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Satchu's Rich Wrap-Up
Thursday 14th of June 2018

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Macro Thoughts

Fed increase its fed funds target range by 25 bps, to a range of 1.75 to 2%

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Bitcoin's remarkable run last year may have been smoke and mirrors @CNNMoney

Tether, another digital currency tied to the US dollar, was used to
artificially inflate bitcoin prices, according a study released
Wednesday by the University of Texas.
John Griffin, a finance professor at the university, and graduate
student Amin Shams analyzed blockchain purchases and discovered that
major Tether buys were timed to follow market downturns and helped
stabilize bitcoin's floor.
"These patterns cannot be explained by investor demand," they said in the study.

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27 NOV 17 :: Bitcoin "Wow! What a Ride!". @TheStarKenya

My investment thesis at the start of the year was that Bitcoin was
going to get main-streamed in 2017. It has main-streamed beyond my
wildest dreams, therefore, I am now sidelined.

Let me leave you with Hunter S.  ompson, “Life should not be a journey
to the grave with the intention of arriving safely in a pretty and
well preserved body, but rather to skid in broadside in a cloud of
smoke, thoroughly used up, totally worn out, and loudly proclaiming
“Wow! What a Ride!”

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University of Texas at Austin Study All But Confirms Tether Is Manipulating Bitcoin @UTSA

Paper authors from the University of Texas at Austin in the department
of finance John M. Griffin and Amin Shams have taken an in-depth look
at the secretive and suspicious cryptocurrency issued by Bitfinex'
called Tether.
The abstract for the paper succinctly describes what the paper is about:
This paper investigates whether Tether, a digital currency pegged to
U.S. dollars, influences Bitcoin and other cryptocurrency prices
during the recent boom. Using algorithms to analyze the blockchain
data, we find that purchases with Tether are timed following market
downturns and result in sizable increases in Bitcoin prices.
Less than 1% of hours with such heavy Tether transactions are
associated with 50% of the meteoric rise in Bitcoin and 64% of other
top cryptocurrencies. The flow clusters below round prices, induces
asymmetric autocorrelations in Bitcoin, and suggests incomplete Tether
backing before month-ends.
These patterns cannot be explained by investor demand proxies but are
most consistent with the supply-based hypothesis where Tether is used
to provide price support and manipulate cryptocurrency prices.
First, if the Tether founders, like most early cryptocurrency adopters
and exchanges, are long on Bitcoin, they have a large incentive to
create an artificial demand for Bitcoin and other cryptocurrencies by
'printing' Tether. Similar to the inflationary effect of printing
additional money, this can push cryptocurrency prices up.
Second, the coordinated supply of Tether creates an opportunity to
manipulate cryptocurrencies. When prices are falling, the Tether
creators can convert their Tether into Bitcoin in a way that pushes
Bitcoin up and then sell some Bitcoin back into dollars to replenish
Tether reserves as Bitcoin price rises.
Finally, if cryptocurrency prices crash, Tether creators essentially
have a put option to default on redeeming Tether, or to potentially
experience a ’hack’ where Tether or related dollars disappear.
This is one of the simplest and digestible explanations on how Tether
possibly affects the price of Bitcoin by creating artificial demand
for Bitcoin by print more Tethers. Like a yo-yo, when Bitcoin falls
they can sell Tether for Bitcoin which drives the price up and when it
goes up, sell it for Tether again. It's a form of money laundering
when you think about it.
The flow goes like this:
Tether is created
Tether is then moved to Bitfinex
Tether is slowly moved out to other crypto exchanges (mainly Poloniex
and Bittrex)
No Tether ever returns to the Tether issuer to be redeemed, and the
only exchange where Tether can be exchanged for USD is Kraken, which
as you can see accounts for a small portion of transaction volumes
Things really start to get interesting when the research focuses on
the data and price movements with a more fine-grained microscope.
To illustrate the potential magnitude and predictive effect of Tether
issuances on Bitcoin prices, we focus on the hours with the largest
lagged combined Bitcoin and Tether flows on the two
These 87 hours have large negative returns before the flows but are
followed by large return reversals. These 87 events account for less
than 1% of our time series (over the period from
the beginning of March 2017 to the end of March 2018), yet are
associated with 50% of Bitcoin’s compounded return, and 64% of the
returns on six other large cryptocurrencies (Dash, Ethereum Classic,
Ethereum, Litecoin, Monero, and Zcash).
A bootstrap analysis with 10,000 simulations demonstrates that this
behavior never occurs randomly

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Crypto Collapse Accelerates As Bitcoin Miners Turn Cashflow Negative @zerohedge

“I’ve looked at a lot of markets,” he said. “If there’s fraud or
manipulation in a market it can leave tracks in the data. The tracks
in the data here are very consistent with a manipulation hypothesis.”

Home Thoughts

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Antarctica's ice sheet is melting 3 times faster than before @ABCNews

From 1992 to 2011, Antarctica lost nearly 84 billion tons of ice a
year (76 billion metric tons). From 2012 to 2017, the melt rate
increased to more than 241 billion tons a year (219 billion metric
tons), according to the study Wednesday in the journal Nature .

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"In post-Brexit Britain, here was an Egyptian, an observant Muslim who prostrated himself after goals, embraced by the Liverpool faithful in the global religion known worldwide as football." @RosaO_Hara

"In post-Brexit Britain, torn by contentious immigration debates, here
was an Egyptian, an observant Muslim who prostrated himself after
goals, embraced by the Liverpool faithful in the global religion known
worldwide as football."

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"Envy those who see beauty in everything in the world." @brainpickings

For James Baldwin, being an artist meant serving as “a sort of
emotional or spiritual historian”; for Georgia O’Keeffe, it meant
“making your unknown known…and keeping the unknown always beyond you.”
For Albert Camus, the artist was a person endowed with the courage to
create dangerously; for E.E. Cummings, with the courage to be oneself.
Virginia Woolf believed it requires a certain “shock-receiving

In a letter found in Egon Schiele: Poems and Letters 1910–1912 (public
library), he writes:

One needs to observe and experience the world with naïve, pure eyes in
order to attain a great weltanschauung; — that is a living cult. — the
proper tone is a book which, for some, may be nice to consult, but
proves itself completely useless in the world; in other words, there
are those who should live through books and those who exist through
themselves; who are better? — that is clear. — Few see the sun and
everyone else must read novels and novellas in order to finally
realize that there is light.

Decades after Kierkegaard insisted that “truth always rests with the
minority… because the minority is generally formed by those who really
have an opinion, while the strength of a majority is illusory, formed
by the gangs who have no opinion,” Schiele considers the power of the
visionaries, who are always in the minority:

The “many” are those who are dependent upon each other, — the people.
— The “few” are the direct leaders of the world because they introduce
only that which is new and are therefore repugnant; that should be
clear enough. Beyond that are the fighters — leaders… — One battles
against the capital and the philistines; the large spirit wishes to
see the smaller one equally large whereas the small spirit forever
wishes to overshadow every small spirit around him. — That is a lack
of will and whatever else… — Envy those who see beauty in everything
in the world.

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Those who love these splendid beings must seize this last tremulous chance to act, to speak the truth in the face of extinction itself, and to do all we can, while we can, to prevent the dawning of an emptied world. @Revelator_News

Those who love these splendid beings — lions and rhinos, giraffes and
cheetahs — must seize this last tremulous chance to act, to speak the
truth in the face of extinction itself, and to do all we can, while we
can, to prevent the dawning of an emptied world

Like with other forms of nonfiction, such as documentary filmmaking,
where the director makes a deliberate choice as to where and at whom
to aim her camera, a journalist covering wildlife poaching and
trafficking issues must make a conscious decision about what will be
examined and why. Should poachers, many of whom are poor people
ensnared by the promise of relative riches for a dangerous act, be
given equal say? Should the market forces behind the demand for ivory,
rhino horn and pangolin scales be allowed a forum for justification,
an evenhanded review of the value of these trafficked products for use
in traditional medicine?

Perhaps they should, I would say, but only to point out the
socioeconomic necessity of making wildlife valuable to local
communities, or to prove the scientific vacuity of fake medicinal
properties. In my opinion this is all the objectivity that is owed as
we relate the end times for these last fading remnants of the

Related to that inborn sense of urgency, several newish scientific
terms and theories have gained mainstream acceptance in recent years.
The first is the Anthropocene — an era of overwhelming human impact
on, not only other life forms, but the fundamental fabric of the earth
itself. Geologists have largely come to an agreement that the lasting
effects of humanity will constitute a distinct stratigraphical layer
of the planet’s surface. Scientists differ as to the so-called “golden
spike” that officially launched the Anthropocene epoch. But whether it
began with the Columbian Exchange — the enduring interaction of
animals, plants and microorganisms back and forth across the Atlantic
that began in 1492 — or with the nuclear age; or with the onset of
climate change, the permanent alteration of the world by humans is
largely a foregone conclusion.

The second theory, now an indisputable fact, is the Sixth Extinction —
the accelerating annihilation of other forms of life through direct
take, habitat loss or climate change. Not since the close of the
Cretaceous and the end of the dinosaurs has the world suffered such a
sweeping loss of unique life forms. And this time it’s not a comet out
of the blue, but the actions of a single species that are squarely to

In a July 2017 study published in the Proceedings of the National
Academy of Sciences, ecologists found that nearly one-third of the
27,600 terrestrial mammal, bird, amphibian and reptile species
considered are dwindling in terms of their numbers and territorial
range, what the researchers called an “extremely high degree of
population decay.” Further, they found that a major planetary
extinction event is currently “ongoing.” It’s now believed that three
quarters of Earth’s species could vanish forever in the coming
centuries — a mere blink of the eye in geologic time.

The most painfully illustrative manifestation of these new theories of
extinction is direct take — the deliberate killing of rare and
declining animals. From the atlas bear — a native of northern Africa
last seen in Roman arenas — to the quagga — a subspecies of plains
zebra last seen in1883 at the Amsterdam Zoo — the purposeful slaughter
of endangered wildlife, out of conflict for resources, for bushmeat or
for illicit profit, constitutes the most preventable pathway to

Objective coverage of this issue — an unflinching, staring-at-the-sun
accountability of what we’re losing and why — can be taken as a kind
of empirical advocacy, a fact-checked narrative description of the
last days of Earth’s most majestic and irreplaceable wildlife. What
the reader chooses to do with the information we provide is generally
beyond our ability to assess, much less direct. An environmental
journalist’s job, as I see it, is simply to ring the alarm so that
others might directly advocate for change while there is time to avoid

Recently another scientific term has been coined, the very invention
of which speaks to the nihilistic nature of our time. An “endling” is
the last member of a particular species whose numbers have dwindled
past the point of recovery. March 19 saw the death of the last male
northern white rhino at Ol Pejeta Conservancy in Kenya. Named Sudan,
the 45-year-old giant had spent his remaining days being constantly
guarded by armed rangers, shuffling about a grassy enclosure without
the searing foresight to understand that he is the last of his kind.
Sudan is survived by a daughter and a granddaughter. And that’s it.
The story of his species is over.

As well-meaning and impressive as was Sudan’s protected status, it was
plainly too little, too late. Unless urgent, decisive and meaningful
action is taken, the rest of Africa’s remaining megafauna will join
Sudan in a premature, undeserved and wholly needless extinction.

Sudan’s death is obviously a tragic story, and that can make stories
like it a tough sell. Editors often cast about for uplifting stories
of hope to punch through the numbness that comes from the constant
deluge of terrible images and statistics arising from the African
poaching crisis. They’re right to do so, but that hardly means that we
should in any way hide or sugarcoat the brutal facts.

For most species, we still have time. This cannot be stressed enough.
The window of opportunity is small and rapidly shrinking, but
furnished with the facts, and driven by an unflinching refusal to turn
away and succumb to despair, science journalists can — and must — make
the critical contributions necessary to achieve lasting change before,
as with the northern white rhino, it is irrevocably too late.

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"The revolutionary contingent attains its ideal form in the street, where for a moment it stops being a cog in the technical machine and itself becomes a motor (machine of attack), in other words a producer of speed."
Law & Politics

“The revolutionary contingent attains its ideal form not in the place
of production, but in the street, where for a moment it stops being a
cog in the technical machine and itself becomes a motor (machine of
attack), in other words a producer of speed.’’

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If Washington does not bring back its military from South Korea, there will be no denuclearization. Essentially, that's the deal discussed between Kim and President Xi Jinping @asiatimesonline
Law & Politics

The Trump-Kim geopolitical reality-TV show – surreal for some –
offered unparalleled entries to the annals of international diplomacy.
It will be tough to upstage the US President pulling an iPad and
showing Kim Jong-un the cheesy trailer of a straight-to-video 1980s
B-grade action movie – complete with a Sylvester Stallone cameo –
casting the two leaders as heroes destined to save the world’s 7
billion people.

Away from the TV, the former “Rocket Man”, now respectfully recast in
Trump terminology as “Chairman Kim”, did strike a formidable coup by
completely erasing the dreaded acronym CVID – or “complete,
verifiable, irreversible denuclearization” – from the final text of
the Singapore joint statement.

Throughout the pre-summit negotiations, the Democratic People’s
Republic of Korea (DPRK) had always stressed an “action-for-action”
strategy leading to denuclearization, as in Pyongyang being
compensated every step of the way instead of waiting until after
complete denuclearization – a process that could last over a decade –
to be eligible for economic benefits.

The Singapore joint statement enshrines exactly what the Russia-China
strategic partnership – formalized in the recent Shanghai Cooperation
Organization (SCO) summit – was suggesting from the beginning: a
double freeze.

The DPRK holds off on any new nuclear and missile tests while the US
and South Korea stop the “war games” (Trump’s terminology).

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12-FEB-2018 :: 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.

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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.’’

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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.

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Arab states launch biggest assault of Yemen war with attack on main port @Reuters
Law & Politics

A Saudi-led alliance of Arab states launched the largest assault of
Yemen’s war on Wednesday with an attack on the country’s main port,
aiming to bring the ruling Houthi movement to its knees at the risk of
worsening the world’s biggest humanitarian crisis.

Arab warplanes and warships pounded Houthi fortifications to support
ground operations by foreign and Yemeni troops massed south of the
port of Hodeidah in operation “Golden Victory”.

The assault marks the first time the Arab states have tried to capture
such a heavily-defended major city since they joined the war three
years ago against the Iran-aligned Houthis, who control the capital
Sanaa and most of the populated areas.

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Currency Markets at a Glance WSJ
World Currencies

Euro 1.1808
Dollar Index 93.47
Japan Yen 110.09
Swiss Franc 0.9845
Pound 1.3390
Aussie 0.7555
India Rupee 67.585
South Korea Won 1081.92
Brazil Real 3.7199
Egypt Pound 17.8760
South Africa Rand 13.2687

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Glencore accounts for more than a quarter of the world's cobalt output, most of it from Congo, which itself is the source of 60 percent of global supplies.

Glencore accounts for more than a quarter of the world’s cobalt
output, most of it from Congo, which itself is the source of 60
percent of global supplies. Any disruption could push up cobalt prices
from already historic highs of near $100,000 a tonne.

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05-FEB-2018 :: Halcyon Days @TheStarKenya
Emerging Markets

Wikipedia has an article on: halcyon days and it reads thus,

From Latin Alcyone, daughter of Aeolus and wife of Ceyx. When her
husband died in a shipwreck, Alcyone threw herself into the sea
whereupon the gods transformed them both into halcyon birds
(kingfishers). When Alcyone made her nest on the beach, waves
threatened to destroy it. Aeolus restrained his winds and kept them
calm during seven days in each year, so she could lay her eggs. These
became known as the “halcyon days,” when storms do not occur. Today,
the term is used to denote a past period that is being remembered for
being happy and/or successfuL

Frontier Markets

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A chart of the 50 worst performers on JSE excluding micro-caps. @davidshapiro61

A chart of the 50 worst performers on JSE excluding micro-caps.
Slowing economy evident in financials- PSG, Discovery, Capitec,
Coronation, Sasfin. Plats also battling- Sibanye. Former hot stocks
Blue Label, DisChem, EOH, Curro and Stadio also on the list.
Construction a disaster

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Dollar versus Rand 6 Month Chart INO 13.2687

Egypt Pound versus The Dollar 3 Month Chart INO 17.8760


Nigeria All Share Bloomberg +2.06% 2018


Ghana Stock Exchange Composite Index Bloomberg +15.69% 2018


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DPP orders probe on top banks over NYS scam @bd_africa
Kenyan Economy

The Director of Public Prosecutions (DPP) has ordered the banking
sector regulator, criminal investigations department and the spy
agency to probe 10 banks that handled millions of shillings that were
siphonedout of the National Youth Service (NYS) and the Sh1.5 billion
proceeds of Ruaraka land compensation.

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"The government needs to look at its expenditure. That is the disease, everything else is a symptom of that disease" @BD_Africa #BudgetKE2018
Kenyan Economy

“The proposed tax increases, if passed, will make us the worst tax
jurisdiction in our environment. The government needs to look at its
expenditure. That is the disease, everything else is a symptom of that
disease,” said Aly-Khan Satchu, an independent analyst.“I believe we
have squeezed existing taxpayers until the pips have squeaked.”
The KRA is expected to raise Sh1.7 trillion in taxes for the next
financial year ending June 2019, up from this year’s Sh1.4 trillion.
The taxman is, however, likely to miss the Sh1.4 trillion target for
this year given that the most recent available data shows that he
raised Sh1 trillion in the 10 months to April, short of Sh400 billion
with only two months left.
“Debt to GDP is now flashing amber. Envelope space to put more debt on
the balance sheet has eroded,” said Mr Satchu, a position shared by
Central Bank of Kenya governor Patrick Njoroge along with multilateral
lenders like the IMF.
Treasury records indicate that development expenditure accounted for a
paltry 15.4 per cent of the total cash released by the Exchequer in
the 10 months through April, highlighting increased demand from
administrative expenses and debt servicing.
“The balance sheet is maxed out. Our investments are not producing a
meaningful ROI (return on investment), at this point,” said Mr Satchu.

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Blockchain is opening up Kenya's $20 billion informal economy
Kenyan Economy

Twiga & IBM processed more than 220 loans for small-food kiosks during
an eight-week pilot program. Loans averaged $30 and helped boost order
sizes by 30% & the profits for each retailer by 6% #Blockchain

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Kenya mulls adoption of Chinese yuan as a reserve currency @XHNews
Kenyan Economy

"It is inevitable that Kenya will include the Chinese yuan as a
reserve currency. The only question is when and the timing will be
determined by a number of short term factors," Njoroge said during the
Guangzhou-Foshan Nairobi Business forum.

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Kenya's exports to key markets in Africa fell to an eight-year low in the first four months of the year, official statistics show @BD_Africa
Kenyan Economy

Latest data by the Central Bank of Kenya (CBK) show earnings from the
continent were about Sh71.44 billion, a 4.5 per cent drop compared to
the same period in 2017 and the lowest since 2010.
Reduced trade between Kenya and the rest of Africa is in keeping with
a trend observed in the 12 months to December 2017.
Kenyan factories have been losing their market share in Africa despite
the country being a member of the six-nation East African Community
(EAC) and 19-member Common Market for Eastern and Southern Africa
(Comesa) partly due to import substitution amid dwindling industrial
Export orders from neighbouring Uganda, the country’s largest market
in Africa, for example fell by 5.69 per cent in the period to Sh20.41
billion, maintaining a flat trend witnessed in recent years.
“We don’t get our VAT refund on time, we don’t get export incentives
and that’s why our trade within the region has been reducing,” Kenya
Association of Manufacturers (KAM) vice chairman Sachen Gudka said in
an interview late April.
“The government should address competitiveness because when you look
at Kenya in terms of global benchmarks, cost levels are at least 10
per cent higher.”
Kenya’s exports to Africa, however, accounted for 33.74 per cent of
her total exports, which stood at Sh211.71 billion between January and
April, the CBK data shows.
Intra-Africa trade remains at a lowly 10 per cent, meaning African
countries trade more with other continents such as Europe than they do
among themselves.

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Kenya Shilling versus The Dollar Live ForexPros
Kenyan Economy

Nairobi All Share Bloomberg +4.09% 2018 (-9.340% since record high of
196.57 set on April 5th)


Nairobi ^NSE20 Bloomberg -9.92% 2018


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Unga share price data here
Kenyan Economy

Par Value:                  5/-
Closing Price:           39.00
Total Shares Issued:          75708872.00
Market Capitalization:        2,952,646,008
EPS:             4.32
PE:                 9.028

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

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