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Satchu's Rich Wrap-Up
 
 
Friday 31st of August 2018
 
Morning
Africa

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The President then turns to all of us and says ''Well that means I will be gone in a week'' and he was.
Africa


we did some business there with the ''Bakrie'' Brothers who were quite
a colourful pair and deserving of a column of their own. Well in that
period 1997-1998, East Asia was gripped by a financial crisis which
started with the collapse of the Thai Baht. The Indonesian Rupiah
followed.

One morning Konishi-san called me into his Office. The Government of
Indonesia is requesting a $500m Facility. Can we do it, he asked? They
are requesting we visit Jakarta immediately. The next day, we were in
Jakarta and in the evening we were in State House with President
Suharto, His Minister of Finance and the Governor of the Central Bank,
Konishi-san and myself. I engaged with the Governor and we established
he could cobble together enough collateral and I turned to Konishi-san
and said, Yes we can. We were of course going to be rewarded very
handsomely and I had persuaded Konishi-san that not only would we make
a lot of money but they would never forget that we had pulled through
when everyone was hitting the eject Button. Konishi-san sat on the
Board of the Bank in Tokyo and started to call other Board members to
get their agreement. We were front-running a request to the IMF by the
Government.

And at that moment, The Phone rings and the Minister picks it up and
then he turns to his President and announces We have got the IMF
Package but one of the conditions is we remove all the Food subsidies.

The President then turns to all of us and says ''Well that means I
will be gone in a week'' and he was.

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Africa


"A planet without the rasping sound at midnight of a leopard call in
the forest or the cough of a male lion’s first syllable in a roar at
dawn will be an incredibly lonely one. A world where the wild has been
tamed out...would be meaningless to many of us."

read more


Filmed lioness relentlessly charging, running, splashing through huge lechwe herds all morning @dereckbeverly
Africa


Filmed lioness relentlessly charging, running, splashing through huge
lechwe herds all morning. Finally after 3 hours of wet hunting she
brings down a youngster in the water. Success for her but not much for
us. She was far away & the strong wind fights a long lens. Tomorrow...

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"I must remember about chandeliers and dancing, about swans and roses and snow." - Jean Rhys, Wide Sargasso Sea
Africa


“Our garden was large and beautiful as that garden in the Bible - the
tree of life grew there. But it had gone wild. The paths were
overgrown and a smell of dead flowers mixed with the fresh living
smell. Underneath the tree ferns, tall as forest tree ferns, the light
was green. Orchids flourished out of reach or for some reason not to
be touched. One was snaky looking, another like an octopus with long
thing brown tentacles bare of leaves hanging from a twisted root.
Twice a year the octopus orchid flowered - then not an inch of
tentacle showed. It was a bell-shaped mass of white, mauve, deep
purples, wonderful to see. The sent was very sweet and strong. I never
went near it.”
― Jean Rhys, Wide Sargasso Sea

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Law & Politics


Leading Saudi Scholar Dr Madawi Al-Rasheed calls for “Overthrow of
Saudi Regime."  Says "MBS reached the threshold of terrorising [sic]
Saudis, destroying other Arab countries, blackmailing the West- it is
time to get rid of him."

read more


13-NOV-2017 :: The then 30-year-old crown prince of Saudi Arabia Mohamed bin Salman MBS arrived on the scene and immediately launched an unwinnable war in Yemen
Law & Politics


The existential paranoia in the head of 32-year-old wannabe King is
evidenced in this comment about Iran in May this year, “How can I
communicate with them while they prepare for the arrival of al-Mahdi
al-Montazar?”

read more







A wave of African nations looking to restructure debt with China on the eve of a major Beijing summit provides a reality check for the continent @Reuters
Law & Politics


Ethiopia and Zambia, heavy borrowers from China, have expressed desire
to restructure that debt, while bankers believe Angola and Congo
Republic have already done so, though details of such deals are
sparse.

The International Monetary Fund says Cameroon, Ghana and others face a
high risk of debt distress, as does Djibouti, whose main source of
foreign loans is China, the Fund says, and which holds the majority of
external debt.

read more


''How this plays out is now the key to Sino-African relations going forward. A Hambantota scenario would be problematic" @SputnikInt
Law & Politics


"China had a singular and positive influence on Africa. It rebalanced
the demand side for Africa's commodities and also bought those
commodities on a long-term basis. It was this which triggered the
African recovery some two decades ago," Mr. Satchu told Sputnik.
"However, since then a freewheeling China Inc has favorited elites,
has facilitated large-scale looting via inflated infrastructure, some
of which were white elephants on Day One, and has lumped the African
citizen with the tab. How this plays out is now the key to
Sino-African relations going forward. A Hambantota scenario would be
problematic," Mr. Satchu said, referring to the Sri Lankan port which
has been leased to China for 99 years because the government in
Colombo was unable to pay for it.

read more


"The African states have this naivete at times that this is somehow free money," Davies said.@Reuters
Law & Politics


From 2000 to 2016, China loaned around $125 billion to the continent,
data from the China-Africa Research Initiative (CARI) at Washington’s
Johns Hopkins University School of Advanced International Studies
shows.

It is the most significant contributor to high debt risks in three
African countries, Congo Republic, Djibouti, and Zambia, CARI said
this week.

read more



The New Silk Roads are just pieces in a giant puzzle @asiatimesonline Pepe Escobar
Law & Politics


The Belt and Road is, additionally, dismissed as just a scheme to
bypass the Strait of Malacca, through which transits 75% of Chinese
exports and 80% of energy imports. In reality that happens to be only
one among myriad vectors of the scheme.

Let’s contrast BRI-bashing with three different dossiers: Malaysia,
Sri Lanka and Pakistan.

The move by Malaysian Prime Minister Mahathir Mohammad to suspend
BRI-related projects – the $20-billion East Coast Rail Link and two
pipelines worth over $2 billion – does not mean they are canceled.
This is an economic recalculation.

Malaysia may be virtually bankrupt because of the Najib kleptocracy,
but that has nothing to do with BRI. Mahathir, in fact, made it clear
he wants to strengthen the partnership with China, and he’s in favor
of the initiative. But first, he needs to balance the national budget.
Kuala Lumpur will eventually be back in BRI mode.

The same applies to one of BRI’s key connectivity projects, the
China-Pakistan Economic Corridor (CPEC). New Prime Minister Imran Khan
is bent on renegotiating some of its terms. Once again, that relates
to bad management by the previous Sharif administration and the
notorious corruption of the tax-evading Pakistani elite.

Then there’s the case of the Sri Lankan port of Hambantota. Last
December, the port – financed by Chinese investment – was transferred
to Middle Kingdom control on a 99-year lease. This has nothing to do
with a Chinese takeover, or some mischievous variant of gunboat
diplomacy. It is mostly about corruption and bad management inside Sri
Lanka’s previous government.

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Currency Markets at a Glance WSJ
World Currencies


Euro 1.1687
Dollar Index 94.67
Japan Yen 110.75
Swiss Franc 0.9678
Pound 1.3010
Aussie 0.7250
India Rupee 70.965
South Korea Won 1113.47
Brazil Real 4.1499
Egypt Pound 17.8275
South Africa Rand 14.7376

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20-AUG-2018 President Trump has apparently embraced a strong Dollar and of course coercive financial warfare and tweeted this on 16 August.
Emerging Markets


Our economy is doing better than ever. Money is pouring into our
cherished Dollar like rarely before, companies earnings are higher
than ever, infla- tion is low & business optimism is higher than it
has ever been. For the first time in many decades, we are protecting
our workers!

read more


Turkey insists economy is strong despite lira plunge @FinancialTimes
Africa


Turkey’s finance minister insisted that the country’s economy did not
face significant risks, despite the lira falling to its lowest point
in a fortnight as new data pointed to a sharp slowdown.
The embattled currency, which has lost about 40 per cent of its value
against the dollar this year, extended a slide after Turkey’s economic
confidence index slumped 9 per cent month on month to 83.9 in August.
Trade data also showed a 6.7 per cent year-on-year contraction in
imports in July.
Late on Tuesday, rating agency Moody’s downgraded 20 Turkish financial
institutions, citing heightened risk of a sudden shift in investor
sentiment. This could leave banks struggling to attract the foreign
financing that keeps the sector afloat.
However, Berat Albayrak, Turkey’s finance minister, said in remarks
published by Hurriyet newspaper on Wednesday: “We do not see a big
risk regarding the Turkish economy and financial system, as our
economy has strong fundamentals.”
At a press conference on Wednesday, he said the latest trade data
showed that a rebalancing of the current account deficit was under
way. He promised to make inflation one of his top priorities.
Mr Albayrak, the son-in-law of President Recep Tayyip Erdogan, also
announced that he would visit London next week. It is not clear if he
will meet foreign investors.
“The latest signs show that higher inflation, coupled with a severe
tightening of financial conditions, is filtering through into an
abrupt slowdown in economic growth,” said Jason Tuvey at Capital
Economics consultancy. He forecast a contraction in GDP growth of 2 to
4 per cent year on year in the final quarter of 2018 and the first
half of 2019.
The eruption of a bitter row at the start of August with US president
Donald Trump over a detained American evangelical pastor plunged the
country into a full-blown currency crisis.
Mr Trump’s decision to impose sanctions in an effort to force the
release of Andrew Brunson sent the lira spiralling. This piled
pressure on Turkey’s indebted corporates and sparked fears about wider
emerging market contagion.
The central bank has ignored calls from investors for a large interest
rate rise, fuelling the perception that it is being stymied by Mr
Erdogan. The president is a self-declared “enemy” of high interest
rates.
Paul Greer, a portfolio manager at Fidelity’s emerging market debt
fund, said he was “very underwhelmed” by the government’s handling of
the crisis.
“Turkey needs to hike policy rates aggressively, they need to resolve
diplomatic issues with the US and they need to install pragmatic
reformists, who investors trust, in the team managing the country’s
economy and finances,” he said.

read more


Emerging Markets


It turns out that Venezuela’s petro is hard to spot almost anywhere.
Over a period of four months, Reuters spoke with a dozen experts on
cryptocurrencies and oil-field valuation, travelled to the site of the
pledged oil reserves and scoured the coin’s digital transaction
records in an effort to learn more.
The hunt turned up little evidence of a thriving petro trade. The coin
is not sold on any major cryptocurrency exchange. No shops are known
to accept it.
Senior government officials have given contradictory statements.
Maduro says petro sales have already raised $3.3 billion and that the
coin is being used to pay for imports. But Hugbel Roa, a cabinet
minister involved in the project, told Reuters on Friday that the
technology behind the coin is still in development and that “nobody
has been able to make use of the petro ... nor have any resources been
received.”
The Superintendence of Cryptoassets, the government agency that
oversees the petro, is a mystery. Reuters recently visited the Finance
Ministry, where the Superintendence is supposed to be housed, but was
informed by a receptionist that it “does not yet have a physical
presence here.”

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Many ask me about link btwn "boring" macroeconomics (debt, deficits, interest rates, inflation, exchange rates etc) and refugees. @ApurvaSanghi
Emerging Markets


So here’s Exhibit A: Venezuela, where abysmal macro
(inflation~million% this year) has led to exodus of 2million
Venezuelans into ngbhrng countries!

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Can @theresa_may build a 'new partnership' with Africa post-Brexit? @FinancialTimes's @davidpilling
Africa


Theresa May’s three-nation tour of Africa, the first visit by a UK
prime minister to the continent in five years, began in Cape Town on
Tuesday where Harold Macmillan gave his famous “winds of change”
speech in 1960.
Just as when the then British leader acknowledged the need to
recalibrate a relationship with countries demanding independence, so
Mrs May spoke of a “fundamental shift” and a “new partnership”.
She sought to convince her hosts that a post-Brexit Britain could
deepen ties with nations that are seeking a more commercially driven
engagement with the world.
As if to underline what analysts say is a new urgency to engage with
Africa, Mrs May’s trip — to South Africa, Nigeria and Kenya, where she
is the first British prime minister to visit in 30 years — came as
Angela Merkel set off on her own African tour.
Since June, Narendra Modi, India’s prime minister, Recep Erdogan,
president of Turkey, and Xi Jinping, president of China, have all made
African forays. Emmanuel Macron, president of France, has visited the
continent three times since November,
In her Cape Town speech, Mrs May spoke of an Africa that was “very
different to the stereotypes”, a continent that, she said, boasted
five of the world’s fastest-growing economies — though none of them
was on her itinerary.
She won praise for cautiously backing land reform in South Africa, a
stark contrast to Donald Trump, the US president, who last week
charged into the debate with an inaccurate tweet about land seizures.
As well as sketching out commercial opportunities in a continent whose
output, Mrs May said, could double by 2030 and where one in four
people — “a quarter of the world’s consumers” as she put it — would be
living by 2050, she also defended the role of aid.
Pledging to continue spending 0.7 per cent of Britain’s gross domestic
product, she said aid not only helped vulnerable people. It also
furthered Britain’s national interest by creating stronger commercial
partners — ones less likely, she implied, to export terrorists or
illegal immigrants.
Although she conceded that Britain could not match the “economic
might” of China or the US, she emphasised the “quality and breadth” of
its offering. The 29-strong business delegation accompanying her
included companies such as Energise Africa, an off-grid solar company,
and Farm.ink, whose chatbot helps farmers raise yields.
Aly-Khan Satchu, a financial analyst in Nairobi, described the “mood
music” around the trip as “quite sweet”. One of the few commentators
to praise the prime minister’s dancing in Cape Town, he said Britain’s
colonial history gave it strong “brand equity” on the continent.
Andrew Mitchell, a former UK international development secretary,
said: “We looked as though we’d been neglecting Africa, so this offers
a chance to put that right.”
In spite of the visit’s mostly positive reception, analysts were
sceptical about the implication that trade with Africa could somehow
compensate for lost opportunities in Europe.
Dipo Salimonu, chief executive of a Nigerian fuels storage company,
said few of Nigeria’s 180m people, nearly half of whom live on less
than $1.90 a day, could afford British goods and services. “The
natural market for the UK is the EU because consumers there have far
more disposable income,” he said. “It’s futile to look for consumers
to replace those guys in this part of the world.”
The 50 countries in sub-Saharan Africa have a combined output of
$1.4tn, less than half the size of France’s economy, according to
International Monetary Fund estimates for 2018.
Mrs May said Britain aimed to be the biggest G7 investor, in stock
terms, by 2022. But in flow terms, Britain comes well down the list:
in 2017, British companies invested $2.3bn in greenfield projects
compared with $8.9bn from China.
In Nigeria, where she pledged to help fight terrorism and human
trafficking, Mrs May spelt out her hopes for a post-Brexit Britain.
“When we leave the EU,” she said, “there will be more opportunity to
increase our commercial links and trading opportunities.”
However, John Ashbourne, of London-based Capital Economics, doubted
whether a standalone Britain would have anything “magically
preferable” to offer. A quarter of African countries, said Mr
Ashbourne, already traded entirely tariff-free with Europe under an
agreement known as Everything But Arms.
Most of the rest, including Nigeria, were negotiating economic
partnership agreements with Brussels that Britain would struggle to
match without the leverage of Europe’s huge market, he said. The UK
could theoretically improve access to African farm products by
lowering food standards, he said.
Mrs May emphasised the role of the CDC Group, Britain’s development
finance institution, which, she said, would invest £3.5bn in Africa by
2022. Mr Mitchell said the CDC was becoming the best institution of
its type in the world, “making some very good investments in difficult
parts of the world and leading the way for the private sector”.
The CDC has come under criticism both for investing in projects such
as hotels and shopping centers as well as, more recently, for losing
most of its $140m investment in a Kenyan cement maker. But Mr Satchu
said it had also done good by investing in technology such as mobile
money, while making a near-11 per cent return for the British taxpayer
since 2012.
Mr Salimonu acknowledged the CDC’s positive role, but said there was a
“whiff of desperation” about Mrs May’s attempts to court Africa. The
UK could no longer count on its Commonwealth legacy, he said. “The sun
has set on that leverage, just as it did on the British empire.”

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My Mind then looped back to another Speech which was delivered to the Parliament in Cape Town on February 3rd 1960 and by a British Prime Minister Harold Macmillan who said
Africa


My Mind then looped back to another Speech which was delivered to the
Parliament in Cape Town but that speech was delivered on February 3rd
1960 and by a British Prime Minister Harold Macmillan who said

''The wind of change is blowing through this continent. Whether we
like it or not, this growth of national consciousness is a political
fact''

''Africa is not a Country'' is a ubiquitous meme and at its core is an
absolute Truth. The Continent is non-linear. Kinshasa is not Addis
Ababa is not Lagos is not Pretoria. However, ''a wind of change is
blowing through this continent''

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@theresa_may's Pledge to Become G7's Biggest Investor in Africa 'Big Ask' - Economist: @SputnikInt
Africa


Theresa May has announced plans to boost Britain's investment in
Africa after Brexit, during her first trip to the continent as prime
minister. Sputnik spoke to Sub-Saharan African political and economic
analyst, Aly-Khan Satchu, about overseas investment in the continent.
On Tuesday, August 28, in a speech in Cape Town, Mrs. May pledged £4
billion (US$5.1 billion) in support for African economies and said she
wanted to create jobs for young people and make Britain the G7's
biggest overseas investor in Africa, ahead of the US.
The British prime minister, who is due to visit Nigeria on Wednesday,
August 29, pledged to prioritize investment in Africa as she sought to
drum up trade deals with Brexit looming in March 2019.
"By 2022, I want the UK to be the G7's number one investor in Africa,
with Britain's private sector companies taking the lead," Mrs. May
told business leaders in Cape Town.
"I want to create a new partnership between the UK and our friends in
Africa built around shared prosperity," she added.
Sub-Saharan African political and economic analyst, Aly-Khan Satchu,
said Britain had a "lot of leverage" in Africa because of the historic
links from its empire and commonwealth.
"Because of its history Britain has a lot of leverage and indeed
ground-level knowledge of the continent so in a post-Brexit world it
makes sense to sweat its African equity," Mr. Satchu told Sputnik.

read more




"How this plays out is now the key to Sino-African relations going forward. A Hambantota scenario would be problematic" @SputnikInt
Africa


China remains the biggest overseas investor in Africa, but is not in the G7.
"China had a singular and positive influence on Africa. It rebalanced
the demand side for Africa's commodities and also bought those
commodities on a long-term basis. It was this which triggered the
African recovery some two decades ago," Mr. Satchu told Sputnik.
"However, since then a freewheeling China Inc has favorited elites,
has facilitated large-scale looting via inflated infrastructure, some
of which were white elephants on Day One, and has lumped the African
citizen with the tab. How this plays out is now the key to
Sino-African relations going forward. A Hambantota scenario would be
problematic," Mr. Satchu said, referring to the Sri Lankan port which
has been leased to China for 99 years because the government in
Colombo was unable to pay for it.

Zambia’s external debt rose to $9.37 billion at the end of June from
$8.7 billion in December last year, the ministry of finance said on
Thursday.

read more


ZIMBABWE: The court may have confirmed him in office, but Mnangagwa emerges from the controversial election a weakened President @Africa_Conf
Africa


In what President Emmerson Mnangagwa must reckon is the final piece of
theatre after the disputed elections, the Constitutional Court's
judgement on the opposition's petition was beamed live by state
television on 24 August. To almost no one's surprise Chief Justice
Luke Malaba and his panel of judges, all appointed by Mnanagagwa or
his predecessor Robert Mugabe, threw out the petition questioning the
Zimbabwe Electoral Commission's arithmetic and its adherence to the
constitution.
Some top lawyers found Malaba's crass partisanship beyond belief (AC
Vol 58 No 5, Whose judge is it anyway?). Not only did Malaba's panel
fail to give serious consideration to the petition but it is using the
case to weaken the opposition still further, by imposing punitive
damages on the Movement for Democratic Change for exercising its
constitutional rights at the court.
Mnangagwa's personal position is also weaker. Officially, he won with
just 50.67%, while many of his MPs won by a large margin. There are
questions around his ability to control MPs and, importantly, the
armed forces, in the wake of the military crackdown against protestors
on 1 August.
Whether Mnangagwa was really unable to control the military, or is
distancing himself from the crackdown to sanitise his image is a
matter of debate. Reuters news agency reported a fierce argument
between Mnangagwa and Vice-President Constantino Chiwenga over the
military's role during or after the elections.
Soldiers also targeted vendors and street children whom they accuse of
rioting on 1 August. Several suburban markets were burned and
bulldozed. This violence was significant not just for its intensity,
but because most of the perpetrators were in the military rather than
the ZANU-PF militia or police.  Previously the military has held
itself aloof from civilian politics, delegating political repression
to the police. In fact, many opposition supporters had been supporters
of the military as was shown in the big post-coup demonstration last
November.
At least three security groups are in contention: soldiers in units
loyal to Vice-President Chiwenga such as the Presidential Guard;
soldiers loyal to the Zimbabwe Defence Force Commander General Valerio
Sibanda; and military and intelligence officers personally loyal to
Mnangagwa as well as some of the militia which have been guarding the
mines (and benefiting from production) in the Midlands and
Matabeleland North. Security sources say there has been upsurge in
militia operations across the country over the last two years, to
protect commercial rather than political interests.
International freeze
The rigging and intimidation around the election,
and the crackdown that followed it, mean that neither the European
Union or the United States will back a resumption of international
support for Zimbabwe, in the International Monetary Fund and other
institutions. That freezes the country's situation unless Mnangagwa
can secure massive bridging finance from China, perhaps premised on a
barter deal for the country's platinum reserves. Mnangagwa's
diplomatic efforts at the Focus on China-Africa Cooperation in Beijing
on 3-4 September could prove critical.

read more


Sudan's al-Bashir meets Machar, asks rebels to initial S. Sudan deal
Africa


August 29, 2018 (KHARTOUM) - The South Sudan Patriotic Movement (SSPM)
negotiator disclosed that President Omer al-Bashir advised the
opposition groups to initial the final document and pledged to bring
their demands to the IGAD leaders.

Stephen Lual Ngor told Sudan Tribune Wednesday that the leader of the
SPLM-IO Riek Machar met with President al-Bashir on Tuesday evening to
discuss their positions from the final document.

read more


27-AUG-2018 :: The ZAR gets caught up in the CrossFire. @TheStarKenya
Africa


President Trump the linguistic and financial warfare specialist has
the Machine-Gun and the ZAR is in its line of Fire.

read more


The rand is behaving more erratically this month than it did during the height of the power struggle between Jacob Zuma and @CyrilRamaphosa in December. @BBGAfrica
Africa


The notoriously volatile currency has traded between 13.18 and 15.55
per dollar during August amid thin liquidity with many
northern-hemisphere market participants on summer vacation. This week
alone, it dipped below 14 per dollar on Tuesday after a report on the
land reform process briefly cheered traders. But by Thursday, it had
weakened above 14.50 as concerns over Turkey and Argentina weighed on
emerging-market currencies.

The rand’s one-month historical volatility is now at its highest level
since December 2016 and the currency is headed for its worst August
performance against the dollar on record, on track for a 9 percent
drop. This would also be the worst monthly performance in more than
two years.

On the other hand, the rand’s implied volatility, based on options to
buy and sell the currency, has moderated from a seven-year high,
suggesting traders expect price swings to narrow in coming weeks. But
traders may be too sanguine: the risks that helped spark the sell-off
in the currency this month, including the land issue, show no signs of
abating, a gauge by GeoQuant shows.

“The rand will remain vulnerable to both fragile local and global
sentiment,” Zaakirah Ismail, a fixed-income strategist at Standard
Bank Group Ltd., wrote in a client note dated Aug. 27. “Local policy
uncertainty will likely persist until the South African national
elections next year.”

The currency slumped as much as 2 percent on Thursday and traded 1.9
percent weaker at 14.6253 per dollar by 3 p.m. in Johannesburg.

read more






MTN shares plunge, wiping almost $3bn off the company's value, after #Nigeria's central bank orders it to transfer $8bn back to the country. @PaulWallace123
Africa


MTN shares plunge, wiping almost $3bn off the company's value, after
#Nigeria's central bank orders it to transfer $8bn back to the
country. MTN says the measure "damages investor confidence" and the
Nigerian economy.

read more




@StanChart CEO Winters Wants to 'Take a Look' at Ethiopia Banking @BBGAfrica
Africa


One emerging market has so far eluded Standard Chartered Plc Chief
Executive Officer Bill Winters: Ethiopia.

Winters, head of London-based Standard Chartered since mid-2015, would
“love to think that there are opportunities” in Ethiopia, he said in
an interview in Nairobi, Kenya. The problem is that “it’s closed to
foreign banks entirely,” he said.

“The underlying fundamentals are pretty interesting,” said Winters.
“It’d be nice if we could get in and take a look and see if we could
add some value.”

Banks across Africa are wagering that Ethiopia, one of the continent’s
fastest-growing economies, will open up a financial industry that’s
been closed to investors since a Marxist junta nationalized lenders
four decades ago. Winters’ comments echo those of Joshua Oigara, CEO
of KCB Group Ltd., Kenya’s largest bank. In June, Oigara said the
country is “ready for a major take-off.”

read more




Margaret and I hosted a State Banquet in honour of Prime Minister @theresa_may at State House. #KenyaBritainRelations @UKenyatta
Kenyan Economy


I am confident that our discussions today have deepened an already
strong relationship #KenyaBritainRelations | @FirstLadyKenya
@WilliamsRuto @10DowningStreet

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PM @theresa_may says Britain committed to free trade with Kenya after Brexit @ReutersAfrica
Kenyan Economy


Britain is committed to free trade with Kenya after it leaves the
European Union, British Prime Minister Theresa May said on Thursday on
a visit to Nairobi as her government plays up increased trade with
non-EU nations as a Brexit selling point.
“As Britain prepares to leave the European Union we are committed to a
smooth transition that ensures continuity in our trading relationship
with Kenya, ensuring Kenya retains its duty free quota free access to
the UK market,” May said.
Total trade with Nigeria, South Africa, and Kenya, the three nations
on her tour this week, amounted to just over 13 billion pounds in
2016, official British figures show, compared with 554 billion pounds
of trade with the EU that year.
Kenyatta said two agreements signed on Thursday — one to enhance
military cooperation, the other for Britain to return assets and
proceeds of corruption to Kenya — indicated the close ties between the
two countries.

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UPDATE 3-Kenya's parliament approves retaining interest rate cap, against IMF wishes @ReutersAfrica
Kenyan Economy


The Kenyan parliament voted on Thursday to retain the cap on
commercial interest rates which the International Monetary Fund has
insisted must be scrapped or modified in return for a new standby
arrangement.
In a response to emailed questions, Jan Mikkelsen, the IMF’s Resident
Representative for Kenya, said they were aware of the passing of the
finance bill and were currently assessing the implications for the
IMF-supported program.
Kenyan lawmakers also voted to delay a proposed 16 percent tax on
petroleum products for two more years, citing the high cost of living
- a move that will be a blow to government efforts to raise revenues
through higher taxes.
The rate cap, introduced in September 2016, was aimed at helping small
traders access capital at affordable rates, but has had the opposite
effect, with banks saying they cannot price risk to small and medium
enterprises (SMEs) properly while the cap is in place.
As a result, lending to the private sector fell from 9.3 percent in
2016 to 2.4 percent last year.
“Many thousands of Kenyans have been unable to access bank lending and
have turned to more expensive borrowing,” said Aly Khan Satchu, a
Nairobi-based independent trader and analyst.
President Uhuru Kenyatta said in April that he recognised the
limitation of the law and hoped that the finance bill would remove the
cap that he said had ended up hurting the financial sector.
The legislation still needs to secure presidential assent, and it was
not clear what line Kenyatta would now take.
“The president will have to crack the whip, and hard, because
notwithstanding some bravado chatter, it would not make sense to lose
the support of the IMF at a time when the markets are so skittish and
our debt-to-GDP ratio is nudging 60 percent,” Satchu said.
In June, Finance Minister Henry Rotich proposed repealing the interest
rate cap, a move cheered by bankers.
But lawmakers have continued to insist they are not ready to remove
the upper limit of commercial lending rates at 4 percentage points
above the central bank rate. Lawmakers did, however, remove the
minimum deposit rate of 70 percent of the central bank rate.
The IMF has demanded the cap be repealed as a condition for Kenya to
access its balance of payments support.
Kenya secured a six-month extension for its stand-by credit
arrangement of $989.8 million from the fund in March, and is seeking
another extension when it expires in mid-September.
Jibran Qureishi, an economist for East Africa at Stanbic Bank, said
the decision threw open the question of how discussions with the IMF
would now proceed.
“On the IMF, with the VAT on fuel being postponed, with most of the
tax measures not approved, this means the fiscal deficit is likely to
remain higher than projected,” Qureishi said. “The odds of the (IMF)
facility being retained are quite slim, but we have to see what will
happen.”
kenya’s legislature also rejected a “Robin Hood” tax of 0.05 percent
on bank transfers of over 500,000 shillings ($5,000) during Thursday’s
session and an employee contribution scheme towards the national
housing development fund.
The rejected tax hikes were designed to fund a range of government
development goals including universal healthcare and affordable
housing. (Additional reporting by George Obulutsa; Writing by Maggie
Fick; Editing by Omar Mohammed and Andrew Bolton)

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Petrol tax vote punches Sh71bn hole in budget @BD_africa
Kenyan Economy


Earlier estimates showed that the 16 per cent tax charge on petroleum
products could have earned the Treasury — which has continued to
suffer perennial budget holes — additional Sh71 billion a year. Mr
Rotich did not respond to Parliament’s vote when reached for comment.

read more


Jubilee Insurance Co reports H1 2018 EPS -1.267% Earnings here
Kenyan Economy


Par Value:                  5/-
Closing Price:           490.00
Total Shares Issued:          72472950.00
Market Capitalization:        35,511,745,500
EPS:             54.26
PE:                 9.031

Jubilee Holdings Limited H1 2018 results through 30th June 2018 vs.
30th June 2017
H1 Gross earned premium 14.191236b vs. 15.600726b -9.035%
H1 Outward reinsurance [5.311719b] vs. [5.408010b] -1.781%
H1 Net earned premium 8.879517b vs. 10.192716b -12.884%
H1 Claims and policyholder’s benefits [9.840372b] vs. [10.381180b] -5.210%
H1 Management expenses [2.114244b] vs. [2.076358b] +1.825%
H1 Investment income 4.303896b vs. 3.396164b +26.728%
H1 Operating profit 1.951141b vs. 1.761183b +10.786%
H1 Share of results of associates 470.596m vs. 578.772m -18.691%
H1 Group profit before income tax 2.421737b vs. 2.339955b +3.495%
H1 Net profit 1.859611b vs. 1.876158b -0.882%
Basic and diluted EPS 23.38 vs. 23.68 -1.267%
Total equity 26.215202b vs. 23.969051b +9.371%
Government securities 54.944239b vs. 43.236596b +27.078%
Total Assets 113.029622b vs. 101.108412b +11.791%
Cash and cash equivalents at the end of period 9.924646b vs. 9.872578b +0.527%
Interim dividend 1.00 vs. 1.00 –

Conclusions


The -9.035% slide in H1 Gross earned premium [Is this a Signal around
competitive pressures?]

read more


Bamburi Cement reports H1 2018 EPS -66.515% Earnings here
Kenyan Economy


Par Value:                  5/-
Closing Price:           183.00
Total Shares Issued:          362959275.00
Market Capitalization:        66,421,547,325
EPS:             4.54
PE:                 40.308

Bamburi Cement Limited H1 2018 results through 30th June 2018 vs. 30th June 2017
H1 Turnover 18.556b vs. 18.589b -0.178%
H1 Operating costs [17.392b] vs. [15.933b] +9.157%
H1 Operating profit 1.164b vs. 2.656b -56.175%
H1 Investment income 65m vs. 97m -32.990%
H1 Other gains and losses [458m] vs. [62m] -638.710%
H1 Profit before tax 722m vs. 2.663b -72.888%
H1 Profit for the period 399m vs. 1.839b -78.303%
EPS 1.47 vs. 4.39 -66.515%
Interim dividend 1.00 vs. 2.50 -60.000%
Cash and cash equivalents at the end of the period 2.860b vs. 7.405b -61.377%
Equity attributable to owners of the company 28.312b

Commentary

The first half of the year was challenging as the market in Kenya
continued to contract closing 8% behind the prior year in a high
external cost environment.
Uganda was negatively impacted in the first quarter by production
challenges and product availability while the second quarter was
negatively impacted by competitive pressure as all major Players
recorded extra capacity and slowdown in government expenditure.
Uganda Audit identified a number of balance sheet write offs amounting
to 315m with no cash impact.
higher power, coal and raw materials costs as well as the impact of
the balance sheet write offs in Uganda.
large unrealised forex losses amount to 465m mainly on a $14m loan
taken in Uganda to partly finance the capacity expansion and dollar
denominated payables.

Conclusions


from a Macro cement consumption perspective -8.00%-10.00% in cement
consumption year on year.

read more


The cement maker said the expansion increased its annual production capacity by 1.8 million tonnes in Uganda and Tanzania. @bd_africa
Kenyan Economy


In Kenya, expansion of the Athi River and Mombasa plants plant is
expected to increase the company’s annual capacity to 3.2 million
tonnes or 50.79 per cent of Kenya’s annual cement consumption. “The
results showed mixed performance, with Kenya experiencing a
contracting market closing at eight per cent behind the prior year,”
said the firm in a statement.

read more


@SanlamKenya reports H1 2018 EPS [10.5] share data
Kenyan Economy


H1 Impairment of financial assets [1.152329b] vs. –

Conclusions

The Question is whether they have taken the whole hit

read more



Housing Finance reports H1 2018 EPS -95.604% Earnings here
Kenyan Economy


Par Value:                  5/-
Closing Price:           7.05
Total Shares Issued:          352416667.00
Market Capitalization:        2,484,537,502
EPS:             0.36
PE:                 19.583

HF Group PLC H1 2018 results through 30th June 2018 vs. 30th June 2017
H1 Investments in government securities 4.029249b vs. 3.434773b +17.308%
H1 Loans and advances to customers (net) 47.593741b vs. 52.768234b -9.806%
H1 Total assets 65.510228b vs. 71.622852b -8.534%
H1 Deposits and current accounts 36.594462b vs. 37.439549b -2.257%
H1 Borrowings 15.638584b vs. 21.619292b -27.664%
H1 Total Equity 11.136966b vs. 11.304186b -1.479%
H1 Net interest income 1.343150b vs. 1.559214b -13.857%
H1 Total income 1.929966b vs. 1.983696b -2.709%
H1 Credit impairment charges [228.135m] vs. [380.866m] -40.101%
H1 Income after impairment charges 1.701831b vs. 1.602830b +6.177%
H1 Total operating expenses [1.689206b] vs. [1.371679b] +23.149%
H1 Profit before tax 12.625m vs. 231.151m -94.538%
H1 Profit for the period 6.828m vs. 159.012m -95.706%
H1 Basic and diluted EPS 0.04 vs. 0.91 -95.604%
Cash and cash equivalents at period end 2.176646b vs. 6.726089b -67.639%
Net NPL and Advances 5.407977b vs. 5.065696b +6.757%
Liquidity ratio 20.88% vs. 26.40%-5.520%

Company Commentary


total operating expenses increased by 9.4% to 1.92b from 1.75b on the
back of continued provisions for non-performing loans, ICT and
marketing expenses.
Customer deposits declined by 3%
Loans and Advances to Customers decreased by 9.8% to 47.59b
Market conditions have largely not changed and have greatly impacted
the performances of various units within the group including banking
subsidiary HFC and property development subsidiary HFDI

Conclusions


high beta and at the sharp end of the Rate Cap structure.

read more


B.O.C Kenya Ltd reports H1 2018 EPS +33.79%
Kenyan Economy


Par Value:                  5/-
Closing Price:           94.00
Total Shares Issued:          19525446.00
Market Capitalization:        1,835,391,924
EPS:             2.02
PE:                 46.535

BOC Kenya Ltd. H1 2018 results through 30th June 2018 vs. 30th June 2017
H1 Revenue 487.130m vs. 515.631m -5.527%
H1 Earnings before finance income and taxes 43.044m vs. 42.551m +1.159%
H1 Net finance income 33.355m vs. 27.780m +20.068%
H1 Exchange gains/ [Losses] 7.961m vs. [9.304m] +185.565%
H1 Profit before tax 84.360m vs. 61.027m +38.234%
H1 Profit for the year 57.301m vs. 42.710m +34.163%
Basic EPS 2.93 vs. 2.19 +33.790%
Interim dividend 2.35 vs. 2.20 +6.818%
Cash and cash equivalents at the end of the period 118.262b vs.
102.173m +15.747%
Total Assets 2.286717b vs. 2.307739b -0.911%
Total Equity 1.645585b vs. 1.728469b -4.795%

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Deacons reports H1 2018 EPS [2.16] Earnings here
Kenyan Economy


Par Value:
Closing Price:           0.75
Total Shares Issued:          123558228.00
Market Capitalization:        92,668,671
EPS:             -6.82
PE:                 -0.110

Deacons (East Africa) PLC H1 2018 results through 30th June 2018 vs.
30th June 2017
H1 Revenue 378.073m vs. 1.077695b -64.918%
H1 Net operating profit 54.024m vs. 333.572m -83.804%
H1 Expenses [264.024m] vs. [523.969m] +49.504%
H1 EBITDA [210.561m] vs. [190.397m] -10.591%
H1 Net foreign exchange [loss]/ gain 22.361m vs. 17.450m +28.143%
H1 Profit from continuing operations [266.504m] vs. [257.746m] -3.398%
H1 Profit before taxation [266.504m] vs. [257.746m] -3.398%
H1 [Loss] from discontinued operations [61.410m] vs. –
H1 Profit before tax from continuing operations [327.913m] vs.
[257.746m] -27.223%
H1 Total comprehensive income for the period [229.539m] vs. [180.422m] -27.223%
H1 Basic and diluted EPS [2.16] vs. [2.09] -3.349%
Total Assets 1.137149b
Cash & cash equivalents at end of period [120.424m] vs. [80.154m] -50.241%

Commentary

The overall retail trading environment during the period was
characterised by extraordinary and exceptional events that adversely
affected the business.
1. Loss of Revenue from discontinued operations amounting to 529m [MRP
formed over 50% of our business]
2. Performance was largely affected by cash constraints
3. Retail Space reduced from 190,341 square feet in 2017 to 69,614 in 2018
4. non-performance of major anchor tenants
5. aggressive sale offers in Q2 reduced average gross margins

Issues a Profits Warning


restructuring capital base and has appointed an Investment Bank to
advise on overall Strategy

read more


Kenya Shilling versus The Dollar Live ForexPros
Kenyan Economy


Nairobi All Share Bloomberg +0.64% 2018

http://www.BLOOMBERG.COM/quote/NSEASI:IND

Nairobi ^NSE20 Bloomberg +0.64% 2018

http://j.mp/ajuMHJ

Every Listed Share can be interrogated here

http://www.rich.co.ke/rcdata/nsestocks.php

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