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Satchu's Rich Wrap-Up
Friday 03rd of August 2018

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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

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A massive losing bet on Bitcoin futures has investors buzzing @crypto

A huge wrong-way bet on Bitcoin has left an unidentified futures
trader unable to cover their losses, putting counterparties at risk
and threatening to dent confidence in one of the world’s largest
cryptocurrency venues.

The more than $400 million long position in Bitcoin futures was
amassed on OKEx, a Hong Kong-based exchange that’s ranked No. 4 on
Coinmarketcap.com’s list of the biggest crypto platforms, according to
a person familiar with the matter, who asked not to be named because
he isn’t authorized to speak about the issue with the media. While
OKEx has moved to liquidate the position, it has so far been unable to
cover the trader’s shortfall amid a down market for Bitcoin this week,
the person said.

Bitcoin, the biggest cryptocurrency by market value, dropped 3.2
percent to $7,309 at 3:20 p.m. Hong Kong time on Friday, extending its
decline this week to 11 percent. It has slumped 49 percent this year.

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A volcanic eruption and lightning storm combine for a surreal shot - photographer Francisco Negroni:

A volcanic eruption and lightning storm combine for a surreal shot—a
rare (& dangerous) glimpse into some of nature’s most extreme forces,
shot by (brave) photographer Francisco Negroni:

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How China's empire of money is reshaping global trade
Law & Politics

Xi calls the grand initiative “a road for peace.” Other world powers
such as Japan and the U.S. remain skeptical about its stated aims and
even more worried about unspoken ones, especially those hinting at
military expansion. To assess the reality of Belt and Road from the
ground up, Bloomberg Markets deployed a team of reporters to five
cities on three continents at the forefront of China’s grand plan.

What emerges is a picture of mostly poor nations—laggards during the
past half-century of global growth—that jumped at the promise of
Chinese-financed projects they hoped would help them catch up. And yet
as some high-profile ones falter and the cost of their Chinese funding
rises, would-be beneficiaries from Hambantota, Sri Lanka, to Piraeus,
Greece, are questioning the long-term price. In Malaysia, one of the
biggest recipients of Chinese investment in Southeast Asia, newly
installed Prime Minister Mahathir Mohamad is pushing back. Expressing
concerns about loan conditions and the use of Chinese labor that limit
benefits to the local economy, he’s put billions of dollars of
Chinese-­funded rail and pipeline projects on hold.

Xi intends a century-long enterprise. China has already outspent the
post-World War II U.S. Marshall Plan, measured in today’s dollars.
Within a decade, according to Morgan Stanley estimates, China and its
local partners will spend as much as $1.3 trillion on railways, roads,
ports, and power grids. “Economic clout is diplomacy by other means,”
says Nadège Rolland, Washington-based senior fellow for political and
security affairs at the National Bureau of Asian Research. “It’s not
for today. It’s for mid-21st century China.”

Belt and Road, says Michael Every, head of financial markets research
for Rabobank Group in Hong Kong, is “a political special sauce. ... If
you drizzle it on anything, it tastes better.”

At first, the sauce whetted the appetites of many developing countries
in Asia and Africa. As the notion of a modern Silk Road gained
traction, Belt and Road meandered into places that had never had any
connection with ancient caravans. This year it reached South America,
the Caribbean, and even the Arctic.

The growing web of trade routes, including the Silk Road Economic Belt
and the Maritime Silk Road Initiative, now extends into at least 76
countries, mostly developing nations in Asia, Africa, and Latin
America, together with a handful of countries on the eastern edge of
Europe. With most global trade moving by sea, it’s no surprise that
many of the first places to lock up major Chinese investments were
ports along with pipelines and other transport links that connect
shipping to markets.

China’s plans to build or rebuild dozens of seaports, especially
around the Indian Ocean, have sounded alarm bells in Washington and
New Delhi: How many of those docks will end up hosting Chinese
warships? Just as mighty navies and global networks of military bases
helped support trading empires for Britain in the 19th century and the
U.S. in the 20th century, so China is building a fleet of submarines,
aircraft carriers, and warships that will rival U.S. power.

Hambantota, Sri Lanka

In a southern Sri Lankan jungle, Dharmasena Hettiarchchi plucks green
chile peppers that grow in the shade of banana trees. His grandfather
tended the same patch of land when this island was the British colony
of Ceylon. Hettiarchchi takes a break from the heat under a teak tree,
removes his wide-brimmed hat, and says, “If a jeep with Chinese
characters comes down the road, the whole village will gather in

Hettiarchchi’s village and the surrounding town of ­Hambantota have
become a cautionary tale for Xi’s Belt and Road aspirations. The idea
was to take an inconsequential harbor visited by fewer than one ship a
month on average and turn it into a modern, bustling seaport adorning
a southern Belt and Road maritime route. It hasn’t turned out so well.

After Sri Lanka elected Hambantota native Mahinda Rajapaksa as
president in 2005, he began sprinkling development projects across the
region, one of the least-developed parts of this nation of 21 million
people. Even long before Belt and Road was officially embedded in
Chinese government policy, Beijing was eager to lend a hand, and
Chinese loans financed Rajapaksa’s munificence. Hambantota (population
at the time 11,200) got a new port, an international conference
center, a cricket stadium, and an airport that, despite all the staff
on show, doesn’t service a single scheduled flight.

To fund the projects here and others all across Sri Lanka, the
Rajapaksa government fell deep into debt. The port at Hambantota, for
example, was partly funded during the Rajapaksa administration by a
loan from the Export-Import Bank of China. By the time Rajapaksa was
voted out of office in 2015, more than 90 percent of Sri Lanka’s
government revenue was going toward servicing debt.

Last year, with Xi’s Belt and Road plan in full flow, a new Sri Lankan
government moved to ease the debt. In return for $1.1 billion, it
basically handed the seaport over to China. Under a 99-year lease
agreement, the government gave 70 percent ownership of the port to
China Merchants Group, a state-owned company with revenue bigger than
Sri Lanka’s economy.

China Merchants has promised to revive the port and turn it into a
major regional trading hub. But some local people have had enough of
promises. “All these huge projects are a waste,” says Sisira Kumara
Wahalathanthri, a local politician who opposes the current Sri Lanka
government. “No ships are coming to the port. No flights are coming to
the airport.”

Gwadar, Pakistan

Surrounded by desert in southwest Pakistan there’s a stone arch
bearing a single name, Al-Noor. Farther along a desolate road, a black
shipping container has been painted to tell you where you are: Gwadar
Creek Arena.

Al-Noor and Gwadar Creek are planned housing ­developments—emphasis on
“planned.” There’s nothing here yet. The same goes for White Pearl
City, Canadian City, Sun Silver City, and other residential tracts on
the drawing boards. What you see are billboards, lots of them, as
speculators and developers carve out future projects on the
sun-blasted outskirts of an old fishing village named Gwadar.

Gwadar is a city of dreams made in China. Beijing is pouring money
into highways and roads, a hospital, a coal-fired power plant, a new
airport, a special economic zone along the lines of Shenzhen, and,
crucially, the port.

Mombasa, Kenya

Astride his boda boda, or motorcycle taxi, at a crossroads in Mombasa,
Simon Agina is counting containers on a passing train that’s heading
to Nairobi: “… 82, 83, 84.”

There are plenty of freight containers back where those came from—and
much more besides. The port of Mombasa, Kenya’s import lifeline, is a
heaving mass of traffic of all sorts. Trucks line up quayside to move
shipping containers from the docks to the railway. Three-wheeled
tuk-tuks weave dangerously between other vehicles through hot, dusty
streets filled with noise and litter.

Kenya’s largest port is also its oldest. So in 2011, with the ancient
British colonial-era Mombasa-to-Nairobi narrow-gauge railway falling
into disrepair and Beijing in the market for African investments,
Kenya made its move. It agreed to let China finance and build a
standard-gauge railway at a cost of $3.8 billion. The Mombasa-Nairobi
SGR, as it’s called, is the nation’s largest infrastructure project
since independence from Britain in 1963.

Atanas Maina, managing director of Kenya Railways, says more than
30,000 Kenyans were employed directly on the project, which was run by
China Road and Bridge Corp.; an additional 8,000 worked for

The first paying passengers rode the line in June last year. Along its
293-mile journey, the SGR rumbles across almost 100 bridges and
viaducts, many designed to allow the lions, zebras, and other wildlife
that inhabit two national parks, Tsavo East and Tsavo West, to cross
under the tracks.

Freight trains like the one Agina saw from his boda boda began running
in January. “Those are 84 trucks off the road,” he says as the
containers whiz by. The railway cuts the ­Mombasa-Nairobi trip to five
hours, down from more than eight by truck. Five freight trains a day
were making the journey during spring. The number could eventually
increase to 12, removing as many as 1,700 of the 3,000 trucks that
currently ply the route.

Like any major infrastructure project, the rail line has its
detractors. The economist and government critic David Ndii says it’s
not commercially viable, while a Kenyan newspaper, the Standard,
accused China Road and Bridge of “neo-colonialism, racism and blatant
discrimination” in its treatment of local employees; Kenya Railways
subsequently said it would investigate the allegations.

Trucking companies, whose business grew steadily as the old railway
decayed, are now worried about the loss of customers. Vanessa Evans,
managing director of Rongai Workshop & Transport Ltd., says the SGR
could have been a plus for the Kenyan economy in the long run, but
poor coordination at the Mombasa and Nairobi rail terminals causes
cargo backups and delays. The new rail line, she says, “has nearly
destroyed our business because the turnaround time varies between not
good and awful. We have been in agony for the past five months.”

The train that pulls out of Nairobi Railway Station each morning at 8
o’clock, with noteworthy punctuality, is called the Madaraka Express.
In Swahili, “madaraka” means power or responsibility; Madaraka Day, a
national holiday, celebrates self-rule. If the old railway was a relic
of Kenya’s British colonial past, the new one, built with Beijing’s
money, could be seen as a harbinger of a new kind of imperial reach.

It’s a blue-suited Chinese instructor who makes sure the female train
attendants—uniformed in the colors of the Kenyan flag—are standing in
a nice straight line as passengers board. China financed 90 percent of
the SGR’s $3.8 billion cost. And the giant Chinese Communications
Construction Co. will operate the rail line for its first decade.

The area around the station thrums with activity as construction
pushes ahead on houses, container yards, and warehouses. Along the
route to Mombasa, gleaming steel-and-glass stations stand out against
clusters of tiny houses with rusty corrugated iron roofs and mud
walls; the contrast encourages the locals “to dream big,” says Maina.

Michael Ndungu, 21, a student who studies in Mombasa and visits the
capital on weekends, used to take the bus. “The SGR has made my life
much better,” he says. “It is faster and definitely safer.” In Mombasa
the surge in passengers—1.3 million during the first six months of the
year—has been good for the economy. “Business is good,” says Stephen
Kazungu, a 26-year-old taxi driver.

The newly laid track, the trains, the stations—“You don’t see that
kind of infrastructure development in this part of the country,” says
Agina, the 22-year-old boda boda driver, as the freight train fades
into the distance. “This is amazing.” —Samuel Gebre

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Thank you Zimbabwe! I am humbled to be elected President of the Second Republic of Zimbabwe @edmnangagwa
Law & Politics

Though we may have been divided at the polls, we are united in our dreams.

This is a new beginning. Let us join hands, in peace, unity & love, &
together build a new Zimbabwe for all!

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"uncomfortable truth that, eight months after Mugabe was ousted, the army remains the pre-eminent political force," said Piers Pigou
Law & Politics

“Deployment of troops reveals the uncomfortable truth that, eight
months after Mugabe was ousted, the army remains the pre-eminent
political force,” said Piers Pigou

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26 Jul 2018 Actually I think @POTUS has taken Xi down a few notches.
Law & Politics

Actually I think @POTUS has taken Xi down a few notches. @ianbremmer
and in what is a game of Chicken has open Xi's eyes to the downside
risk which looks precipitous and of a Fat Tail nature

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26 Jul 2018 The method in his madness is the triangulation of China and a serious ratcheting higher of pressure. Xi is looking more brittle. #BRICS2018
International Trade

@BarackObama spoke of bending the Arc of History whereas @Potus bends
the Arc of Reality but having said that the method in his madness is
the triangulation of China and a serious ratcheting higher of
pressure. Xi is looking more brittle. #BRICS2018

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09-JUL-2018 :: Tariff wars, who blinks first? @TheStarKenya
International Trade

James Dean was an iconic American Actor, who tapped into the universal
yearning and Angst of nearly every adolescent human being with a raw
connection that has surely not been surpassed since. In one of his
most consequential Films, Rebel without a Cause, Two players (read,
teenage boys) decide to settle a dispute (read, teenage girl) by way
of near-death experiences. Each speeds an automobile towards a cliff.
A simple rule governs the challenge: the first to jump out of his
automobile is the chicken and, by universally accepted social
convention, concedes the object in dispute. The second to jump is
victorious, and, depending on context, becomes gang leader, prom king,

Jimmie (James Dean), to settle a dispute (read, teenage girl) with
Buzz, the leader of a local gang, agrees to a "Chickie Run." Both race
stolen cars towards the edge of a cliff. The first to eject out of his
car is branded a "chickie." Seconds into the race, Buzz discovers that
his jacket is stuck on the door handle, making jumping out of the car
somewhat difficult.
Jimmie jumps out an instant before the cars reach the edge of the
cliff. Buzz, still unable to free his jacket from the door handle,
fails to escape. While he won't be branded a "chickie," he suffers a
worse fate.

President Trump after bashing on Justin Trudeau of Canada and Mexico's
Enrique Peña Nieto [now upended, of course] and then firing a few
broadsides at Europe, has now turned his attention to Xi Jinping and
thrown him the Keys challenging him to a "Chickie Run." and also sent
Two US Destroyers Into the Taiwan Strait For the First Time Since

China has accused US president Donald Trump of launching the “largest
trade war in economic history”

President Trump has seemingly always fancied his chances in this Trade
War business and said as much. He is unhappy with America's $376
billion deficit in goods trade with China and a system of Trade which
he believes advantages China.Trump and his advisers argue the tariffs
are necessary to pressure China into abandoning unfair practices such
as stealing intellectual property and forcing American companies to
hand over valuable technology. Washington put tariffs on $34 billion
worth of Chinese goods on Friday, and Beijing immediately responded
with penalties of an equal scale. The cost of the new tariffs can be
found in the roughly 1,300 individual products that have suddenly
become more expensive. The Chinese Government has been quite surgical
in its response and is targeting the Farm Economy in particular.

Oxford Economics has estimated tariffs will knock around 0.1 to 0.2
per cent off each country’s growth rate this year which struck as a
complacent and very binary prediction. Oxford Economics' prediction is
assuming no further escalation and a correlation which is not proven.
The US is calculating that its Economy is blowing hot and it therefore
can make Xi Jinping jump.

Trump described the potential escalation to reporters aboard Air Force
One: "Thirty-four, and then you have another 16 in two weeks and then,
as you know, we have 200 billion in abeyance and then after the 200
billion we have 300 billion in abeyance. OK?" Trump said. "So we have
50 plus 200 plus almost 300."

That amount is higher than an earlier threat from Trump to target as
much as $450 billion of Chinese exports. It's also bigger than the
$506 billion of goods that the United States imported from China last

If we see such an escalation, Its a sure thing the hit to GDP is going
to be more than the 0.1% to 0.2% Oxford Economics' ''Don't worry be
happy'' prediction. In fact, I recall speaking to a Standard Chartered
Macro Economist who said the precursor to this Trade War was witnessed
in the 1930s and then the world Economy cratered. The global trade
wars that followed the harsh tariffs imposed by the Hoover
administration in the early 1930s following the stock market crash of
1929, deepened the trough of the Great Depression. Worldwide economic
hardship led to political restructuring and eventually to World War

This is a multi-dimensional Chess Board, however. China has yanked
PyongYang's Leash. The KCNA reported that Pompeo was sent packing with
a few choice phrases:

"The U.S. is fatally mistaken if it went to the extent of regarding
that the DPRK would be compelled to accept, out of its patience, the
demands reflecting its gangster-like mindset."

Emerging and Frontier Markets have surfed higher on lashings of cheap
money [now being reversed] and on expanding Global Trade and GDP.
Cheap money is being reversed.

''EM currencies need the liquidity that the big CBs are starting to
take back - buying EM into the teeth of this epic liquidity drain is
not a cute contrarian trade - it is suicide unless you think it is a
ruse and they all stay easy'' @pineconemacro

And if We get a fully blown Tariff War, its going to a double whammy
for the Emerging and Frontier Markets Universe.

Who will blink first?

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China dethroned by Japan as world's second-biggest stock market @Schuldensuehner
International Trade

China dethroned by Japan as world's second-biggest stock market.
Nation surrenders #2 ranking taken from Japan in late 2014. But
Shanghai stock gauge one of the world's worst performers this year.

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Currency Markets at a Glance WSJ
World Currencies

Euro 1.1575
Dollar Index 95.24
Japan Yen 111.71
Swiss Franc 0.9948
Pound 1.2997
Aussie 0.7362
India Rupee 68.765
South Korea Won 1127.54
Brazil Real 3.7501
Egypt Pound 17.8755
South Africa Rand 13.4474

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What raw materials can tell us about the trade war

The Bloomberg Commodity Index, which measures returns on 22 raw
materials from aluminum to zinc, dropped more than 10 percent, peak to
trough, from May through July for its sharpest decline over a
comparable period in more than two years. In that time span, the U.S.
enacted tariffs on $34 billion worth of Chinese goods and threatened a
further $500 billion of imports, and China struck back at Trump’s
political base with tariffs targeting products such as those grown by
farmers in the Midwest. Here’s another measure: A basket of six
industrial metals fell 11 percent in the first seven months of this
year, according to data from the London Metal Exchange. The Bank of
England says metal prices can be used to preview the growth in the
world’s gross domestic product.

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#DRC govt spokesman Lambert Mende confirms to me that there is an arrest warrant out for @moise_katumbi and he will be arrested "as soon as he enters Congolese territory".

#DRC govt spokesman Lambert Mende confirms to me that there is an
arrest warrant out for @moise_katumbi and he will be arrested "as soon
as he enters Congolese territory". He also denied Katumbi had
submitted a request to land at Lubumbashi.

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Rand reels as hawkish Fed and trade war add to investor worries

The currency fell as much as 2.2 percent, the most in emerging
markets, and traded 1.2 percent down at 13.3725 per U.S. dollar by
3:44 p.m. in Johannesburg, its weakest level since July 23 on a
closing basis. Yields on benchmark government bonds due December 2026
climbed six basis points to 8.66 percent.

“It is a combination of mainly external factors: general sour global
risk sentiment driven by renewed trade jitters between China and the
U.S., and the stronger dollar on the back of the Fed meeting
yesterday,” said Jakob Christensen, a Copenhagen-based analyst at
Danske Bank A/S. “Given the rand is a more liquid emerging market
currency, it takes a beating more than other emerging-market
currencies when sentiment is hit.”

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Eritrea, Africa's most repressive state, begins to open up

Mr Isaias, the only president since independence, appears to be
gambling that he can bring Eritrea out of international isolation
without weakening his grip on power. On July 30th the former guerrilla
chief restored ties with Somalia. There is little sign that he plans
to introduce political reforms, such as implementing the constitution
drawn up in 1997 but shelved with the outbreak of war. Eritrea has
never had a national election and parliament has not met since 2002.
Mr Isaias governs alone, surrounded by a clique of ageing veterans of
the independence struggle. In a café on a tree-lined avenue in Asmara,
a 40-year-old conscript points to a photograph of the president on his
phone. “You see this man?” he asks. “That man is a dictator.”

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Kenya's finance minister and a cabinet colleague should be investigated over the way they handled sugar imports @ReutersAfrica
Kenyan Economy

The report by parliament’s agriculture and trade and industries
committees said Finance Minister Henry Rotich and Adan Mohamed, who is
now East African Community minister but was previously minister for
Trade, Industry and Cooperatives, should be investigated over the
sugar imports last year.

The report said Rotich had authorised imports that led to a market
oversupply of more than 450,000 tonnes of sugar.

It said Mohamed had failed to supervise the country’s standards
agency, which falls under the ministry he ran, leading to imports of
sugar that was not safe for human consumption.

Rotich did not answer calls from Reuters seeking comment. Mohamed said
he had not seen the report and would comment once he had seen it.

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Williamson Tea reports FY 2018 Earnings here
Kenyan Economy

Par Value:                  5/-
Closing Price:           135.00
Total Shares Issued:          17512640.00
Market Capitalization:        2,364,206,400
EPS:            27.86
PE:             4.84

Williamson Tea FY Results
FY Turnover 3.984971b versus 3.416340b +16.644%
FY Profit via existing operations 660.635m versus [362.162m]
Biological Assets 37.754m versus 5.112m
FY Finance Income 43.838m versus 25.586m
FY share of results of Associated Companies 65.829m versus [20.480m]
FY Profit before Tax 810.056m [351.944m]
FY Profit after Tax 502.769m versus [261.593m]
FY EPS 27.86 versus [13.73]
FY Dividend 20/= a share

Company Commentary

Favourable Weather and improved Prices


Incredibly cheap share on an Earnings and a NAV basis.

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Kapchorua Tea reports FY 2018 Earnings here
Kenyan Economy

Par Value:                  5/-
Closing Price:           72.00
Total Shares Issued:          7824000.00
Market Capitalization:        563,328,000
EPS:             21.27
PE:              3.385

FY Earnings through 31st March 2018
FY Turnover 1.429341b versus 1.292123b
FY Profit [loss] from existing operations 214.165m [136.968m]
FY Increase in Fair Value 48.067m versus 59.791m
FY Profit before Tax 257.238m versus [72.323m]
FY Profit After Tax 166.405m versus [51.769m]
FY EPS 21.27 versus [6.62]
FY Dividend 10/= a share


Cheap real cheap on an Earnings, NAV and dividend Pay Out Basis.

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Kenya Shilling versus The Dollar Live ForexPros 100.31
Kenyan Economy

Nairobi All Share Bloomberg -0.25% 2018

Nairobi ^NSE20 Bloomberg -11.13% 2018

Every Listed Share can be interrogated here

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by Aly Khan Satchu (www.rich.co.ke)
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August 2018

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