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Satchu's Rich Wrap-Up
Tuesday 14th of March 2017

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Macro Thoughts

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Dutch Election Upended as Turkey Dispute Seen Aiding Wilders
Law & Politics

With less than 48 hours to polling day in the first of Europe’s big
elections this year, political analysts said the international
incident centered on the Netherlands could benefit both Prime Minister
Mark Rutte’s Liberals and the anti-Islam Freedom Party of populist
Geert Wilders. The upshot may be to re-energize Wilders’s campaign
just as it appeared to be fading.

“The cabinet has shown political decisiveness,” said Kees Aarts,
professor of political institutions and behavior at the University of
Groningen. “But when you add everything up, what happened will clearly
help Wilders. He wasn’t very visible during the campaign and not very
involved. But in the end it’s his main theme that’s at stake now.”


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The problem in Washington is not a Deep State; the problem is a shallow man-an untruthful, vain, vindictive, alarmingly erratic President.
Law & Politics

By now, Trump’s tactics are familiar. Schooled by Roy Cohn, Joseph
McCarthy’s protégé, in the dark arts of rage, deflection, insult, and
conspiracy-mongering, Trump ignited his political career with
“birtherism,” and he has kept close by his side Steve Bannon, formerly
of Breitbart, who traffics in tinfoil-hat theories of race,
immigration, and foreign affairs. Together, they have artfully
hijacked the notion of “fake news,” turning it around as a weapon of
insult, diversion, division, and attack.

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Containing China is a strategic trap to India
Law & Politics

The Asia-Pacific security pattern is witnessing drastic changes, with
all forces being regrouped and readjusted. Indian and American
scholars have said that cooperation among India, the US and Japan
"will determine the parameters of security" in the Indian Ocean and
Pacific regions in the face of an "assertive" China, India's Zee News

The US, India and Japan have different strategic goals, but some
Indians hold similar stance with Washington and Tokyo on countering
China's rise. Cooperation among the three countries is necessary to
face "the Chinese assertiveness" in the Indian and Pacific region,
according to the Hindu. Last month, India's Foreign Minister Sushma
Swaraj and US Secretary of State Rex Tillerson agreed in their first
phone conversation to intensify defense and security cooperation,
which has been emphasized by some Indians.

Washington hopes to use New Delhi to contain China in the Indian
Ocean. Tokyo wishes to counterbalance China in the Pacific Ocean with
the help of New Delhi. All these seem to be strategic opportunities
for India, but they are actually nothing more than traps. Once India
falls into them, the country will become a pawn for the US and Japan
and will lose numerous opportunities while facing more risks.


The Indian Ocean is set to be a key battleground in Global Geopolitics.

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Law & Politics

Saudi King Salman’s stop in the Maldives on his month-long tour of
Asia brings into focus how this tiny archipelago – best known for
high-end tourism and an existential battle against climate change –
has emerged as a key player in a regional struggle for influence.

Both Riyadh and Beijing are currying favour with the strategically
located 820km-long chain of Indian Ocean atolls, in efforts analysts
believe are aimed at gaining concessions for military bases.

China sees the islands as a node in its “string of pearls” – a row of
ports on key trade and oil routes linking the Middle Kingdom to the
Middle East – while for Saudi Arabia, the atolls have the added
advantage of lying a straight three-hour shot from the coast of
regional rival and arch-foe, Iran.

They “want to have a base in the Maldives that would safeguard trade
routes – their oil routes – to their new markets. To have strategic
installations, infrastructure,” Climate Change News quoted Nasheed as

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Currency Markets at a Glance WSJ
World Currencies

Euro 1.0652
Dollar Index 101.38
Japan Yen 114.83
Swiss Franc 1.0075
Pound 1.2202
Aussie 0.7560
India Rupee 66.192
South Korea Won 1147.55
Brazil Real 3.1531
Egypt Pound 17.7105
South Africa Rand 13.1404

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13-MAR-2017 :: The Right has the wind in its sails but in Europe the elections are not of the Winner takes All variety.
World Currencies

This week The European Election Season kicks off in earnest in Europe
with the Dutch Parliamentary Elections. President Erdogan once again
proved himself a tremendous and quality asset for the European
Far-Right.  The dispute between Turkey and the Netherlands hit a new
low Sunday, with a Turkish minister escorted out of the country as
persona non grata, less than a day after Turkey's foreign minister was
denied entry, prompting President Recep Tayyip Erdogan to call the
Dutch "Nazi remnants." The diplomatic standoff was over plans by
Turkish government officials to campaign in the Netherlands for a
referendum back home. Family and Social Policies Minister Fatma Betul
Sayan Kaya had arrived in the country from Germany but was prevented
from entering Turkey's diplomatic compound in Rotterdam, setting up an
extraordinary standoff with armed police. She was later sent under
escort back to Germany. The Direction of Travel the world over has
been in the Populist direction from Brexit to Trump and Geert Wilders
surely will post his Freedom party's best result ever and the Turks
will surely have juiced that some more. We then have an election in
France where Marine Le-Pen and her Front Nacional are fighting for the
keys to the Elysee Palace and the French Presidency. And later in the
year we go to Germany. The Right has the wind in its sails but in
Europe the elections are not of the Winner takes All variety. It would
require a very big Tide a Tsunami even to carry Gert, Marine and
others into power. The Euro, counterintuitively might rally ''bigly''
if a coalition blocks Gert in the Netherlands and the French 2nd round
vote blocks Le-Pen.

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Goldman calls for patience to see commodity gains after rout @BNCommodities

The Bloomberg Commodity Index, a measure of raw material returns, fell
3.4 percent last week in the biggest decline since July, led by drops
in oil and nickel.

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13-MAR-2017 :: OPEC is that "scared little man"
World Currencies

Crude-oil sank below $50.00 in New York to close at December lows of
$48.75 a barrel. OPEC, which is led by Saudi Arabia, had been on a
Kamikazi mission to destroy the Shale Boys by pumping up the volume in
2015 and 2016 before doing a 360 degree turn in Q4 16, and dialing
down the volume.  e problem is that Shale has been able to turn up its
volume by more than OPEC can turn its down. It’s a delicious catch-22.

OPEC’s braggadocio had veiled this reality but last week crude oil
crashed as the markets lifted the veil and OPEC was found to be
General Butt Naked (for reasons of accuracy, Joshua Milton Blahyi
better known by his nom de guerre General Butt Naked, is a former
commander of forces under the wider control of Liberian warlord
Roosevelt Johnson). It surely suits President Trump’s MAGA Agenda to
encourage the Shale Folks to turn it up some more.  is price trend,
which I expect to accelerate, is set to put breaking-point pressure on
oil producers. The Treasuries in Riyadh, Luanda, Caracas and in so
many places had been betting on a price rebound (by borrowing more). I
believe we had a Wizard of Oz like lifting the curtain moment for OPEC
last week. ‘’It’s Like Dorothy and the Wizard of Oz. When Dorothy’s
world ended in a terrible storm, she found herself beginning a great
adventure. She went looking for the fabled wizard in the Land of Oz
who was going to solve all of her problems and save the world. But
when she got to the Land of Oz and found the wizard, she discovered
that behind the great curtain there was a scared little man.” OPEC is
that ‘’scared little man’’.

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'It's life and death': how the growth of Addis Ababa has sparked racial tensions

“The masterplan was a trigger but not the cause,” says Gataa. “It
seems calm now but under the surface much is happening. We are
gathering our forces now. People are talking, meeting, organising. Now
no one – not even the young people – is interested in [economic]
growth. Once you have lost faith in the government, everything is dark
for you.

“Am I afraid? Yes, but when those in the front line fall, others will
take their place.”

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Cocoa Plunge, Mutinous Army May Widen Ivory Coast Deficit

Tumbling cocoa prices and unscheduled payments to civil servants and
mutinous soldiers in the past two months could widen Ivory Coast’s
budget deficit and curb growth this year.
Cocoa prices have fallen by more than a third after reaching a
six-year high in July, denting revenue for the world’s biggest
producer of the chocolate ingredient. This year the West African
country’s government has tried to defuse military and social unrest by
agreeing to pay bonuses to soldiers and making some concessions to
civil servants who led a strike earlier this year.
The budget deficit will probably widen to 5 percent of gross domestic
product this year compared with government estimates of 3.9 percent
for 2016, said Charles Robertson, global chief economist at
London-based Renaissance Capital. The International Monetary Fund will
on March 22 start a review of the three-year program agreed on last
year and may adapt the $670 million deal depending on the impact of
the combination of lower revenue and increased spending, according to
Alain Feler, the lender’s representative in the country.
“Concessions were granted to civil servants, payments were made or
promised to mutineers; it means additional spending,” Feler said by
phone. “There’s a revenue shortfall as cocoa prices dropped strongly.
The question that’ll be raised is whether the deficit target is still

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The Central Bank of Nigeria won't allow "faceless and criminally minded people to destroy the currency under the guise of a free float as is being canvassed," Emefiele said

The Central Bank of Nigeria won’t allow “faceless and criminally
minded people to destroy the currency under the guise of a free float
as is being canvassed,’’ Emefiele said in a speech on Saturday in
Abuja, the capital, while accepting an award from a local newspaper.
Independent estimates and “purchasing power parity analysis” by the
regulator showed that the currency shouldn’t be so low on the
unofficial market, which has been influenced by “criminal activities,”
he said.

Emefiele also said:

Inflows into Nigeria have declined to less than $700 million per month
from $3.6 billion in June 2014, while demand for foreign currency is
about $4.8 billion
The central bank will “continue to meet all legitimate
transaction-based foreign exchange demands in the market”
While the ban on the 41 items wasn’t “cast in stone,” calls for a
reversal now were wrong given the “new realities of nationalist and
populist sentiments sweeping across the world,” including Brexit and
the election of Donald Trump as U.S. president
“I have heard commentators suggest we should follow Egypt’s example
and free the naira. What they do not tell you is that following their
currency adjustments, inflation today in Egypt is over 30 percent. Is
that what we want in Nigeria?”

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Mr Buhari's presidency so far has been a triumph of reality over spin. FT

Clever publicists were able magically to transform Mr Buhari into a
sprightly and forward-thinking leader. But repackaging Mr Osinbajo as
a Muslim northerner may be a feat beyond even the most gifted of

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Nigeria All Share Bloomberg -6.47% 2017

Happy #IndependenceDay #Ghana #Ghana60YearsOn pic from #MyAfrica
by @kwakudgh


Ghana Stock Exchange Composite Index Bloomberg +11.04% 2017


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Knight Frank Wealth Report

The growth in ultra-wealthy populations in Africa (33%) and Latin
America (37%) will also outpace that in Europe and North America. In
Africa, sharp rises are expected in countries such as Mauritius,
Ethiopia, Tanzania, Uganda, Kenya and Rwanda. In fact, of the 20
countries whose ultra-wealthy populations have grown most rapidly over
the last decade, 11 are in Africa.
In pole position sits Mauritius which, with its reputation as a
relatively safe, business-friendly country with lower tax rates than
many countries in Africa, is expected to remain a popular retirement
hotspot for the wealthy. “The country will also be bolstered by its
strengthening local  nancial services, with a forecast 130% rise in
its UHNWI population over the next decade,” Mr Amoils says.While the
total UHNWI population in these African countries is starting from a
relatively low base, wealth is expected to increase all the way up the
chain, with 7,500 new millionaires set to be created over the next
decade in Kenya alone.

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Sudan's annual rate of inflation rose to 33.53 percent in February from 32.86 percent the previous month

Sudan's annual rate of inflation rose to 33.53 percent in February
from 32.86 percent the previous month, as food and energy prices kept
rising after subsidies were cut in early November, the Central
Statistics Office said on Sunday.

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Kenya's central bank finalising licences for two new banks
Kenyan Economy

Kenya's central bank said on Monday it would process requests for
licences by two new banks, ending a moratorium it put in place in 2015
on licensing new commercial banks.

The central bank said in a statement that DIB Bank Kenya and Mayfair
Bank Kenya had received "approval in principle" before the 2015
suspension of licensing.

"The Central Bank of Kenya (CBK) announces its intention to finalise
the processing of licence applications for two institutions ... as a
first step to lifting the moratorium on licensing of new commercial
banks," it said.

DIB Bank Kenya is wholly owned by the Dubai Islamic Bank PJSC, which
operates according to Islamic principles. Mayfair Bank is owned by
Kenyan investors.

The central bank gave no reason for its action when it suspended the
licensing of new banks.

But the moratorium came after it had placed privately-owned Imperial
Bank under receivership in October 2015. Imperial's board had alerted
the central bank to malpractices at the mid-sized lender.

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Kenya set to end freeze on new banking licences FT

Aly-Khan Satchu, an investment adviser in Nairobi, described the
announcement as a “subtle signal of strength” by Mr Njoroge.

“The moratorium spoke to the fact that there was such a lack of
capacity,” Mr Satchu said. “Now he appears to be saying ‘I’m in
control and Kenya is open for business’.”

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East African Breweries Ltd. plans to raise 6 billion shillings ($58.5 million) in a sale of five-year debt
Kenyan Economy

East African Breweries Ltd. plans to raise 6 billion shillings ($58.5
million) in a sale of five-year debt, breaking a 17-month drought of
corporate-bond issuance in Kenya.

The securities, the second and final portion of an 11 billion-shilling
program, offer a fixed annual rate of 14.17 percent until maturity in
March 2022, a 64 basis-point premium over the benchmark five-year
government bond. The initial offer attracted 12.25 percent.

The issue is the first corporate bond since the collapse of Imperial
Bank Ltd. in October 2015. The lender was placed under statutory
management on the same day its 2 billion-shilling bond was scheduled
to begin trading on the Nairobi Securities Exchange. That was followed
by the bourse in April 2016 suspending trade Chase Bank Kenya Ltd.’s
corporate bonds after the central bank put the lender under

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Kenya Shilling versus The Dollar Live ForexPros 102.655
Kenyan Economy

Nairobi All Share Bloomberg -6.59% 2017 [+4.121% since March 8th]



Nairobi ^NSE20 Bloomberg -6.77% 2017



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

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