollsters and the traditional media echo chamber and was ranked a rank outsider at 4-1 in a two horse race just a few short hours before the final result was known. The result in the US mimicked the Brexit result and what is clear to me is that we are watching a populist wave or zeitgeist (some have characterised it as a ‘’whitelash’’) which has now swept the United Kingdom and the US and has Italy (where Matteo Renzi has called for a Referendum), France (where Marine Le Pen is the most popular politician by a street) and the Netherlands all in its crosshairs.
Comic-turned-politician Beppe Grillo, co-founder of Five Star, said
“ This is the deflagration of an epoch. It’s the apocalypse of this information system, of the TVs, of the big newspapers, of the intellectuals, of the journalists.”
And this is another important point, traditional media has lost its position of control. It’s been upended by the internet which allowed insurgent politics to broadcast over the top.
I am a Seller of Ian Bremmer’s rather hyperbolic critique. Putting a Stop-Loss into play with the Syrian rebels (who are a bunch of ne’er-do-wells and paid mercenaries), reaching out to Vladimir Putin indicate a trend-change in the way the US engages with the rest of the World strikes me as an entirely sensible mid course correction. 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. erefore, I see Trump playing a Ronald Reagan Game.
From an economic and trade perspective, I expect Trump to be much more aggressive with China. I think the QE [Quantitative Easing] consensus is now a busted Flush.
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@rhodes44 : "What I take issue with is that we were spinning. We believed in these things" Rhodes told @politico Law & Politics |
Rhodes’ colleagues have said he achieves a “mind meld” with Obama when writing speeches. Over the past decade, the onetime aspiring fiction writer has evolved, to the dismay of critics who cite his lack of prior experience, into a bona fide policy adviser and even a diplomat: Rhodes participated in secret talks with Cuba that led to restored diplomatic relations with the U.S. and was instrumental in Obama’s historic visits to closed-off Myanmar.
Michael Crowley: Is there any way to sum up on a bumper sticker—or at least a postcard—what the foreign policy legacy of the last eight years is?
Ben Rhodes: A single word I would apply is engagement. We’ve engaged diplomatically around the world. We’ve engaged former adversaries. We’ve engaged publics. We’ve sought to work through multilateral coalitions and institutions with the purpose of repositioning the United States to lead.
A lot of what we did was to restore the United States at the center of the international order. People have criticized us for presiding over a decline. I think we make the opposite argument: that we were in decline and that we—by both husbanding our resources, investing in our economy, and being opportunistic diplomatically—tried to set the United States up for being in a stronger position in a changing world than where we were when we came in.
Rhodes: I would say a couple of things. One, the Arab Spring obviously overwhelmed the circuits. There’s an intensity [to the period from] 2011 to 2014, when a 100-year storm took place in three years.1 Two, there is a discordance between the nature of power in the current moment and how Washington thinks about foreign policy that you can only appreciate if you’re in these jobs. A lot of thinking in both political parties was understandably shaped by the 1990 to 2002 window, when the United States had a great deal of freedom of action. We could get anything through the U.N. Security Council that we wanted, with some small exceptions. We could, frankly, interfere in the internal affairs of other countries in a host of different ways. We could count on Russia being on its back foot as we enlarged NATO. We had some time before the Chinese started to try to shape events in their neighborhoods. And we could even have the hubris to think that it made sense to invade and occupy Iraq. What hasn’t changed is the United States is still, by far, the most powerful country. But what has changed is there are other power centers that are going to ensure that there are limits on certain things that the United States wants to do.
Rhodes: I went through an evolution on Syria. I came into this job shaped by the post-Rwanda view of liberal interventionism3—suspicious of some amount of U.S. military intervention, but also seized with the necessity of acting in certain situations. I was a vocal advocate of [going into] Libya,4 and in the early days of the Syrian conflict, I was an advocate for military action in Syria. And I believe that I was wrong about that. Everything that I have learned about watching that conflict unfold suggests to me that the president’s refusal to get into a military conflict with the Assad regime was actually one of his best decisions.
The only country in the world that was prepared to join us was France. And we had no domestic legal basis. We actually had Congress warning us against taking action without congressional authorization, which we interpreted as the president could face impeachment.
Crowley: Really? Was the prospect of impeachment actually a factor in your conversations?
7 “It is essential you address on what basis any use of force would be legally justified and how the justification comports with the exclusive authority of Congressional authorization under Article I of the Constitution,” House Speaker John Boehner wrote to Obama in 2013. Rhodes: That was a factor.
The world order and American actions in the world have deep wiring. We found that when we came into office. It took us a long time to turn the ocean liner around a dust-up with the Iranians or the Chinese could get out of hand very fast.
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The Real Meaning of Putin's Press Conference Atlantic Law & Politics |
“You haven’t yet commented on the report that, allegedly, we or in Russia have been collecting kompromat on Donald Trump, including during his visit to Moscow, as if he were having fun with prostitutes in a Moscow hotel,” said the reporter with the pro-Kremlin LifeNews. “Is that true? Have you seen these files, these videos, these tapes?”
Dodon looked half mortified, half amused as he looked over toward a laughing Putin.
“You know,” Putin said, “there’s a category of people who leave without saying goodbye, out of respect for how things have come together, so as to not disturb anything. Then there are people who endlessly say goodbye. The departing [U.S. presidential] administration, in my opinion, is in the second category.”
Then he tried, barely, to suppress a smirk.
Unlike Trump, who tends to react immediately and viscerally, Classic Putin likes to keep people waiting in suspense. Whenever something big and important happens, don’t expect Putin to speak. For days. When pro-democracy protests broke out in Moscow in 2011, Putin was silent for more than a week. He was one of the first to personally congratulate Trump on his election victory, but he said nothing publicly about the results of the election until November 21, nearly two weeks after the fact. When he meets with pretty much anyone—Queen Elizabeth, the Pope, the parents of children who were killed in a plane crash—he keeps them waiting for him. (The Queen waited 14 minutes, the Pope for 50 minutes, and the grieving parents for two hours at a cemetery.
Classic Putin is both a master bureaucrat and a salt-of-the-earth guy; he is fluent both in cunning bureaucratese—as when he described the alleged prostitutes referred to in the dossier as “women of decreased social responsibility”—and in the language of the muzhik, the hearty, salty Russian man—as when he then joked that, regardless of anything else, Russian prostitutes “are undoubtedly the best in the world.”
“There’s an impression as if, having practiced in Kiev, they want to organize a Maidan in Washington just to keep Trump from taking office,” Putin said.
What Putin’s comments showed is that he is, finally, after all these years of frustrated ego, the senior partner in this relationship. He has to defend Trump’s sullied reputation; he has to defend his undermined legitimacy; he is now Trump’s protector, guarding him the way a mob capo might protect a diamond shop. And that’s Classic Putin, too.
05-DEC-2016 :: Putin's Parabolic Rebound http://www.rich.co.ke/media/docs/PX_014NSX0512.pdf
05-OCT-2015 :: Putin is a GeoPolitical GrandMaster @TheStarKenya http://www.rich.co.ke/media/docs/038NSX0510.pdf
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World Currencies |
“The idea that this is likely to happen sooner rather than later caught the market offside,” said Alvise Marino, a foreign-exchange strategist at Credit Suisse Group AG in New York. “Everything he said tends to confirm fears that a Nafta repeal as early as next week is a distinct possibility,” he said.
The loonie has rallied this year, part of a broad-based surge against the U.S. dollar, which has wilted amid a revaluation of growth prospects under a new administration. Still, Bank of Canada Governor Stephen Poloz flagged Trump uncertainty as a factor in saying a rate cut is still a possibility. Meanwhile, the peso has led losses among major currencies amid concern trade with U.S. will fizzle as the nation accounts for 80 percent of the Latin American country’s exports.
The Mexican peso fell 2 percent to trade at 21.9544 per dollar on Wednesday, while the Canadian dollar dropped 1.7 percent to trade at 1.3269 per dollar.
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Commodities |
Late times are bad, but if there’s one way to make a sushi chef go ballistic—at least internally—it’s watching a customer mash a mound of wasabi in a pool of soy sauce and then dunk the sushi in it. So it bears repeating: At a good sushi bar, every piece is precisely composed by the chef. Not only are you insulting the chef with your soy-wasabi bath, you’re upsetting the delicate flavor balance of a piece of fish that you're paying a lot of money for (at Nakazawa, $150 at the sushi bar; $120 in the dining room). Still, if you’re determined to be the boss of your sushi, the chef will hand over a little extra wasabi and/or soy sauce; the word "please" is helpful.
Emerging Markets
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Citigroup, Top Africa Loan Arranger, Sees M&A Boosting Lending Africa |
Citigroup Inc., sub-Saharan Africa’s top loan arranger in 2016, expects increased sovereign demand and mergers and acquisitions to drive lending in the region this year as low valuations spur deals.
“Lots of financing activity is expected in 2017,” Aziz Rahman, the bank’s head of corporate finance in the region said in an interview on Monday. Loans to sovereigns and corporates will increase as M&A deals rise and infrastructure spending picks up, he said. A total of $34.3 billion in loans were arranged for borrowers in the region last year, according to data compiled by Bloomberg.
Citigroup reclaimed its position as the top loan arranger in sub-Saharan Africa for the first time since 2008, edging out Standard Chartered Plc, which held the top spot since 2011. The U.S. lender, which operates in 12 countries in the region, helped arrange $3.5 billion in loans, while the London-based bank arranged $2.5 billion, the data showed.
Citigroup last year helped to arrange a total of $1 billion in loans for Africa’s largest mobile operator MTN Group Ltd. and $666 million in lending to South African-born retailer Steinhoff International Holdings NV. The New York-based bank held 16 percent of the region’s market share, while Bank of America Corp. held a 12 percent share and Standard Chartered accounted for 11 percent, according to the data.
Still, lending in Africa doesn’t come without risks. Mozambique said on Monday that it won’t honor a $59.8 million coupon payment on Jan. 18, which would be Africa’s first sovereign default in five years.
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Shoprite Wins as S. Africans Seek Cheap Food to Beat Inflation Africa |
South African shoppers have been hurt by an inflation rate that climbed to a 10-month high of 6.8 percent in December, led by surging food costs following the worst drought since at least 1904. That’s been compounded by unemployment of 27 percent and economic growth in 2016 that was the slowest in seven years.
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"The possibility of a devaluation is certain; the question is the timing" Nigeria Naira Africa |
That expectation by seven of the nine economists polled this week comes even though Central Bank Governor Godwin Emefiele has said he would not devalue the naira <NGN=D1>. "The possibility of a devaluation is certain; the question is the timing," said Aly-Khan Satchu, an analyst and investor at Rich Management in Nairobi. "They are eventually going to capitulate at some point this year, a similar scenario to Egypt at the end of last year - a big devaluation in the official rate." Nigeria stubbornly held on to an official peg of 197 naira to the dollar for 16 months, until June of last year, hurting the economy. It subsequently floated the currency but maintained some measures to prevent further weakening. The naira currently trades at 305 per dollar. Dollar shortages meant the currency fell to close to 500 against the dollar last week on the unapproved open retail market [nL5N1F3400].
Conclusions
If President Buhari thinks China is going to underwrite an overvalued Naira i Think he is mistaken
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Nakumatt agrees stake sale to fund for $75m Africa |
Nakumatt, Kenya's biggest supermarket chain by sales, has agreed to sell a 25 percent stake to a foreign fund for $75 million, part of an effort to bolster its balance sheet and pay off debts, its managing director said on Wednesday.
"We are already at final stages with the investor. We are just waiting for the money to come," Atul Shah told Reuters, without naming the fund involved.
The deal is part of the chain's plan to overhaul its balance sheet and restructure a $75 million debt tranche owed to four local banks, Shah said. Expansion and other investments have pushed its debt up overall to $150 million.
"Nakumatt is going through some financial stress. We are out looking for funds and we are restructuring," Shah said, adding the cash was expected before the end of February and would help the firm extend the tenor of its debts to more than five years.
The equity deal with the foreign fund values the business at $300 million.
"It is a fair valuation," Shah said, noting the business had expanded from a single small store to a regional network in 24 years.
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A brutal start to 2017 at the NSE @TheStarKenya Africa |
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. e 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.
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