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Satchu's Rich Wrap-Up
Wednesday 28th of February 2018

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Macro Thoughts

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Powell's hawkish testimony Markets now price 3.5 hikes this year following hawkish remarks up from 3.3 hikes. (BBG) @Schuldensuehner

Powell’s hawkish testimony raised the possibility that the #Fed could
rethink its plan for 3 rate hikes this year and potentially add a
fourth. Markets now price 3.5 hikes this year following hawkish
remarks up from 3.3 hikes. (BBG)

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The way "one story contains many and how they belong not to us but are part of the random currents of our time, and about how stories capture us and entangle us for all time"

Abdulrazak Gurnah's fiction grows out of desertion. His novels are
haunted by abandonment, as characters rupture ties not only with their
homelands but with loved ones and their own sense of identity. His
fictional territory is Africa and he expertly traces how political
fissures reverberate into the minute details of personal
relationships. Desertion treads much of this same ground, reworking
Gurnah's perennial themes - racial tensions, the forging of identity,
belonging and rejection, and competing versions of truth.

Gurnah's first novel, Memory of Departure (1987), trawled through the
alleyways of an old East African coastal town. Desertion opens in a
small town along the coast from Mombassa with the tale of how, in
1899, a man appeared there at dawn, like "a figure out of myth".

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"Youthquake", defined as "a significant cultural, political, or social change arising from the actions or influence of young people",
Law & Politics

“Youthquake”, defined as “a significant cultural, political, or social
change arising from the actions or influence of young people”, has
been selected by Oxford Dictionaries as the 2017 word of the year.

The term saw a 401% increase in usage year-on-year as 2017 saw the
often-maligned millennial generation drive political change. The
publishers cited the UK and New Zealand general elections as examples
of young voters mobilising to support opposition parties.

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The youth vote slept in during Brexit then woke up for the UK snap election and nearly carried Jeremy Corbyn into 10 Downing Street
Law & Politics

The youth vote slept in during Brexit then woke up for the UK snap
election and nearly carried Jeremy Corbyn into 10 Downing Street. The
newly enfranchised youth vote is a big absolute number of first time
voters, and is a very big curve ball. Is this youth vote turned on?
Will it turn out? And how will it vote? My view is that this
demographic actually has the election in its hands. Will we see a
youthquake and if so how does it break?

“O youth! youth! you go your way heedless, uncaring – as if you owned
all the treasures of the world; even grief elates you, even sorrow
sits well upon your brow. You are self-confident and insolent and you
say, 'I alone am alive – behold!' even while your own days fly past
and vanish without trace and without number, and everything within you
melts away like wax in the sun .. like snow .. and perhaps the whole
secret of your enchantment lies not, indeed, in your power to do
whatever you may will, but in your power to think that there is
nothing you will not do: it is this that you scatter to the winds –
gifts which you could never have used to any other purpose. Each of us
feels most deeply convinced that he has been too prodigal of his gifts
– that he has a right to cry, 'Oh, what could I not have done, if only
I had not wasted my time.” ― Ivan Turgenev, First Love

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Xi's power grab means China is vulnerable to the whims of one man @FT Martin Wolf
Law & Politics

It had long been evident that China’s Xi Jinping would not — indeed,
could not — step down from power. He has made too many enemies,
particularly through his anti-corruption campaign, even if he wanted
to go, which seems unlikely.

Yet the announcement that the two-term limit on the presidency is to
go, is still shocking. What seemed likely is now a fact. Mr Xi has
discarded the attempt by Deng Xiaoping to institutionalise checks on
the power of China’s leaders — itself a reaction to the wild excesses
of the era of Mao Zedong. What is re-emerging is strongman rule — a
concentration of power in the hands of one man. It now looks a bit
like “Putinism with Chinese characteristics”.

How is this momentous step — the move towards placing one man in
absolute control of a rising superpower for the indefinite future —
justified? Interestingly, it is not. The authoritative People’s Daily
states: “The amendment is a vital move, made from the long-term
experience of the party and country, to improve the institutions and
mechanisms by which the party and country exercise leadership.”

So why is this a vital move? Because the “implementation of the
structure will be conducive to the authority and centralised
leadership of the [Chinese Communist party’s] Central Committee, and
the guidance to the country and society by the party”. Thus, the party
controls the country and Mr Xi controls the party — and so everything
else, indefinitely. That is good, because, well, it is good.

The move back from a collective leadership to autocracy negates the
hopes of all those who believed a rapidly developing China would move
towards democracy as, say, South Korea did in the 1980s. Yet China’s
gross domestic product per head at purchasing power parity is already
a little higher than was that of South Korea at that time. Today, the
only rich autocracies are oil exporters. Singapore may be viewed as a
“guided” democracy.

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28-AUG-2017 :: China Rising
Law & Politics

China’s parabolic rise has been simply breath-taking. Millions of
Chinese have been lifted out of poverty and China continues to expand
at a pace that other big economies can only dream about. Xi Jinping’s
One Belt One Road [OBOR] program binds the world to Beijing because
all the roads and railways have but one destination and that is China.
Washington has metastized into an epicentre of risk [Donald Trump
refers] and talk of a unipolar US-dominated world have largely
evaporated. President Putin refused to be rolled over by a Victoria
Nuland inspired ‘’Colour Revolution’’ in the Ukraine and drew a line
in the sand and one of the collateral consequences of that was to send
President Putin into the ready embrace of Xi Jinping. In fact, far
from being a unipolar world, we have entered a bipolar or even a
Tripolar world [US, China and Russia].

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The extreme event continues to unfold in the high #Arctic today in response to a surge of moisture and "warmth" @UlrikaModeer
Law & Politics

The extreme event continues to unfold in the high #Arctic today in
response to a surge of moisture and "warmth". 2018 is well exceeding
previous years (thin lines) for the month of February. 2018 is the red

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Welcome to Dubai 2.0
Law & Politics

Building by building, Sarah Al Amiri watched Dubai rise into the sky
as she grew up in the city. She’s now a government minister overseeing
the next stratospheric leap: a mission to Mars.
The quest for the next new thing, though, masks an uncomfortable truth
as Dubai comes of age: The city has no choice but to reinvent itself
again or risk a severe reversal of fortunes. Wealthier neighbors are
trying to replicate its effort to move beyond oil, international banks
are retrenching and it’s losing some of its allure for foreign
The trick is to avoid the same kind of debt-fueled spending overdrive
that brought the emirate to the brink of default in 2009. After
pursuing the biggest, tallest and glitziest, it’s now all about the
smartest. Dubai’s government wants to make technology, research and
development the cornerstones of the economy.
Soaring glass and steel towers bloomed from the desert in an era of
superlatives: the tallest building, biggest mall and largest man-made
harbor to breaking records with the biggest caviar tin, longest
handmade gold chain and highest sword throw.
It tackled oppressive summer heat and sandstorms, the population more
than doubling in a decade to approach 3 million. Foreigners, who make
up the vast majority of Dubai’s residents, flocked for work, banking
and fun.
Now it’s about how to keep the party going, even one in a country
where unmarried couples can’t legally live together and where free
voice calls over the Internet and Apple’s FaceTime are blocked.
There’s a belief among Emiratis that “impossible isn’t a notion
because we saw visual changes that happened right in front of us,”
said Al Amiri, the minister. “It’s this understanding that people
abroad don’t get.”

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At Valdai, a rare public appearance by @nirrosen, who explains how the US commitment to regime change in Syria has isolated their Kurdish allies
Law & Politics

At Valdai, a rare public appearance by @nirrosen, who explains how the
US commitment to regime change in Syria has isolated their Kurdish
allies, and how the Kurds are at the center of any realistic plan to
resolve the crisis

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U.S. consumer confidence rises to highest since November 2000 @ReutersJamie
International Trade

U.S. consumer confidence rises to highest since November 2000. In the
last 50 years, it's only been higher twice: 1968-69, just before the
1969-70 recession; and 1998-2000, just before the dot-com crash and
subsequent recession.

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Currency Markets at a Glance WSJ
World Currencies

Euro 1.2223
Dollar Index 90.42
Japan Yen 107.19
Swiss Franc 0.9400
Pound 1.3901
Aussie 0.7791
India Rupee 65.105
South Korea Won 1083.16
Brazil Real 3.2516
Egypt Pound 17.6345
South Africa Rand 11.7316

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The 2017 return was equivalent to $131 billion, or 13.7 percent @business
World Currencies

The fund’s growing exposure to the stock market means that returns may
be more volatile in the future, Slyngstad said.

Owning on average 1.4 percent of the world’s listed stocks, the fund
largely follows indexes but has leeway for some active management.
It’s in the process of raising the share of stocks in its portfolio to
70 percent to improve returns. It’s also increasing its influence in
areas such as executive pay, corporate corruption and sustainable

“The fund’s cumulative return since inception has passed 4,000 billion
kroner. One out of four kroner of return was generated in 2017, after
a very strong year for the fund,” Slyngstad said in the statement.

The 13.7 percent return was generated in a year characterized by the
biggest stock-market boom in eight years. The development pushed
stocks closer to a 70 percent target.

The fund’s stock portfolio rose 19.4 percent in the year, while fixed
income investments gained 3.3 percent and real estate grew 7.5
percent. It held 66.6 percent in stocks at the end of 2017, 30.8
percent in bonds and 2.6 percent in real estate.

Its biggest equity investments in 2017 were Apple Inc., Nestle SA and
Royal Dutch Shell Plc, while its largest fixed income holdings were
U.S., Japanese and German government bonds.

The fund has also moved more into emerging markets over the past years
to raise returns and Norway is currently looking into whether it
should buy private equity and infrastructure.

The government withdrew 61 billion kroner from the fund last year,
after tumbling oil prices forced its first-ever withdrawals in 2016.

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Commodity Markets at a Glance WSJ

U.S. crude #oil futures settle at $63.01/bbl. ⬇️$0.90. -1.41%. #CME
#NYMEX #CL_J7 #OOTT @Lee_Saks


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Investors pile into debt sales by rare sovereign borrowers @FT
Frontier Markets

For three decades Tajikistan has wanted to build the world’s tallest
hydroelectric dam but struggled to pay for it.

That changed last September when the mountainous central Asian country
tapped international debt markets for the first time, was inundated
with $4bn of orders and eventually sold $500m of debt at a yield of
7.125 per cent — a landmark moment for an economy with an annual GDP
of just $7bn.

The sudden popularity of Tajikistan’s Rogun barrage project with
global investors is the most startling example of the warm welcome
that new and infrequent sovereign borrowers have enjoyed over the past
12 months, but it is far from the only one. Their presence in the
market has helped drive sovereign debt issuance in emerging markets to
a record, with nearly $340bn of bonds sold in the 12 months to
January, according to data provider Dealogic.

Investors’ search for yield, brightening global economic conditions
and structural reforms in many countries have resulted in benign
conditions for what debt bankers refer to as “frontier” economies.

The world’s riskiest countries are selling debt at a record rate,
research published late last year found, with junk-rated borrowers
comprising nearly half of all borrowing from emerging markets in 2017;
one adviser called it a “gold rush”.

“The markets are so good at the moment that clients can literally ask
for whatever they want,” said an experienced deals banker. “People
will buy anything so long as it offers them yield and diversification.
They get bored of only being able to buy the same names and have also
hit their limits for some of the more frequent names.”

Despite the recent weakness in developed bond markets such as US
Treasuries and German Bunds — which has rippled through into emerging
market bond indices — the pace of sales shows few signs of easing.

This month Nigeria sold $2.5bn in dollar-denominated debt, Kenya
raised $2bn and Belarus raised $600m. This comes after EM borrowers
raised over $150bn in syndicated bond sales in January, according to
Dealogic, 15 per cent higher than the previous annual record for the
start of the year.

Investors’ willingness to tolerate the risky profiles of such
borrowers is “a function of the constant reach for yield in EM”,
according to Samad Sirohey, head of CEEMEA debt capital markets at
Citi, who has worked on bond sales by Tajikistan, Belarus and Iraq.
Higher-yielding debt offers “relative rate protection” in comparison
to lower-yielding, safer bonds where a small move in interest rates
can wipe out an investor’s returns, he added.

Another reason investors are becoming more comfortable putting money
into previously uncharted corners of capital markets is that many
infrequent borrowers are undertaking structural reforms.

“One of the most fundamental things we’re looking for is an improving
structural trend — political and regulatory stability, reliable
institutions,” said Andrew Brudenell, a frontier markets portfolio
manager at asset manager Ashmore. “An unprecedented number of frontier
countries are making these institutional changes.”

He cited Vietnam as a popular focus for investors, alongside Egypt and
Nigeria. Pakistan is also trying to woo back investors.

However, some warn that the market has become too complacent, with
buyers abandoning the precautions that have historically helped them
to navigate risky debt markets.

“Some of these deals are even unrated because investors just didn’t
seem to care as long as they were being offered relatively high
yields,” said a deals banker.

When looking at a bond sale or initial public offering, “if the main
[finance minister] guy doesn’t do much talking and it’s all being done
by the banker and a slightly spivvy investor relations guy, then we
know what’s going on here”, said one investor. “They may give you a
whole load of information at the launch, but that could be the last
time you hear from them.”

Investors’ willingness to pour into such borrowers risks being
punished if sentiment turns. With the OECD last week warning of
heightened refinancing risks in a new era of rising bond yields,
borrowers’ ability to repay or roll over maturing debt will be a
crucial factor to watch in coming years.

Douglas Rediker, a non-resident senior fellow at the Brookings
Institution and former US representative on the board of the
International Monetary Fund, said it was “not entirely clear that all
countries will be able to refinance” at such favourable yields in

Citing Tajikistan, he said: “If the tide turns in terms of investor
appetite, then what happens?”

Recent shifts in the wider market have seen some repricing of
low-credit-quality debt, Mr Sirohey of Citi said, but he has been
“positively encouraged recently by investor engagement”, with Kenya’s
bond sale being a case in point.

“The liquidity is still there, but now there’s a new price
environment,” he added. “There has been a yield back-up and so
investors think that, to some extent, that makes this a more
attractive environment to come into, and are still positive on the
asset class.”

But as the buying continues, the debate about risk and return is
likely to intensify.

“Ultimately this is people’s pensions we’re talking about,” said one
investor. “If you explained to the man on the street that their
pension fund is being invested in Nigeria at 7 per cent, they would be
incredulous. If you threw that decision out to ordinary people, would
they buy it? Probably not.”

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@MoodysInvSvc's affirms Ethiopia's B1 rating; maintains stable outlook

Moreover, political tensions could have a more negative and
long-lasting impact on growth and FDI inflows than Moody's currently
expects which would heighten Ethiopia's external vulnerability.
Ethiopia's very strong growth potential supports the sovereign rating.
Moody's projects that real GDP growth will exceed 8% over the next few
years, after an estimated 10% growth rate in 2016-17. Moody's assumes
that the social tensions amid anti-government protests will have a
limited impact on the economy.
Ethiopia's growth potential is supported by strong investment growth,
as continued FDI facilitates a significant step-up in infrastructure
spending, which, combined with rapidly broadening availability of
credit, fosters domestic investment across sectors.
FDIs reached $4.1 billion in 2016/17 -- a 27.6% increase compared to
the previous year, to around 5.8% of GDP - which illustrates continued
willingness by foreign investors to locate production in the country.
Moody's baseline assumptions assume that FDI will remain robust.
Additionally, the banking system continues to grow rapidly, covering
an increasingly larger share of the population, by harnessing new
deposits (+29.3% in 2016/17) which allows credit (+23.9% in 2016/17)
to support growth across the main sectors of the economy.
Investments in large infrastructure continue to support growth, as the
authorities allocate close to 50% of government expenditures towards
capital spending. Key projects like the railway to Djibouti or the
Grand Renaissance Dam allow for marked improvements in productivity,
reduction of transaction costs and the development of the
manufacturing sector over the medium-term.
Ethiopia's central government debt is low, at around 27% of GDP in
2017 (up from 23.6% in 2013), reflecting modest and broadly stable
deficits that have averaged 2.0% of GDP between 2008 and 2017.
Ethiopia's investment is in large part undertaken by state-owned
enterprises (SOEs) and debt financed. As a result, public sector debt
has risen more rapidly than the economy, to 59% of GDP at the end of
June 2017, from 46.9% four years earlier.
SOEs play a strategic role in the economy, are fully owned by the
government and are taking on debt at a faster pace than they increase
their revenues, in particular US dollar revenues. As such, SOEs pose
some contingent liability risks to the sovereign. Moreover, around
half the SOEs' debt is raised from foreign investors, which poses
external vulnerability risks.
SOEs' external debt reached $10.6 billion or 13.6% of GDP in 2016/17
from $5.6 billion in 2013/14. Moody's estimates the public sector
external debt service including principal and interest will average
$1.4 billion (1.8% of GDP) each year between 2017/18 and 2020/21.
For the economy as a whole, Ethiopia's External Vulnerability
Indicator (EVI, the ratio of external debt due over the next year to
foreign exchange reserves) will rise to 67.6% at the end of 2017/18
from 13.2% in 2007/8.
All the unrests are the most serious in Ethiopia's recent history, and
have resulted in the tragic loss of life and property. While the
economy has been broadly resilient so far, the political situation
remains a source of credit risk for Ethiopia should heightened social
and political tensions have a material and long-lasting negative
impact on investment and availability of external financing.
For the economy as a whole, Ethiopia's External Vulnerability
Indicator (EVI, the ratio of external debt due over the next year to
foreign exchange reserves) will rise to 67.6% at the end of 2017/18
from 13.2% in 2007/8. While still pointing to adequate reserves
coverage of external debt, the rapid rise in the EVI highlights the
external vulnerability risks associated with rapid investment-led
growth that is partly financed from external debt.
External vulnerability risks also relate to structural US dollar
shortages in the private sector. This is evidenced by the spread
existing between the official exchange rate and the parallel market
that grew from 10% to around 20% despite the 15% depreciation of the
Ethiopian birr against the dollar in October 2017. The private sector
will certainly grow even faster if the dollar liquidity constraint

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Not yet Team Ramaphosa @Africa_Conf

The new cabinet line-up shows signs of a fraught balancing of ANC
factional interests

It may be Cyril Ramaphosa's first cabinet but it was not all of his
making. That much was evident from the repeated delays in the
announcement from the Union Buildings on the evening of 26 February.
When the President finally stood in front of the television cameras
just after 10pm, he looked like a man who had been at the other end of
some excruciating phone calls. Either he had been trying to placate
people whom he had fired or demoted, or he had been fending off
demands for shiny new jobs in the new order.

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Gupta empire crumbles in wake of Zuma's departure @FT

The corporate logo on the deserted plot in a grim industrial park near
Johannesburg is broken. At the front, a “To Let” sign hints at a
business in decay. A solitary security guard emerges and orders a
visitor to leave the premises of Sahara Computers.

The company was once at the heart of the mining-to-media empire
established by the Gupta family that has been embroiled in South
Africa’s biggest political scandal of the democratic era. Now its
abandonment epitomises the three Indian-born brothers’ dramatic fall
since Jacob Zuma lost a power struggle in the ruling African National
Congress and was forced to step down as president this month.

A coal mine that was acquired by the family from Glencore, the
Swiss-based group, two years ago went into administration last week.
According to company records, seven other Gupta-affiliated businesses
have also filed for administration — including the company owning
Sahara’s building, says the Organisation for Undoing Tax Abuse (Outa),
a non-governmental organisation that fights corruption.

Even the family’s private plane has been caught up in the saga after
Canada’s export development bank — which funded the Bombardier jet’s
purchase — went to court to take it back, according to legal
documents. ANN7, a television station set up by the family but now
owned by a Gupta associate, will not have its broadcasting contract
renewed. And India’s state-owned Bank of Baroda, the only institution
in South Africa that still banked the Guptas, will be leaving the
country soon.

“The political power of the Guptas has been eliminated. They are
totally exposed at the moment,” says Ben Theron, chief operating
officer of Outa. “This empire is imploding at a very rapid rate.”

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Q4 2017/Full 2017 GDP report: GDP grows 1.92% in Q4 2017 compared to 1.41% in Q3 2017 & -1.73% in Q4 2016 ending full year 2017 with GDP growth of 0.83% @sgyemikale

Q4 2017/Full 2017 GDP report: GDP grows 1.92% in Q4 2017 compared to
1.41% in Q3 2017 & -1.73% in Q4 2016 ending full year 2017 with GDP
growth of 0.83% compared to -1.58% in 2016. Non Oil GDP grew 1.45% in
Q4 2017(0.47-% for 2017), Oil GDP grew 8.38% in Q4 2017(-1.79% for

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Kenya's government spent 54.1 billion shillings ($532 million) on elections last year after a disputed presidential vote spurred a rerun and additional outlay, the Treasury said.
Kenyan Economy

Spending included 46.2 billion shillings by the election authorities
and 7.4 billion shillings by the Interior Ministry, according to a
report posted Tuesday on the Treasury’s website. The East African
nation held a repeat election in October that President Uhuru Kenyatta
won after the Supreme Court threw out his initial victory in an August
vote, citing irregularities.

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.@Coopbankenya gets Sh15.2bn @IFC loan for small firms @BD_Africa
Kenyan Economy

Co-operative Bank is set to take a $150 million (Sh15.2 billion)
seven-year loan from the International Finance Corporation (IFC) for
onward lending to small firms.
The global lender, part of the World Bank Group, disclosed the
proposed loan to the Nairobi Securities Exchange-listed firm on
“The project comprises of a senior loan… to help strengthen the bank’s
long-term funding position and enable it to expand its lending
operations to the under-served micro small and medium enterprises
(MSMEs) segment in Kenya,” IFC says in the disclosure statement.

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@Coopbankenya share price data here +8.75% 2018
Kenyan Economy

Par Value:                  1/-
Closing Price:           17.40
Total Shares Issued:          5867179554.00
Market Capitalization:        102,088,924,240
EPS:             2.2
PE:                 7.909

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Kenya Shilling versus The Dollar Live ForexPros 101.604
Kenyan Economy

Nairobi All Share Bloomberg +5.54% 2018


Nairobi ^NSE20 Bloomberg +0.62% 2018


Every Listed Share can be interrogated here


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Unga reports H1 EPS +257.377% Earnings here share price +43.10% 2017
Kenyan Economy

Par Value:                  5/-
Closing Price:           41.50
Total Shares Issued:          75708872.00
Market Capitalization:        3,141,918,188
EPS:             4.32
PE:                 9.606

HY Turnover 11.077744b vs. 10.246913b +8.108%
HY Operating profit 716.796m vs. 172.993m +314.350%
HY Other income 33.035m vs. 33.111m -0.230%
HY Finance [cost]/ income [16.444m] vs. 15.118m -208.771%
HY FX loss [0.301m] vs. [29.783m] -98.989%
HY PBT 733.087m vs. 191.439m +282.935%
HY Profit for the period 511.133m vs. 132.873m +284.678%
HY Profit attributable to owners of the parent 330.274m vs. 92.540m +256.899%
HY Profit attributable to non-controlling interests 180.859m vs.
40.333m +348.414%
Basic and diluted EPS 4.36 vs. 1.22 +257.377%
Total assets 10.676292b vs. 10.209960b +4.567%
Cash and cash equivalents at the end of the period 1.085245b vs.
1.093590b -0.763%
No interim dividend

Company Commentary

Animal nutrition volumes increased by 20% supported by a stable supply
of raw material that ensured continuous supply during the period of
Human Nutrition volumes declined by 4%
our New product lines - pulses, rice and fish feed continue to show growth.
Selling and administrative expenses increased in the period compared
to the prior year, mainly as a consequence of increased provisions for
doubtful debts in the FMCG business.
Bakery business is working to recover its market presence.
new wheat mill project underway in Eldoret
current sluggish demand for wheat and maize products may negatively
impact volumes and profitability in the second half.


Well Well. The Offer by Seaboard dated 22-FEB-2018 has to be improved

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E.A. Portland Cement @EAPCC reports H1 EPS [10.55] -334.156% Earnings here share price -8.33%
Kenyan Economy

Par Value:                  5/-
Closing Price:           24.75
Total Shares Issued:          90000000.00
Market Capitalization:        2,227,500,000
EPS:             -16.35
PE:                 -1.514

A key provider of Cement and Cement products in Kenya for over 70 years.

East African Portland Cement Company HY 2018 results through 31st
December 2017 vs. 31st December 2016

HY Revenue 3.052119b vs. 3.722059b -17.731%
HY Cost of sales [2.916684b] vs. [3.074533b] -5.134%
HY Gross profit 145.435m vs. 647.527m -77.540%
HY Other operating income 1.202m vs. 0.340m +253.529%
HY Administration and selling expenses [1.001027b] vs. [1.062116b] -5.752%
HY [Loss]/ Profit from operating activities [854.390m] vs. [414.250m] -106.250%
HY FX [Losses]/ gains 21.046m vs. 186.241m -88.700%
HY Finance costs [313.492m] vs. [307.308m] +2.012%
HY [Loss]/ Profit before tax [1.145433b] vs. [533.698m] -114.622%
HY [Loss]/ Profit after tax [969.573m] vs. [248.121m] -290.766%
EPS [10.55] vs. [2.43] -334.156%
HY Cash and cash equivalents as at 31st December [899.419m] vs.
[1.502873b] +40.153% No dividend

Company Commentary

Revenue declined by 18% ...due to slow market uptake on account of
prolonged political activity which dampened investment decisions and
thus slowed down economic activities.
Further impacted by knock on effects of interest rates capping and
prolonged drought...
increases in cost of coal and unit cost of electricity adversely
affected cost of sales.
Gross profit margin declined from 18% in the prior period to 5%
Given tat the company has enormous resources in the form of idle and
fully mined parcels of land, Board expects to be granted the necessary
approvals to generate value from these idle parcels of land.


Its a Real Estate Play.

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N.S.E Today

“Starting last year ... the retailers in Kenya were in total disarray
and we were able to secure seven sites and leases.”  said @Shoprite_SA
in their commentary that accompanied their Earnings Release.
The Shilling touched a 2018 High of 100.80 in early February was last
at 101.40.
The Nairobi All Share rose +1.09 points to close by 181.77 led by
Banking Stocks.
The Nairobi NSE20 rallied +15.74 points to close at 3750.75
Equity Turnover clocked 832.755m.

N.S.E Equities - Commercial & Services

Safaricom was the most actively traded share today and firmed +0.85%
to close at 29.75 and traded 10.937m shares worth 326.408m. Safaricom
is +11.214% in 2018.

N.S.E Equities - Finance & Investment

The Banks were a strong stand-out Feature as Investors started to
price in the lifting of the rate cap. Certainly, the Treasury, The
Central Bank and the IMF are all keen but its a political move that
has to be made and that is by no means a ''shoo-in''
Co-operative Bank which announced its set to take a $150 million
seven-year loan from the (IFC) for onward lending to small firms.
CO-OP Bank surged +3.16% to close at a 2018 high of 17.95. CO-OP Bank
is +12.1875% in 2018.
KCB Group rallied +2.717% to close at 47.25 [a 2018 closing High] and
was trading at session highs of 49.00 +6.52% at the Finale. KCB is
+10.52% in 2018 and traded 2.062m shares.
Equity Group rallied +1.734% to close at 44.00 [a 2018 closing High]
and traded 1.418m shares. Equity is +10.69% in 2018.
Barclays Bank firmed +0.9132% to close at 11.00 and has responded
+14.583% in 2018 ahead of an imminent FY Earnings Release.

NIC Bank rallied +3.52% to close at 36.75 and traded 497,000 shares.

N.S.E Equities - Industrial & Allied

Unga which is subject to a 40/= a share Offer by Seaboard Corporation
released H1 Earnings where HY Turnover expanded +8.108%, HY Profit
before Tax accelerated +282.935% and HY EPS clocked 4.36 versus 1.22
last time. These were startlingly shapely Half Year Earnings. In the
accompanying commentary we learnt

''Selling and administrative expenses increased in the period compared
to the prior year, mainly as a consequence of increased provisions for
doubtful debts in the FMCG business''

Unga firmed +1.807% to close at 42.25  [+45.68% in 2018 and the best
performing share at the Securities Exchange this year] which is above
the offer price of 40.00. These results justify a substantively higher
offer compared to the offer dated  22-FEB-2018.

E.A Portland Cement reported HY Earnings where HY Revenue slumped
-17.731% and the Loss after Tax widened -290.766% to clock [969.573m]
versus [248.121m]. EAPC said gross profit margin declined from 18% to
just 5% in the reporting period. They also said

''Given that the company has enormous resources in the form of idle
and fully mined parcels of land, Board expects to be granted the
necessary approvals to generate value from these idle parcels of

My conclusions is that this is no longer a Cement Play but Its a Real
Estate Play. EAPC traded 800 shares at 25.00 and is -7.407% Year To

EABL closed unchanged at 239.00 and traded 621,300 shares worth 148.811m.


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

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