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Satchu's Rich Wrap-Up
 
 
Wednesday 07th of March 2018
 
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The biggest risks to markets this year come from the U.S., according to JP Morgan markets symposium @ReutersJamie
Africa


The biggest risks to markets this year come from the U.S.,  according
to JP Morgan markets symposium held last week. Citing U.S. "political
dynamics" and rising interest rates, "investors may be less willing to
buy the dips as the year progresses".

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"What matters in life is not what happens to you but what you remember and how you remember it." - Gabriel Garcia Marquez
Africa


“It is not true that people stop pursuing dreams because they grow
old, they grow old because they stop pursuing dreams.” ― Gabriel
García Márquez

“To him she seemed so beautiful, so seductive, so different from
ordinary people, that he could not understand why no one was as
disturbed as he by the clicking of her heels on the paving stones, why
no one else's heart was wild with the breeze stirred by the sighs of
her veils, why everyone did not go mad with the movements of her
braid, the flight of her hands, the gold of her laughter. He had not
missed a single one of her gestures, not one of the indications of her
character, but he did not dare approach her for fear of destroying the
spell.” ― Gabriel García Márquez, Love in the Time of Cholera

“But when a woman decides to sleep with a man, there is no wall she
will not scale, no fortress she will not destroy, no moral
consideration she will not ignore at its very root: there is no God
worth worrying about.” ― Gabriel García Márquez, Love in the Time of
Cholera

“It was inevitable: the scent of bitter almonds always reminded him
of the fate of unrequited love.” ― Gabriel García Márquez

https://www.theguardian.com/books/2014/apr/26/gabriel-garcia-marquez-legacy-mona-simpson

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Interesting Pivot by @tomfriedman Memo to the President on Saudi Arabia @nytimes
Law & Politics


Memo to: President Trump.

From: The U.S. ambassador to Saudi Arabia (if we had one.)

Mr. President, in advance of the visit by Saudi Crown Prince Mohammed
bin Salman, a.k.a. M.B.S., I want to share some thoughts:

It’s only a matter of time before King Salman turns over the reins of
power to M.B.S., who’s already the effective ruler. M.B.S. is not a
democrat, nor is he interested in promoting democracy. He’s a
modernizing autocrat. The most we can expect from him is the
modernization of Saudi Arabia’s economy and religious/social
structure, but given how badly the country has stagnated from years of
tentative reforms, this is deeply significant.

M.B.S. is definitely bold. I can think of no one else in the ruling
family who would have put in place the profound social, religious and
economic reforms that he’s dared to do — and all at once. But I can
also think of no one in that family who’d have undertaken the bullying
foreign policy initiatives, domestic power plays and excessive
personal buying sprees he’s dared to do, all at once. They are two
halves of the same M.B.S. package. Our job: help curb his bad impulses
and nurture his good ones.

His potential is vast. M.B.S. is trying to forge a societal
transformation in Saudi Arabia. Call it “one country, two systems.”
For those who want piety, the mosque, Mecca and Islamic education,
they’ll all be available and respected. But for those who want modern
education and a more normal social life between men and women — and
access to Western film, music and the arts — those too will be
available and respected. No more religious domination. That is huge.

Because when the Saudi ruling family — feeling the need to demonstrate
greater piety after the 1979 takeover by Islamist zealots of the Grand
Mosque in Mecca — took Sunni Islam down a much more puritanical path,
right when Iran’s ayatollahs did the same with Shiite Islam, they
changed the face and culture of Islam. And it was not for the better.
The Saudis closed all cinemas, banned concerts and fun, choked off
trends for women’s empowerment and modern education and spread an
anti-pluralistic, misogynist, anti-Western form of Islam far and wide
that created the ideological and financial underpinnings of 9/11,
ISIS, Al Qaeda and the Taliban.

Just think of the dollars we’ve spent countering Islamic extremism
since 9/11. It’s trillions.

He even got the clerics to green-light “expressions of love” on
Valentine’s Day for the first time.

If Saudi women are empowered (which will be fully true only when the
rules of “male guardianship” over them are lifted), and the kingdom
becomes a more normal, connected and productive society, Saudi Islam
will naturally become more moderate and inclusive. Given how Saudi
Arabia sets the tone for Islam globally, this will isolate extremists
and empower moderates everywhere. Again, huge.

This will take time to play out, though, and reverse the supply chain
of extremist books, madrasas and clerics Saudi Arabia exported across
the globe — but the whole world will be better for it.

To pull this off requires extraordinary leadership by M.B.S., and an
extraordinary team. Alas, here M.B.S. has issues. For starters, he
comes from the poorest wing of the ruling family; his father was only
governor of Riyadh and was known for being uncorrupted. As a result,
M.B.S. grew up with a lot of resentment and disdain for his lazy
cousins, who got obscenely rich, along with the big merchants close to
them. His anti-corruption campaign was meant to stem the tide of
graft, but it also had elements of revenge, and a power and money
grab. And he still has 56 wealthy Saudis under house arrest.

He needs to let them all go, shut the whole thing down, create a
permanent, transparent anti-corruption court to handle all cases — and
get this thing over with. He can’t achieve his economic reforms
without global investors — and today there are a lot of foreign (and
Saudi) investors asking: “If I put money into Saudi Arabia, or partner
with a Saudi, can that wealth be confiscated without warning at the
Ritz-Carlton?”

At the same time, we need to tell M.B.S.: You can be an effective
king, with real legitimacy, or you can buy yachts, chateaus and
Leonardo da Vincis like your cousins — but you can’t do both. He has
to understand he’s becoming an important figure on the world stage,
and he needs to cultivate the same reputation his father has — clean,
modest, conciliatory.

On the management side, M.B.S.’s team is too small and contains a
couple of minister-bullies close to him who are in way over their
heads, and who bring out his worst instincts and offer terrible advice
— some of which led to his failed overreaches in Yemen, Lebanon and
Qatar. And while M.B.S. is a creative reformer, he has a fierce
temper. Most of his ministers are afraid to challenge him or give him
the candid, caring advice he needs.

If M.B.S. chases Iran everywhere, Tehran will sap all his strength; it
will be death by a thousand cuts. We need to be in his ear regularly
with someone he respects, and not just leave him to “the boys’ club” —
your son-in-law or other young testosterone-fueled Sunni Arab princes
in the Gulf. If you think you can just applaud his anti-Iran stance
and religious reforms and all will work out fine, you’re wrong.

But, if I may, President Trump, M.B.S. is a young man, and two-thirds
of Saudi Arabia is under 30. They look to America for more than just
weapons. They look to us as an example. They watch what we model — so
it is more vital than ever that we continue to model the rule of law,
respect for institutions, tolerance and pluralism. A special U.S.
envoy to Saudi Arabia is necessary now, but keeping America a special
example is even more important. You get my point.

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13-NOV-2017 :: The paranoia in the palaces in Saudi Arabia is real and existential
Law & Politics


The paranoia in the palaces in Saudi Arabia is real and existential.
And what is also clear is that Bibi Netanyahu, MBS [the crown prince
of Abu Dhabi], Jared Kushner and a Trump carte blanche have all
leveraged this existential paranoia to effect not a state capture but
a kingdom capture

The then 30-year-old crown prince of Saudi Arabia Mohamed bin Salman
MBS, who is expected to ascend to the throne as early as this week,
arrived on the scene and immediately launched an unwinnable war in
Yemen. President Assad, with his Russian, Iranian and Lebanese allies,
resisted the regime changers in Syria. IS, which was a Sunni and Saudi
blade, has been eviscerated. Iraq, which was once firmly in the Saudi
camp, is now aligned with Iran completely. Qatar is lost (see the
intercept article which refers to a plan headlined “Control the yield
curve, decide the future” a plan to construct the ‘’Big Short’’ on
Qatar -  The crown prince of Abu Dhabi should have spoken to me
because I could have told them how to do it).
Saudi Arabia and its allies UAE, Bahrain, Kuwait are caught in an ever
tightening Shia pincer. The paranoia in the palaces in Saudi Arabia is
real and existential. And what is also clear is that Bibi Netanyahu,
MBS [the crown prince of Abu Dhabi], Jared Kushner and a Trump carte
blanche have all leveraged this existential paranoia to effect not a
state capture but
a kingdom capture.  e Guptas were a precursor for this particular capture.

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

Last week after being coached into the early hours by Ivanka Trump’s
husband, Jared Kushner, MBS launched his night of the long knives,
which, according to the veteran Journalist Robert Fisk, and I quote:

‘’When Saad Hariri’s jet touched down at Riyadh on the evening of 3
November, the first thing he saw was a group of Saudi policemen
surrounding the plane. When they came aboard, they confiscated his
mobile phone and those of his bodyguards.  us was Lebanon’s prime
minister silenced’’ Hours later, MBS’s newly minted Anti-Corruption
commission detained 11 House of Saud princes, four current ministers
and dozens of former princes/cabinet secretaries – all charged with
corruption. Bank accounts were frozen [We could witness a massive $1
trillion dollar disgorge right here], private jets grounded.  e
high-profile Princely crew is jailed at the Riyadh Ritz-Carlton and
the gates are now shut, the phone line is perpetually busy and you
can’t book a room until Feb. 1. Fisk concludes ‘’Put bluntly, he is
clawing down all his rivals.’’

In all the history books I have read, its probably wisest to operate
on one front not two and certainly not three.

This is an unprecedented moment in the history of the Kingdom and the
most perilous moment for the House of Saud that I can recall. Taking
on Iran looks like will the straw that breaks the camel’s back.

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12-FEB-2018 :: Kim Yo Jong Cuts Through the Noise @TheStarKenya
Law & Politics


At a geopolitical level, we have to see things for what they are. The
US has been triangulated. Kim has his nuclear deterrence. His sister
Kim Yo Jong is now playing the soft power game.

“Water is fluid, soft, and yielding. But water will wear away rock,
which is rigid and cannot yield. As a rule, whatever is fluid, soft,
and yielding will overcome whatever is rigid and hard. This is another
paradox: What is soft is strong,” Lao Tzu

South Korea is set to be peeled off and going by his puppy dog smiles
President Moonriver will be in PyongYang before you can pronounce Kim
Yo Jong correctly. Russia always had their back. China was never
interested in bringing him to heel. After all, he is the buffer state
between China and more than 30,000 US soldiers parked on their
doorstep in South Korea. What we saw unfold in Pyeongchang marks a
significant and iconic moment for the Mount Paektu Bloodline (a
three-generation lineage of North Korean leadership descended from the
country’s first leader, Kim Il-sung).

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"But it is a curve each of them feels, unmistakably. It is the parabola"
Law & Politics


“But it is a curve each of them feels, unmistakably. It is the
parabola.  They must have guessed, once or twice -guessed and refused
to believe -that everything, always, collectively, had been moving
toward that purified shape latent in the sky, that shape of no
surprise, no second chance, no return.’’

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China Unlikely to Match India Strength in Indian Ocean in Near Future - Analysts SPUTNIK
Law & Politics


Amid growing rivalry between Beijing and New Delhi in the Indian
Ocean, China is not likely to overtake India in naval strength in the
region in the next two-three decades, despite increasing presence of
the Chinese navy and planned new Chinese naval bases, experts told
Sputnik. China first revealed its plan to build its first overseas
naval base in Djibouti in 2016. As a focal point of the Belt and Road
Initiative, championed by Chinese President Xi Jinping to boost the
nation’s global influence, Pakistan’s ports on the Indian Ocean are
widely expected to host a new Chinese military base in the near
future.

In response, Indian Prime Minister Narendra Modi secured access to
naval facilities in Oman during an official visit last month. Earlier
this year, India reached an agreement with Seychelles to build
military infrastructure on the Assumption Island.

As India and China both strive to boost their naval presence and
strength in the Indian Ocean, New Delhi is likely to continue to enjoy
an advantage over Beijing in the region thanks to is geographical
proximity, military experts told Sputnik.

"India is stronger in the Indian Ocean, because China has to go
through choke points in the Southeast Asia. Their logistic line is
very stretched. Although they have an aircraft carrier, it would take
them a long time, probably decades, to incorporate that into an
aircraft carrier battle group, which would allow them to achieve
sea-control in the Indian Ocean. In this sense, I would say it would
take maybe two-three decades. India still has a great advantage over
the Chinese Navy in the Indian Ocean. I am not talking about West
Pacific. I’m only talking about the Indian Ocean," Gurpreet Khurana,
an Indian Navy captain and executive director of the National Maritime
Foundation in New Delhi, India, told Sputnik.

Khurana illustrated why China’s increasing military presence in the
Indian Ocean could cause concerns in New Delhi.

"Because of India’s geographical position, the Indian Ocean becomes
very critical to the country’s national security interests. In other
parts of the world, such as the Indo-Pacific, we do not have the
luxury of the West which has fought wars and got over it. We still
have traditional military insecurities. India still has adversary
relations with China, which has increasingly come into the Indian
Ocean region. This has heightened the insecurity for India," he said.

"Although the Indian Navy has a distinct advantage over the Chinese
Navy in the Indian Ocean so far, Chinese realizes it. That’s why,
they’re trying to offset India’s advantage by building facilities in
the Indian Ocean. For example, Djibouti and [Pakistan’s] Gwadar or
Jiwani could all have Chinese naval bases. What Chinese is trying to
achieve is to shorten their logistic lines. They would be able to do
it to a certain extent, but not completely. That’s because even when
they have bases or facilities in the Indian Ocean, they would need to
be resupplied from their home base in China," he said.

The Indian naval officer pointed out a key vulnerability of China in
the Indian Ocean.

"The naval bases China has in the Indian Ocean would be very
vulnerable to Indian military strikes. It would be difficult for them
[China] to establish sea-control in the Indian Ocean. If you cannot
establish sea-control, all your surface base and air base operations
cannot be undertaken. Because of the historic adversary relations
between the two nations, China is very vulnerable in the Indian Ocean
because its energy supply lines passing through that area, where the
Indian Navy traditional had a very strong presence. China would not be
able to directly protect its oil shipments coming from the Gulf region
or Africa through the Indian Ocean. What the Chinese is trying to do
now is to increase their submarine presence in the Indian Ocean, as
submarine warfare does not need sea-control. But the only way they can
use submarine forces is in retaliation," he said.

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05-MAR-2018 :: Make no mistake, China has elbowed everyone aside in that Sea and is now accelerating its position in the Indian Ocean
Law & Politics


I appreciate that the USS Carl Vinsson is sailing around the South
China Sea but make no mistake, China has elbowed everyone aside in
that Sea and is now accelerating its position in the Indian Ocean

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Currency Markets at a Glance WSJ
World Currencies


Euro 1.2417
Dollar Index 89.501
Japan Yen 105.67
Swiss Franc 0.9368
Pound 1.3895
Aussie 0.7800 JUST IN: Australia's fourth-quarter GDP expands 0.4% on quarter
India Rupee 64.925
South Korea Won 1067.355
Brazil Real 3.2096
Egypt Pound 17.6320
South Africa Rand 11.8312

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WPP suffers the worst stock slump since 1999 after Chief Executive Officer Martin Sorrell slashes the profit outlook and predicts a year of no growth @adage
International Trade


WPP suffered the worst stock slump since 1999 after Chief Executive
Officer Martin Sorrell slashed the profit outlook and predicted a year
of no growth, giving already jittery investors another reminder that
the advertising industry is undergoing its most dramatic upheaval in
decades.
Long-term earnings growth will be as little as 5 percent and twice
that at best, compared with a prediction of as much as 15 percent
previously. The year got off to a "slow start," WPP said, continuing a
trend from 2017 that saw flat margins and sales. Investors responded
by pushing the shares down as much as 15 percent, briefly prompting a
stock suspension.
"There's a real sense of shock and awe at what's happened to his
business model," said Alex DeGroote, media analyst at Cenkos
Securities. "This is a stark reminder of the significant challenges
WPP faces."

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Emerging markets under pressure as debt mounts @FinancialTimes
Emerging Markets


Now that period is nearing its end, and as the US continues its
“normalisation” of monetary policy — with a further three or four
interest rate rises expected this year — several analysts have
questioned whether the emerging world’s debt pile is sustainable.

“The premise on which lenders keep lending to borrowers as they become
more indebted is that the backdrop will stay benign,” says Sonja
Gibbs, senior director for global capital markets at the
Washington-based Institute of International Finance, an industry
association. With political uncertainty on the rise around the world,
she says, “it feels more like there is the potential for events to
trigger volatility in emerging markets than it has done for some
time”.

Among a group of 21 developed markets monitored by the IIF, the
combined outstanding debt of households, governments, corporations and
financial institutions rose from the equivalent of about 290 per cent
of their combined gross domestic product at the end of the 1990s, to
380 per cent at the end of 2008. Since then, it is broadly unchanged.

But, since the crisis, debt in emerging markets has surged. In China,
it rose from 171 per cent of GDP at the end of 2008 to 295 per cent at
the end of last September. The combined debts of a group of 26 large
emerging markets monitored by the IIF rose from 148 per cent of GDP at
the end of 2008 to 211 per cent last September.

The IMF and others argue that the pace of debt growth is often at
least as significant as its overall level in signalling trouble ahead.
Yet the rapid rise in emerging market debt to GDP during the past
decade — by more than 40 per cent in the IIF’s 26 countries and by
more than 70 per cent in China — has still to register with many
people.

Indeed, the continuing ability to borrow cheaply should be a boon for
growth. “Emerging markets have been taking advantage of extremely
favourable borrowing conditions,” says Charles Robertson, chief
economist at Renaissance Capital, an investment bank focused on
emerging markets. “You would hope they could support growth through
investment at these interest rates.”

Nevertheless, bond issuance by governments and companies in emerging
markets continues at a fast pace, at more than $1tn for each of the
past two years, with investors apparently undeterred by Mozambique’s
renegotiation of its debt two years ago or by the prospect that Angola
may soon follow suit. “People will buy anything so long as it offers
them yield and diversification,” one banker told the Financial Times.

He warns that buyers of local currency emerging market bonds, who have
done well in the rally of the past two years as investors have sought
to take advantage of the improving growth outlook, “are going to lose
out”.

Others argue that if quantitative easing was the driver of rising
global asset prices, it makes sense that quantitative tightening,
already under way in the US and soon to come elsewhere, should have
the opposite effect.

He sees two potential outcomes: one in which emerging market debt
becomes less of a problem because growth is maintained; and another,
less benign, future in which developed markets do not maintain their
pick-up in growth, “and we get policy mistakes [in emerging markets]
and the system fragments more quickly”.

Ms Gibbs at the IIF shares that view. “It feels like we are at an
inflection point,” she says. “We have gone for so long with a sense of
underlying calm, but now the Fed is more hawkish, the ECB and BoJ are
less dovish, and consensus views are being shaken across the board.”

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05-FEB-2018 :: Emerging and Frontier Markets Borrowers surely need to get their skates on and pull the trigger real quick on any borrowing they had been considering for this year.
Emerging Markets


Interestingly, JP Morgan’s EMBI spread is down to 258 basis points,
the tightest since mid-2014. How long this lasts is anybody’s guess.
Emerging and Frontier Markets Borrowers surely need to get their
skates on and pull the trigger real quick on any borrowing they had
been considering for this year.

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Tillerson to #Africa ahead of visit: you're hooked on #China debt @MatinaStevis
Africa


Tillerson to #Africa ahead of visit: you’re hooked on #China debt. In
speech just delivered before he takes off, he said China “encourages
dependency”; China is biggest trading partner to sub-Saharan Africa by
far. US is 5th.

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Fueling Atrocities: Oil and War in South Sudan @TheSentry_Org
Africa


Documents reviewed by The Sentry purport to describe how funds from
South Sudan’s state oil company, Nile Petroleum Corporation (Nilepet),
helped fund militias responsible for horrific acts of violence. They
also indicate that millions of dollars were paid to several companies
partially owned by family members of top officials responsible for
funding government-aligned militia or military commanders.

One key document, part of a collection of material provided to The
Sentry by an anonymous source, appears to be an internal log kept by
South Sudan’s Ministry of Petroleum and Mining detailing
security-related payments made by Nilepet. The document titled,
“Security Expenses Summary from Nilepet as from March 2014 to Date”
(“the Summary”) lists a total of 84 transactions spanning a 15-month
period beginning in March 2014 and ending in June 2015. In total, the
document lists over $80 million in payments to politicians, military
officials, government agencies, and private companies, many of which
include captions that describe activities directly linked to the
government’s war effort. Other documents reviewed by The Sentry
include copies of correspondence that describe the petroleum
ministry’s provision of fuel and other supplies to Padang Dinka
militia groups.

There are indeed two payments recorded in the Summary that mention
Prince’s company, Frontier Services Group, in connection with “Project
Sierra.” Two $16.4 million payments were recorded as paid in July and
October 2014, labeled “Air Logistics & Support Services...(Project
Sierra, Frontier Services Group).”

A report released in January 2018 by the regional anti-money
laundering body, the East and Southern Africa Anti-Money Laundering
Group (ESAAMLG) demonstrated that the Kenyan banking system in
particular faces major concerns from “de-risking” by global banks that
are concerned about the risks flowing through Kenya and the inability,
or unwillingness, of Kenyan banks to address them.27 Taking action
against illicit flows from South Sudan is a direct way that Kenyan
banks and regulators can demonstrate sounder practices to the
international community, particularly at a time when the country is
taking on increasing levels of debt from Europe and facing stronger
scrutiny from the International Monetary Fund.28
Continuing to enable, or at least failing to prevent, the proceeds of
South Sudanese corruption to transit through the Kenyan banking system
will continue to grow as a risk factor and could easily imperil the
financial system. As demonstrated by this investigation, these
transactions can be identified, and they must be stopped

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#Senegal is set to issue a new #Eurobond today. It's in the market selling a 9-year euro tranche, with initial yield-guidance of 5.125-5.25% @markets
Africa


#Senegal is set to issue a new #Eurobond today. It's in the market
selling a 9-year euro tranche, with initial yield-guidance of
5.125-5.25%, and a 29-year dollar one, with guidance of 7.125-7.25%.
@markets

read more


US sanctions blow for Mnangagwa as Trump says Harare 'still a threat' Mail and Guardian
Africa


US President Donald Trump has reportedly “extended sanctions against
Zimbabwe for another year”, saying that President Emmerson Mnangagwa’s
administration “remained a threat to Washington’s foreign policy”.

According to Voice of America (VOA), the extension was made in a
notice signed by Trump on Friday. The notice stressed that the
situation in Zimbabwe had not yet transformed following the removal of
former president Robert Mugabe from power.

read more


20-NOV-2017 :: Zimbabwe The genie is out of the bottle @TheStarKenya
Africa


The pictures from Harare on Saturday spoke to a ‘’People Power’’ which
is a genie which will be difficult if not impossible to put back in
its bottle.
“It’s like Christmas,” said one marcher, Fred Mubay to Reuters.
He had a warning for whoever takes over Zimbabwe: “If the next leader
does the same, we are going to come out again.”
I agree with US assistant secretary of state for African affairs
Yamamoto who said, “It’s a transition to a new era for Zimbabwe,
that’s really what we’re hoping for.”
The military which launched this decapitation are certainly set to
shape the outcome but now have a Tiger by the Tail. Interestingly, the
Military have been walking on linguistic egg- shells and side-stepping
the word ‘’coup’’ with finesse.

read more


Kabila defies poll demands as Congo drifts towards conflict FT
Africa


“It’s crucial that we have a legitimate government through fresh
elections,” said Adolphe Mozito, who was Mr Kabila’s prime minister
from 2008-2012. “However, I don’t think there will be an election this
year.”

One person who knows the president well says the video games and
luxury cars enthusiast does not want to leave office because he is
“afraid of tomorrow, partly because of what happened to his father”.

“The people who are closest to him are his brother and sister and he
doesn’t trust anyone outside his family,” the person said. “He says
little and the people who can read his silence and interpret what he
doesn’t say have the most influence.”

Nickson Kambale, the director of the Centre for Governance, an
independent research organisation in Kinshasa, says. “If he [Mr
Kabila] says tomorrow ‘I won’t be a candidate’ the national tension
will decrease massively. But it would trigger conflict within the
family and the ruling elite because they will all start fighting for
supremacy.”

“They want the building to remain, they just want the concierge to
go,” Mr Hoebeke said. “Kabila’s failure is that unlike other leaders
in the region he has not been able to ensure an internal transition or
change the constitution.”

Father Jean-Claude Tabe, the priest at St Benoit’s Church in Kinshasa,
where one demonstrator was shot dead in the February 25 protests, said
the police tactics spoke volumes about Mr Kabila’s intentions. “He
just wants to retain power and he’ll do whatever it takes to do so.”

read more


The RSA economy grew by 1.3% in 2017 compared a revised 0.6% in 2016. @Reuters
Africa


The statistics agency said the economy of Africa’s most industrialised
country grew by 3.1 percent in the fourth quarter of 2017 after
expanding by a revised 2.3 percent in the third quarter.

The growth was above market expectations of a quarter-on-quarter GDP
expansion of 1.8 percent, according to a Reuters poll.

The rand, which was largely flat before the release of the data,
firmed more than 0.5 percent against the dollar to a session high of
11.7575/dollar. Government bonds also firmed.

The agriculture industry registered the highest growth at 37.5
percent, although the expansion was slower than in the third quarter
when the sector grew 41.1 percent.

Trade recovered in the fourth quarter to expand 4.8 percent after
falling by 0.1 percent in the prior quarter, while manufacturing grew
4.3 percent from 3.7 percent in the third quarter.

“Primary industries had very robust growth and that was emanating from
the amount of crops and harvest from agricultural and fisheries
sector,” Statistics South Africa Deputy Director General Joe de Beer
said.

Gross domestic product rose 1.5 percent on an unadjusted year-on-year
basis in the fourth quarter, compared with a revised 1.3 percent
expansion in the previous three months.

read more


South Africa All Share Bloomberg -0.44% 2018
Africa


Dollar versus Rand 6 Month Chart INO 11.8312

http://quotes.ino.com/charting/index.html?s=FOREX_USDZAR&v=d6&t=c&a=50&w=1

Nigeria All Share Bloomberg +14.03% 2018

http://www.bloomberg.com/quote/NGSEINDX:IND

Ghana 2018 GDP growth seen at 8.3 pct vs 6.8 pct budget target

https://af.reuters.com/article/investingNews/idAFKCN1GI1XX-OZABS

Ghana Stock Exchange Composite Index Bloomberg +27.74% 2018

http://www.bloomberg.com/quote/GGSECI:IND

read more


Rwanda's economy to grow 6.5 percent in 2018: central bank
Africa


“This year we expect to perform much better than last year. For
Rwanda, we project growth of 6.5 percent,” said John Rwangombwa as he
presented a monetary policy and financial stability statement.

“In Rwanda we all see better climate conditions this year that will
impact positively on our economic performance,” he said.

At least 70 percent of Rwandans are farmers, the national statistics
body says, growing crops like maize and vegetables for local use and
tea and coffee for export.

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"Our response to the authors' absurd demand for US intervention in Kenya is a loud no, thanks," @AmbMKamau @dailynation
Kenyan Economy


He was responding to an article published late last month by former US
ambassadors to Kenya Johnnie Carson and Mark Bellamy in which they
called for US intervention in Kenya.

“Our response to the authors’ absurd demand for US intervention in
Kenya is a loud no, thanks,” he said in a statement yesterday.

President Uhuru Kenyatta’s spokesman Manoah Esipisu appeared to
confirm that, indeed, that was the position held by the Head of State.

“The PS has spoken and that is his docket. What else do you want us to
add?” he asked.

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.@KenyaAirways looks upmarket for financial salvation @ReutersAfrica
Kenyan Economy


When Sebastian Mikosz took over as CEO of loss-making Kenya Airways
last June, he immediately shut its outlet in Nairobi’s downmarket
Accra Road, which served thousands of small traders who fly to the Far
East to buy cheap goods in bulk.

The move marked the beginning of an aggressive hunt for cost savings
and premium passengers, after years of losses following a slump in
tourism and large debts incurred to buy new aircraft.

Polish native Mikosz, who helped turn around flag carrier LOT Polish
Airlines as its chief executive, needs to stem those losses before it
can begin to pay down $2 billion of debt restructured in November to
stave off the airline’s collapse.

He told Reuters he plans to roll out a new economy plus class by the
end of the year designed for business and wealthy leisure travellers,
including growing numbers of American tourists and executives from
dozens of Nairobi-based U.S. firms.

Coming first to wide-bodied planes, it will mean new seats with the
same capacity by using space between them. “We are working on a pretty
big reshape of the onboard experience,” Mikosz said.

The airline also plans a direct route to the Indian Ocean luxury
tourism island of Mauritius and the first direct flight from Nairobi
to New York by any airline from October, a plan Mikosz said was known
as the “$100 million project” for the revenue the daily flight is
expected to bring in.

The U.S. route will compete with indirect flights from established
players such as Emirates, British Airways and Ethiopian Airlines and
test Kenya Airways’ ability to reshape its image from an
Africa-focused carrier.

“We still have to prove that we can produce an operating profit,”
Mikosz said in an interview in his office overlooking airport service
hangers. “That is the biggest challenge that we have in an environment
where you have a lot of competition.”

Twenty five foreign airlines operate out of Nairobi’s main airport,
including Turkish Airlines which is expanding in Africa and
state-owned Emirates, South African Airways and Ethiopian.

Mikosz describes this state-backed competition as his biggest fear as
he tries to turn around a publicly listed firm owned 48.9 percent by
the government and 7.8 percent by Air France/KLM and attract a
strategic investor.

“It is really sometimes very frustrating when you see that somebody
can have much lower costs thanks to this protected environment and you
have to face a real free market economy,” he said.

His plans mark a shift from a focus on African air passenger demand,
which the International Air Transport Association (IATA) sees growing
by almost 6 percent a year over the next decade due to increasing
economic output and poor road and rail links.

Kenya hosts regional hubs for 48 U.S. or U.S.-based businesses like
Google and IBM and the United States is the fastest-growing source of
tourists, many changing planes in Europe or the Gulf in more than
20-hour trips.

Jan Mohamed, chief executive of TPS Eastern Africa, which runs the
Serena chain of luxury hotels and safari lodges, said people would pay
extra for direct flights, which take about 15 hours.

Tickets to New York have begun retailing for around $1,000 return,
compared with about $1,500 for an indirect flight.

Mikosz said there was plenty of room. The potential to Europe is “very
big,” he said, adding that he planned to add a second daily flight to
Amsterdam in high season alongside KLM.

Forty-year-old Kenya Airlines, which flies to 53 destinations with 38
Boeing and Embraer planes, has not said when it will return to profit.

Kenya only got U.S. security clearance a year ago after a major
refurbishment of Nairobi’s main airport and the United States extended
a warning last week over the threat to aviation from militant activity
in eastern Kenya, which borders Somalia.

The company, which reports full-year results in June, had a $251
million loss in the financial year 2016-17 and negative equity of 45
billion shillings.

The government restructured its debt in November, converting loans to
build up its stake from just under a third to preserve a national
carrier that serves the vital tourism sector and growing foreign
investment.

Shareholders found their holdings diluted 95 percent by the
restructuring but shares more than tripled to 18.50 shillings
($0.1829) before dropping back by around four shillings.

The government has guaranteed some of the airline’s debts and Mikosz
and his team have 10 years to clear them.

“Sell more tickets and cut costs,” said the CEO, who has headed up
major Central European online travel agent eSky.pl as well as helping
to rescue LOT from bankruptcy.

“It’s always the same game.”

read more



.@HFGroupKE gets Sh1.5bn from @badeabank for lending to SMEs via @BD_Africa
Kenyan Economy


The Arab Bank for Economic Development in Africa (Badea) has opened a
Sh1.5 billion ($15 million) line of credit with HFC — the banking and
property finance subsidiary of HF Group — for lending to the SME
sector.

read more


@HFGroupKE share price data here -1.44% 2018
Kenyan Economy


Par Value:                  5/-
Closing Price:           10.25
Total Shares Issued:          352416667.00
Market Capitalization:        3,612,270,837
EPS:             2.59
PE:                 3.958

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N.S.E Today


The biggest risks to markets this year come from the U.S., according
to a JP Morgan markets symposium held last week, citing U.S.
"political dynamics" and rising interest rates.
On the 28-AUG-2017 I wrote Washington has metastized into an epicentre
of risk [Donald Trump refers]
The resignation of Gary Cohn created an immediate downside reaction as
Investors fretted that he was the last orthodox Economist Man
standing.
Both the US Secretary of State Tillerson and his Russian Counterpart
Sergei Lavrov [who is very erudite and as a pithy turn of phrase] are
criss-crossing the Continent and might meet in the Sheraton Addis.
Senegal was the latest SSA Sovereign Issuer to tap the Eurobond markets.
The Sentry.Org released a report headlined ''Fueling Atrocities: Oil
and War in South Sudan'' which report concluded
''A report released in January 2018 by the regional anti-money
laundering body, the East and Southern Africa Anti-Money Laundering
Group (ESAAMLG) demonstrated that the Kenyan banking system in
particular faces major concerns from “de-risking” by global banks that
are concerned about the risks flowing through Kenya and the inability,
or unwillingness, of Kenyan banks to address them.27 Taking action
against illicit flows from South Sudan is a direct way that Kenyan
banks and regulators can demonstrate sounder practices to the
international community, particularly at a time when the country is
taking on increasing levels of debt from Europe and facing stronger
scrutiny from the International Monetary Fund.28 Continuing to enable,
or at least failing to prevent, the proceeds of South Sudanese
corruption to transit through the Kenyan banking system will continue
to grow as a risk factor and could easily imperil the financial
system. As demonstrated by this investigation, these transactions can
be identified, and they must be stopped''
The Nairobi All Share surged +0.629% to close at a Fresh All Time High
of 182.16.
The Nairobi NSE20 closed +5.01 points to close at 3740.97.
Equity turnover clocked 916.755m and Banking stocks were an Outlier today.



N.S.E Equities - Commercial & Services


Sebastian Mikosz the CEO of Kenya Airways gave a wide-ranging
interview to Reuters where he said;
He told Reuters he plans to roll out a new economy plus class by the
end of the year designed for business and wealthy leisure travellers.
 “We are working on a pretty big reshape of the onboard experience,”
Mikosz said.
The airline also plans the first direct flight from Nairobi to New
York by any airline from October, a plan Mikosz said was known as the
“$100 million project” for the revenue the daily flight is expected to
bring in.
“We still have to prove that we can produce an operating profit,”
Mikosz said in an interview in his office overlooking airport service
hangers. “That is the biggest challenge that we have in an environment
where you have a lot of competition.”
The company, which reports full-year results in June, had a $251
million loss in the financial year 2016-17.
“Sell more tickets and cut costs,” said the CEO, “It’s always the same game.”
Kenya Airways closed at 14.00 -1.06% and traded 54,700 shares.

Safaricom firmed +0.85% to close at 29.50 and traded 5.825m shares.
Buyers outpaced Sellers by a Factor of 2 versus 1.

TPS Serena closed at 35.00 +2.19% and is +7.69% this Year.



N.S.E Equities - Finance & Investment


Bank Stocks caught a bid again ahead of the Full Year Results season
and have been a strong feature in 2018 as Investors start to consider
some serious tinkering around the Rate Cap.
KCB Group rallied +1.03% to close at a Fresh 2018 and a 29 month high
of 49.25 and on buoyant volume action of 6.262m shares worth 309.665m.
KCB is +15.204% in 2018 ahead of its FY 2017 Earnings Release at the
Radisson Blu tomorrow.
Equity Group rallied +2.139% to close at a Fresh 2018 and a 29 month
high of 47.75 and traded 2.125m shares. Equity is +20.125% in 2018 and
its FY 17 Earnings Release is no doubt as imminent as KCB's.
Diamond Trust Bank traded 225,500 shares all at 209.00 +0.48%, DTB
does not surprise and is +8.85% YTD [Year to Date].
COOP Bank firmed +0.8196% to close at 18.45 and had stretched to 18.70
+2.19% at the Final Bell. COOP Bank traded 1.882m shares and is
+15.3125% YTD.
Barclays Bank which will be re-configured as Absa Bank in short order
firmed +0.909% to close at 11.20. Barclays Bank is up an eye-popping
+16.66% in 2018.

NIC Bank rallied +2.01% to close at 38.00 and was heavily traded with
1.876m shares worth 71.406m changing hands. NIC Bank is +12.592% in
2018.
Business Daily reported that HF Group has received 1.5b shillings from
 The Arab Bank for Economic Development in Africa (Badea). Baden has
opened a Sh1.5 billion ($15 million) line of credit with HFC  for
lending to the SME sector. HF Group closed unchanged at 10.25  and
sits -1.44% in 2018.



N.S.E Equities - Industrial & Allied


EABL closed unchanged at 239.00 on the same day that EABL said its
Sh15 billion Senator Keg brewery in Kisumu will require at least 4,000
new bars to be opened in western Kenya for it to operate at optimal
capacity.

KenGen firmed +1.18% to close at 8.55 and traded 755,400 shares.

KenolKobil firmed +1.13% to close at 16.70 and traded 2.311m shares.
KenolKobil has surged +19.285% in 2018 and on heavy duty volume
action.

BAT fell -1.31% to close at a Fresh 2018 Low of 674.00 and traded
51,000 shares. BAT has been on a run lower since releasing its FY
Earnings and is -11.315% in 2018.



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