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Satchu's Rich Wrap-Up
 
 
Thursday 18th of January 2018
 
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Africa

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.@Barclays_Kenya Kenya Economic Outlook #BbkEcon2018
Africa


Global growth of 3.9% in 2017 would be the fastest since 2011, and
there are signs of further modest acceleration into early 2018
Growth looks to be largely synchronised, suggesting a resilient recovery

Home Thoughts

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"The sky, at sunset, looked like a carnivorous flower." - Roberto Bolano, 2666
Africa


“The truth is we never stop being children, terrible children covered
in sores and knotty veins and tumors and age spots, but ultimately
children, in other words we never stop clinging to life because we are
life.” ― Roberto Bolaño, 2666

“Still, American television is full of smiles and more and more
perfect-looking teeth. Do these people want us to trust them? No. Do
they want us to think they're good people? No again. The truth is they
don't want anything from us. They just want to show us their teeth,
their smiles, and admiration is all they want in return. Admiration.
They want us to look at them, that's all. Their perfect teeth, their
perfect bodies, their perfect manners, as if they were constantly
breaking away from the sun and they were little pieces of fire, little
pieces of blazing hell, here on this planet simply to be worshipped.”
― Roberto Bolaño, 2666

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Iran's Supreme Leader accuses Saudi Arabia of committing 'treason' against Muslims with US alliance
Africa


Iran’s supreme leader has accused Saudi rulers of committing “treason”
against Muslims by aligning themselves with the United States and
Israel.

Addressing parliamentary representatives from Islamic countries
gathered in Tehran, Ayatollah Ali Khamenei said the US decision to
recognise Jerusalem as Israel’s capital was “a big mistake” and
“doomed to failure”.

“Regional governments that are cooperating with the United States and
the Zionist regime to fight against Muslims are certainly committing
treason. That is what Saudi Arabia is doing,” Khamenei said, according
to his official website.

Conclusions

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"At this point, it's not clear what constitutes corruption, what the penalties are for corruption, what evidence there is and what constitutes evidence," said James Dorsey
Law & Politics


“At this point, it’s not clear what constitutes corruption, what the
penalties are for corruption, what evidence there is and what
constitutes evidence,” said James Dorsey, a Middle East specialist at
Singapore’s Nanyang Technological University. “What one sees is
fly-by-night arrests on unknown grounds during which pressure is
increased until the detainee accedes to financial and restrictive
terms dictated to him.

read more


The Middle East, as we all know, is a place of djinns, ghosts, Crusaders, Saracens, Apocalypses, 12th Imams and Christ figures and bearded men in caves @Independent
Law & Politics


There really is no point any more in talking about Donald Trump or US
foreign policy. They do not exist.

International Markets

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Currency Markets at a Glance WSJ
World Currencies


Euro 1.2186
Dollar Index 90.89
Japan Yen 111.42
Swiss Franc 0.9648
Pound 1.3810
Aussie 0.7957
India Rupee 63.905
South Korea Won 1068.81
Brazil Real 3.2238
Egypt Pound 17.7205
South Africa Rand 21.3134

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Bitcoin Sinks Below $10,000 to Bring Monthlong Rout to 50% 11,430 Last
World Currencies


Bitcoin tumbled below $10,000, bringing its loss to almost 50 percent
from a record set only a month ago, as increased scrutiny from
regulators around the world weighs on the digital-coin craze.

The largest cryptocurrency dropped 10 percent to $9,610.05 as of 9:33
a.m. in New York, its first foray below $10,000 since Dec. 1,
according to consolidated pricing data collated by Bloomberg. It has
fallen from a record $19,511 reached Dec. 18, and seen more than $140
billion shaved off its market value.

The selloff this week brings more trauma to a digital-coin market that
has lost more than $300 billion in value just since Jan. 13. After a
dizzying rally pushed Bitcoin higher by 1,400 percent last year, the
latest plunge cast doubt on the viability of cryptocurrencies and the
blockchain technology that underpins it.

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27-NOV-2017 :: Bitcoin "Wow! What a Ride!"
World Currencies


Or as T.S Eliot said in The Hollow Men
Between the idea
And the reality
Between the motion
And the act
Falls the Shadow
For thine is the Kingdom.

One of the few men to get out in time before the Wall Street crash of
1929 did so – legend has it – because he was offered a stock tip by
the boy who shined his shoes. He immediately sold all his holdings. If
the mania for gambling on the stock market had reached down to the
children on the streets, the bubble must have been due to pop at any
moment. The corresponding moment for the cryptocurrency bubble will
only be discernible in retrospect, but we have some pretty strong
candidates already.  The endorsement of one project by the reality TV
star Paris Hilton has already happened.’’
There are many cryptocurrency schemes which are sold on the same
grounds as the greatest South Sea Bubble prospectus:
“For carrying on an undertaking of great advantage, but nobody to know
what it is.”
My investment thesis at the start of the year was that Bitcoin was
going to get main-streamed in 2017. It has main-streamed beyond my
wildest dreams, therefore, I am now sidelined.
Let me leave you with Hunter S. Thompson, “Life should not be a
journey to the grave with the intention of arriving safely in a pretty
and well preserved body, but rather to skid in broadside in a cloud of
smoke, thoroughly used up, totally worn out, and loudly proclaiming
“Wow! What a Ride!”

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02-JAN-2018 :: In November, I turned bullish on Oil and am forecasting a further run higher towards $65 a barrel in New York
Commodities


In November, I turned bullish on Oil and am forecasting a further run
higher towards $65 a barrel in New York. The portfolio will therefore
look to bag that gain in 2018. Once we strike that level the portfolio
will switch to flat. I expect this gain to be booked in the first
quarter which gives us a substantial gain when you annualise it.

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AFRICA: RESULTS OF 2017 AND PROGNOSES FOR 2018 Alexandr Dugin @A_G_Dugin
Africa


The fact is, that the Chinese have shown that they can also organise
colour revolutions. This is very important and will have meaning in
2018.

In 2017, the EU, US, China, India, and Japan continued their battle
for influence in Africa. The US mainly uses military mechanisms. In
2008, the US Armed Forces created an African command. It is formally
responsible for counter-terrorist operations and the training of
African soldiers. According to data acquired by American journalist
Tom Engelhart, in 2015 the US had base points in 24 African countries.

In 2017, Japan, India, and China, which normally depend on investment
mechanisms, did not hold any large summits with the participation of
African countries (if we do not count invitations for Kenya and Egypt
to the BRICS summit in the DRC). In November 2017, in the capital of
Cote D’Ivoire of Abidjan, a joint EU-African Union summit was held.
Leaders of European countries promised to raise investment in Africa
and also solve the problem of African slaves in Libya. Emmanuel Macron
even proposed the creation of special police forces to evacuate the
unfortunates, but there haven’t been any concrete actions as of yet.

The Red Sea is one of the key places of the world’s oceans. Those who
controls it in many ways controls world communications. The Red Sea,
Bab-el-Mandeb Gulf, and Horn of Somalia are very important places in
Atlanticist geopolitics. As is known, the Soviet Union under Brezhnev
had naval bases in Yemen which were removed under Yeltsin, and now
both sides in the civil war are asking Russia to if possible
re-establish its bases. The Kremlin isn’t in a hurry to do this,
doesn’t insist on reopening the bases, and for the time being
considers this an expensive move, perhaps even a dangerous one with
the conditions of the civil war.

Nonetheless, in some form the presence of the Russian fleet in the Red
Sea and the Bab-el-Mandeb Gulf will become more stable and solid, be
it in the form of a base in Sudan or the use of UAE bases in Eritrea,
Somalia, or Yemen.

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Addis Ababa's plans expose rivalry with Cairo for regional power; 'Egypt cannot live without the Nile'
Africa


The world’s longest river, a lifeline for hundreds of millions of
people, is also fast becoming a fault line.

read more


Lourenco Proves He's No One's Puppet in Angola
Africa


Shortly after becoming president of Angola in September, Joao Lourenco
did something completely unexpected: he stopped at a red light.

The incident prompted thousands of social-media users to praise the
63-year-old former army general for abiding by the law. In October,
Lourenco waited in line at a KFC restaurant to buy a burger, and then
this month, photos surfaced of him and his wife Ana Dias strolling on
a beach in the capital, Luanda.

Few predicted the sharp contrast in leadership style with his
predecessor, Jose Eduardo dos Santos, who rarely left the pink
presidential palace from where he ruled Africa’s second-biggest oil
producer for almost four decades. When he did emerge, hundreds of
soldiers swarmed the city center to allow his convoy to move swiftly
through the pot-holed streets, leaving traffic paralyzed for hours.

“He’s been a very positive surprise,” said Soren Kirk Jensen, an
independent Angola expert. “There’s been a profound change of style,
from a completely closed style to a completely open one. More
importantly, he’s initiated much-needed economic reforms by addressing
dysfunctionalities in the way the market works due to unnatural
monopolies that happened to be controlled by certain families.”

The first high-profile official to be removed was central bank
Governor Valter Filipe, a lawyer Dos Santos appointed the previous
year.

Then came the bombshells. He fired both Dos Santos’s billionaire
daughter, Isabel, as chairwoman of state oil company Sonangol, and
Jose Filomeno dos Santos, one of his sons, as head of Angola’s $5
billion sovereign wealth fund.

Lourenco also replaced the boards of several state-owned companies
loyal to Dos Santos, and canceled multimillion dollar contracts for
the management of Angola’s public television channels with two other
Dos Santos children.

“The leadership change in Angola is radical,” said Nuno Borges, who
heads the country’s car dealers’ association, Acetro. “People are no
longer scared to speak out about corruption. There’s a lot more
transparency.”

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Angola to issue $2 bln Eurobond in 2018 to ease debt burden
Africa


Angola plans to issue a Eurobond and renegotiate bilateral debt in
2018 as part of a series of measures aimed at restructuring the
economy and controlling mounting debt payments, a government
macroeconomic plan showed.

President João Lourenço took power in September and is seeking to win
credibility with international investors and shed Angola’s image as an
opaque oil economy with rampant corruption. The government earlier put
the Eurobond’s size at $2 billion.

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02-JAN-2018 :: I like what I am seeing in Angola
Africa


I like what I am seeing in Angola. I am keen on being long on Angolan
risk. The devil is in the detail of the execution, however. I would
probably look to be long Angola Eurobonds.

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The currency is now down almost 20 percent against the dollar this year to around 205, though its still much stronger than its black-market rate of 450 against the greenback.
Africa


The government said on Tuesday it would repay arrears of $5 billion to
contractors by 2019 and plans to tap the international bond market by
the end of June. Lourenco’s new central bank governor, Jose de Lima
Massano, also weakened the kwanza another 11 percent against the euro,
bringing its total drop to about 25 percent since the nation scrapped
a peg last week that was put in place in early 2016. The currency is
now down almost 20 percent against the dollar this year to around 205,
though its still much stronger than its black-market rate of 450
against the greenback.

The extra yield investors demand to hold Angolan debt over U.S. bonds
is 399 basis points, compared with the 347 average for sub-Saharan
Africa, according to JPMorgan Chase & Co. indexes.

“You can see it as cheap versus its sub-Saharan African peers,” said
Edwin Gutierrez, Aberdeen’s head of emerging-markets sovereign debt.
“Other than Zambia, it’s the only other major one still at about 400
basis points. And unlike Zambia, it’s doing a lot of the right things
to get an IMF deal. Whether it actually wants an IMF deal remains
uncertain.”

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S.African regulator pursues criminal complaints against SAP, KPMG, McKinsey
Africa


South Africa’s companies registry office is pursuing criminal
complaints against SAP, KPMG and McKinsey on suspicion that business
they conducted with friends of President Jacob Zuma broke the
companies act, it said on Wednesday.

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"Once in a while, something doesn't turn out the way we want because that's what the definition of taking risk is," @BankofAmerica CEO Brian Moynihan #Steinhoff
Africa


Steinhoff International Holdings NV’s accounting scandal is getting
costly for U.S. banks.

Four of the nation’s biggest U.S. lenders disclosed more than $1
billion mark-to-market losses and charge-offs on margin loans and
other debt tied to the embattled South African retailer in their
fourth-quarter results. Citigroup Inc. led the pack with about $370
million, followed by Bank of America Corp.’s $292 million.

Loans tied to embattled retailer Steinhoff have weighed on U.S. bank results

Shares of Steinhoff lost about 90 percent of their value last month
after it announced Dec. 5 that it had uncovered accounting
irregularities. The disclosure also prompted the resignation of Chief
Executive Officer Markus Jooste and Chairman Christo Wiese. Steinhoff
this month said it’s seeking “significant near-term liquidity” for
some business units.

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Zimbabwe finance minister says "bond notes" to stay for now
Africa


Zimbabwe will not stop using “bond notes”, a domestic quasi-currency,
until the economy fully recovers, Finance Minister Patrick Chinamasa
said on Wednesday.

“Bond notes will stay until we have our own local currency,” Chinamasa
told a business meeting in Harare.

The conditions needed to bring back a local currency include foreign
currency reserves of more than three months, a lower budget deficit
and higher exports and industrial production, Chinamasa said.

The bond notes, which are also in short supply, are pegged at par with
the U.S. dollar but trade at a discount on the black market. On
Wednesday $1 was equivalent to $1.25 in bond notes.

read more


Each time Patrick Okello goes to tend his crops, he has to tell the soldiers or face 50 lashes with a whip when he returns.
Africa


Equatoria was once South Sudan’s breadbasket, producing the corn,
sorghum and vegetables that fed the nation including the oil-rich
north where famine hit last year. Since fighting spread to Equatoria
in mid-2016, output has collapsed, adding to what charity Oxfam
International says is the likelihood of the country’s worst-ever
hunger this year. The conflict that began in December 2013 has claimed
tens of thousands of lives.

“Fighting and insecurity in Greater Equatoria means that food
production is dropping every year,” said Ranjan Poudyal, Oxfam’s South
Sudan director. “Farmers who have managed to stay are only able to
cultivate land around their homesteads for fear that lands further
afield are too great a risk.” That contributed to unprecedented hunger
even during the recent harvest season, normally the most plentiful
period.

Kenya

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.@Safaricom, @KenGenKenya, @stanchartke and @Barclays_Kenya
Africa


Here in Kenya, the Portfolio will stay long Safaricom (I believe
geographical expansion and the e-commerce opportunity have not yet
been baked into the price - I look for 30%), KenGen (about 35% -
dividend passes have weighed a little) and some Standard Chartered and
Barclays Bank (more than 25%) and a small slice of higher beta via
Uchumi.

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@Safaricomltd at a record high
Africa


Par Value:                  0.05/-
Closing Price:           29.00
Total Shares Issued:          40065428000.00
Market Capitalization:        1,161,897,412,000
EPS:             1.21
PE:                 23.967

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EU suspends Sh3.6bn funding over Singer evictions
Africa


The European Union has suspended Sh3.6 billion funding for a water
tower conservation programme following death of a herder in forceful
eviction of the Sengwer, a tribe living in Embobut forest in Western
Kenya.
Kenya Forest Service (KFS) guards are said to have used excessive
force during the evictions intended to pave the way for a European
Union-funded project seeking to protect water catchment areas in the
Western Kenya region.
The EU had warned the government that continued use of force by KFS
against innocent locals would lead to suspension of its financial
support for conservation work on the country’s water towers.
“Accordingly, we are now suspending the support to the Water Towers
Programme with the Government of Kenya,” said Stephano Dejak, head of
EU delegation in Kenya.
On Monday, United Nations experts called on Kenyan authorities to halt
the fresh wave of forceful evictions of the Sengwer that started late
December.
The UN noted more than 100 armed forest service guards had invaded
traditional lands of the Sengwer in the Embobut forest, firing
gunshots, burning at least 15 homes and killing their livestock.
The six-year programme seeks to end poverty through enhancing the
productivity of ecosystem services in two of Kenya’s five water towers
– Mt Elgon and Cherangany and its ecosystems covering eleven counties.
The Sengwer hunter-gatherers have for five decades fought with the
government for the right to live in the Embobut forest in the
Cherengany Hills from where they were first evicted by British
colonialists in the 19th century.
The community is reported to have moved back into the forest after
they were evicted and compensated in 2014.
“The EU insists on full respect for the rights of indigenous people,
and the conservation work on the water towers was never expected to
involve any evictions or use of violence,” said Mr Dejak.

read more



 
 
N.S.E Today


You will recall my article from 27th November about crypto-currencies
and I quoted Hunter S. Thompson
 “Life should not be a journey to the grave with the intention of
arriving safely in a pretty and well preserved body, but rather to
skid in broadside in a cloud of smoke, thoroughly used up, totally
worn out, and loudly proclaiming “Wow! What a Ride!”
Investors in crypto-currencies have endured a white-knuckle ride of
late. At one point yesterday BITCOIN tumbled below $10,000, bringing
its loss to almost 50 percent from a record set only a month ago.
The selloff this week brings more trauma to a digital-coin market that
has lost more than $300 billion in value just since Jan. 13 through
yesterday before a rebound which feels like a ''dead cat'' bounce.
Citi said last week that A bitcoin wipe-out would generate meaningful
[negative] wealth effects in Russia, NZ, Nigeria, and Kenya. Citi was
measuring BITCOIN in those countries as a % of GDP.
The Dollar Index hit 3 year lows earlier this week.
The Rand is trading at 2 and 1/2 Year highs versus the Dollar on
''Ramaphosa'' optimism.
The Nigeria All Share is the best performing Equity Index world-wide
and was +17.37% in 2018 through tis morning.
It is predictable and predicted that the GOK will sell a Eurobond in
the quantum of $1.5b-$2b in short order.
The Eurobond markets remain benign for Sovereign SSA Issuers.
The Nairobi All Share closed +0.82 points higher at 178.49.
The Nairobi NSE20 rose 7.79 points to close at 3705.97.



N.S.E Equities - Agricultural


Sasini Tea and Coffee has joined Kakuzi  in growing macadamia and
avocado for export. Sasini Tea and Coffee reported a FY Revenue
acceleration of +17.66% but a -41.085% decline in FY earnings per
share at the end of last week. Sasini Tea popped +3.809% higher to
close at 27.25 on light trading.
Kapchorua Tea was the biggest gainer at the Exchange today and rallied
+8.4% and closed at 71.00.



N.S.E Equities - Commercial & Services


Safaricom firmed +0.86% to close at a Fresh record high of 29.25 and
traded 9.393m shares worth 275.011m. Safaricom has surged a blistering
+9.345% in 2018.

According to inside sources, Nation Media Group is set to lay off
about 150 employees. NMG rowed back -1.83% to close at 107.00 and
traded 76,900 shares.

Kenya Airways was marked down -4.00% to close at 15.60 but on light
trading of 88,100 shares.



N.S.E Equities - Finance & Investment


KCB Group was the most actively traded share at the Securities
Exchange and closed unchanged at 45.25 [+5.84% Year To Date] and
traded heavy volume of 10.807m shares worth 491.436m. Exotix gave the
share a fillip and said the following in a research note
''With the bank able to access cheap retail deposits and possessing
negotiating capacity with corporates, we expect the bank to sustain
NIM (net interest margin) above 8.5 per cent and outperform its peers.
With this, we expect net interest income to average 10 per cent growth
over the next three years''
Equity Group pushed +1.17% higher to close at 43.25 and traded 1.251m
shares. Equity Group is +8.8% in 2018.
Barclays Bank firmed +1.53% to close at 9.95 and interestingly was
trading at session highs of 10.50 +7.14% at the closing bell. Barclays
Bank traded 4.203m shares and is +3.64% through 2018.
DTB closed +1.52% higher and regained the 200.00 mark. DTB is +4.1666% in 2018.
NIC Bank closed unchanged at 34.00 but was trading at 36.50 +7.35% at
the Finale. NIC Bank traded 566,300 shares and Cytonn continues to
build out its position. NIC is +0.74% in 2018.



N.S.E Equities - Industrial & Allied


KenGen Kenya eased 5cents to close at 8.20 and traded 209,700 shares.
Buyers mopped up the excess supply at these levels just last week.

KenolKobil traded 2.367m shares and turned +0.68% higher to close at
14.70. The underlying metrics of the business continues to trend
positively.



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