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Friday 27th of January 2017 |
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The Latest Daily PodCast can be found here on the Front Page of the site http://www.rich.co.ke |
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2017 Is Shaping Up as a Volatile Year for Markets Africa |
Looking at 250 assets across market classes that include equities, sovereign bonds and commodities, eight currencies were volatility outliers based on their year-to-date price swings, or Z-scores, according to data compiled by Bloomberg as of Jan. 20. A Z-score is a normalized measure based on price standard deviation, which gauges a security's moves compared with a longer-term average (1997 to 2017).
Three weeks into 2016, there were 19 outliers: 16 currencies and three benchmark equity indexes. At the same stage in 2015, there were 10. That followed a five-year period of relative calm preceded by an eye-popping 53 outliers at the start of 2009.
The Egyptian pound shows up as the most volatile asset in the study's universe so far this year. With a Z-score of 4.15, it has been more than twice as volatile as the digital currency bitcoin and six times more jumpy than the Bloomberg Dollar Index. To be classified as an outlier in this study, an asset needs an absolute Z-score of 2.575 or more, which means its movements have less than a 1 percent chance of happening. The greater the score, the greater the volatility.
Looking just at the commodity sphere, lean hog futures posted a Z-score of 1.86, making them the most volatile in that group. Hogs also led the commodity herd in early 2013 and 2015. Argentina's Merval Index, which hit a record high this week, is the most volatile of equity indices for the second year in a row. It had a z-score of 1.84 this year and 3.62 in the first three weeks of 2016, shortly after new president Mauricio Macri let the peso float freely.
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This concept of speed, velocity and volatility has infected the markets Africa |
This concept of speed, velocity and volatility has infected the markets where we witnessed unprecedented and extraordinary moves. I refer to the Sterling Pound moves on the Brexit Vote, Flash crashes in Sterling and the Rand, the extraordinary Sell-Off in the Japanese Yen after November 8th. Price moves are being amplified by algorithmic trading.
The contemporary Philosopher Paul Virilio who considers the real time says this:
''The message is not exactly the medium . . . but above all the ultimate SPEED of its propagation"
"Coeval emergence of mass media an industrial army, where the capability to war without war manifests a parallel information market of propaganda, illusion, dissimulation.” (Der Derian in Virilio, 2002a: viii)
''We are facing the emergence of a real, collective madness reinforced by the synchronization of emotions: the sudden globalization 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 panic.''
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Trump's approach to the economy begins to take shape via @BV Africa |
It is targeting higher growth and greater job creation using what can be called an “import- substitution-plus” approach to policy making, together with elements of an industrial policy:
In a manner reminiscent of traditional import-substitution strategies, the Trump administration is seeking to attract to the U.S. production facilities that serve the domestic market from abroad. Also, and this is where the “plus” comes in, it is seeking to bring to America foreign-based production facilities that serve non-U.S. markets. To amplify the desired impact on jobs and wages, the administration is adding elements of industrial policy in its interactions with certain sectors (automobiles, for example).
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Putin Is Using Spy Tactics To Split NATO From The Inside Law & Politics |
Turkey was struggling through a troubled time. Its rebel allies in Syria were losing ground and Kurdish militants attacked some of its cities. Its closest friends repeatedly harped on its spotty human rights record. And in July 2016, a faction within its military tried to overthrow the government. That’s when one of its foremost rivals came calling. Less than two days after the failed coup, Russian President Vladimir Putin phoned Turkey’s president to offer his “unconditional” support and sweep past troubles under the rug. This shrewd maneuver to exploit Turkey’s vulnerability was right out of the spy recruitment playbook that Putin once learned as a KGB officer, analysts say.
“This is the application of foreign policy using intelligence techniques,” said Marc Pierini, a longtime former EU diplomat and now a scholar at the Carnegie Endowment for International Peace in Brussels. “If you want to recruit someone, turn somebody, you exploit their weaknesses, assess their psychology, and the Russian president is an expert at that.”
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@BuzzFeedNews There's something very weird happening inside Russia's cybersecurity world Law & Politics |
At some point in December, Ruslan Stoyanov, a well-respected researcher with the Moscow-based Kaspersky Lab, and Sergei Mikhailov, head of the FSB’s Center of information Security, were arrested by Russian police as part of what Russia’s Kommersant newspaper described as a probe into possible treason. No date of arrest has been made public, though Kommersant reported that Stoyanov last logged into his private social media account on December 4, and Mikhailov on December 5. The Moscow-based Novaya Gazeta newspaper cited sources as saying Mikhailov was arrested during a meeting with other FSB officers in Moscow, and was taken from the room with a sack over his head.
On Thursday, REN-TV, a privately-owned TV channel in Russia, said a second FSB officer had also been arrested in December. They identified the man as Major Dmitry Dokuchayev, and reported he had served under Mikhailov in the the Center for Information Security. In another indication that Russia was seeing a high-level shakedown at the FSB, Kommersant reported that on January 13, the director of the Center for Information Security, Andrei Gerasimov, was fired. He was described as having close ties to cybersecurity companies, including Kaspersky Lab.
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[Weekly Review] | January 25, 2017, by Joe Kloc | Harper's Magazine via @Harpers Law & Politics |
At a ceremony in Washington, D.C., Donald Trump, a WWE Hall of Fame inductee who has been named in at least 169 federal lawsuits, placed his hand on Abraham Lincoln’s Bible, swore he would preserve the Constitution, and ascended to the presidency of the United States.[1][2][3] “Amazingly,” said Trump, “it rained.”[4] Trump delivered a sixteen-minute inaugural address, the first in American history to use the words “bleed,” “ravages,” and “carnage.”[5] Trump’s press secretary, Sean Spicer, who swallows at least 35 sticks of cinnamon-flavored Orbit gum a day and has tweeted for five years that Dippin’ Dots are “not the ice cream of the future,” said the inauguration’s audience, which was smaller than the previous two inaugural crowds, was the “largest audience ever, period.”[6][7][8] The White House website published a biography of Trump that stated he had the most electoral-college votes of any Republican president since 1988, a time period encompassing only one Republican president.[9] In a speech to 400 CIA employees, Trump, who recently tweeted that the behavior of U.S. intelligence agencies made him feel he was “living in Nazi Germany,” said that he was on their “same wavelength,” prompting applause from the audience members whom Trump had brought with him to the event.[10][11][12] At an inaugural ball attended by the bounty hunter and reality-television star Duane “Dog” Chapman, Trump adviser Kellyanne Conway punched a man in the face.[13][14] In demonstrations across Washington, groups of protesters lit a limousine on fire and broke the windows of a Bank of America, a white supremacist who said “sure” when asked whether he liked black people was punched in the face, a man marched with two alpacas and a llama to demand better trade policies, and at least 10 journalists simultaneously photographed a trash-can fire.
Ivanka Trump @IvankaTrump 💞 https://twitter.com/IvankaTrump/status/824833527166488577
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Currency Markets at a Glance WSJ World Currencies |
Euro 1.0668 Dollar Index 100.63 Japan Yen 115.00 The BOJ’s move was seen as a commitment to keep the 10-year yield at around zero percent. Swiss Franc 1.0009 Pound 1.2568 Aussie 0.7535 India Rupee 68.215 South Korea Won 1171.04 Brazil Real 3.1777 Egypt Pound 18.7245 South Africa Rand 13.4008
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Jack Ma's Ant Financial Buys MoneyGram for $880 Million World Currencies |
Ant Financial, the financial technology company controlled by billionaire Jack Ma, stepped up its international expansion by buying U.S. money-transfer service MoneyGram International Inc.
The $880 million transaction, Ant’s second U.S. deal, will connect MoneyGram’s network of 2.4 billion bank and mobile accounts with Ant’s customers. Ant, which was once part of Alibaba, is seeking to expand abroad amid increasing competition from Tencent Holdings Ltd.’s Wechat payment system at home. The MoneyGram deal will further that goal, following recent partnerships with Paytm in India and Ascend Money in Thailand.
“This gives us a very attractive business that’s already quite engaged with a substantial consumer base in the U.S.,” said Douglas Feagin, who runs Ant Financial’s global operations, in a telephone interview. “Remittance is a very important activity and we think this is a great way for us to build a presence around U.S. consumers.”
Ant is a behemoth in China, where it serves more than 450 million customers and provides services from wealth management and insurance to credit checks and consumer loans. Formally known as Zhejiang Ant Small & Micro Financial Services Group Co., the company was valued at $75 billion by Hong Kong investment group CLSA in September and is expected to go public some time this year.
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Crude Oil 1 Month Chart INO 53.76 Commodities |
West Texas Intermediate crude was at $53.80 a barrel, up less than 0.1 percent after surging 2 percent Thursday on optimism that OPEC and other producing nations would adhere to their pledged output cuts.
Emerging Markets
Frontier Markets
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Gambia's Ex-Leader Left His Mark-and a Grim Legacy WSJ Africa |
SALIKENNI, Gambia—Across Yahya Jammeh bridge and on the side of Yahya Jammeh highway, amid fields of bushy mango trees and giant baobabs, there is a town of women, children and aging men. Most young men have left.
Of the 420 households in this peanut-producing community, each has lost at least one member to an exodus of young men seeking a better life in Europe and the chance to send money back to their impoverished families.
The settlement of cement houses is part of the legacy of Mr. Jammeh, Gambia’s longtime leader who stepped down on Jan. 21 after more than 22 years as president.
Mr. Jammeh’s weekslong tantrum over ceding power—and his theatrical exit—has drawn attention to this tiny West African nation and its former president.
But, in contrast to Mr. Jammeh’s taste for fancy cars and other prized assets, such as rare-breed sheep with swirly horns, most Gambians live on less than $2 a day, according to the United Nations.
Between 2008 and 2015, nearly 40,000 men left, mostly for economic reasons. Some 1,200 applied for asylum in the European Union in 2008; the number exploded to 13,405 mostly unsuccessful requests in 2015, the EU statistics agency said.
Gambia’s challenges reach beyond the drain of brain and muscle that will be hard to compensate for without a large-scale return of émigrés. Its economy, which produces less than $1 billion a year, lacks sophisticated industries and its most active export sector—peanuts—has been so heavily regulated that farmers struggle to make a living, let alone garner sufficient profit to scale up production.
But the government’s coffers are nearly empty: Official debt is above 100% of gross domestic product
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"His game plan is to play for time and hope that something will turn up," Mr Stearns said. FT Africa |
“His problem is he doesn’t know what that something will be.”
For months, it was a battle for the presidency that threatened to plunge the Democratic Republic of Congo back into conflict. Now, just weeks after a surprise political deal that pulled the country back from the brink, a power struggle has erupted over who will be the next prime minister.
At stake is who will lead a new unity government and have control of elections that are part of a December 31 agreement that eased a crisis triggered by President Joseph Kabila’s refusal to cede power.
If successful, the vote would mark the country’s first democratic transition of power since independence in 1960. But squabbles between Mr Kabila and the opposition over the selection of a prime minister are undermining the deal even before it is implemented.
“What’s going on shows an implosion is inevitable because the [political] system is not set up to solve problems like these,” said Hans Hoebeke, an analyst at the International Crisis Group. “We’re not there yet, and in the past negotiations in Congo have taken a year longer than planned. But the signs are worrying.”
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Zimbabwe Stands Still as President Vacations Off the Grid Africa |
HARARE, Zimbabwe — It was an urgent matter for President Robert Mugabe of Zimbabwe: His approval was needed so that a loyal supporter who had just died could be buried at a cemetery for national heroes.
But with Mr. Mugabe off on his extended annual holiday in Asia this month, it took the acting president a couple of days to track him down, en route from Beijing to his Asian base in Singapore.
“I phoned the president telling him about the death, and he told me that he had learned about it through the first lady, who had read about it on the internet,” said the acting president, Emmerson Mnangagwa, one of Mr. Mugabe’s two vice presidents.
Mr. Mugabe’s annual holidays are one of the unusual aspects of the rhythms of political life in Harare, the capital of this southern African nation. Every year, from mid-December through the end of January, Mr. Mugabe, who has ruled Zimbabwe for 37 years with a tight grip, seemingly releases it. He vanishes in Asia, going off grid, becoming at times unreachable to his own deputies.
In Harare, government decisions, big and small, are put off. It’s a slow month and half for political journalists, even as rumors fill the vacuum. But even in Mr. Mugabe’s absence, the grip of the only leader Zimbabwe has ever known never really loosens.
“When Mugabe goes on holiday, he goes on holiday with the state,” said Pedzisai Ruhanya, a political analyst and the director of the Zimbabwe Democracy Institute, a research group. “Mugabe’s behavior is inconsistent with practices in other countries, with general state practices. This is kind of strange.”
“We didn’t hold cabinet meetings in Mugabe’s absence because he is the one who chairs the meetings,” said Didymus Mutasa, who served as a minister to Mr. Mugabe for many years and is now in the opposition. “When Mugabe goes on leave, some of his ministers also go on leave.
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"There is no iota of truth in the messages being circulated on the health of the President, who is hale and hearty" Africa |
The Nigerian government said on Wednesday that President Muhammadu Buhari is in good health, urging people to disregard what it said were false and subversive messages on social media after he traveled to Britain last week for medical checks.
News of the president's medical leave sparked a flurry of talk in Nigeria that Buhari, 74, was unwell, and potentially very sick. Those claims have been fueled by a previous illness, when he spent nearly two weeks in London last June treating an ear infection.
Minister of Information and Culture Alhaji Lai Mohamed said the government urged Nigerians "to disregard the subversive messages being circulated via text messaging and the Social Media, saying the fabricated messages are being orchestrated by those who feel threatened by the emerging order."
"There is no iota of truth in the messages being circulated on the health of the President, who is hale and hearty, and the purported emergency meetings of the State Governors in Abuja or anywhere," he said in a statement.
Sources of the allegations about Buhari's wellbeing are being investigated, the minister said.
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IMF Executive Board Completes First Review Under the Stand-By Arrangement and Standby Credit Facility Arrangement for Kenya Kenyan Economy |
IMF Board approved completion of first review of Kenya’s economic program supported by the Stand-By Arrangement (SBA) and the Standby Credit Facility (SCF). Kenyan authorities indicated that they do not intend to draw on the SBA and SCF arrangements (about US$1.5 billion in total), unless there is a balance of payment emergency caused by external shocks. Economy has continued to perform well with robust growth and reduced external imbalances. On January 25, 2017, the Executive Board of the International Monetary Fund (IMF) completed the first review of Kenya’s performance under the program supported by the Stand-By Arrangement (SBA) and an Arrangement under the Standby Credit Facility (SCF). The 24-month SBA/SCF with a combined total access of SDR 1.06 billion (about US$1.5 billion) was approved by the IMF’s Executive Board on March 14, 2016 “The macroeconomic outlook is overall positive, including robust growth and reduced external imbalances. However, interest rate controls are likely to reduce access to credit, weighing on growth. They also complicate monetary policy and adversely affect banking sector profitability, especially for small banks. Although the adverse effects of the controls are manageable in the near term, if maintained, they could potentially pose a risk to financial stability. Therefore, it is essential to remove these controls, while taking steps to prevent predatory lending and increase competition and transparency of the banking sector.''
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CBK cancels 15-year bond meant for budgetary support Kenyan Economy |
CBK was expected to carry out the auction for the re-opened 15-year bond on Wednesday, but in a notice published Thursday the regulator announced the cancellation, which some market players say may have been caused by either low bidding or high rate demands by buyers.
“It is not clear yet the reason behind the auction cancellation. The likely reasons could have been due to poor subscriptions in the wake of a tight money market, as well as overly aggressive bids,” said Genghis Capital in a note to its clients on Thursday morning.
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EABL reports H1 17 EPS -31.291% Earnings here Kenyan Economy |
Par Value: 2/- Closing Price: 219.00 Total Shares Issued: 790774356.00 Market Capitalization: 173,179,583,964 EPS: 12.2 PE: 17.951
H1 Earnings through 31st December 2016 versus 31st December 2015
H1 Net revenue 35.156b vs. 37.514b -6.286% H1 Cost of sales [18.556b] vs. [20.085b] -7.613% H1 Gross profit 16.600b vs. 17.429b -4.756% H1 Total costs [8.567b] vs. [9.507b] -9.887% H1 PBT 8.033b vs. 7.922b +1.401% H1 PAT (Continuing operations) 5.585b vs. 5.484b +1.842% H1 PAT (from discontinued operations) – vs. 2.249b H1 PAT (for the year) 5.585b vs. 7.733b -27.777% H1 EPS (Continuing operations) 6.28 vs. 6.29 -0.159% H1 EPS 6.28 vs. 9.14 -31.291% Cash & cash equivalents at the end of the year [3.367b] vs. 5.802b -158.032% Interim dividend 2/share
Company Commentary
backdrop of significant excise increase in Kenya last year and tough economic and operating conditions elsewhere in the region Kenya delivered flat net sales with double digit growth in spirits and Senator Keg which offset the impact of price increase on bottled beer Net Sales growth of 7% in Uganda Tanzania faced a challenging consumer environment which negatively impacted consumer spend Net Sales declined by 7% despite double digit growth in Pilsner and triple digit in reserve spirits Innovation pipeline Tusker Cider Smirnoff Ice Electric Ginseng and Black Bell On a like for like basis net sales were flat but adverse foreign exchange movements and impact of excise tax increase resulted in a 6% decline in reported net sales Operating margin improvement to 27% from 25% The company said Kenya makes up 70 percent of its profits, and this had been affected by tax hikes. “There have been four major excise duty increases affecting bottled beer volumes in the last five years, with the most aggressive one taking effect in December 2015 – a 43 percent rise in duty," Andrew Cowan, its group managing director and chief executive, said. "This was the highest excise duty increase in Africa," he said.
Conclusions
Organic Earnings were flat once you strip out the Previous Half Years extraordinary gain. Interesting colour on Kenya Tanzania and Uganda I would have thought that these results are fully priced in.
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