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Satchu's Rich Wrap-Up
Thursday 16th of March 2017

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Macro Thoughts

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Juan Carlos Londono @parasiteven2 Time to Play?

I miss the older girls. The House is so quiet without teenagers - Its
a Presence of an Absence. it has been incredibly hot and I moved into
my Daughter Layla's room where like her I leave the doors and windows
wide open and a breeze from the peaks of Mount Kenya blows through and
occasionally like a gale. And I tell her Darling, I am your hood every
night, as it were and we feel connected across thousands of miles.

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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.
Law & Politics

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

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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"This is, in the opinion of many, an unprecedented judicial overreach," he added.
Law & Politics

Derrick Watson, a US district judge in Hawaii, ordered the temporary
stay just hours before Mr Trump’s action was due to come into effect
at midnight. The nationwide ruling means that people should not be
impacted by the order.

At a rally in Nashville President Trump called the move by the judge
was an "unprecedented judicial overreach" and said he was ready to
take the case "as far as it needs to go" including to the Supreme

"A judge has just blocked our executive order on travel and refugees
coming into our country from certain countries", Mr Trump said.

"The order he blocked was a watered-down version of the first order
that was also blocked by another judge and that should never have been
blocked to start with …

"This is, in the opinion of many, an unprecedented judicial
overreach," he added.

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The blinding elegance of Ivanka Trump Quartz
Law & Politics

Over the past year or so, Donald Trump has solidified his image as a
fundamentally blue-collar president—a relatable vehicle, despite his
personal wealth, for the tastes and concerns of America’s white
working class. Trump is “a poor person’s idea of a rich person,” Fran
Leibowitz declares in Vanity Fair. “They see him. They think, ‘If I
were rich, I’d have a fabulous tie like that. Why are my ties not made
of 400 acres of polyester?’ All that stuff he shows you in his
house—the gold faucets—if you won the lottery, that’s what you’d buy.”
His gauche décor, his blunt and blustering style of speech, his
terminal lack of manners—all this, supposedly, helps Trump connect
with the little guy.

Less frequently acknowledged is the hold that Trump has on the white,
suburban middle and upper-middle classes. Last November, he scored the
vote of 53% of all college-educated white men (white women in that
demographic went, by a slim majority, to Clinton) and the majority of
all voters with a household income of over $50,000. The roots of
Trump’s middle-class appeal are no doubt complex. Yet if you had to
boil it down to one word, it’s pretty easy to pick: Ivanka.

But Ivanka also serves another important purpose: She classes her
family up. Through her social media accounts and personal branding,
she presents the world with the exact sort of aspirational, firmly
upper-class image that her father is lauded for being unwilling to
provide. Thanks to Ivanka’s mastery of white respectability politics
and bougie social norms, she can appeal to those who claim to care
about “good taste” while allowing her father to reap the benefits of
blustering “authenticity.” As long as Ivanka’s around, in other words,
Trump doesn’t have to be classy at all.

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High profile Twitter accounts hijacked in Turkish-Dutch protest
Law & Politics

The diplomatic spat between Turkey and the Netherlands spread online
on Wednesday when a large number of Twitter accounts, many with no
apparent connection to the dispute, were hijacked and replaced with
anti-Nazi messages in Turkish.

The attacks, which appeared to be simply a form of political vandalism
and used the hashtags #Nazialmanya or #Nazihollanda, took over
accounts of high-profile CEOs, publishers, government agencies and
also some regular Twitter users.

President Tayyip Erdogan has suspended high-level diplomatic ties with
the Netherlands and branded the country's citizens "Nazi remnants" for
preventing his ministers at the weekend from addressing rallies of
Turks living there.

Hijacked accounts featured tweets with Nazi symbols, a variety of
hashtags and the phrase "See you on April 16", an apparent reference
to the date of Turkey's planned referendum to grant Erdogan more

The Twitter accounts hijacked included those of the European
Parliament and the personal profile of French politician Alain Juppe.


Erdogan is prone to bouts of insanity and this is one of them and its
inimical to the interests of the Turkish diaspora.

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Dollar crunched by cautious Fed, bonds and commodities cheer Reuters
International Trade

The dollar nursed sharp losses in Asia on Thursday while sovereign
bonds savored their biggest rally in nine months after the Federal
Reserve hiked interest rates, as expected, but signaled no pick-up in
the pace of tightening.

The euro got an added bonus when early returns showed the anti-EU
party of Geert Wilders won fewer seats than expected in Dutch
elections, soothing fears that public opinion was swinging inexorably
toward a break-up of the union.

The sigh of relief was heard across Asia as investors had feared
faster U.S. hikes and more political upheaval in Europe could spook
funds out of emerging markets.

"The Fed makes the world safe for risk until June," said CitiFX
strategist Steven Englander. "Buy emerging market FX, equities,

Somebody seemed to be listening as gold, copper and oil all rallied as
the dollar dropped. MSCI's broadest index of Asia-Pacific shares
outside Japan rose 0.9 percent to its highest since mid-2015.

South Korea's market climbed 0.6 percent, but Japan's Nikkei dipped
0.1 percent as a jump in the yen pressured exporters.

Shanghai stocks <,SSEC> added 0.6 percent with investors seemingly
untroubled as China's central bank raised short-term rates for the
third time in as many months.

The Dow had ended Wednesday with gains of 0.54 percent, while the S&P
500 added 0.84 percent and the Nasdaq 0.74 percent.

The Fed lifted its funds rate by 25 basis points, as expected, to a
range of 0.75 percent to 1.00 percent, but said further increases
would only be "gradual."

Crucially, officials stuck to their outlook for two more hikes this
year and three more in 2018, when many had expected an accelerated
spate of moves.

Rather, the Fed said its inflation target was "symmetric," indicating
that after a decade of below-target inflation it could tolerate a
quicker pace of price rises.

That was painful news for bond bears who had built up huge short
positions in Treasuries in anticipation of a hawkish Fed.

Yields on two-year notes were down at 1.30 percent, having fallen 8
basis points overnight in the biggest daily rally since June last
year. They had been at their highest since June 2009.

The drop pulled the rug out from the dollar, which sank to a
three-week low of 100.510 against a basket of currencies.

The euro was taking in the view at $1.0727, having climbed 1.2 percent
overnight in its steepest rise since June. The dollar suffered similar
losses on the yen to huddle at 113.38.

Richard Franulovich, a forex analyst at Westpac, noted history showed
a strong positive correlation between the dollar and yields one week
after a Fed meeting and the direction and magnitude of the change in
policymakers' projected rate increases - termed dots - from meeting to

"The absence of any overt hawkish guidance from the Fed and their dots
should leave the dollar trading on the back foot over the next month,"
he said.

The yen and the Swiss franc tended to move the most in the first week,
he added, but the impact tended to be longer lasting on the Australian
and Canadian dollars.

The Aussie currency did indeed rise a rousing 2 percent in the wake of
the Fed, but took a slight knock on Thursday when local data showed
the country's jobless rate hit a 13-month peak in February.

A protracted bout of weakness for the U.S. dollar would be seen as
positive for commodities priced in the currency.

Spot gold was up at $1,224.61 an ounce, after enjoying its biggest
daily jump since September.

U.S. crude futures rose 25 cents to $49.11 per barrel, adding to a 2.4
percent gain on Wednesday. Brent firmed 30 cents to $52.11, after
rising more than a dollar overnight.

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Currency Markets at a Glance WSJ
World Currencies

Euro 1.0723
Dollar Index 100.62
Japan Yen 113.38
Swiss Franc 0.9998
Pound 1.2266
Aussie 0.7677
India Rupee 65.345
South Korea Won 1133.34
Brazil Real 3.1036
Egypt Pound 18.1005
South Africa Rand 12.8478

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"As KwaZulu-Natal, our proposition is expropriation of land with no compensation," he said in an interview Wednesday in Johannesburg.

“If we don’t agree on expropriation, we will have to take a view of
ensuring that we mobilize for a referendum.’’

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South Africa All Share Bloomberg +2.07% 2017

Dollar versus Rand 6 Month Chart INO 12.8478


Egypt Pound versus The Dollar 3 Month Chart INO 18.1005


Nigeria All Share Bloomberg -5.85% 2017


Ghana Stock Exchange Composite Index Bloomberg +11.28% 2017


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Angola's inflation slows to 38.32 percent year/year in February

Angola's inflation slowed to 38.32 percent year-on-year in February
from a revised 39.66 percent in January, data from the national
statistics agency showed on Wednesday.

Price increases on a month-on-month basis rose 2.3 percent in February
compared to a revised 2.25 percent previously.

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Inflation Is Back in Zimbabwe After 2 1/2-Year Hiatus: Chart

Consumer prices in Zimbabwe rose on an annual basis for the first time
since September 2014 last month. The 0.1 percent increase was partly
due to a 1.3 percent advance in prices of food and non-alcoholic
beverages, which account for a third of the basket. The southern
African nation, where hyperinflation peaked at 500 billion percent at
the end of 2008, abandoned its own currency and uses of a basket of
foreign exchange including the South African rand, the dollar, the
euro and the pound, as well as so-called bond notes printed by the

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The drop in annual profit was the first since Equity became a fully fledged commercial lender in 2004, according to data compiled by Bloomberg.
Kenyan Economy

Equity’s shares dropped 5.2 percent to 27.50 shillings by 12:46 p.m.
in Nairobi, bringing the decline since rates were capped in August to
more than 20 percent. A close at that level would mark the biggest
one-day slide since Aug. 29.

Non-performing loans surged to 18.8 billion shillings from 9.1 billion
shillings as loan-loss provisions almost tripled to 6.65 billion

Equity more than doubled lending to the government last year to 100.6
billion shillings. That helped boost income from investments in
government securities by 80 percent to 7.88 billion shillings. The
bank’s total loan book shrank 5 percent to 213.8 billion shillings.

“The rate caps have forced them to rebalance their assets and move
away from loan growth, which was driving earnings growth for the last
decade, to a more conservative position of holding more government
securities and retaining a more liquid balance sheet,” Francis Mwangi,
an analyst at Standard Investment Bank in Nairobi, said in an

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Housing Finance notifies watchdog of IFC 5pc acquisition
Kenyan Economy

The International Finance Corporation (IFC) is set to acquire a 5.08
per cent stake in mortgage firm HF (Housing Finance) on completion of
buying a 10.37 per cent stake in insurance firm Britam.

Britam owns 48.8 per cent of HF, part of which will now be indirectly
owned by the IFC once it buys into the insurer.

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Kenya Shilling versus The Dollar Live ForexPros 102.80
Kenyan Economy

Nairobi All Share Bloomberg -6.03% 2017


Nairobi ^NSE20 Bloomberg -6.76% 2017


Every Listed Share can be interrogated here


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N.S.E Today

Janet Yellen purred yesterday raising US interest rates a 1/4 point
but implied just 2 more dots [rate hikes] in 2017 and not 3.
The markets reacted bullishly to this and rallied across the Board.
The Rand, for example, rose to a 19 month high and is as good a proxy
for risk as anything.
Gert Wilders' electoral flop in the Netherlands was seen as bullish
for the European Project and the Euro.
The Shilling retreated off 10 week highs to trade with a 103.00 Handle
for the first time this month.
The Nairobi All Share eased back -0.54 points to close at 124.76
The Nairobi NSE20 Index eased back -5.67 points to close at 2965.31

N.S.E Equities - Commercial & Services

Safaricom was the most actively traded share at the Securities
Exchange and closed at 17.55 -1.68% and traded 9.616m shares.
Safaricom is -8.355% in 2017 but +8.00% since closing at a 1 Year Low
on the 9th of this month. The Regulator has rowed back from his
untenable position and I expect the price to rebound meaningfully from
these current levels.

TPS Serena Hotels rebounded +8.64% to close at 22.00.

N.S.E Equities - Finance & Investment

Equity Group reported FY 16 Earnings yesterday where Full Year
Earnings Per share declined -4.575% to 4.38 and the FY dividend was
unchanged at 2.00.  Equity shrank its total loan book about 5% Year on
Year and now hold 100.6b shillings worth of Government of Kenya
securities. Equity held a very forthright and robust Investor
Briefing. In that Briefing

The CFO asked ''if risk free rate (t bonds) yield more than the
cap....where is the incentive to price risk?''
Dr. Mwangi characterised the ''operating environment for banks in
2016''  as turbulent.
Dr. Mwangi confirmed Equitel did 227mn transactions, Agency 62mn
transactions, ATMs 24.8mn transactions, Branch 20.4mn transactions,
which once again confirms that the Future is digital.

Equity’s shares dropped -4.31% yesterday but rebounded +1.8% today to
close at 28.25 which leaves it -5.833% in 2017.
KCB Group closed unchanged at 29.50. KCB's dividend is worth 10.169%
and underpins the price. KCB is one of the rare Banking shares that is
positive for the Year at +2.608% in 2017.
COOP Bank ahead of an imminent FY 16 Earnings release ticked +0.389%
firmer to close at 12.90 and was trading at 13.00 1.17% at the Finish.
COOP Bank traded 4.202m shares.
DTB upticked +3.88% to close at 107.00 on just 1,200 shares.

Sanlam was high ticked +6.73% to close at 27.75. Sanlam is +0.909% in 2017.

N.S.E Equities - Industrial & Allied

KenGen firmed +0.77% to close at 6.55 and traded 7.520m shares worth
49.241m. KenGen is +12.93% in 2017 and has been seeing seriously
decent volume action in 2017. I can only assume that PIC SA are keen
on parlaying their allotted shares into a bigger stake.

EABL is in the market selling 6b shillings of 5 year paper which will
be taken up, no doubt about that. EABL firmed

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

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