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Satchu's Rich Wrap-Up
Friday 23rd of February 2018

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Macro Thoughts

Home Thoughts

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"There is no story that is not true." - Chinua Achebe, Things Fall Apart

“Storytellers are a threat. They threaten all champions of control,
they frighten usurpers of the right-to-freedom of the human spirit --
in state, in church or mosque, in party congress, in the university or
wherever.” ― Chinua Achebe, Anthills of the Savannah

“Until the lions have their own historians, the history of the hunt
will always glorify the hunter.” ― China Achebe

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This Male lion crossed from Laikipia with his brothers

“There was a saying in Umuofia that as a man danced so the drums were
beaten for him.” ― Chinua Achebe, Things Fall Apart

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Eastern Ghouta crisis: Russia considers ceasefire in Syria after UN plea independent

Russia has said it will consider supporting the UN-proposed ceasefire
in Syria as long as it does not cover Isis and al Qaeda-linked groups.

A 30-day nationwide ceasefire is possible as long as it does not cover
Isis, the Nusra Front and other groups "who are shelling residential
quarters of Damascus", Foreign Minister Sergei Lavrov said on


The Russian Modus Operandi in these matters is to flatten it
completely - See Grozny

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North Korea's Kim Yo Jong emerges from the shadows @FT
Law & Politics

Before she became the global face of North Korean diplomacy, Kim Yo
Jong was better known for avoiding the limelight.

That changed in February when the North Korean dictator dispatched his
sister — who is believed to be 30 — to South Korea for the first visit
by a member of the Kim dynasty to its southern neighbour.

The trip was hailed as a “charm offensive”, with many international
media outlets praising the smiling Ms Kim for softening the image of
the notorious regime in Pyongyang.

In reality, Ms Kim is an integral part of the dictatorship.

Officially, she is the deputy director of the Propaganda and Agitation
Department of the Worker’s Party of Korea, a role that charges her
with crafting and bolstering the image of her brother and the nation.

Unofficially, she is a close adviser to Mr Kim and is believed to be
one of his most trusted confidantes. Ms Kim’s importance to the
Pyongyang regime was evident in Seoul last week when she met South
Korean president Moon Jae-in. Despite the presence of 90-year-old Kim
Yong Nam — North Korea’s ceremonial head of state — it was Ms Kim who
led discussions, sitting directly opposite Mr Moon.

She was also scheduled to meet Mike Pence, the US vice-president, in
what would have been the highest level meeting between the two
adversaries for almost two decades, but pulled out just hours before
the talks were to begin.

“For Kim Jong Un, Kim Yo Jong is the most reliable person at this
moment,” says Lim Jae-cheon, an expert in North Korea’s dynastic
politics at Korea University. “More than anybody else in the
delegation [to the South], her advice is the most valuable and

Ms Kim, meanwhile, took to earning her other brother’s trust by
managing his security, schedule and public appearances.

At this time, she began appearing in state media photography, often
taking copious notes from Kim Jong Un’s speeches or lurking
inadvertently in the background.

For analysts, the nature of these appearances speak volumes about how
Ms Kim treats her brother: she wants to support but never outshine

Her reward came last October when she was promoted to the nation’s
politburo — a move that experts interpreted as Kim Jong Un cementing
dynastic control over North Korea. Only months earlier she had been
sanctioned by the US Treasury department for her role in the regime’s
human rights abuses.

Lee Yoon-keol, a North Korean defector who now heads the North Korea
Strategic Information Service Center in Seoul, says that while she is
trusted by her brother, Ms Kim is disliked by North Korean officials,
many of whom are more than twice her age.

“It is known that there are frequent conflicts . . . due to her
personality and her know-it-all attitude. She is known to be
condescending, arrogant and foul-mouthed,” he said.

In some ways, Ms Kim’s career echoes that of her aunt, Kim Kyong Hui.

As a sister to Kim Jong Il, the elder Ms Kim also rose to prominence,
eventually joining the politburo in the position that Kim Yo Jong now

However, her luck ran out in 2013 when Kim Jong Un had her husband —
Jang Song Thaek — executed for treason. Kim Kyong Hui has not been
seen since.

They were not the only members of the ruling family to meet an
unpleasant end. A year ago, Kim Jong Nam — the estranged half brother
of Kim Yo Jong and Kim Jong Un — was assassinated with VX nerve agent
while travelling in Malaysia.

The killing was a brutal reminder to all, including Kim Yo Jong, not
to challenge the supreme leader in Pyongyang.

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After the 'Peace Olympics,' time for the war games? @asiatimesonline
Law & Politics

1. Why are the 2018 Winter Olympics so critical, in political terms?

They have offered a breathing space amid unprecedentedly high
peninsular tensions. Following a furious and very personal war of
words between North Korean leader Kim Jong-un and US President Donald
Trump, North Korea test-fired a ballistic missile in November 2017. It
had the range to reach all of the United States. Analysts are divided
over how close North Korea is to possessing a full nuclear deterrent –
questions hang, particularly, over its re-entry vehicles and targeting
systems – but there is now a clear and present danger to the
continental US. This changes the game for the Seoul-Washington
alliance. Since the Korean War wound up in 1953, the alliance has been
designed to defend South Korea against North Korea. Now, the US is
also in North Korea’s crosshairs. Accordingly, the Trump
administration has made the North Korea crisis the centerpiece of its
foreign policy.

2. What does South Korean President Moon Jae-in want?

Since taking power in May 2017, the liberal Moon has consistently held
out for dialogue with North Korea. His wishes were answered in January
when North Korea announced that it would come to the Games. Moon wants
to use the contacts and goodwill established during the Olympics to
provide a springboard for post-Games talks to reduce tensions. Moon’s
argument has been persuasive, with US President Donald Trump following
his lead and agreeing to halt military exercises during the Games.

3. What does North Korean leader Kim Jong-un want?

Given the opacity surrounding North Korean governance, we cannot say
for sure. But it is widely believed he wants the following:

Relief from global sanctions in the near-term
The halting of spring allied military drills in the mid-term
To leverage Seoul away from Washington in the long-term. He may also
want a peace treaty with the US, and the establishment of diplomatic

4. What does US President Donald Trump want?

North Korean denuclearization. The question is how to achieve it. Thus
far, largely diplomatic options have been exercised, and Trump has
said he would be willing to talk to Kim personally. However, there is
increasing talk in Washington of some kind of pre-emptive strike
against North Korean facilities, designed to degrade key links in its
nuclear and missile manufacturing chains, and against certain military
assets, such as missile launch sites, mobile launchers and command and
control nets.

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19-FEB-2018 :: The Wind of Change @TheStarKenya
Law & Politics

‘’Africa is not a country’’ is a ubiquotious 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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Currency Markets at a Glance WSJ
World Currencies

Euro 1.2284
Dollar Index 89.99
Japan Yen 107.09
Swiss Franc 0.9359
Pound 1.3935
Aussie 0.7817
India Rupee 64.855
South Korea Won 1079.93
Brazil Real 3.2503
Egypt Pound 17.6950
South Africa Rand 11.6916

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WTI Crude Oil @TCommodity 62.70

Emerging Markets

Frontier Markets

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$14 Billion Order Book Shows Investors Still Crave African Bonds

When Kenya started a series of meetings with some of the world’s
biggest bond investors in the U.S. and London last week, it was in the
midst of a political crisis. On the day the roadshow started, Moody’s
Investors Service downgraded the nation’s credit, and then the
International Monetary Fund divulged that the government had lost
access to an emergency $1.5 billion facility after missing fiscal

Never mind: investors placed $14 billion of orders when Kenya came to
the market on Wednesday, allowing it to issue $2 billion of 10- and
30-year securities at 7.25 percent and 8.25 percent, respectively.

Kenya continued Africa’s blazing start to the year in the Eurobond
market. Egypt and Nigeria each attracted $12 billion of orders when
they sold $6.5 billion of debt between them last week. Even with
benchmark U.S. Treasury yields heading for 3 percent as the Federal
Reserve continues along its policy-tightening path, African dollar
debt -- which offers some of the highest sovereign yields globally --
still has plenty of buyers.

There could be more to come from the continent. Ivory Coast is said to
have chosen BNP Paribas SA, Citigroup Inc., Deutsche Bank AG and
Societe Generale SA to manage a sale of euro-denominated debt. On
Tuesday, Ghana’s finance minister said he may double his target for an
upcoming deal to $2 billion. And South Africa said it plans to raise
as much as $3 billion in each of the next three fiscal years.

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Switzerland imposes sanctions on allies of Congo's Kabila

Switzerland imposed sanctions including asset freezes and travel bans
on 14 allies of Democratic Republic of Congo’s President Joseph Kabila
on Wednesday amid a worsening political crisis linked to his refusal
to step down.

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The edifice cracks @Africa_Conf

First a concession, then a crackdown. The ruling party's divisions
over how to respond to growing revolt are on show

After the most tumultuous week in Ethiopian politics for years, which
included the resignation of Prime Minister Hailemariam Desalegn,
hardliners appear to be reasserting themselves in the accustomed

The critical step in that process came on 16 February as the Council
of Ministers approved the imposition of another state of emergency, to
last an initial six months. The previous one, first declared in
October 2016, was finally lifted last August (AC Vol 57 No 21, Ruling
party ploughs on). The latest authoritarian measure came after mass
prisoner releases were followed by further violent unrest, a strike in
Oromia that choked Addis Ababa, and Hailemariam's sudden move. It
created the impression of a government about to topple.

Furthermore, the increasingly argumentative four regional parties in
the ruling Ethiopian Peoples' Revolutionary Democratic Front (EPRDF)
are apparently some way from agreeing who should replace Hailemariam.
Given the volatile security situation, including ethnic killings,
there was a strong risk that what could be a fairly open contest for
the premiership would lead to further instability.

Oppositionists blame the unrest on persistent refusal by the
pre-eminent party in the EPRDF – the Tigray People's Liberation Front
(TPLF), which controls the military and the national intelligence
agency – to relinquish power.

The first sign of the drama to come was the decision in early January
to release political prisoners who had been jailed for years on
paper-thin terrorism charges. More than 6,000 inmates were reportedly
freed, including many who had been rounded up after fatal protests in
the Oromia, Amhara and Southern Nations, Nationalities, and Peoples'
Region from November 2015 onwards. The move followed an EPRDF
Executive Committee decision towards the end of last year to free
opposition members to help widen democracy. It is possible
Hailemariam's fate was also sealed at that meeting.

With the Command Post handed control of national security, and
constitutional rights such as due process, freedom of assembly and
much freedom of expression suspended, any immediate prospect of reform
has been blocked. This makes it likely that anger will increase as
even more Ethiopians give up hope that the TPLF and EPRDF will ever
allow any significant moves to liberalise politics, especially in
Oromia. However, the EPRDF's management of the transition will also be
vital in the short term.

Many critics thought that this month's events would pave the way for
an Oromo prime minister, who, it was assumed, would be the OPDO's
chair and regional president, Lemma Megersa. He has been the most
successful EPRDF figure in the past 12 months, managing to impress a
swathe of political players and observers with his dynamism, fresh
thinking and ability to connect with EPRDF stalwarts, diaspora
activists and the masses across Ethiopia (AC Vol 58 No 21, Rifts in
the regions).

With the clamour for change growing, and the security state buffeted
by repeated crises, the EPRDF will need to listen to the people's
wishes while ensuring change is orchestrated in a way that forestalls
further destabilisation. Last week's chaotic events are another
indication that it may be too difficult for the beleaguered ruling
front to chart this course.


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Does Ethiopia's New State of Emergency Dash Hopes for Reform? HRW

Ethiopia’s constitution requires that two-thirds of the members of the
House of Peoples’ Representatives approve any state of emergency
within 15 days. In the recent past, this would have been a rubber
stamp vote, given that the legislative body has no opposition members.
But the resurgence of the Oromo People’s Democratic Organization, the
Oromia region party within the ruling coalition, means a two-thirds
majority is not a certainty and that there could be a fierce and
polarizing debate on who will be the next prime minister. Resolution
of both questions will send an important signal as to whether the
Ethiopian government will continue to rely on repression to stifle
calls for change or embark on a meaningful process of reform.

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South Africa Notebook: After Zuma's fall, and life on the Little Karoo Rian Malan @spectator

In recent years, living in South Africa has been a bit like having
cancer. The malaise eating us from within was corruption and there
seemed to be no cure, which is why there was no dancing in the streets
when our dreadful president, Jacob Zuma, was finally eased out of
office on Valentine’s Day. For me, it felt as if the entire nation was
hobbling out of hospital after a long and painful stay, almost too
weak to walk, but very surprised and grateful to discover that it had
somehow survived. So I didn’t dance in the streets. But I did spot a
local ANC leader standing in the sun outside the general store. I
hobbled over and shook his hand. ‘Comrade,’ I declared. ‘Well done!’
We talked for a while about the way forward and for once, found
ourselves in agreement about almost everything. The new president,
Cyril Ramaphosa, is a good chap. With any luck, he might just manage
to muck out the giant pile of ordure left behind by his predecessor.

There are quite a lot of those here in Van Wyksdorp, an obscure
village perched on the edge of a vast, brutal aridity at the eastern
end of the Little Karoo, population 833. It hasn’t rained properly
here in years. The grass around farm dams rustles with thirsty snakes,
and baboons are gathering on the outskirts of town, looking for fields
or orchards to raid. Farmers are struggling too, but the spring on the
mountain keeps giving water, so for the moment we’re OK. So what
prompted me to move to a village hardly anyone has heard of? Well, it
was Zuma’s fault really. At the start of last year, our peasant
president veered sharply leftward, embracing a dog-Marxist ideology
that envisaged seizure of land without compensation and other bold
blows against what remained of the white-dominated economy. I was
convinced that the true aim of this ‘rapid economic transformation’
campaign was to enable Zuma to rid himself of irritants like rule of
law and a free press and turn himself into Robert Mugabe. I thought,
bugger this, time to get out of here, hence my decision to retreat to
the desert, where I planned to equip myself with guns and night-vision
goggles and mount a doomed last stand.

Looking back, it seems I folded my hand a bit quickly. Zuma’s campaign
did not go as planned. His first error was to rely on a British PR
firm to spread his toxic RET message. That didn’t go down well in
South Africa, especially once it emerged that Bell Pottinger was being
paid by the Guptas, a family of carpetbagging Indians who clearly
envisaged that the ripest fruits of economic transformation would fall
into their own greedy hands. This alienated youthful radicals and
forced Zuma to seek support from Black First Land First, a thuggish
grouping of Hutu-style radicals who were supposed to spearhead the
struggle against ‘white monopoly capital’. But then it turned out that
the BFL was also financed by the Guptas, and by mid-year, Zuma had
become a laughing-stock, at least for urban Africans and those with
enough nous to see through his machinations. Elsewhere in the world,
he would have been ousted at this point, but a web of patronage
sustained him until mid-December, when Ramaphosa managed to take
control of the ruling party. Zuma tried to dig in, but Ramaphosa has a
silver tongue and a winning personality, and by 14 February he’d
somehow winkled the incumbent out of power.

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Oxfam's troubles began when it became politically correct It should stick to providing clean water and food @Oxfam @AidanHartley @spectator

In the early 1980s when I was a schoolboy, my father, Brian Hartley,
worked for Oxfam during a famine in Uganda’s Kara-moja. Like Dad, the
other Oxfam people I remember in East Africa were earnest
agriculturalists or engineers who had been overseas most of their
lives. Some of them were religious or socialist, but they all had the
technical skills to help local farmers rebuild their lives after wars
or droughts.

The focus was on development. Like my dad, most were sandal-clad
volunteers who worked for the charity for free. They helped farmers
cultivate better crops or breed improved livestock to stop soil
erosion, vaccinate cattle, plant trees and dig boreholes.

Around the turn of the century, during Tony Blair’s government,
everything suddenly changed. UK charities like Oxfam had failed to
move on from the cycle of emergency to sustainable development, and
yet the crises were getting bigger and nastier and the do-gooders had
never been in such demand. Budgets exploded. Aid groups got so much
money they could hardly keep up with the ‘burn rate’, which is what
they call the need to spend funds before the end of a financial year
so that donors do not cut the flow of future cash.

During my visits to these offices, I have wondered how often many of
these aid workers ever visit what they call ‘the field’. They attend
workshops, seminars and even retreats, but they are not the old
technicians in dusty sandals we once knew.

Suddenly Oxfam became like a large corporation with 19 global
franchises — last year it raised £408 million in donations — and this
created its own momentum to raise yet more money. Fundraising by
itself gobbled up £26 million of Oxfam annual revenue, and the media
became a key tool for mobilising more cash.

Meanwhile, there was a gradual shift of emphasis from development work
in the field towards ‘advocacy’ and what Oxfam calls ‘influencing’.
The year before last, Oxfam says it spent an incredible €67 million on
‘a worldwide influencing network’ to ‘support progressive movements at
all levels’.

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Zambia's finmin says to continue engaging @IMFNews on debt management

Zambia has no other options

Cityscape! 🏾🇹🇿 by @dhlaxman Thanks for sharing this great shot


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Seychelles swaps debt for groundbreaking marine protection @AP

CURIEUSE ISLAND, Seychelles (AP) — With deep blue waters, white sand
beaches and rich marine life, the tiny island nation of the Seychelles
is announcing a pioneering marine conservation plan as part of a debt
swap deal with creditors.

In an agreement described as the first of its kind, the Indian Ocean
nation popular with tourists is designating nearly a third of its
waters as protected areas, aiming to ensure the longevity of its
unique biodiversity.

The archipelago’s 115 islands have been isolated by continental land
masses for millions of years. The Aldabra atoll, a UNESCO World
Heritage Site, is home to the world’s largest population of giant
tortoises, critically endangered sea cows and spawning grounds for a
number of rare species. But overfishing has hurt.

The government on Wednesday signed a bill restricting nearly all human
activity in the waters around Aldabra and overall setting aside more
than 210,000 square kilometers (81,081 sq. miles) as protected areas.
The areas around Aldabra will ban all extractive uses such as fishing
and petroleum exploration; the rest will be restricted to sustainable
practices. The plan will be completed by 2021.

“A great honor and privilege,” the country’s environment minister,
Didier Dogley, said at the signing.

The deal with the country’s creditors was brokered by U.S.-based The
Nature Conservancy and involved a $1 million grant by the foundation
of actor Leonardo DiCaprio.

At the height of its debt crisis in the late 2000s, the Seychelles was
one of the world’s top debt-ridden countries. Its sovereign debt
peaked at nearly $1 billion, according to the World Bank. Today the
debt stands at less than half of that, according to the finance

The deal allows for a certain amount of money to be repaid into a
trust fund to support conservation-related projects, organizers said.

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02-NOV-2015 The Seychelles @TheStarKenya

I am writing this article from Mahe, which is the one of 115 islands
that make up the Seychelles archipelago, which lies 1,500 Kilometres
off East Africa.
Seychelles has a population of 90,024 and that is the small- est
population of any independent African state.
The minister for Finance, Trade and The Blue Economy Jean-Paul Adam
informed me that the Seychelles receives tourists three times its
population every year.
If Kenya was to receive the same ratio of tourists, we would be
welcoming 120 million tourists a year. The minister described to me
how the Seychelles navigated the 2008 financial crisis [debt to GDP
soared close to 125 per cent] and the Republic defaulted, but now runs
an annual surplus of over five per cent.

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Kenya insists it will implement reforms to extend IMF deal @FT
Kenyan Economy

Kenya’s finance minister has promised to implement contentious reforms
demanded by the International Monetary Fund to extend a frozen $1.5bn
emergency standby facility that expires next month.

Henry Rotich told the Financial Times that he will halve the
government’s budget deficit by June 2021 and repeal or reform an
18-month-old cap on bank lending rates that has resulted in a massive
fall in loans to the private sector.

The announcement comes two days after the IMF said that Kenya’s access
to the standby facility, which is designed to alleviate a balance of
payments crisis, had been suspended since last June. The fund had
blocked access because it had been unable to conduct a review amid a
prolonged political crisis over disputed presidential elections.

“We don’t need the IMF resources at the moment but we need a
precautionary or insurance arrangement,” Mr Rotich said. “So we’d
definitely like to continue with the same facility.”

He said he would curb spending and boost revenue to reduce the budget
deficit from 8.9 per cent last June to 4 per cent by June 2021 and
“come up with a package of reforms that will help us get out of the
current [interest rate cap] arrangement so we can extend credit to the
private sector”.

Jan Mikkelsen, the IMF’s Kenya resident representative, said the two
reforms were “key” to extending the facility.

An IMF team is in Nairobi to discuss how the programme could be renewed.

Kenya is east Africa’s dominant economy and for many years until 2017
was one of the best performers in the region. But last year growth
slowed to an estimated 4.8 per cent from 5.8 per cent in 2016 because
of the political crisis, a severe drought and the fall in lending to
the private sector. The ratio of Kenya’s debt to gross domestic
product has swollen from 42 per cent in 2012 to about 51 per cent.

Ministers and investors are now optimistic, however, that the economy
will recover quickly with both the drought and political crisis
seemingly over. On Wednesday Kenya priced its first 30-year US dollar
sovereign bond, a $1bn issuance, along with a $1bn 10-year US dollar
bond. Traders said that the 8.25 per cent coupon rate on the 30-year
paper was high but not excessive.

Mr Rotich said the fact the bonds were seven times oversubscribed
showed “the credit story of Kenya remains positive”. He added that
about a quarter of the bonds would be used to pay off debt and the
rest spent on development projects.

However, analysts are sceptical that Mr Rotich will be able to deliver
on either reform.

Razia Khan, chief Africa economist at Standard Chartered, said the
“need for fiscal consolidation is fully realised” at the finance

“Whether this is taken on board by all actors in Kenya is a different
matter,” she said. “There will have to be a broader buy-in that this
is the way to go.”

Aly-Khan Satchu, an investment analyst in Nairobi, said: “So far we’ve
seen no willingness from the government to bring the deficit under
control. He’s got to slash a few things and so far I’ve never seen him
wield a knife.”

Eliminating the interest rate cap, passed by parliament despite
opposition from the government and central bank, will also be tricky,
according to Anzetse Were, an independent economist. “There are
political issues around it despite it making technocratic sense,” she
said. “Many Kenyans won’t understand why it’s not needed and the
opposition will jump on it.”

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Kenya raises $2 bln Eurobond but concerns over deficit linger @Reuters
Kenyan Economy

 Kenya shook off a downgrade and the loss of access to an IMF standby
credit facility to raise a $2 billion dollar bond at competitive
yields, but market participants said on Thursday it still needs a
credible plan to tackle its fiscal deficit.

Kenya received $14 billion worth of bids. It took just $1 billion in a
10-year note with a yield of 7.25 percent, and another $1 billion in a
30-year tranche with a yield of 8.25 percent, Thomson Reuters news and
market analysis service IFR reported.

Last week, credit ratings agency Moody’s downgraded Kenya’s debt
rating to B2 from B1 while officials were in the middle of the bond
roadshow abroad, angering the government.

More bad news emerged on Tuesday, after the International Monetary
Fund said it had frozen Kenya’s access to a $1.5 billion standby
facility last June, after failure to agree on fiscal consolidation and
delay in completing a review.

“They (the government) were able to weather the knocks of the Moody’s
downgrade and the IMF issue,” said Aly Khan Satchu, a Nairobi-based
independent trader and analyst.

But he warned that the government needed to convince investors it has
a plan to tackle the fiscal deficit.

“People are worried about debt-to-GDP ratios and they want to see a
stronger language about how this will be addressed,” he said.

Kenya’s total debt is about 50 percent of GDP, up from 42 percent in
2013. It has borrowed locally and abroad to build infrastructure like
a new railway line from Nairobi to the port of Mombasa.

The finance ministry has published a plan to lower its fiscal deficit
to 7 percent of GDP at the end of this fiscal year in June, from 8.9
percent in 2016/17, and to less than 5 percent in three years’ time.

Satchu said it was not enough for investors. They want to see more
targeted infrastructure investments that will ensure a return, and
attempts to reign in a ballooning public service wage bill and other
recurrent expenditure.

“We have got to walk the talk. We are not even talking the talk yet” he said.

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Statement by the @KenyaTreasury on the issuance of the Eurobond. @ngcc_ke
Kenyan Economy

- 7x oversubscribed order book.
- A dollar yield curve, stretching out to 30 years.

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@KenyaPower reports H1 EPS -30.233% Earnings here
Kenyan Economy

Par Value:                  20/-
Closing Price:           8.20
Total Shares Issued:          1951467045.00
Market Capitalization:        16,002,029,769
EPS:             3.72
PE:                 2.204

The energy company in charge of national transmission, distribution
and retail of electricity throughout Kenya.

The Kenya Power and Lighting Company HY 2018 results through 31st
December 2017 vs. 31st December 2016
HY Non-fuel revenue 46.931b vs. 45.795b +2.481%
HY FX Adjustment 4.492b vs. 2.531b +77.479%
HY Fuel cost charge 11.637b vs. 6.183b +88.210%
HY Other operating income 4.043b vs. 3.961b +2.070%
HY Revenue 67.103b vs. 58.470b +14.765%
HY Power purchase costs (non-fuel) [27.429b] vs. [26.109b] +5.056%
HY FX Costs [3.793b] vs. [3.156b] +20.184%
HY Fuel costs [12.294b] vs. [6.226b] +97.462%
HY Transmission and distribution costs [15.814b] vs. [15.058b] +5.021%
HY Total operating costs [59.330b] vs. [50.549b] +17.371%
HY Operating profit 7.773b vs. 7.921b -1.868%
HY Finance income 52m vs. –
HY Finance costs [3.257b] vs. [2.281b] +42.788%
HY PBT 4.568b vs. 5.640b -19.007%
HY Profit for the year 2.927b vs. 4.201b -30.326%
Basic and diluted EPS 1.50 vs. 2.15 -30.233%
Total Assets 357.067b vs. 299.225b +19.331%
Shareholders’ Equity 71.914b vs. 69.231b +3.875%
Cash and cash equivalents at 31st December [7.743b] vs. 925m -937.081%
No interim dividend

Company Commentary

EPS declined by 30.2% y/y to KES 1.50 in 1H18.
PBT reduced by -19%
Decrease was attributed to the general slowdown of the economy and an
increase in financing costs.
Electricity Sales grew by 2.3% to 3,893 GWh
During the period under review there was increased usage of thermal
generation as a result of poor hydrology.
Units generated from thermal plants increased by 416 GWh or 47% from
885 GWh to 1,301 GWh
This raised Fuel costs by 97.4%
Finance costs rose to 3.257b versus 2.281b


Its a very cheap share on a classic PE Analysis.
KPLC has been in the eye of the storm.

read more

"Drunks love paying by M-Pesa," the owner of a bar in a low-income area of Kenya's capital, Nairobi, explained drily. "It's easy to get conned when you have cash." @guardian
Kenyan Economy

M-Pesa – which references the Swahili word for money – offers
efficiency and traceability. And if you lose your phone at the end of
the night, no one else can access your funds.

Launched 10 years ago in east Africa’s largest economy, this
much-copied platform allows users to send money between mobile
“wallets”, pay bills and apply for loans. Nearly 28m phone lines are
registered for M-Pesa, and more than 16m transactions happen on the
system every day. Over 36m mobile money accounts are registered across
all available platforms, making Kenya a leader in digital payments on
the African continent.

But despite the ubiquity and convenience of mobile money “cash is
still king” in the country, as the operator behind M-Pesa itself

“As many as eight out of 10 transactions are still cash,” said Stephen
Chege, director of corporate affairs at the market-dominating mobile
operator Safaricom. “We want to keep on reducing that ratio.”

In late 2016 Safaricom removed fees for transactions under Ksh100
(£0.71) with a view to driving uptake among the cost-conscious. The
response was swift – low-level transactions jumped from 1% of the
total volume to nearly 11% by the end of 2017.

As banks and other operators offer alternative mobile money and
digital payment platforms, many hope competition will further drive
down customer costs.

Perhaps most importantly, many people – especially those who work in
the informal sector – are still paid in cash. Even if people transact
using mobile money, the funds often begin in physical form.

“We estimate that only about 10% of people’s income is born digitally.
So it’s an extra step to move money into the digital environment,”
said Tamara Cook, digital innovations head at FSD Kenya, which works
to extend financial inclusion.

“We won’t see a big shift until more people are paid digitally.”

A big shift is exactly what has taken place in Zimbabwe, showing how
swiftly populations can move away from cash.

Despite its rocky monetary history the country has seen a momentous
and rapid shift into digital transactions, the surprising consequence
of a new economic crisis.

“We were literally forced into a change of behaviour,” said Dr Lance
Mambondiani, CEO of Steward Bank, a retail-focused subsidiary of the
country’s leading mobile operator, Econet. “In June 2017 we were
averaging 10m transactions per month on our electronic platforms; by
November 2017 we had reached 18m per month.”

Zimbabwe abandoned its currency in 2009 after one of the most extreme
episodes of hyperinflation in history, adopting the US dollar in its

But for the past two years the country has experienced an acute,
ongoing shortage of greenbacks.

There are so few US dollars in circulation that Zimbabweans were
queuing for hours on end just to withdraw the low daily maximum from
their bank accounts. Waiting for change in a cafe can often be a
fruitless exercise.

A few months, however, saw a rapid decline in the use of cash. The
central bank massively reduced the cost of electronic transactions.
Financial institutions and mobile operators raced to offer, or
improve, digital solutions.

“Previously only about 20% of transactions were being done
electronically, and the remaining 80% was cash,” added Mambondiani.
“But by 2017 the surge in electronic transactions saw that share rise
to 80%, while cash just accounted for 20% of transactions. It was
driven by necessity, there was no other option.”

The uptake of mobile money and swipe cards, as debit-style cards are
referred to by Zimbabweans, has progressed at such velocity that the
team at Steward Bank admitted that for a period their systems couldn’t
process the transactions quickly enough.

The circumstances that have driven Zimbabwe’s fast-paced flight from
cash are unusual and unique but reflect the huge growth potential of
cash-free transactions in markets across Africa.

There is, however, still a long way to go before many of these markets
become cash-light let alone cash-free.

read more

@SafaricomLtd sits +10.28% in 2018. share price data
Kenyan Economy

Par Value:                  0.05/-
Closing Price:           29.50
Total Shares Issued:          40065428000.00
Market Capitalization:        1,181,930,126,000
EPS:             1.21
PE:                 24.380

read more

@DTBKenya +9.375% 2018 share price data
Kenyan Economy

Par Value:                  4/-
Closing Price:           210.00
Total Shares Issued:          266321115.00
Market Capitalization:        55,927,434,150
EPS:             26.94
PE:                 7.795

read more

N.S.E Today

A single Tweet from @KylieJenner who tweeted ''sooo does anyone else
not open Snapchat anymore? Or is it just me... ugh this is so sad''
sent SNAP into a price tailspin.
African Sovereign Eurobond issuance this year in the 10 Year Maturity
space has been as follows 7.25% Kenya; 6.59% Egypt; 6.5% Nigeria
Kenya also issued a 30 Year Bond at a yield of 8.25%.
The Nairobi All Share rose +0.03 points to close at 180.78
The NSE20 declined 8.94 points to close at 3710.97
Equity Turnover clocked 808.059m
Energy Companies KenGen and KPLC reported Half Year Earnings.

N.S.E Equities - Commercial & Services

Safaricom closed unchanged at 29.50 and traded 4.996m shares worth
148.142m. Safaricom closed the session trading at 30.00 +1.69% and had
unserviced Buyers for more than 10m shares at the Finish Line.
Safaricom is +10.28% in 2018 and is pointing higher.

Uchumi announced it was shuttering its Sarit Centre Branch, a day
after releasing its H1 Earnings. Uchumi eased -1.5625% to close at
3.15 and traded 44,600 shares.

N.S.E Equities - Finance & Investment

KCB Group firmed +0.55% to close at 45.50 and traded 4.120m shares
worth 187.505m. KCB is +6.43% in 2018.
Equity Group closed unchanged at 42.75 and traded 3.110m shares.
Equity is +7.54% in 2018.
Diamond Trust Bank Kenya which has seen a spectacular spike in volumes
this week closed unchanged at 210.00 and traded 43.827m.

The Nairobi Securities Exchange rallied +2.3% to close at 20.00 and
traded 2.254m shares. NSE has lagged the averages and is +1.522% in
2018. The NSE is self evidently heavily correlated to volumes.

N.S.E Equities - Industrial & Allied

KenGen Kenya released H1 Earnings after the closing Bell. KenGen
reported a +4.927% acceleration in Headline Revenue to register
18.613b, Steam Revenue was a Stand-Out at 3.154b +27.951%,
Depreciation and amortisation clocked a +14.705% gain to [5.195b] and
trimmed Half Year Profit after tax which declined -11.459% to 4.095b.
The Growth curve is very much intact and
''higher energy revenues from geothermal and increased steam revenue
following the completion of the Olkaria-Suswa transmission line'' is a
promising development.  KenGen is embarked on a steep growth
Trajectory but depreciation and amortisation crimped the Trajectory a
little this time. KenGen firmed 5cents to close at 8.60 and traded

Kenya Power reported H1 Earnings pre-market opening today. H1 Revenue
climbed +14.765% to register 67.103b, H1 Operating Profit declined
-1.868% to 7.773b, Finance costs accelerated +42.788% to 3.257b versus
2.281b and tat translated into a -30.326% decline in H1 PAT which
clocked 2.927b. The accompanying company commentary said tat the
''decrease [in profit] was attributed to the general slowdown of the
economy and an increase in financing costs'' and that during the
period under review ''there was increased usage of thermal generation
as a result of poor hydrology. Units generated from thermal plants
increased by 416 GWh or 47% from 885 GWh to 1,301 GWh This raised Fuel
costs by 97.4%. The cash and cash equivalents position was [7.743b]
versus +0.925b last time which is an eye-popping turnaround. KPLC has
been in the eye of a storm of late - The Lawyer Apollo Mboya refers.
KPLC trades on a very undemanding PE of 2.204 but has been trading at
this sort of PE Ratio for a while now.

BAT eased a spilling to close at 769.00 and traded 126,700 shares. BAT
recently released FY Earnings where FY Gross Revenue declined -6.0200%
and FY PAT declined -21.209% to 3.336b.


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

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