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Satchu's Rich Wrap-Up
 
 
Wednesday 18th of April 2018
 
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Macro Thoughts

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Alison Hargreaves became the first woman to scale Mount Everest alone sent a radio message to her children: "To Tom and Kate, my dear children, I am on the highest point of the world, and I love you dearly"
Africa


When Alison Hargreaves became the first woman to scale Mount Everest
alone and without oxygen, she sent a radio message to her children:
“To Tom and Kate, my dear children, I am on the highest point of the
world, and I love you dearly”

read more



Mike Pompeo, CIA chief, met secretly with North Korean leader Kim Jong-un - reports @BBCBreaking
Law & Politics


CIA director Mike Pompeo travelled to Pyongyang for a secret meeting
with North Korean leader Kim Jong-un, US media report.
The meeting to prepare for direct talks between US President Donald
Trump and Mr Kim took place on about 1 April, unnamed officials said.
Mr Trump had earlier alluded to high-level direct talks with Pyongyang.
But this unexpected and clandestine meeting would mark the highest
level US contact with North Korea since 2000.
"We have had direct talks at... extremely high levels," Mr Trump said
from Florida, where he is hosting Japan's Prime Minister Shinzo Abe.

read more



Why the Trump-Kim talks will fail @asiatimesonline
Law & Politics


If US President Donald Trump is to be believed, North Korea’s leader
Kim Jong-un may be interested in giving up his nuclear arsenal.

“For years and through many administrations, everyone said the
denuclearization of the Korean peninsula was not even a small
possibility,” Trump tweeted on March 28. “Now there is a good chance
Kim Jong-un will do what is right for its people and for humanity.
Look forward to our meeting!”

But what Trump believes Kim thinks is best for his people is likely
very different from what the North Korean leader has in mind as the
two leaders head towards highly anticipated “denuclearization” talks
that could make the difference between war and peace on the Korean
Peninsula.

With the US invasion that toppled Iraqi leader Saddam Hussein in 2003,
and the Western air strikes that brought down Libyan strongman Muammar
Gaddafi in 2011, Kim would be taking a high stakes risk to give up the
only insurance he has against a similar US-led attempt at regime
change.

Kim Jong-un thus enters talks with Trump with little guarantee that
any reached agreement on curtailing his nuclear program will be upheld
after making concessions such as intrusive outside inspections that
would likely weaken his hand.

Significantly, the North Korean public has not been officially
informed that talks could take place, indication that Kim is playing
to the international community and not domestic audiences.

So what is Kim Jong-un really up to? Following four costly nuclear
tests since 2012 and dozens of missile launches that have been met
with escalated international sanctions, the North Korean economy is
clearly in dire straits and in desperate need of funds to prevent a
full-blown collapse.

According to a July 2017 United Nations report, rainfall in North
Korea has been ominously low, a sign of potential severe food
shortages to come. International sanctions, meanwhile, have made it
nearly impossible for North Korea to import enough fuel to meet basic
needs.

Aid for promises to freeze WMD tests has long been the card North
Korea plays and later withdraws in its on-and-off negotiations with
the US and wider West.

Conclusions

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18 SEP 17 :: it is entirely unlikely that the West has anything to offer the Chinese that can compensate them for the loss of their hinterland, buffer and instrument of attack.
Law & Politics


And front and centre in Kim’s mind must be the image of Saddam Hussein
being hung by his neck and of Muammar Gaddafi meeting his death after
having been sodomised with a bottle. When you view things from Kim the
rocket man’s perspective, you might appreciate that far from being
illogical, he is in fact being ruthlessly logical

read more



12-FEB-2018 :: 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.
Law & Politics


“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.

read more


18 SEP 17 :: "A screaming comes across the sky" North Korea. @TheStarKenya
Law & Politics


Gravity’s Rainbow is a 1973 novel by Thomas Pynchon which is about the
design, production and dispatch of V-2 rockets by the German military.
In particular, it features the quest undertaken by several characters
to uncover the secret of a mysterious device named the “Schwarzgerät”
(black device), slated to be installed in a rocket with the serial
number “00000”. As the world watches PyongYang, I cannot help
wondering if Kim Jong-Un has read Pynchon which speaks of “A screaming
comes across the sky” and North Korea.

“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.’’

read more


29-11-2010 FAR away in distant lands lies the Hermit Kingdom They all have had tiny little hands like the Elves in the Elves and the Shoemaker.
Law & Politics


They all have had tiny little hands like the Elves in the Elves and
the Shoemaker. And this country has nuclear weapons and on its border
with its neighbour South Korea sit 25,000 American soldiers.

read more


16-APR-2018 :: Lets be frank, these Tomhawks fired at will over Syria have put Putin in a corner.
Law & Politics


His entire political raison d'etre has been framed as a ''Strong
Man''. It is a neat twist that Trump is the US president that has
taken Putin to a ''Put Up or Shut Up'' moment. In his book from 2000,
Putin briefly tells a story of the first time he learned “the meaning
of the word cornered.”

There, on that stair landing, I got a quick and lasting lesson in the
meaning of the word cornered. There were hordes of rats in the front
entryway. My friends and I used to chase them around with sticks. Once
I spotted a huge rat and pursued it down the hall until I drove it
into a corner. It had nowhere to run. Suddenly it lashed around and
threw itself at me. I was surprised and frightened. Now the rat was
chasing me. It jumped across the landing and down the stairs. Luckily,
I was a little faster and managed to slam the door shut in its nose.

Ben Bernanke was asked why people hold gold and he said: "As
protection against what we call tail risks: really, really bad
outcomes."

I expect ''Geopolitical'' Tail risks to continue to climb higher
lifting Gold and Crude Oil Prices further.

read more




16-APR-2018 :: ''When our President draws a red line, our President enforces a red line'' [He must have loved that]
Law & Politics


I cannot opine on why Bashar Assad would use chemical warfare just
when he was apparently winning all ends up and frankly nor can anyone
else because the International Community [US, UK and France] started
bombing before the OPCW [Organisation for the Prevention of Chemical
Warfare] got on the ground.

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This Tunnel System in #Ghouta was painstakingly built because the Syrian capital was the ultimate prize @EHSANI22
Law & Politics


This Tunnel System in #Ghouta was painstakingly built because the
Syrian capital was the ultimate prize. No other place in Syria,
including Aleppo, saw anything near this level of dedication and
resources dedicated

read more









Currency Markets at a Glance WSJ
World Currencies


Euro 1.2368
Dollar Index 89.66
Japan Yen 107.31
Swiss Franc 0.9680
Pound 1.4281
Aussie 0.7757
India Rupee 65.705
South Korea Won 1067.82
Brazil Real 3.4089
Egypt Pound 17.7099
South Africa Rand 12.0287

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.@abraajgroup offers to step down as manager of $1bn healthcare fund @FT
Emerging Markets


Abraaj has offered to resign as manager of its $1bn healthcare fund as
the emerging markets private equity company deals with investors angry
about alleged misuse of their money.

The plan seeks to swap Dubai-based Abraaj with an interim manager and
then a permanent replacement, people involved in the discussions said.
Other options include turning the fund into a company or a
self-governing fund.

Abraaj, which has deployed $8bn in its 15-year history, came under
fire during the healthcare fund’s annual general meeting with
investors in London earlier this month.

“The meeting went badly,” one person briefed on the meeting said.
“There was shouting.”

But the investors, this person and others added, have responded more
positively to the proposed management change as both sides search for
a solution to allow the fund to manage the roughly $500m it has
already deployed and put the remaining commitments into healthcare
projects in emerging markets.

Abraaj and the investors are drawing up documents outlining the
withdrawal as manager of Abraaj, which is also the largest investor in
the fund.

Bankers say splitting off the healthcare fund would allow the
embattled company to move on from the impasse with some investors,
allowing Abraaj to focus on its governance revamp. It would also allow
Abraaj and its partners to find a solution allowing the fund to deploy
the remaining $500m in commitments.

Abraaj’s troubles first emerged when four healthcare fund investors,
including the World Bank’s International Finance Corporation,
questioned Abraaj about money that had been drawn down but not
deployed, prompting concerns that their funds were misused. After
talks, Abraaj returned the money with interest.

Abraaj’s auditor, KPMG, exonerated the company, saying it had followed
agreed-upon procedures. This report fuelled the concerns of investors,
who are awaiting the final results of their own audit carried out by
Ankura Consulting.

The embattled Dubai-based group has since admitted to drawing on
investors’ funds for “general corporate purposes”, albeit within the
terms of the fund agreement, people close to the company say.

The admission has fuelled anger among some of its investors,
especially arms of governments and development financial institutions.

“It’s still uncertain how this will play out,” said an industry executive.

Frontier Markets

read more







Ethiopia Pips Ghana as Fastest-Growing Africa Economy for IMF
Africa


Ghana has lost its mantle as the African economy likely to grow the
quickest this year to Ethiopia, which has held the position for most
of the past decade, International Monetary Fund data showed.

West Africa’s second-biggest economy should expand 6.3 percent this
year, the IMF said in its World Economic Outlook released Tuesday.
That’s lower than the 8.9 percent forecast in October, and is also
less than the raised 7.4 percent estimate for Ivory Coast and the
prediction for Ethiopia, which was held at 8.5 percent.

Commodities including oil, gold and cocoa are the mainstay of Ghana’s
$43 billion economy, which surged 8.5 percent last year as the Sankofa
crude field started up in May. Its growth booms and busts have been
closely linked to oil since it became a producer in 2010. Ethiopia,
whose gross domestic product is almost double Ghana’s, has drawn
investors including General Electric Co., Johannesburg-based Standard
Bank Group and hundreds of Chinese companies.

The IMF increased its forecast for expansion in sub-Saharan Africa to
3.4 percent this year and 3.7 percent the next “as the challenging
outlook in commodity exporters gradually improves,” it said.

Nigeria, the region’s most-populous nation and top crude producer,
will grow 2.1 percent, matching the lender’s estimate released in the
Jan. 22 update to the outlook, while South Africa, the world’s biggest
source of platinum, will expand 1.5 percent, more than the 0.9 percent
prediction three months ago. The two economies account for almost half
of the region’s GDP.

read more



Burundi forces kill perceived regime opponents, says group AP
Africa


Burundi’s government forces and ruling party members have beaten and
killed perceived opponents of an upcoming referendum that could allow
the president to extend his rule, Human Rights Watch said Tuesday,
citing what it called “widespread impunity” for local authorities and
their allies.

The New York-based rights group reported that it had confirmed 19
cases of abuse since December 12, “all apparently to press Burundians
to vote yes on the referendum” that is scheduled for May 17.

State agents and members of a violent youth group allied with the
ruling party, the Imbonerakure, have used repression to ensure the
vote goes in the president’s favor, and their victims include a man
who was beaten to death and another whose beating may have resulted in
his death, the group said in its report.

read more









Kenya-focused fintech lender Tala raises $65m to fund expansion @FT
Kenyan Economy


Tala, a Kenya-focused fintech company providing uncollateralised
loans, has raised $65m in Series C equity investment and debt
financing to fund its newly launched global expansion.

The announcement, which takes Tala’s total fundraising to $105m, comes
three weeks after its main competitor, Branch International, announced
a $70m Series B equity and debt funding round that took its total
raised to $80m.

Tala, headquartered in Santa Monica, California, launched in Kenya in
2014 and last year expanded into the Philippines, Tanzania, Mexico and
India. It uses mobile phone and behavioural data to provide loans
ranging from $10 to $500 with the median being $100. Loans are usually
approved within minutes and, where available, disbursed via mobile
money platforms.

It has issued more than $300m via 6m loans to 1.3m people. Some 95 per
cent of those who have taken out loans have done so more than once.

World Bank data indicate that more than 2bn people have extremely
limited access to financial services. Analysts say that the rapid
growth in smartphone use across the developing world has enabled
companies like Tala and Branch to flourish.

Shivani Siroya, Tala’s chief executive, said the new funds would be
used to “focus on growth in our current markets”.

“We aim to provide an entire financial life to our customers and prove
we are trusting them and it’s a two-way street,” she told the
Financial Times, adding: “This year will be the year when Tala
customers will get further products [beyond loans].”

Tala’s latest funding round comprised $50m in equity investment led by
Revolution Growth and existing investors, including IVP, Data
Collective, Lowercase Capital, Ribbit Capital, and Female Founders
Fund. The $15m in debt was provided by institutional investors.

Branch, which is also based in California and began operations in 2015
in Kenya, has adopted a similar model. It also has operations in
Tanzania and Nigeria and intends to launch in India this year. It said
it has more than 1m unique borrowers but refused to give further
specifics of its business to date, other than that its loans range in
value from $2.50 to $500. It said it issues “tens of thousands of
loans” every day.

Its funding round was led by Trinity Ventures. Other participants
included Victory Park, International Finance Corporation, Andreessen
Horowitz and CreditEase Fintech Investment Fund.

Both companies have said they launched in Kenya because it has a high
unbanked population and one of the most developed mobile money markets
in the world. Mpesa, the world’s first major mobile money platform,
was launched in Kenya in 2007.

Ms Siroya said Tala chose to expand into India and Mexico because “if
you look at the underserved population globally, India and Mexico are
two of the largest markets”.

“And if you look at the governments of these two countries there’s a
real push for access to finance,” she said.

read more


TPS @serenaHotels reports FY 2017 EPS -25.00% Earnings here
Kenyan Economy


Par Value:                  1/-
Closing Price:           33.00
Total Shares Issued:          182174108.00
Market Capitalization:        6,011,745,564
EPS:             0.36
PE:             91.666

TPS manages 15 hotels and resorts across East Africa under the Serena
brand name.

TPS Eastern Africa FY 2017 results through 31st December 2017 vs. 31st
December 2016
FY Revenues 6.408206b vs. 6.468803b -0.937%
FY Earnings before exchange loss, interest, depreciation, results of
associates and taxation 831.525m vs. 973.487m -14.583%
FY Exchange gain on foreign currency loans 3.039m vs. 51.558m -94.106%
FY Net interest expense [137.961m] vs. [172.669m] -20.101%
FY Depreciation and amortisation [406.496m] vs. [538.333m] -24.490%
FY Profit before income tax 260.747m vs. 315.148m -17.262%
FY Profit for the year 119.465m vs. 119.175m +0.243%
FY Profit for the year attributable to equity holders of the company
65.209m vs. 88.150m -26.025%
Basic and diluted EPS 0.36 vs. 0.48 -25.000%
Total Equity 9.164617b vs. 9.367517b -2.166%
Cash and cash equivalents at the end of the year 611.779m vs. 1.425891b -57.095%
Final dividend 0.35 vs. 0.35 –

Commentary


2017 - Group successfully traversed through a challenging business
landscape for the tourism industry in East Africa mainly caused by the
ripple effect of the political uncertainty in Kenya.
despite the increasing competition arising from new market entrants
most Serena City hotels performed well.
Serena safari circuit in Kenya and Tanzania were healthier tan the
corresponding periods in the past 2 years.
foreign tourism for destination Kenya in particular is expected to be
more promising than year 2017
support from domestic and regional markets is expected to continue at
encouraging levels during 2018
Nairobi Serena operating at 46% of its room inventory

Conclusions


I expect the Tourism rebound to gain more traction.
TPS is a value proposition notwithstanding its elevated PE

read more





The Serena The Star
Kenyan Economy


MY memories of the Serena start in Mombasa years back when the
managing director Mahmoud Jan Mohamed was the manager. I was then a
teenager and remember losing my heart to a girl, who would beat me at
table tennis, in a bikini. That table tennis Table is still there. The
Serena brand has always been sprinkled with a fairy dust and reminds
me of happy joyful carefree halcyon days of youth. That brand equity
was appreciated last Thursday at the Grosvenor House where The Serena
Hotels won the Best Hospitality, Travel and Tourism in Africa award at
the African Business Awards.

And now, Serena is clearly staking out a much more forward and
offensive position across the region and as you know by now, I sense
the Eastern sea board of Africa is at a tipping Point [The oil and gas
refers but just as important is the late cycle arrival of the
information century which is the entry ticket for Africa to join in
the c21st That Arrival of the Information Century is very grass roots
because anyone with an Internet enabled mobile phone has an entry
ticket and therefore, I see the expansion of the brand as timely and
riding a rising tide. The brand is established. Its got breadth, its
not a mom and pop operation. Sure, lots of folks are coming for Serena
lunch but their longevity, their ability to navigate has been proven
and their DNA make them a formidable competitor.

read more





Our digital footprint in terms of reach grew by 24% between March 2017 and March 2018 @NationMediaGrp
Kenyan Economy


This year we implemented a multi-channel publishing system, putting in
an investment of Ksh150 million.

read more


BOC Kenya reports FY 2017 EPS -68.779% Earnings here
Kenyan Economy


Par Value:                  5/-
Closing Price:           97.00
Total Shares Issued:          19525446.00
Market Capitalization:        1,893,968,262
EPS:                 2.02
PE:                48.091

BOC Kenya Limited FY 2017 results through 31st December 2017 vs. 31st
December 2016
FY Revenue 967.626m vs. 1.076719b -10.132%
FY Earnings before finance income and taxes 29.677m vs. 132.368m -77.580%
FY Net finance income 53.936m vs. 58.314m -7.508%
FY Profit before tax 83.613m vs. 190.682m -56.151%
FY Profit for the year 39.379m vs. 126.323m -68.827%
Basic EPS 2.02 vs. 6.47 -68.779%
Final Dividend 3/= a share
Total dividend 5.20 vs. 5.20 –
Cash and cash equivalents at the end of the year 73.389m vs. 71.417m +2.761%
Total Assets 2.228669b vs. 2.223838b +0.217%
Total Equity 1.611082b vs. 1.689449b -4.639%

Commentary


Revenue for the year at 967.6m was down 10% compared to the previous
year due to the loss of a major public sector hospital tender
occasioned by the importation of medical oxygen., depressed demand in
a constrained credit environment and reduced economic activity in
welding and fabrication during the extended period of the national
elections.
Profit after tax decreased by 56% due to a once-off credit in the
prior year following the adoption by the Company of the revised
methodology used by Group companies to determine stock obsolescence
provisions, increased debtor provisioning due to delayed payments by
public sector customers and customers in the sugar industry and the
provisioning of disputed tax assessments in one of the subsidiary
companies.
Local industrial gases, medical gases and welding products markets
face significant pressures from low-cost imported products, wich
together with illegal refilling of gas cylinders continue to constrain
the company's volume growth initiatives.

Conclusions


counterintuitively, this lower run rate looks like the new normal.

read more






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