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Satchu's Rich Wrap-Up
 
 
Tuesday 24th of July 2018
 
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Normal Board - The Whole shebang

Prompt Board Next day settlement

Expert Board All you need re an Individual stock.



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Macro Thoughts
World Of Finance


Venezuela’s inflation will skyrocket to 1,000,000% by the end of the year, the @IMFnews forecasts 




Venezuela’s inflation will skyrocket to 1 million percent by the end of the year as the government continues to print money to cover a growing budget hole, the International Monetary Fund predicted on Monday.

The crisis is comparable to that of Germany in 1923 or Zimbabwe in the late 2000s, said Alejandro Werner, head of the IMF’s Western Hemisphere department. He forecast the economy to shrink 18 percent in 2018 -- the third consecutive year of double-digit contractions -- as oil production falls significantly.

“The collapse in economic activity, hyperinflation, and increasing deterioration in the provision of public goods as well as shortages of food at subsidized prices have resulted in large migration flows, which will lead to intensifying spillover effects on neighboring countries,” Werner wrote in a blog post.


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Global bond mkts sold off w/ US 10-year yields jump to 2.96% following speculation of a BoJ policy shift @Schuldensuehner
World Of Finance


Global bond mkts sold off w/ US 10-year yields jump to 2.96% following speculation of a BoJ policy shift. Japanese investors might repatriate part of their money if JGB yields rise.

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12-SEP-2016 :: Mirrors on the ceiling, The pink champagne on ice
World Of Finance


If volatility spikes, positions are going to be reduced en masse. Or to put it another way and to borrow the lyrics from the Eagles Hotel California:

Mirrors on the ceiling,

The pink champagne on ice

And she said “We are all just prisoners here, of our own device” 

Last thing I remember, I was

Running for the door

I had to find the passage back

To the place I was before

“Relax,” said the night man,

“We are programmed to receive.

You can check-out any time you like,

But you can never leave! “

What is clear is that we are at the fag-end of this party.

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Home Thoughts
Misc.

Kenneth Noland @saatchi_gallery

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Mark Rothko 1962's oil on canvas 'Untitled (Rust, Blacks on Plum).'
Misc.

Mark Rothko passed away in New York City #onthisday in 1970. We're toasting his unending impact on the daring colouration, flatness and emotion of abstraction with 1962's oil on canvas 'Untitled (Rust, Blacks on Plum).'

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Political Reflections
Law & Politics

Time Check: 6:53pm President Kagame bids farewell to Chinese President Xi Jinping after his two day State Visit @KimKamasa



Conclusions

President Kagame is very shrewd on the World Stage. 


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Highly efficient WH comms strategy summed up by Trump/Sarah attack: @GlennThrush
Law & Politics


Everybody is now talking about security clearances, which displaces other stories from front pages/top of newscasts which have finite time/space. 

New indignation supplants old, which makes Putin old news

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COLOR US UNIMPRESSED
Law & Politics

COLOR US UNIMPRESSED: The world heard even harsher bluster a few months ago. And Iranians have heard them —albeit more civilized ones—for 40 yrs. BE CAUTIOUS! @JZarif

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Opinion today - Vladimir Putin's revenge @financialtimes
Law & Politics



For Vladimir Putin, last week’s summit in Helsinki with Donald Trump was a moment of deep satisfaction. Mr Trump’s hesitation when asked to condemn Russian interference in the 2016 US election (or even to recognise Moscow’s responsibility) echoed the standard Putinist response to the charge of attempting to subvert American democracy.

As Gideon Rachman argues in his column this week, Mr Putin maintains that the US has long attempted to undermine Russia’s political system. And because the west lies too, Moscow’s deceptions are a legitimate defence mechanism.


Conclusions



Thats exactly the right word for the #HelsinkiSummit - ''The Revenge of Vladimir'' 




Thats exactly the right word for the #HelsinkiSummit - ''The Revenge of Vladimir'' Watch the Footage and it reminded me of a Predator - He has his Prey - every instinct is to snuff it out - he can hardly stop himself - but he has to - because it is a decapitation strike....



It’s all very curious @LeonLidigu but @KremlinRussia_E has penetrated deep in my humble opinion.




The Russians are supremely sophisticated in these matters and considerably ahead of the curve ~ I think Folks are dumbfounded ~ Vladimir learnt his lesson




But you are also right for a long time the discourse was of the Other whom by being the other is to be immediately discounted to zero @LeonLidigu




The issue is that Information Architecture which allowed complete Console Control has been disrupted by the Internet and the new Tower of Babel @LeonLidigu


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Information created worldwide (zettabytes): @ValaAfshar
Information & Communication Technology



2005 - 0.1 ZB

2010 - 2 ZB

2015 - 12 ZB

2020 - 47 ZB

2024 - 163 ZB




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International Markets
World Of Finance


It cost $5.96 to insure $100 of @Tesla’s debt, plus an upfront cost of around 18 percent, representing a total of 24.1 percent of the face value of the 2025 bond on Monday @Reuters @elonmusk



It cost $5.96 to insure $100 of @Tesla’s debt, plus an upfront cost of around 18 percent, representing a total of 24.1 percent of the face value of the 2025 bond on Monday @Reuters @elonmusk



“The CDS is saying that there are a lot of people betting this company is going out of business,” said Thomas Graff, head of fixed income at Brown Advisory.


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Currency Markets at a Glance WSJ
World Currencies


Euro 1.1661

Dollar Index 94.78

Japan Yen 111.37

Swiss Franc 0.9950

Pound 1.3078

Aussie 0.7362

India Rupee 68.965

South Korea Won 1136.60

Brazil Real 3.7823

Egypt Pound 17.9045

South Africa Rand 13.5017

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Talk of BOJ changing policy and U.S. Treasuries selloff have raised Japanese yields across the curve quite substantially in the last few days
World Of Finance

Talk of BOJ changing policy and U.S. Treasuries selloff  have raised Japanese yields across the curve quite substantially in the last few days. Kept in context though, the govt can still borrow at <1% for 40 years.

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FAANGs are up on #Google's earnings beat. Google parent company Alphabet reported Q2 sales of $26.24bn vs $25.55bn expected.@Schuldensuehner
Information & Communication Technology

FAANGs are up on #Google's earnings beat. Google parent company Alphabet reported Q2 sales of $26.24bn vs $25.55bn expetcted. Google’s advertising business grew a whopping 24%.

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China's Belt and Road Initiative is boosting its ties with Africa @business
Africa


Senegal’s decision to become the first African country on the Atlantic coast to sign up to the Belt and Road Initiative shows how quickly the transport network project connecting China by land and sea to Asia, the Middle East, Europe and Africa is expanding. Lending by China to Africa rose to about $12 billion in 2015 from little more than $100 million in 2000. Bloomberg Economics expects China to make significant policy declarations on its lending to Africa and other economic initiatives at the next forum on China-Africa Cooperation in Beijing in September.

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'We need him to go faster.We need his promises to turn into action now,' Abedir said of Abiy @ReutersAfrica
Law & Politics

“There may be a gap in that the people’s expectations are huge,” said Mohammed Aman Ogeto, an economics professor at Harameya University, in the Oromiya region bordering Harar. “It’s difficult to deliver on all of the changes they expect.” 

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Senior official in Kabila's party says he has the right to stand in December. This is the scenario many fear @WTBClowes
Law & Politics

Senior official in Kabila's party says he has the right to stand in December. This is the scenario many fear: that Team Kabila will claim (& constitutional court will agree) that constitutional modification in 2011 = new constitution

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In an exclusive interview with Times Select, Katumbi has asked Ramaphosa 'to save the people of Congo from the dungeons of hell'.
Law & Politics



“Kabila doesn’t want me to return home so I can fill in my nomination form to be an official presidential candidate. The situation in my country is escalating‚ opposition leaders and supporters are jailed on trumped-up charges‚ and I believe president Ramaphosa can be our saviour‚” he said.

Katumbi said he was coming to SA in a few weeks’ time “to plead with President Ramaphosa to come to the rescue of the people of Congo. I would beg him to save the people of Congo from the dungeons of hell”.

Ramaphosa’s spokesperson‚ Khuselo Diko‚ said on Friday she was “not able to speculate about a meeting that has not been requested”.





In an exclusive interview with Times Select‚ Katumbi‚ who is in self-imposed exile in Belgium since May 2016 after falling out with President Joseph Kabila‚ has asked Ramaphosa “to save the people of Congo from the dungeons of hell”.

“Kabila doesn’t want me to return home so I can fill in my nomination form to be an official presidential candidate. The situation in my country is escalating‚ opposition leaders and supporters are jailed on trumped-up charges‚ and I believe president Ramaphosa can be our saviour‚” he said.

Katumbi said he was coming to SA in a few weeks’ time “to plead with President Ramaphosa to come to the rescue of the people of Congo. I would beg him to save the people of Congo from the dungeons of hell”.

Ramaphosa’s spokesperson‚ Khuselo Diko‚ said on Friday she was “not able to speculate about a meeting that has not been requested”.


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Zimbabwe military on high alert ahead of election
Law & Politics




Zimbabwe’s government put its security forces on high alert before the July 30 presidential election as some opposition parties threatened to protest against voting irregularities and incorrect printing of ballot papers.

“Those bent causing disorder are being warned that the long arm of the law will be applied without fear or favor," Home Affairs Minister Obert Mpofu told reporters late Monday in the capital, Harare. The government is “deeply concerned with threats of violence” and warnings that the country will be shutdown and rendered “ungovernable.”

Opposition parties are taking on President Emmerson Mnangagwa and his Zimbabwe African National Union-Patriotic Front, which has ruled the country for 38 years. The vote will decide who will lead the southern African nation into a new era following the ouster of Robert Mugabe in November.


20-NOV-2017 :: The military which launched this decapitation are certainly set to shape the outcome but now have a Tiger by the Tail #ZimbabweDecides2018 #ZimElections2018 


20-NOV-2017 :: Zimbabwe The genie is out of the bottle #ZimbabweDecides2018 #ZimElections2018 



Zanu PF also imported hundreds of new vehicles for the campaign from a reported $200 million war chest. @allafrica 


So where did the $200 million come from? ZANU-PF director of information Musukuma struggled to explain the source of the funding last week

This was after National Patriotic Front (NPP) spokesperson Jealously Mawarire told an election debate in the capital that the campaign was being run by a fuel cartel controlled by Mnangagwa.

"We are having a cartel that is running the country's fuel industry and is being led by Mnangagwa," said Mawarire.

"They pushed out some businessman and now own 50% of the fuel pipeline through some individuals whom they are fronting.

"We saw one of them (Kudakwashe Tagwirei) when his father died; the whole Cabinet closed, the President and his entire Cabinet went to bury the businessman's father.

"Then you understand what is happening."


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E-commerce contributed 6pc of all purchases in Kenya in 2017 -UNCTAD @UNCTADKituyi @CapitalFMKenya
Kenyan Economy

“African countries can do better. With about 300 million smartphones, E-Commerce has the potential to grow economies & also market local productions. Here in Africa when ordering one line, one has to Pick, Pay and then pray,” 

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BAT reports H1 2018 EPS -9.31% Earnings here
N.S.E Equities - Industrial & Allied


Par Value:                  10/-

Closing Price:           600.00

Total Shares Issued:          100000000.00

Market Capitalization:        60,000,000,000

EPS:             33.36

PE:                 17.986

6 months through 30th June 2018 versus 6 months through 30th June 2017

H1 Gross Revenue 17.142b versus 18.968b -10.652% 

H1 Net Revenue 9.138b versus 10.394b -12.083% 

H1 Operating Profit 3.003b versus 3.138b -4.302%

H1 Profit Before Tax 2.793b versus 3.068b -8.96%

H1 Profit after Tax 1.948b versus 2.148b -9.310%

H1 EPS 19.48 versus 21.48 -9.31%

Interim Dividend 3.50 a share unchanged

Company Commentary

Gross revenue reduced by 10% driven by lower domestic volumes following excise-led price increases, lower cut rag sales offset by higher export sales and contract manufacturing revenues.

Operating margin improved by 2.7 percentage points to 32.9%.

The reduction in net cash generated from operating activities is driven by lower revenues and timing of working capital movements. [5.109b] versus [3.735b]

Via Kestrel Email

With exports now contributing a larger share of company revenues (52% compared to 49% in 1H17 and 41% in 1H16), our expectation is for the trend to persist as the domestic market takes time to recover.

Sportsman and Safari now contribute ~75% of local revenues, we estimate a 40-35% mix. The company is targeting to grow Sportsman, having launched 3 variants of the brand in the last 12 months. In the case of excise adjustment for inflation, we expect the company to aim to foster stability in Sportsman prices as a way of supporting the brand’s position and mitigating down-trading.

Conclusions

H1 EPS was at the top of the range. 

However Note the deterioration in Cash position [5.109b] versus [3.735b]

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23-JUL-2018 - @SafaricomPLC ports its M-Pesa Platform into Ethiopia @TheStarKenya
N.S.E Equities - Commercial & Services



23-JUL-2018 ::  And for Prime Minister Abiy Ahmed and for his counterpart in Asmara, President Isaias Afwerki, they need Growth, it will provide wind in their sails. And what we know is Mobile Money is seriously stimulative and at the grass roots.

It has been no secret that Safaricom has been looking to unlock the geographical expansion opportunity. I recall the Chairman indicating as much early last Year. The Story has been on background for a while. In one of its finest financial interventions, DFID via its Financial Deepening Challenge Fund (FDCF) awarded Vodafone a grant of nearly £1m, which they were required to match, to begin developing a product that would leverage mobile phone technology to deliver financial services in East Africa. I recall [as if it were yesterday] Michael Joseph taking out his Phone and walking me through probably the very first iteration of M-Pesa and saying

''We think it will be very sticky'' Stickiness is a good thing, you will find. You could say that again. In fact, I recall a time when Airtel came calling and launched an ''irrational'' price war and of the reasons that Price War went down in flames was the stickiness of M-Pesa. Of course, M-Pesa has metasized from being largely an in-country money remittance service. The Flow was one where Folks working in our Cities needed to move money to their Families who were dispersed out of town and typically deep in the countryside. M-Pesa was serving a need and the service at its inception was a ''leapfrog'' level improvement, it was doing the transfer in the ''Now'' versus maybe a 24 or even 36 hour process of handing your hard earned ''moolah'' to a Matatu driver or Tout to deliver. Consider how the velocity of money accelerated and how it improved livelihoods at the fringes. [MIT has done some outstanding research on the upliftment in particular at the Fringes]. Since then M-Pesa has driven our financial inclusion numbers off the charts and the M-Pesa Economy has grown by leaps and bounds. M-Pesa has integrated with the Banks. The PayPal partnership has meant that anyone anywhere with a Safaricom connection can transact with the World. Many Folks talk about ''democratisation'' and I can think of no finer example of that characterisation. I visited Kakuma refugee Camp [the furthest North I had ever visited] and i keep thinking this place is so far from anywhere and then i realised but its not because everyone is connected. The Velocity of Money has surged and I reckon M-Pesa has added more than 1.5% to the GDP score consistently every year. 

''Mpesa has been a growth engine. Whenever theres a cash transaction, we see an opportunity. Transaction value in 2017 doubled. We are building the ecosystem to monetise tomorrow'' said Sateesh kamath to me on the occasion of the release of their Full Year Numbers this year.

M-Pesa Full Year Revenue expanded +14.2% to clock 62.91b [$624m] and is currently responsible for 27.83% of Safaricom's total revenue. 

Now something can be a ''No-Brainer'' but its also about timing your market-Entry. 

On the 6th of June I wrote Safaricom PLC "This can add up to 20% to Safaricom's share price. Its a big Deal and Ethiopia is a 100m market and ripe for the taking for M-PESA in particular''

What has changed in Ethiopia is of course firstly the arrival of Prime Minister Abiy Ahmed whose arrival I rate as the most consequential arrival of any African Politician since 1994 and when Mandela exited Prison and soon thereafter became President of the ''Rainbow'' Nation. PM Abiy has made so many pivots its head-spinning but he has read the writing on the wall when it came to the Economy. He saw that notwithstanding the stellar growth numbers, it was running on empty, FX reserves were down to weeks of import cover. He had to make a move and pronto. I was at Lunch that KEPSA hosted for the President of the African Development Bank Akinwumi Adesina and we agreed that Growth was a Silver Bullet. And for Prime Minister Abiy Ahmed and for his counterpart in Asmara, President Isaias Afwerki, they need Growth, it will provide wind in their sails. And what we know is Mobile Money is seriously stimulative and at the grass roots.

Reuters reported last week 

Kenya’s Safaricom is in “advanced talks” with the Ethiopian government to introduce its popular M-Pesa mobile money service to neighbouring Ethiopia, a market of 100 million people, two sources said on Tuesday.

Britain’s Vodafone, Safaricom’s parent company, will license the use of the M-Pesa trade name to an Ethiopia-based bank while Safaricom will host the servers in Nairobi, one telecoms industry source told Reuters.

Ethiopia’s state telecommunications monopoly, Ethio telecom, will carry the service, the source added. Started in 2007, M-Pesa has nearly 30 million users in Kenya.

It is ''Abiymania'' which has opened the Ethiopian door wide open for Safaricom and Kenya inc. It is a singular moment. 

@SafaricomPLC ports its M-Pesa Platform into Ethiopia Youtube


42.@SafaricomPLC share price data here 



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Your sugar has mercury, lab results show @TheStarKenya
Kenyan Economy





“Sixty per cent of the samples analysed for the moisture content ... is not suitable for human consumption.”

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Outrage greets Ben Chumo vetting for SRC job @dailynation
N.S.E Equities - Industrial & Allied



Kenyans on social media seemed baffled by his vetting despite facing graft charges over the Sh450 million scandal linked to purchase of faulty transformers.

Nairobi-based lawyer Donald Kipkorir led the chorus against his vetting, chiding Parliament for setting a low moral bar for public sector leaders.

"That Ben Chumo facing a multi-million corruption case is being interviewed by Parliament to be the chair of the [Salaries and Remuneration Commission] is taking absurdity to a new level. Our MPs would have set a new moral bar...by openly dismissing him," said Mr Kipkorir.




Only in Kenya will a bloke be in the dock for economic crimes charges one week & in parliament the next week to be vetted @WehliyeMohamed




Only in Kenya will a bloke be in the dock for economic crimes charges one week & in parliament the next week to be vetted for an office that is meant help achieve transparency & fairness in remuneration setting & review!

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