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Satchu's Rich Wrap-Up
Thursday 05th of July 2018

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Commentary: For markets, 2018 mid-year looks more like tipping point @Reuters @ReutersJamie

Emerging markets are under heavy and mounting pressure, credit markets
are crumbling, the U.S. bond yield curve is barely 30 basis points
from inverting, which may portend a recession. Tech and bank stocks,
which led Wall Street’s rally earlier this year, are also wobbling.

Add to that a sharp slide in the Chinese currency and rise in global
trade war fears, and it’s not hard to see why some investors might
want to throw in the towel completely.

Chinese and Brazilian stocks are in bear markets, India’s rupee is at
a record low, and according to Bank of America Merrill Lynch, global
equity funds posted their second biggest ever weekly outflow last week
($30 billion) and U.S. stock funds their third largest redemption ever
($24 bn).

Strategists at BAML note the parallels between now and 1998, when the
Asian crisis and LTCM crash plunged world markets into turmoil: Fed
tightening, U.S. decoupling and dollar strength, flattening yield
curves, and emerging market weakness.
Between July 1997 and October 1998 emerging market equities fell 59
percent in dollar terms, and between July and October 1998 developed
markets capitulated: the S&P 500 fell 22 percent, the Nasdaq 33
percent and U.S. bank stocks 43 percent; the Japanese yen surged 30
percent; equity and bond market volatility tripled.
There’s no suggestion declines and swings of this magnitude are
imminent, or even likely. Investors still expect stocks to end the
year higher, according to the latest Reuters poll of fund managers.
The benchmark U.S. yield curve, the difference between 10- and
two-year Treasury yields, is the flattest in over a decade and only 30
basis points from inverting. Almost all inversions in the last half
century have preceded recession.

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Asia in bad shape a day before the deadline on these trade tariffs. @DavidInglesTV

- Stocks down for the 9th time in 10 days
- Philippines gets clobbered; inflation shoots up further
- H-shares sink deeper into bear market
- Sovereigns and USD bid
- Copper hammered in Shanghai

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'I was disappointed that I didn't capture the owl head on, until it occurred to me that this shot of it disappearing into the gloom might capture a far more atmospheric impression.' -

‘I was disappointed that I didn’t capture the owl head on, until it
occurred to me that this shot of it disappearing into the gloom might
capture a far more atmospheric impression.’ - #WPYalumni

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<<I had seen the royal lion, before sunrise, below a waning moon, crossing the grey plain on his way home from the kill, drawing a wake in the silvery grass, his face still red up to the ears>> Isak Dinesen

«I had seen the royal lion, before sunrise, below a waning moon,
crossing the grey plain on his way home from the kill, drawing a wake
in the silvery grass, his face still red up to the ears» Isak Dinesen
- photo by @laurentbaheux

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The air was filled with clarity,-and over our heads, to the West, a single star which was to grow big and radiant in the course of the night

“How beautiful were the evenings of the Masai Reserve when after
sunset we arrived at the river or the water-hole where we were to
outspan, travelling in a long file. The plains with the thorn trees on
them were already quite dark, but the air was filled with clarity,—and
over our heads, to the West, a single star which was to grow big and
radiant in the course of the night was now just visible, like a silver
point in the sky of citrine topaz. The air was cold to the lungs, the
long grass dripping wet, and the herbs on it gave out their spiced
astringent scent. In a little while on all sides the Cicada would
begin to sing. The grass was me, and the air, the distant invisible
mountains were me, the tired oxen were me. I breathed with the slight
night-wind in the thorn trees.”
― Isak Dinesen

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US to keep Persian Gulf waterway open despite Iran threats @AP
Law & Politics

DUBAI, United Arab Emirates (AP) — The U.S. military is reiterating a
promise to keep Persian Gulf waterways open to oil tankers as Iran
renewed threats to close off the region.

Capt. Bill Urban, a spokesman for the U.S. military’s Central Command,
told The Associated Press on Wednesday that American sailors and its
regional allies “stand ready to ensure the freedom of navigation and
the free flow of commerce wherever international law allows.”

Iranian President Hassan Rouhani on Tuesday suggested Iran could halt
regional exports if it is stopped from exporting oil after America
pulled out of the nuclear deal with world powers.

Meanwhile, Iranian Gen. Qassem Soleimani reportedly sent a letter to
Rouhani applauding his stance.

Soleimani, the head of the Revolutionary Guard’s expeditionary Quds
Force, said his forces were “ready for any policy.”

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To put things in perspective considering potential disruption, the last major crisis of global economic consequence took place nearly three decades ago: @ZEROHEDGE
Law & Politics

The largest oil market disruption ever occurred in August 1990, when
Iraq's invasion of Kuwait took 4.3 million barrels per day of oil off
the market—about 6.5 percent of world supply. That stoppage caused
world oil prices to double (from about $20 to $40 per barrel). But a
blockade of Hormuz would cut off nearly four times as much oil as the
Kuwait crisis did, disrupting a share of the oil market three times

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The China-U.S. power struggle is just beginning @business
Law & Politics

Chinese President Xi Jinping has an ambitious master plan for his
country’s transformation into a wealthy, technology-driven global
economic power. And U.S. companies need not apply.

That’s why the current trade rumble between the U.S. and China, in
which the Trump administration is threatening to slap tariffs on $34
billion of Chinese imports and Beijing promises to respond in kind, is
far more than just a spat over market restrictions, intellectual
property rights and the epic U.S. deficit.

On a deeper level, the standoff reflects an escalating economic and
military rivalry between a status quo power and one of the most
remarkable growth miracles in history. It’s a clash between two
divergent systems, (one state-directed, the other market-driven) with
markedly divergent world views and national aspirations. That
strategic tension seems likely to intensify, regardless of how the
current brinkmanship over tariffs plays out.

It’s also a battle for global influence. Whereas the U.S. has long
sought to spread democracy and free markets to other nations, China’s
ruling Communist Party is just starting to pitch its heavy-handed
growth model as an alternative for developing nations. And Xi is
backing it up with hundreds of billions of dollars in loans for
infrastructure projects from Asia to Europe and beyond.

In the U.S., a bipartisan consensus has begun to emerge that now is
the time to stand up to China, even if many oppose President Donald
Trump’s tactics. Senate Minority Leader Chuck Schumer, a Democrat, has
attacked Trump for not being tougher on China, saying last week that
failure to change Beijing’s behavior now could hurt the U.S. economy
“for generations to come.”

With a roughly $13 trillion economy and expanding wealth, China is now
going head-to-head with the U.S. in advanced manufacturing and digital
technologies. It also has the wherewithal to make rapid technological
progress in defense, particularly with air-to-air missile systems that
pose a strategic challenge in Asia for the U.S. and its allies.

Xi is playing a long game, pursuing what he calls the “Chinese Dream,”
or “the great rejuvenation of the Chinese nation.” To get there, he
has set targets to double his country’s per capita gross domestic
product (from 2010 levels) to $10,000 by 2021 and refashion China into
a tech powerhouse, competitive in robotics, new energy-vehicles,
chips, software and other bleeding-edge industries under his Made in
China 2025 program. A separate development strategy envisions China
ruling in artificial intelligence by 2030.

China’s push for more self-reliance may reverse the trend toward
deeper economic integration with the U.S. that came following China’s
accession into the World Trade Organization in 2001. China is the
single largest foreign purchaser of U.S.-manufactured goods -- led by
transportation, chemical, computer and electronics -- outside of North
America, according to the National Association of Manufacturers.
Chinese goods have also flooded across American shores, pushing up the
U.S. trade deficit with China more than fourfold to $375 billion last

The Trump administration views such deficits as alarming and Chinese
trade practices as brash mercantilism, even a national security
threat. U.S. Defense Secretary Jim Mattis labeled China a “strategic
competitor using predatory economics” in January as he unveiled the
Pentagon’s National Defense Strategy.

This is a country on what it views as a historic mission to become a
21st century economic power, and the contest is just beginning.

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A leaked Chinese propaganda guidance obtained by @CDT provides some very unique insights about PRC preferences, strategy, and public opinion management for the US-China trade war @RushDoshi
Law & Politics

A leaked Chinese propaganda guidance obtained by @CDT provides some
very unique insights about PRC preferences, strategy, and public
opinion management for the US-China trade war. Everyone should read
it. Here are 6 quick takeaways:
1) The guidance suggests the PRC wants to frame the trade war to its
people as US-led containment:
"The trade conflict is really a war against China’s rise, to see who
has the greater stamina. This is absolutely no time for irresolution
or reticence."
2) The PRC fears this won't end soon:
"All media should prepare well for protracted conflict.  Don’t follow
the American sides’ fluctuating declarations."
3) The PRC knows Made in China 2025 is a major problem. Rather than
change end it, they think it is better to hide it:
"To re-emphasize: do not make further use of "Made in China 2025," or
there will be consequences."
Indeed, the phrase has largely stopped showing up in Xinhua.
4) They don't want a war of words with Trump, perhaps because they
fear he's quite good at them:
"Don’t attack Trump’s vulgarity; don’t make this a war of insults."
5) Unsurprisingly, their strategy is to pit U.S. interest groups
against each other:
We should "strike accurately and carefully, splitting apart different
domestic groups in US. "
6) There is an awareness that public opinion could become more
inflamed on this issue:
We should "hold public opinion at a good level without escalating it."

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

Apart from a few half-hearted and timid FONOPs [freedom of navigation
operations], China has established control over the South China Sea.
It has created artificial Islands and then militarised those
artificial islands across the South China Sea. It is a mind-boggling
geopolitical advance any which way you care to cut it.

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60% of the Nigerian population is aged under 25. That's 60% of the population which, like me, did not witness colonisation. We are the new generation @EmmanuelMacron
Law & Politics

60% of the Nigerian population is aged under 25. That’s 60% of the
population which, like me, did not witness colonisation. We are the
new generation. We are going to dispel prejudice by rebuilding a new
future through culture.

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07-MAY-2018 :: Africa Calling. @TheStarKenya
Law & Politics

Of course, Africa is not a Country, in fact the Continent is seriously
non-linear, booms and busts quite often occur simultaneously. However,
what is clear is that the demographic surge, the overwhelming nature
of the numbers of this ''Born Free'' generation

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Currency Markets at a Glance WSJ
World Currencies

Euro 1.1693
Dollar Index 94.37
Japan Yen 110.59
Swiss Franc 0.9917
Pound 1.3232
Aussie 0.7377
India Rupee 68.825
South Korea Won 1119.18
Brazil Real 3.9125
Egypt Pound 17.8917
South Africa Rand 13.7126

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China is now Africa's largest trading partner, with trade totalling $114 billion in 2016 that accounted for around 14% of the continent's total export @NewAfricanMag

As Africa’s largest trading partner China shifts to consumption-led
growth, Africa’s oil and ferrous metal exporters are set to suffer,
but tourism and investment will benefit, according to a new report by
Moody’s Investors Services.

A Moody’s report – Sovereigns: Africa, Closer trade and investment
ties with China released 3 June, says China’s new shift to
consumption-led growth will have mixed credit implications for African
sovereigns, flattening the trade volumes of oil and ferrous metal
exporters, while benefitting some exporters and tourist destinations.

“China is now Africa’s largest trading partner, with trade totalling
$114 billion in 2016 that accounted for around 14% of the continent’s
total exports,” said Colin Ellis, Moody’s Chief Credit Officer EMEA
and co-author of the report.

“But as commodity demand softens and international competition
increases, Africa’s oil and ferrous metal exporters are likely to see
trade volumes level off. That said, growing Chinese investment in
Africa is likely to narrow the continent’s infrastructure gap and help
to boost potential growth in some cases,” he added.

Economic growth of around 6.5% forecast in China over the next two
years should support a modest resurgence in demand for some
commodities. However, the Chinese economy is shifting from investment
towards consumption which will partially mitigate the upside.

In addition, competition from other international commodity producers
like the United States, shale oil producers and mining companies from
Australia and Brazil is likely to intensify and erode market shares
for African exporters.

Although the recovery in oil prices lately could lead to strong growth
in value terms this year, the price effect would likely diminish based
on Moody’s medium term oil price estimates. As a result, Angola,
Republic of Congo and Nigeria are likely to face slower demand for
their exports to China than in the past decade.

By contrast, Moody’s expects Chinese demand for commodities like
copper, cobalt and aluminium to remain strong. These non-ferrous
metals are widely used to produce cars, home electronics and transport
that are likely to benefit from rising Chinese incomes.

The Democratic Republic of the Congo and Zambia are likely to benefit
most given that their copper exports to China account for more than
half of their Chinese exports. Rising food exports to China will
benefit agricultural exporting countries such as Senegal and Ethiopia.

China’s rising income levels could also lead to a rise in tourism to
Africa. Although the share of Chinese tourists to Africa remains small
– 1.5% of total outbound Chinese tourists – they have risen 30%
annually since 2012, the fastest rate globally.

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Zimbabwean opposition threatens to pull out of election @FT

Zimbabwe’s main opposition leader has threatened to boycott this
month’s general election after claiming that ballot papers have been
rigged to favour President Emmerson Mnangagwa.

Nelson Chamisa, Mr Mnangagwa’s biggest challenger in the July 30 vote,
demanded a halt to printing the papers on Wednesday, warning that “we
will not have an election without a ballot paper that has been agreed

The poll will be the first election in the southern African nation
without Robert Mugabe, who ruled Zimbabwe for 37 years before he was
ousted by the military last year.

Mr Mnangagwa, who succeeded Mr Mugabe, has promised that the election
will be free and fair. His ruling Zanu-PF has a history of rigging
votes and intimidating the opposition but this year Mr Mnangagwa has
invited international election observers, including a team from the

A fair election is seen as critical to unlocking badly needed
international investment for Zimbabwe’s economy, which endured years
of isolation under Mr Mugabe and is buckling under a severe cash
shortage. Mr Mnangagwa is also seeking legitimacy after last year’s

But tension has risen in recent weeks. Mr Mnangagwa narrowly escaped
an explosion at a campaign rally that he blamed on internal enemies in
Zanu-PF still loyal to Mr Mugabe, while Mr Chamisa’s Movement for
Democratic Change has accused the country’s election commission of
failing to make a final voters’ roll available. It has also raised
concerns of military interference in the poll.

“We’d rather be in a grave or a prison cell” than continue the
elections under present conditions, said Mr Chamisa, a 40-year-old
lawyer, who became leader of the MDC after the death this year of
Morgan Tsvangirai, Mr Mugabe’s greatest political foe. The MDC is
leading an alliance of seven opposition parties into the election.

“This is a political crisis,” Mr Chamisa said. “We will not repeat the
mistakes of 2013,” he added, referring to the last election, in which
rigging was rife.

Zimbabwe’s election commission has denied Mr Chamisa’s claims and
defended the ballot paper. The design features Mr Mnangagwa at the
top, despite being 15th in the alphabetical candidate list, by
splitting the paper into two columns of 14 presidential contenders on
the left hand side and nine on the right.

The commission has admitted in the past that at least 15 per cent of
its staff were former members of the army and intelligence services.
Human Rights Watch said the body had “not demonstrated independence or
impartiality” and called on Mr Mnangagwa to remove military influence
on politics.

Zimbabwe’s army says it will uphold the constitution during the
election. But it has not said whether it would accept an opposition
party in power instead of Zanu-PF, the former liberation movement. An
army spokesperson denied on Wednesday that its soldiers had been sent
to rural areas to intimidate voters into backing Zanu-PF.

According to polling released last month by Afrobarometer, 42 per cent
of Zimbabweans plan to vote for Mr Mnangagwa and Zanu-PF, against 31
per cent for Mr Chamisa and the MDC, implying the presidential vote
may go to a runoff in September. The intentions of over a quarter of
voters remain unknown.

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After Mugabe, how free and fair will Zimbabwe's vote be? @AP

It will be a first for Zimbabwe’s voters: The name of Robert Mugabe
won’t be on the ballot when elections are held on July 30. But the
military-backed system that kept the former leader in power for
decades, and then pushed him out, is still in control.

That is the conundrum facing a southern African country anxious to
shed its image as an international pariah, and to draw the foreign aid
and investment needed for an economic revival. The government promises
a free and fair vote and the military, whose 2017 takeover led to
Mugabe’s resignation, says it won’t stray from the barracks.

They ask whether a political establishment accused of vote-rigging and
state-sponsored violence over a generation would accept an election
outcome — that is, an opposition victory — that might damage its
interests or even expose it to prosecution for alleged human rights
abuses. The military’s economic interests include the alleged
involvement of security forces in Zimbabwe’s diamond-mining sector,
which Mugabe himself once said had been plundered of billions of
dollars in revenue.

Then there is the uneasy legacy of the military’s November takeover.
It sent euphoric Zimbabweans into the streets to celebrate and was
later described as a coup by Mugabe, who quit as impeachment
proceedings loomed in parliament. The military intervention was mostly
peaceful and tacitly supported by other countries, but critics
compared it to letting a genie out of the bottle: Once the military
steps brazenly into politics, why wouldn’t it do so again?

“Do you believe that people would risk their lives to carry out a
coup, only to hand over power six months later to some unknown
person?” Dewa Mavhinga, regional director for Human Rights Watch,
asked at a recent forum on Zimbabwe in Johannesburg.

In this scenario, the “unknown person” would be Nelson Chamisa, the
new leader of the MDC opposition party whose members were brutalized
by ruling ZANU-PF party supporters during violent, fraud-tainted
elections in 2008.

Some things are very different. A record 23 presidential candidates
and 128 political parties will participate; there are more than five
million registered voters. Western monitors, banned during the Mugabe
era, are invited; concerned about military involvement, some are
urging senior officers to pledge loyalty now to the election winner,
regardless of who it is.

The opposition has held rallies without interference from a police
force once quick to break up gatherings of government opponents.

But the idea of accountability for past crimes by suspected state
agents has no traction under Mnangagwa, himself linked to the killings
of thousands of people in the Matabeleland opposition area in the
1980s. And on Monday, the MDC’s chief election agent, Jameson Timba,
said the state election commission had failed to provide an accurate
voters’ roll and was trying to manipulate the vote.

“We are sure Zimbabweans will not be railroaded into a sham election,”
Timba said.

Zimbabweans don’t need to worry about the military, said Vice
President Constantino Chiwenga, who was military commander in November
when soldiers and tanks deployed in Harare, the capital. The military
intervened to back a ruling party faction loyal to Mnangagwa, who had
been fired as Mugabe’s deputy, in a feud with a group associated with
Mugabe’s politically ambitious wife, Grace.

“There will not be a recurrence, let me assure you,” Chiwenga said
last week, according to Zimbabwe’s NewsDay newspaper. “We had created
a situation which was bad for ourselves and that will not happen

The military on Wednesday told reporters it will not interfere in the
election but will help police with law and order and assist the
election commission with transport logistics, which could prove
contentious with the opposition.

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.@WorldBank Backs Egypt To Become Regional Oil, Gas Trading Hub @OilandEnergy

Following the start-up of the giant gas field Zohr, Egypt has become
an important player in the Mediterranean. Zohr, discovered by Eni in
2015, plays a key role in helping Egypt to avoid the need to import
liquefied natural gas (LNG), according to the Italian oil and gas

Last month, Egypt issued what is likely to be its last LNG import
tender, and could begin exports early in 2019, El-Molla told
Bloomberg. The June tender was for Egypt’s third-quarter gas needs,
and it might not need to import LNG for the fourth quarter and
onwards, the minister said.

“I don’t think there will be more tenders beyond this, I think this is
it,” El-Molla told Bloomberg. “Local production should cover our

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Kenya Shilling versus The Dollar Live ForexPros
Kenyan Economy

Nairobi All Share Bloomberg +0.10% 2018 (-12.820% since record high of
196.57 set on April 5th)


Nairobi ^NSE20 Bloomberg -11.74% 2018


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"When I grew up the land was for the community": Oil troubles in Turkana @africaarguments H/T @jmollel

On a Sunday afternoon in Lodwar, the capital of Turkana county, a
crowd gathers to watch a hoopla game at a muddy crossroads. The
spectators, many wearing the blankets and beads of pastoralists,
observe as hopefuls try to win a bottle of Fanta or, even better, the
big prize: a KSh50 ($0.50) note.

Turkana, located in the far north-west of the country, is the largest
and poorest of Kenya’s 47 counties. Since 2013, it has received around
$100 million per year from the national exchequer according to a
funding formula designed to help marginalised areas catch up. But it
remains extremely impoverished.

79% of its nearly one million people are below the national poverty
line. A third of the county’s children under five are underweight and
a quarter are stunted. Primary school attendance is the lowest in the
country, even though free school meals have long been provided, and
82% of adults have no formal education.

Turkana is still hugely underdeveloped, though the county is soon
hoping to get a new boost that would eclipse the contributions from
central government. First discovered in 2012, it is estimated that
there are 750 million recoverable barrels of oil lying under Turkana’s
soils. In order to exploit this potential, there are plans to build an
820km export pipeline to Lamu on the coast, along the$25-billion
LAPSSET (Lamu Port—South Sudan—Ethiopia) transport corridor.

This could transform the county’s fortunes. But down in Lokichar, the
epicentre of Turkana’s oil industry, the boom has so far brought more
frustration and conflict than hope. The British company Tullow Oil has
opened the oil fields, but many are frustrated that this has not led
to more jobs and benefits for those who have lived on the land for
generations. Members of the herding community around the village of
Nakukulas have barricaded roads in protest.

“Many people working with Tullow are from Nairobi, but they have only
given jobs to one or two locals,” says Nakwaan Echwaa. “When I grew up
the land was for the community. That is what I knew. God gave us the
oil, like the land. Now we hear the government saying it all belongs
to them.”

Tullow has tried to earn goodwill by offering $70,000 for each well it
drills to committees of residents, who can spend it on public projects
of their choosing. As a result, Nakukulas now has a new secondary
school and community centre. But people expect more. “We still demand
Tullow to build a hospital and drill for water,” says Lowoto Muya who,
at 55, is regarded as an elder in the community.

Denis Okore, who leads Kenya field communications for Tullow, argues
that these demands have got out of control. “People look to us as if
we are the government,” he says. “If someone is bitten by a snake –
look for Tullow. Need a road? Go to Tullow. Their appetite for
benefits and employment has increased hugely.”

Quarrels over benefits affect not only Tullow but its contractors.
Africa Camp Solutions, a Kenyan company that services Tullow’s Lodwar
base, agreed to pay a community levy of $5 per night per person
sleeping on the site. Wrangles over the management of a committee set
up to receive the funds, however, led to angry protests in January.

Two-thirds of Turkana’s population is made up of pastoralists whose
tough, self-contained lives have long been characterised by cattle
raiding conflicts with their southern neighbours, the Pokot, and the
perennial fear of drought. The arrival of oil has changed people’s
lives in a variety of ways.

For instance, livestock has long been the measure of wealth here, but
the arrival of large quantities of cash has altered this. “When we
came, we established a money system; not deliberately but just by our
presence,” says Okore.

According to Ngasike Akuam, a mother of nine, working in oil has also
changed some local people’s priorities. “When someone gets a job from
Tullow, he comes back crazy, forgets about the family, just running up
and down, taking three, four, wives, building houses,” she says.

Andrew Orina, Programs Manager of local NGO, Friends of Lake Turkana,
echoes this, arguing that oil has unleashed short term opportunism in
disrupted communities. “Everyone is thinking ‘What is in it for me
now?’” he says. “There’s no thinking about what it will be like in 15

The biggest show in town, Lopeyok says, is Kapese Contractors, which
belongs to local MP James Lomenen Ekomwa. This business has won
numerous Tullow contracts for building feeder roads and other

This dynamic reflects the merging of political and economic elites
that is familiar in Kenya more broadly. But District Commissioner for
Lokichar sub-county, Alexander Fleming Losikiria, welcomes these
investments, which are reversing the usual trend of capital exodus.
“There is a multiplier effect,” he says. “Local contractors mean that
jobs and money go directly and freely to local people.”

Losikiria adds that “there’s been a very serious awakening to the
importance and value of land, which people used to see as just nature,
just trees and sand.” In response, however, he notes that the county
government has placed a moratorium on sales, pending development of a
legal framework, in order to avoid speculative land grabs.

He is optimistic they can be resolved. But many locals, whose way of
life may be at risk, are not so sure. In the face of elite interests
and oil majors, however, Turkana’s pastoralists may struggle to push
back, as Nakwaan Echwaa’s weak threat reveals. If the worst comes to
the worst, he says, “We can raise up the spirits that are in our soil
and make that oil not come out”.

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@TullowOilplc says Kenyan protesters block oil trucks

The truck scheme aims to transport about 2,000 barrels per day (bpd)
of crude from northern oil fields to the coast to test oil flow rates
and other technical issues before the start of full production and
exports via a pipeline to be built by 2022. The pilot truck scheme was
launched in June.

“Tullow confirms that there have been interruptions to the trucking of
crude oil in Turkana County. Tullow is working with the respective
national government agencies, the county government, local leadership
and the communities to ensure that the matter is resolved amicably,”
the firm told Reuters.

“Tullow has provisionally reduced the number of personnel in the field
while operations are paused,” it said.

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The Kenyan Beach Town Malindi Is a Tropical Paradise - With a Mafia Problem @dailybeast

If it weren’t for the oppressive humidity and the slight scent of
frangipani, you might think you were in Italy.

In the corner of a restaurant, a skinny woman with brassy blonde hair,
diamante earrings and skin the color of old leather pushes the remains
of her penne al pomodoro around on the plate, before finally giving up
and signaling to the Kenyan waiter: “Un espresso, perfavore!”

A TV booms in the corner, a news anchor relaying Italy’s latest
political woes; watching intently, a heavy-set man in his late ’60s,
tufts of greying hair sticking out from under his collar, sighs and
shakes his head before taking a long, deep drag on his cigarette. His
companion, a Kenyan girl in her early twenties, keeps her eyes firmly
on the screen of her phone, not bothering to hide the look of tedium
from her face.

It’s low-season in Malindi, a small town on the Kenyan coast where the
Galana River spills its muddy waters into the Indian Ocean. An
important port city since at least the 13th century, Malindi has been
settled over centuries by Arab traders, the Portuguese (explorer Vasco
de Gama met Malindi authorities in 1498 to sign a trade agreement, and
the coral pillar he built still stands on a rocky outcrop overlooking
the ocean), the British, and most recently by thousands of Italians.

It is a place of stunning natural beauty, where sinewy palm trees line
pearly white beaches and tufts of cerise bougainvillea’s creep up the
crumbling walls that run along the coastal road.

Perhaps this is why Italians started coming here in the 1970s, when it
was still a secluded, unspoiled little town. Or maybe it was the fresh
lobsters, octopus, calamari, and shrimp, caught at dawn and cooked on
dug out fire pits by beach boys hustling hard to make a dollar or two.
To some, it was the prospect of leaving everything behind and starting
all over again that made Malindi so attractive.

The very first Italians, though, came in the name of science. In 1963
a team lead by a young space engineer called Luigi Broglio began the
construction of a satellite launch pad some 30 kilometres north of
Malindi as part of partnership between NASA and CRA, Italy’s space

On April 26, 1967, Broglio and his team launched the San Marco 2, the
first of many satellites that would be sent into orbit from the East
African coast. With the project came Italian engineers, researchers,
and technicians, some of whom stayed and settled down, bringing their
families with them.

By the 1980s Italians were flocking to Malindi, buying up all the
prime beachfront real estate. During the construction wave of the
1990s they built dozens of hotels and villaggi, the quintessentially
Italian-style resorts where tourists can speak Italian, eat Italian,
and dance to Italian music. Malindi became the place to be for Italy’s
rich and famous: politicians, footballers, and veline—the bikini clad
dancers who are a mainstay of Italian quiz shows—mingled in private
clubs, beach bars, and Italians-owned casinos. With the advent of
package holidays and charter flights, the rest of Italy followed.

Before the Eurozone crisis, the number of Italians living in Malindi
was close to the 4,000 mark, while 30,000 more would come and go
throughout the year. They opened restaurants, gelaterie, and
supermarkets selling mozzarella and home-made pasta, started tour
companies and import businesses. In 2007, Formula One’s playboy par
excellence Flavio Briatore, who in the 1980s was convicted for fraud
and later, in 2008, was forced off the F-1 team after a race-fixing
scandal, announced that he would build the Billionaires Club,
“Malindi’s most luxurious resort.”

“If it were not for the Italians we would have nothing” Giovanni told
me over a bottle of mnazi, a local alcoholic drink of fermented
palm-tree sap. A small, sharply dressed tour guide who carries a
wooden cane and wears dozens of thick beaded bracelets, Giovanni
speaks Italian with a lilting Milanese accent and likes to talk about
his love of Italy and Italian women.

But at the mnazi den his opinion was not a popular one. Speaking in
Italian accents from the whole length of the boot, locals bemoaned
Malindi’s seedier side, and spoke about the sex tourism and the
tension between locals and Italians.

“They don’t respect us. They come here and think they are better, they
control the tourism industry and tell other Italians not to trust
locals, ever, so we can’t get any work” said Paolo, a local who spends
his day walking up and down the beach trying to flog snorkeling day
trips and wooden trinkets to Italian tourists.

“The Kenyan coastal resort town of Malindi is schizophrenic: hundreds
of Italians […] dominate the town’s economic lifeline, a tourism
industry that caters to tens of thousands of European sun-seekers
annually” reported a leaked 2005 cable written by the then U.S.
ambassador. “Some” it continues, “are involved in feeding the town’s
skyrocketing illegal drug consumption.” Just a year earlier, a
73-year-old Italian man and his Venezuelan wife were arrested after
700 kilos of narcotics were seized from a speed boat stored on their

Malindi’s reputation as a shady place, coupled with the combined
impact of Italy’s economic crisis, Kenya’s 2007 post-election
violence, and the deadly 2013 Westgate terror attack have had a
devastating effect on its tourism industry, and the once glamorous
town has become the subject of knowing looks and whispered

In 2012, Kenyan journalist Paul Gitau wrote an article exposing the
Italian community’s underworld of money laundering, prostitution
rackets, and protection for fugitives. The Law Society of Kenya (LSK),
he wrote, had enough evidence to prove that coastal town was firmly in
the grip of the Italian Mafia, and Eric Mutua, the chairman of LSK, is
quoted as saying that the Mafia “have taken full control of Malindi.
They are in control of police, courts and lawyers.” According to
Gitau’s sources, Italian criminal networks had such an extensive
influence over the corrupt judicial system that they could live and
operate without fear of arrest. “Malindi is controlled by foreigners.
They have established a club of impunity. The town is full of foreign
thieves and it is very easy for anyone to come and stay here” said
Mutua. Gitau almost paid for the article it with his life. He received
threats and a warning that the Italian community was “meeting to
decide what to do about him” and was forced to hire personal security
and spend some time in hiding.

In his book Mafia on the Move: How Organized Crime Conquers New
Territories, Italian author and Mafia expert Federico Varese writes
that the East African coast is an emerging criminal hub, and that
Malindi especially has become a place where Italian Mafiosi come and
launder their dirty money.

“Traditionally there is a lot of Italian tourism there in Malindi,”
writes Varese. “[Criminal networks] need to invest in profitable
businesses, many times abroad. They do it in communities that they
know… where they have friends and shady financial advisors.”

On Malindi’s main drag, just opposite Karen Blixen, one of the
Italian-owned restaurants where people meet for an espresso and a
gossip, is the concrete shell of a mall. On the top floor, staring
down on the empty car park, is a large golden statue of a Buddha and a
sign reading “Mario’s Buddha Fashion Lounge and Restaurant.” The owner
of the boarded up club, Mario Mele, was arrested and extradited to
Italy in 2017. Known as “The King of the Discotheques” in Sardegna,
where he managed some of the island’s most exclusive clubs, Mele had
left Italy for Malindi in 2013, fleeing an international arrest
warrant for fraudulent bankruptcy for 17 million euros. He then spent
almost five years hiding in plain sight on the Kenyan coast where he
bought several clubs and hosted tasteful events like “Ladies Wet
T-shirt Contest” and “Waitress in Bikini Night.”

“He used to talk about it and boast that no one could touch him here,”
one Italian man told me. “He felt like a king.”

Tanzini himself is a controversial figure. Originally from Tuscany, he
arrived in Malindi as a hunting guide almost 50 years ago and later
opened The White Elephant, one of Malindi’s most exclusive resorts. He
is known as a shrewd businessman, a sculptor, poet, philosopher,
architect, a womanizer, and an eccentric. He happily cultivates this
image by telling endless stories about his contact with other
dimensions, the six or seven attempts on his life by secret services,
his many lovers, and about the time he saw a flying saucer hovering
above the Indian Ocean.

Tanzini, who on his website says he loves Africa because it is
“innocent and poor,” hit the headlines in 2015 for representing Kenya
at the Venice Biennale as part of a panel described as “a frightening
manifestation of neo-colonialism vulgarly presented as
multiculturalism” and “primitivism at its very worst.”

When I visited him in his villa he told me that he is inspired by the
tribal artworks of the Giriama tribe, one of the ethnic groups that
live on the coast.

“See this?” he asked, pointing to a wooden totem about a meter tall.
“It’s very powerful, no one knows this but they were built to
communicate with other dimensions.” He found dozens of them while
hunting in the forest decades ago, and took them. The totems are
sacred to the Giriama, and removing them goes against all their
spiritual beliefs. The Giriama stopped erecting the totems long ago,
fearing they would be stolen.

Recently Tanzini was asked to give them back.

read more

N.S.E Today

Emerging markets are under heavy and mounting pressure, credit markets
are crumbling, the U.S. bond yield curve is barely 30 basis points
from inverting, which may portend a recession.
Add to that a sharp slide in the Chinese currency and rise in global
trade war fears, and it’s not hard to see why some investors might
want to throw in the towel completely.
Chinese and Brazilian stocks are in bear markets, India’s rupee is at
a record low [Reuters]
The Iranian President Hassan Rouhani on Tuesday suggested Iran could
halt regional exports [by shuttering the Straits of Hormuz] if it is
stopped from exporting oil after America pulled out of the nuclear
deal with world powers.
Zerohedge said this ''The largest oil market disruption ever occurred
in August 1990, when Iraq's invasion of Kuwait took 4.3 million
barrels per day of oil off the market—about 6.5 percent of world
supply. That stoppage caused world oil prices to double (from about
$20 to $40 per barrel). But a blockade of Hormuz would cut off nearly
four times as much oil as the Kuwait crisis did, disrupting a share of
the oil market three times greater''
Glencore who were ready to settle Dan Gertler in Euros to escape a US
dragnet and are the subject of a Department of Justice subpoena
launched a $1b share Buy Back.
“China is now Africa’s largest trading partner, with trade totalling
$114 billion in 2016 that accounted for around 14% of the continent’s
total exports,” said Colin Ellis, Moody’s Chief Credit Officer EMEA
Procter & Gamble to shut down $300 million Nigeria production plant,
one year after launch.
Diaspora remittances surged to Sh112.21 billion in the January-May
period from Sh73.92 billion in the same period 2017.
Tax consultants at audit firm PKF last month reported a surge in
clients seeking to file & return wealth stashed in foreign countries
to enjoy the tax pardon @MihrThakar
These Two Trends have underpinned the Shilling which is +2.1% YTD and
I believe the best performing currency in SSA in 2018.
The Bourse swung higher for the 2nd consecutive session.

N.S.E Equities - Commercial & Services

followed on yesterdays gain of +1.785% to progress a further
+1.75% to close at 29.00 and traded 5.412m shares.

N.S.E Equities - Finance & Investment

Equity Group rallied +1.6129% to close at 47.25 and traded 1.140m
shares and was trading session highs of 48.25 +3.76% at the Finale.
Buyers outpaced Sellers by a wide margin.
KCB Group was the most actively traded share and firmed +0.55% to
close at 45.50 and traded 4.916m shares worth 224.679m. KCB's CEO
Joshua Oigara confirmed KCB was poised to strike in Ethiopia in an
interview with Bloomberg.

N.S.E Equities - Industrial & Allied

EABL improved +0.47% to close at 215.00 and traded 90,500 shares.

ARM Cement surged +8.96% to close at 3.65 and whilst -71.92% in 2018
it has rallied +43.137% off its multi year closing low of 2.55 from
earlier in the year

KenGen closed at 6.90 and is oversold and due a meaningful pop higher
towards 8.00.


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

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