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Satchu's Rich Wrap-Up
 
 
Monday 30th of July 2018
 
Afternoon
Africa


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0930-1500 KENYA TIME

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 Currencies


Iran's currency hit a record low of 100,000 rials to the dollar amid a deepening economic crisis and the imminent return of full US sanctions 






Tehran (AFP) - Iran's currency hit a record low on Sunday of 100,000 rials to the dollar amid a deepening economic crisis and the imminent return of full US sanctions.

The unofficial rate stood at 102,000 rials by midday, according to Bonbast, one of the most reliable sites for tracking the Iranian currency.

The rate was confirmed by a trader who spoke on condition of anonymity to AFP.

The rial has lost half its value against the dollar in just four months, having broken through the 50,000-mark for the first time in March.

The government attempted to fix the rate at 42,000 in April, and threatened to crackdown on black market traders.


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The #Iranian rial plunged from 98,000 to the dollar on Saturday to 112,000 to the dollar on Sunday. The #rial has entered a classic death spiral @steve_hanke
World Currencies


The #Iranian rial plunged from 98,000 to the dollar on Saturday to 112,000 to the dollar on Sunday. That is a 12.5% depreciation in value in a single day. The #rial has entered a classic death spiral



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Is the key to beating the market written in the stars?
World Of Finance


But here’s the thing about AFund: The A stands for “Astrologers.” It’s run by an antic, charming 70-year-old named Henry Weingarten who says he gleans insight from charting the movements of celestial bodies. Today’s event isn’t technically about astrology, but like everything in the universe, it probably is. “Sixty to 70 percent of what I do is in the natural resource space,” Weingarten tells me after lunch at the club, holding a glass of red wine. “I think it’s because I’m a Leo. And effectively, as a Leo, I have an affinity for gold.”



“When I first met Henry, I thought, ‘What the hell,’ ” Husband says, evenly. Over time he learned to trust Weingarten’s advice and stop asking questions. “So if he uses—Henry, forgive me, because I don’t follow it—if he uses Jupiter and Mars to say that the next three-month trend for gold is going to be good, and if it coincides with something that I’m thinking, then OK.” To Husband, Weingarten’s appeal is obvious: “He uses astrology to separate himself from the other guys.”

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Home Thoughts
Misc.


The bonobo, often referred to as "the forgotten ape", shares more than 98% of DNA with humans @AWF_Official 




The bonobo, often referred to as "the forgotten ape", shares more than 98% of DNA with humans. These endangered primates are lesser known than chimps, gorillas, and orangutans mainly because they live in a remote place — deep in the rainforest of the DRC.

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In the language of India's Thar Desert, the word "dharolyuo" means "a joyous veil of rain that bridges sky & earth, drawing life from dry land" @RobGMacfarlane
Misc.



In the language of India's Thar Desert, the word "dharolyuo" means "a joyous veil of rain that bridges sky & earth, drawing life from dry land", & "baaval" is the smell that rises from arid earth after rain. Read more in @AratiKumarRao'

 


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Forty Names Of Clouds @AratiKumarRao
Misc.


The deep Thar desert sees only forty cloudy days. Yet, the shepherds have as many different names for clouds. Does the essence of thriving in this hostile clime begin with an evocative lexis of the land?   




There was excitement in the air. The horizon was flashing an intermittent neon in the darkness, silhouetting ghostly clouds.

What are those clouds called? I asked. Chhattar Singh gazed into the distance, as if mining a lost memory. The words began to trickle — hesitant at first, then faster, crowding one another in his excitement. Those were kanThi, he said. And if they consolidate and promise rain, their name will change to ghaTaaTope. If the clouds become very dense, they’ll be called kaLaan.

That night, the kanThi did not build up. It did not rain.

Life stirred awake next morning under a pretty-patterned sky — tufts of white trailing in arcs and lines, horizon to blue horizon. We sat sipping chai and watching a distant wind ripple through a feathery, fruit-laden khejri. “Those clouds won’t rain either,” I offered.

“Teetar pankhi” Chhattar Singh replied. They had a word for this cloud pattern too – a perfect analogy that likened it to the pattern on the wings of a partridge.  


The area I have been visiting over the past three years, the deep western part of the Thar desert, lies in Jaisalmer district. It is bounded on the north and west by Pakistan, in the east by Jodhpur district, in the south by Barmer district, and in the northeast by Bikaner district.

The rainfall here is a meager 100-150mm, about a tenth of the national average and a pitiful 2 per cent of the rainfall Kerala and some other of the wettest areas in India get. For the people of the Thar, sighting clouds and rain are events. Memorable. Priceless. Because these moments hold the key to their very existence.

Traditional desert dwellers, traveling mostly on foot, have an innate knowledge of this vast and differentiated land. They map it not in kilometers but in inches, fathoming slopes as gentle as a foot over a kilometer. Shepherds form the majority of the rural population, and animal husbandry is crucial to the rural economy.

These semi-nomadic shepherds sleep in feeble kheemp and kair gawDis in the deep desert and navigate by the stars. During their weeks and months in the desert, the grassland commons is their larder. These people of the desert follow the rhythm of the land. From the grazing paths their flocks take to the food they themselves eat, everything maps to the seasons.

One morning, we headed out southward from the village we were in, under eyyloor (cirrus) skies. Kair trees were in full bloom, and some had begun to fruit. A babbler poked its beak eye-deep into the attractive coral-colored kair flower for its nectar. The flower is a known natural sweetener and widely used in traditional food.  



As soon as we left the scree behind, we stopped. The ground was now smooth sandstone, layered in purples and golds, oranges and burgundies. And suddenly, there was water.

It took me a while to fathom where the pools came from in all this layered rock. Rainwater, percolating through porous rock further up, had dripped onto stone, grinding it over uncounted time into a natural cistern. It was deep in some places to several feet and shallow enough in others to see rock. It was full of freshwater — sweet, strained. I knelt, cupped my hands, and sipped.

The desert people have a name for such natural cisterns. They call them bheys.



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Political Reflections
Law & Politics


Mugabe’s press conference was important @RangaMberi #ZimbabweDecides2018


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never forget this graph. It's absolutely key. To everyone who says "Does advertising work?" Yes. Yes, it does. @carolecadwalla
Law & Politics

To everyone writing about adverts, microtargeting, the law, Turkey, racists, Jo Cox today, never forget this graph. It's absolutely key. To everyone who says "Does advertising work?" Yes. Yes, it does.

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BBC here are the facts: @chrisinsilico
Law & Politics


BBC here are the facts: 1) Majority of Vote Leave's AIQ spend went to Facebook ads. That's a fact. 2) Facebook did NOT check if it was legal. That's a fact. 3) The EC found the scheme was illegal. That's a fact. 4) Facebook's platform facilitated those illegal ads. That's a fact.



It's never enough for the autocrat to say "The truth is whatever I say it is." It soon becomes "The truth is whatever I say it is *today*" @Kasparov63


 

It's never enough for the autocrat to say "The truth is whatever I say it is." It soon becomes "The truth is whatever I say it is *today*", as a loyalty test. 2+2=5 if you are loyal enough.

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Has China's leader Xi Jinping now passed his peak? @FinancialReview
Law & Politics


We are a long way, in other words, from peak China. But that begs another question which has been sweeping Beijing over the northern summer – whether we are now witnessing peak Xi Jinping.

In recent weeks, the signs of a nascent pushback against Xi's absolute power have started to emerge. Some are cryptic, given the nature of Chinese politics, contained in coyly worded postings on social media. Some are the stuff of rumour, or back alley news, as the Chinese call such information, which flourishes in the absence of a free press.

The whisperings emanate from a variety of sources – retired leaders, rival factions within the CCP, the intelligentsia and the economic policy making apparatus. None presage Xi being toppled from power, nor are they an indicator of meaningful political reform of the single-party state. The ruling communist party, in whatever form, is here to stay.

Trump's unpredictable tactics – striking a deal one day, only to throw it out the next while issuing a new set of demands – have thrown the Chinese leadership off-balance. At a time when the economy is slowing, China does not want a trade war with the US, even if it is convinced it could ultimately prevail.


But the shift in Beijing's economic axis hardly abrogates the importance of America's enduring role in anchoring stability in China's environs. Xi may regret, in retrospect, pursuing such a forceful foreign policy, as it has allowed the China hawks to gain ascendancy in Washington.

America's foreign policy establishment generally has visceral disdain for Trump, but many make an exception in the case of China, where they are enjoying seeing their president put Xi on the back foot.

Xi plans to be in office for many years to come. To ensure he stays there, maybe he will have to share some power along the way.


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26 Jul 2018 Actually I think @POTUS has taken Xi down a few notches.
Law & Politics

Actually I think @POTUS has taken Xi down a few notches. @ianbremmer and in what is a game of Chicken has open Xi's eyes to the downside risk which looks precipitous and of a Fat Tail nature

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26 Jul 2018 The method in his madness is the triangulation of China and a serious ratcheting higher of pressure. Xi is looking more brittle. #BRICS2018
Law & Politics


.@BarackObama spoke of bending the Arc of History whereas @Potus bends the Arc of Reality but having said that the method in his madness is the triangulation of China and a serious ratcheting higher of pressure. Xi is looking more brittle. #BRICS2018




09-JUL-2018 ::  Tariff wars, who blinks first? @TheStarKenya 



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International Markets
World Currencies


Bank of Japan offers to buy an unlimited amount of bonds for a third time in a week @business





Currency Markets at a Glance WSJ




Euro 1.1682

Dollar Index 94.61

Japan Yen 111.10

Swiss Franc 0.9933

Pound 1.3119

Aussie 0.7399

India Rupee 68.705

South Korea Won 1119.10

Brazil Real 3.7147

Egypt Pound 17.8833

South Africa Rand 13.1876

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Emerging Markets


Wait till you read this. From January 2018 to the end of May 2018, 26 billion dirhams worth of cheques have been bounced. 1.2 million cheques in total. Or 39.3% of the total number of cheques issued in 2017 which were to come due in 2018. They came due and they bounced. 39.3% is not an amount to be taken lightly, neither is the number of checks that is 1.2 million nor the amount of 26 billion dirhams, that’s $7 billion dollars in just 6 months of 2018. 




Let’s look at the biggest phone carrier of Dubai, Etisalat and its data. 32,000 phone connections were cancelled between March and April of 2018. Just in 38 days in total. 28,000 children were withdrawn from schools without registering themselves for the end of summer sessions. Meaning those families do not plan to come back.

I wish it ended here. I wish the signs were not as obvious. But they are. Dubai property that used to be sold at 2300 dirhams per square foot is selling at less than 600 dirhams per square foot. Or in simple words, it’s selling at 25% of its value.  

Abraaj Capitals’ collapse is a nail in the financial system coffin of Dubai. The biggest confidence eroding incident ever to have taken place in the history of Dubai’s financial system.  




This is a bad cycle that Dubai is going through and in my humble opinion we have yet to see its bottom. What is happening right now is only a glimpse of what is yet to come. With media censorship and controlled release of any and all news, you will not even hear these stories in Dubai. Unless you want to be a journalist who loves jail food.

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USD/TRY 5.00 barrier risk increased on US sanctions threat, RTRS says. @Schuldensuehner
World Currencies


US threatens sanctions on #Turkey amid pastor row over weekend. 4.9767 was record high 12 July, last resistance before big 5.00 barriers.

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Frontier Markets
Africa


30-JUL-2018 ::  The AfDB @AfDB_Group  is a Force Multiplier 


The African Development Bank [AfDB] and its erudite and sophisticated President Akinwumi Adesina dialled up Kenya this month. President Adesina amongst many things sports a vivacious Bow-Tie on most occasions. President Kenyatta who is clearly partial to the AfDB President arrived about thirty minutes early for an Africa50 function I attended. 

I said to President Adesina, ''in my experience, that is unbelievable and off the charts [as it were] and it speaks to the esteem with which you are evidently held.''

Subsequently and after a visit to State House, I noted President Kenyatta announced the following via Tweet 

@UKenyatta Jul 20 ''I have directed all govt accounting officers including Principal Secretaries, Parastatal Heads, Vice Chancellors of Public Universities & Chairmen of State Corporations that there will be no new government projects that will be embarked on until those that are ongoing are complete''

And I thought to myself, that is influence for you. The President of the AfDB operates in a very subtle and Sun Tzu way and was elected as the 8th President of the African Development Bank on May 28, 2015. Before that he was Nigeria’s Minister of Agriculture and Rural Development and before that was at AGRA here in Nairobi.  The AfDB was founded in 1964 and comprises three entities: The African Development Bank, the African Development Fund and the Nigeria Trust Fund. The AfDB’s mission is to fight poverty and improve living conditions on the continent through promoting the investment of public and private capital in projects and programs that are likely to contribute to the economic and social development of the region. The Mission statement has been reinterpreted and fine tuned under the Banner Headline ''The High 5s'' 

The ''High 5'' is a hand gesture that occurs when two people simultaneously raise one hand each, about head-high, and push, slide, or slap the flat of their palm against the flat palm of the other person. The gesture is often preceded verbally by a phrase like "Give me five", "High five", or "Up high." Its meaning varies with the context of use but can include as a greeting, congratulations, or celebration. The use of the phrase as a noun has been part of the Oxford English Dictionary since 1980 and as a verb since 1981.The phrase is related to the slang "give me five" which is a request for some form of handshake – variations include "slap me five", "slip me five", "give me (some) skin" – with "five" referring to the number of fingers on a hand.

Linguistics is much under-estimated but the choice of ''High 5'' is typical of the AfDB, Its very ''Can-Do'' and ''Yes we can'' which i have found is exactly the correct starting point for practically anything.

The High 5s are to: Light up and Power Africa; Feed Africa; Industrialize Africa; Integrate Africa; and Improve the Quality of Life for the People of Africa. I don't think you will find anyone who is going to argue with these coordinates. According to the latest data, Cumulative loans signed, net of cancelations, as at 31 December 2017 amounted to UA 44.63 billion [$62.33b] and Total disbursed and outstanding loans as at 31 December 2017 was UA 17.82 billion [$24.88b]. The Scale of the Bank is seen in its plan to raise USD 8 billion from the global capital markets in 2018.

Here in Kenya the AfDB has a $3.1b Portfolio that spans ''The Last Mile Project'' [i.e. switching on the lightbulb at the Household level] Lake Turkana Wind Power, the Ethiopia-Kenya Power Interconnection, the Thika Super-Highway, the road to Ethiopia and various lending programs which seek to stimulate the SME sector. This is not an exhaustive List. 

The AfDB is a ''Force-Multiplier''. Each $1.00 it puts to work has a Multiplier effect. Where the AfDB leads others follow. It would be interesting to scientifically measure the ''Multiplier'' Ratio.  i came across this Jorge Luis Borges quote [H/T @VictorOladokun] on the AfDB web site “Don’t talk unless you can improve the silence.”  President Adesina spoke about how the Private Sector need to ''influence'' and I was left thinking about how Africa is not one Country but 55 [countries at the last count]. One of our singular disadvantages is that marshalling 55 voices into one voice is no easy Task. 

And in my humble opinion, the AfDB is probably the premier voice articulating a Pan-African vision and advocating in the Pan-African interest. And this is crucial if we are as a Continent to move meaningfully into the bright new Future that our more than a billion Fellow Africans all are wishing for. 

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[CHAMISA SPEAKS]Foreigners have been hired to interfere with the country's (Zimbabwe) electoral system, claims @nelsonchamisa @eNCA #ZimElections2018 #ZimDecides2018 Video
Law & Politics


Zimbabwe's ZANU-PF faces growing opposition challenge @oxfordanalytica 




The latest polls show Chamisa with considerable momentum, potentially even having a slight advantage over Mnangagwa. With 23 registered presidential candidates, a run-off contest is increasingly likely. ZANU-PF is unlikely to be willing to cede power, potentially forcing it into desperate strategies to manipulate or overturn the result. While levels of intimidation in rural areas are likely to increase, visible violence in the capital Harare is less probable.  




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



I am just going to leave this 360 degree video of the National Sports Stadium at @edmnangagwa  rally yesterday. @freemanchari  




I am just going to leave this 360 degree video of the National Sports Stadium at @edmnangagwa  rally yesterday. Even when Zimbabwe played that fake El Salvador team the stadium not this empty! @nelsonchamisa


34. It’s @nelsonchamisa’s moment  #ZimbabweDecides2018 #ZimElections2018 ️





#ZimbabweDecides2018 Zanu PF final rally in Harare ..... it’s midday low turnout so far @harumutasa


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Bindura Rally roars!!Change is the air and inevitable!!! @nelsonchamisa
Law & Politics


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




Mugabe: 23 presidential candidates... hmmm. I cannot vote for those who have tormented me. I make my choice from the other 22 @violetgonda  


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Following the reunion of the #Ethiopia-n Orthodox Tewahdo Church under one Holy Synod, His Holiness Abuna Merkorios accepted the invitation of HE PM Abiy to return to Ethiopia
Law & Politics


Following the reunion of the #Ethiopia-n Orthodox Tewahdo Church under one Holy Synod, His Holiness Abuna Merkorios—who lived in exile in US for more than two decades—accepted the invitation of HE PM Abiy to return to Ethiopia most likely with the PM on July 31st, 2018. 



Lots of great t-shirts and #Ethiopia swag in downtown DC today. This one seemed to sum up the mood, at least for today:


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The Man from Hope H/T @LaurenPinDC
Law & Politics



The most consequential arrival of a Politician in SSA since 1990 and when Mandela walked out of Prison blinking in the bright sunlight cc @BillClinton #Mandela100 


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The US embassy has denied a tourist visa for the daughter of dictator Kabila who wants to go on vacation in the U.S
Law & Politics


'If South Africa's water shortage persists, the country may turn into a Mad Max-like dystopia: a world of water barons and social meltdown' @FT




South Africa All Share Bloomberg -3.94% 2018 


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Dollar versus Rand 6 Month Chart INO 13.1891
World Currencies



Egypt Pound versus The Dollar 3 Month Chart INO 17.8783




Nigeria All Share Bloomberg -4.20% 2018 




Ghana Stock Exchange Composite Index Bloomberg +10.72% 2018 


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Zambia says Turkish firm wants to refinance its $750 man Eurobond @Reuters
World Of Finance



Zambia, whose credit rating was downgraded by Moody’s on Friday, said in December last year that it would begin refinancing Eurobonds worth a total $3 billion in 2019 to reduce the cost of debt servicing for Africa’s No.2 copper producer.

During talks in Lusaka with the visiting Turkish president, broadcast on state ZNBC TV, Lungu said that the firm would send representatives to Zambia in September to discuss details of refinancing.

“We urge you to take keen interest in this matter and encourage the company to pursue this deal without hesitation,” Lungu told Erdogan during the meeting held at State House, but gave no details about the company he mentioned.

As well as the $750 million Eurobond, Zambia has a $1 billion Eurobond due in 2024 and another $1.25 billion Eurobond which will be due for repayment in 2027.

Ratings agency Moody’s on Friday downgraded Zambia’s long-term issuer ratings to Caa1 from B3 and maintained a stable outlook, reflecting ongoing fiscal consolidation challenges.

The International Monetary Fund in February rejected Zambia’s borrowing plans, saying they risked making it harder for the southern African country to sustain its debt load.  




Conclusions



In Turkish Lira?



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.@WPPScangroup reports H1 2018 EPS Earnings +25.64% here
N.S.E Equities - Commercial & Services



Par Value:                  1/-

Closing Price:           15.50

Total Shares Issued:          378865102.00

Market Capitalization:        5,872,409,081

EPS:             1.2

PE:                 12.917



The largest marketing services company in East Africa.  



H1 2018 Earnings ended 30th June 2018

H1 Billings 6.309101b versus 6.770011b -6.808% 

H1 2018 Net Sales 1.793437b versus 1.998379b -10.25% 

H1 Operating and Admin Expenses [1.637507b] versus [1.898301b] -13.738%

H1 Net Interest Income 158.772m versus 140.198m

H1 Profit Before Tax 301.003m versus 244.480m 

H1 EPS 0.49 versus 0.39 +25.64%

Cash and Cash Equivalents 3.890b versus 3.736b



Management observations 



Net Sales decreased by -10.26% - Reduction in Net Sales in line with forecast and reflects the state of economies across the Countries where the Group operates.



Conclusions



Billings at -6.808% Year on Year confirm it was a tough slog in 2018.

However, they have proven nimble as they squeeze out a +25.64% EPS Gain.

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.@CICInsurance reports H1 2018 EPS +61.538% Earnings here
N.S.E Equities - Commercial & Services


Par Value:                  

Closing Price:           4.70

Total Shares Issued:          2615538528.00

Market Capitalization:        12,293,031,082

EPS:             0.18

PE:                 26.111

 

CIC is the leading provider of micro insurance and other financial services

6 month Earnings through 30th June 2018

H1 2018 Gross written premium 8.980946b versus 7.585498b +18.396% 

H1 Investment and other Income 1.640640b versus 1.975345b -16.944% 

H1 Total Income 8.723542b versus 7.853271b +11.08% 

H1 Net Claims and policy holder benefits [-4.669916b] versus [-4.056777b] 

H1 Total Expenditure [7.745040b] versus [7.098640b]

H1 Profit before Tax 643.694b versus 429.508m +49.86% 

H1 Profit after Tax 537.055m versus 347.872m

H1 EPS 0.21 versus 0.13 +61.538%

H1 Total Assets 32.765341b versus 30.505376b

Company commentary 

Gross written premiums increased by 18% from 7.6b in 2017 to 9b in 2018

Claims incurred increased by 15% in line with business growth from 4.1b to 4.7b

Operating expenses remained stable

Outlook 

Group has registered commendable growth during the period, with key focus areas being growth and diversification of revenue streams, innovation and information technology.

CIC Life has continued to leverage on diversification into ordinary life and pension while the motor assessment centre has resulted in lower motor claims costs for CIC General

Conclusions

sharply improved H1 Earnings.

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EABL reports FY 2018 Earnings EPS -26% here
N.S.E Equities - Industrial & Allied


Par Value:                  2/-

Closing Price:           230.00

Total Shares Issued:          790774356.00

Market Capitalization:        181,878,101,880

EPS:             7.19

PE:              31.988

FY Revenues of KES - 73.5bn

FY Profit Before Tax 11.7b versus 13.3b -12.00%

FY Profit After Tax 7.3b versus 8.5b -15.00%

FY EPS 7.19 versus 9.71 -26.00%

Final Dividend 5.50

Via Media Release 

+5% revenue growth

performance significantly improved in t he second half with net sales +10%

EABL spirit sales increased 8% in the FY

Mainstream spirits portfolio +23%

Beer +4%

Innovation delivered good performance contributing 22% to EABL net sales - Serengeti Lite in Tanzania, Tusker Cider in Kenya and Uganda Waragi flavours

Gross margin improved by 4%

marketing spend +19%

Profit after Tax declined by 15% as a result of one-off tax provisions

''In the year we spent 13b on CAPEX a with 7.8b of that being spent on Kisumu Brewery'' Andrew Cowan

Kenya +1% Uganda +4% Tanzania +41% - Andrew Cowan

Final Dividend of 5.50 a share. 

Volume +7% 

Net Sales +5%

Gross Profit +4.00%

Profit after tax -15.00%

Operating Cash Conversion +117% 

Total Dividend KES 7.50/share

KENYA 73% of Total Revenues +1%

UGANDA 16% of Total revenues +4.00%

TANZANIA 11% of Total Revenues +41%

Total EABL 100% +5%

Kenya Earnings +1.00% 1. Bottled beer turnaround, sales growing +5% 2. Scotch grew +4% 3. Mainstream spirits growing +22% 4. Senator decline driven by uncertainty and plant shutdown in H1 5. Total spirits in +7% growth constrained by uncontrolled imports 

.@tuskerlite and @GuinnessIreland delivering +11% growth in Premium beer

Improved volume performance in H2 (+10% vs +4% in H1) across all categories

Stable regulatory and economic environment in H2 allowed us to deliver highest net sales growth (+10%) for 6 years

Volume (mEU) 12.5 11.7 +7%

Gross sales 135.0 124.1 +9%

BROAD BASED GROWTH WEAKENED BY SENATOR KEG

 +4% growth in underlying operating profit offset by one- off provision provision for tax exposure

Net borrowings (27.5b) (24.4b) 

 EPS further deteriorated by higher non-controlling interest (SBL)

Priorities going forward

 Opportunities for further growth

 Commercialize the Kisumu brewery

 Drive margin enhancement

 Srengthen re-recruitment of bottled beer consumers

 Win in premium leading with Scotch and vodka

 Go bolder and faster with productivity initiatives

 Sustain spirits growth momentum

 Accelerate innovations - Serengeti Lite, Tusker Cider, Black & White, Uganda Waragi flavours, etc.

DPS of KES 7.5 per share, unch - payout ratio >100%

Conclusions

 

Its a very strong Franchise. Clearly 2 elections a drought and a credit crunch crimped Kenya +1.00%.

The Co. is signalling an H2 acceleration.

Tanzania a stand out.

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#EABLResults @KenyaBreweries
N.S.E Equities - Industrial & Allied


The main challenge facing the company was illegal brews, which account for 50 percent of the alcohol market in Kenya, EABL said. @ReutersAfrica 




The brewer, which is controlled by Britain’s Diageo and is known for its Tusker beer, said its net sales value grew by 10 percent in its second half to the end of June, the fastest pace in six years.



“We think we will be selling Keg out of that plant to locals around the Kisumu region and the west of Kenya before Christmas,” he said.



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.@Shoprite_SA announced plans to open a new outlet in the Mombasa @CityMallNyali taking over space previously occupied by @Nakumatt , as part of its plans to open 7-outlets across the country by 2019 Real Estate @CytonnInvest
Retail & Manufacturing

This week, in the retail sector, South African retailer Shoprite announced plans to open a new outlet in the Mombasa City Mall, taking over space previously occupied by Nakumatt, as part of its plans to open 7-outlets across the country by 2019. In the commercial office sector, Britam Tower, a 32-storey building with a Gross Lettable Area (GLA) of 350,000 SQFT, is letting in Upperhill. In the residential sector, Housing Finance (HF) Group Limited, a mortgage provider in Kenya, intends to offload its home loans book, with the aim of benefiting from government plans to construct 500,000 affordable housing units in the next 5-years;

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a 20-year Treasury bond (FXD 2/2018/20) with coupon rate set at 13.2% overall subscription rate coming in at 34.7% while the weighted average rate of accepted bids came in at 13.4% @CytonnInvest
World Of Finance


The Kenyan Government issued a new 20-year Treasury bond (FXD 2/2018/20) with the coupon rate set at 13.2% in a bid to raise Kshs 40.0 bn for budgetary support. The issue had a lacklustre performance, with the overall subscription rate coming in at 34.7% while the weighted average rate of accepted bids came in at 13.4%, 



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The Kenyan shilling has gained by 2.6% year to date @CytonnInvest
World Currencies




During the week, the Kenya Shilling gained by 0.3% against the US dollar to close at Kshs 100.5, from Kshs 100.7 the previous week, supported by inflows from diaspora remittances amidst tightened liquidity in the money markets. The Kenyan shilling has gained by 2.6% year to date, and in our view the shilling should remain relatively stable against the dollar in the short term, supported by:

The narrowing of the current account deficit, to 8.9% of GDP in Q1’2018 compared to 11.3% in Q1’2017 on account of the faster growth of exports at 7.1%, compared to imports growth of 6.5%, Stronger inflows from principal exports, which include coffee, tea and horticulture, which increased by 9.3% during the month of April to Kshs 21.9 bn from Kshs 20.0 bn in a similar period the previous year, with the exports from coffee and horticulture increasing by 6.7% and 25.0% y/y, respectively, while tea exports have declined marginally by 1.6% y/y, Improving diaspora remittances, which increased by 16.9% to USD 253.7 mn in May 2018, from USD 217.1 mn in April 2018, with the largest contributor being North America at USD 122.8 mn attributed to (a) recovery of the global economy, (b) increased uptake of financial products by the diaspora due to financial services firms, particularly banks, targeting the diaspora, and (c) new partnerships between international money remittance providers and local commercial banks making the process more convenient, and, High forex reserves, currently at USD 8.8 bn (equivalent to 5.9 months of import cover) and the USD 1.5 bn stand-by credit and precautionary facility by the IMF, still available until September 2018.

 

According to data from the Kenya National Bureau of Statistics (KNBS), foreign currency deposits rose by 9.5% in the month of May 2018 to Kshs 514.9 bn, from Kshs 470.2 bn in April, and by 16.6% y/y from Kshs 441.6 bn in a similar period in 2017. This is a new high, being the first time the foreign currency deposits have crossed the Kshs 500 bn level, which has been attributed to increased inflows from abroad as individuals continued to take advantage of the tax amnesty granted on foreign income. The Tax Procedures Act had been amended in 2016 with the introduction of Section 37B, which granted amnesty on foreign income that had been earned on or before 31st December 2016 and was subject to taxation in Kenya. The section was later amended on 3rd April 2017, extending the deadline to allow full amnesty provided the foreign income was declared and funds realized were transferred to Kenya no later than 30th June 2018; failure to which they could be remitted within 5-years thereof but would be subjected to a 10% penalty. In the 2018/2019 financial year budget reading, the Cabinet Secretary for National Treasury proposed the extension of the amnesty to 30th June 2019 amidst concerns that it would lead to inflows of illicit cash including proceeds from corruption. The increase in foreign currency deposits has also been reflected in the increased diaspora remittances, which also increased by 57.1% year on year in the month of May to USD 253.7 mn from USD 161.5 mn in May 2017. The increased inflows have led to the strengthening of the Kenyan Shilling against the US Dollar, which has gained by 2.6% year to date as well as maintained the high forex reserves experienced during the year that are currently at USD 8.8 bn (equivalent to 5.9 months of import cover).


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N.S.E Today


The Iranian rial plunged from 98,000 to the dollar on Saturday to
112,000 to the dollar on Sunday. That is a 12.5% depreciation in value
in a single day and some [Secretary Pompeo, for one, I am sure] would
characterise it as a classic death spiral.
Pakistan which has a brand new President Imran Khan who allegedly is
seeking a $12b bail-out Package from Madame Lagarde's IMF.
Anecdotal chatter emitting from Dubai is talking of a melt-down.
Wait till you read this. From January 2018 to the end of May 2018, 26
billion dirhams worth of cheques have been bounced. 1.2 million
cheques in total. Or 39.3% of the total number of cheques issued in
2017 which were to come due in 2018. They came due and they bounced.
39.3% is not an amount to be taken lightly, neither is the number of
checks that is 1.2 million nor the amount of 26 billion dirhams,
that’s $7 billion dollars in just 6 months of 2018. [ Mir Mohammad Ali
Khan - Modern Diplomacy]
The implosion of Abraaj is not helping either.
I think President Mnanagwa is in danger of being ''youth-quake''-ed by
the Opposition in Zimbabwe.
The Nairobi All Share Index eased -0.19 points.
The Nairobi NSE20 Index fell 11.7 points.



N.S.E Equities - Commercial & Services


WPP-Scangroup reported H1 2018 Earnings, where notwithstanding a
-10.25% slide in H1 2018 Net Sales which clocked 1.793437b, ScanGroup
reported a +25.64% ratchet higher in H1 Earnings Per Share. The Cash
and cash equivalents scored 3.89b. Clearly it was a tough slog in
2018. However, they have proven nimble as they squeeze out a +25.64%
EPS Gain. WPP-ScanGroup rebounded +3.23% to close at 16.00 and traded
77,900 shares. WPP-Scangroup is -13.15% on a Total Return Basis in
2018 and trades on a Trailing P/E Ratio of 13.33 which is cheap versus
the long term moving average.

Safaricom closed unchanged at 28.50 and traded 11.459m shares. When
the market turns, i expect a meaningful Pop because the Ethiopian
Opportunity has not been priced into the share price, at all,
whatsoever.



N.S.E Equities - Finance & Investment


CIC Insurance reported a startling +61.538% gain in H1 2018 EPS [but
in my experience they always report a muscular H1] off the back of a
+18.396% gain in H1 2018 Gross written premium 8.980946b. CIC
Insurance rallied +3.191% to close at 4.85 and traded 1.105m shares.



N.S.E Equities - Industrial & Allied


EABL released FY 2018 Earnings Friday. Full Year Revenues clocked
73.5b, FY Profit After Tax declined -12.00%, FY Earnings Per share
declined -26.00% to 7.19. EABL cited ''one-off tax provisions'' as
crimping Profit after Tax. Kenya which constitutes 73% of Total
Revenues posted a 1% gain [Mr. Cowan cited Senator and the period
between the two elections as being relevant], Uganda [16% of total
Revenues] posted a +4.00% gain and Tanzania [11% of Total Revenues]
was the standout +41% Year on Year. EABL is paying out 104.74% of its
EPS as dividend. EABL also said its net sales value grew by 10 percent
in its second half to the end of June, the fastest pace in six years.
The main challenge facing the company was illegal brews, which account
for 50 percent of the alcohol market in Kenya, EABL said.

“We think we will be selling Keg out of that plant to locals around
the Kisumu region and the west of Kenya before Christmas,” he said.

EABL retreated -0.88% to close at 225.00 and traded 421,100 sales.
EABL is -5.46% in 2018.

BAT was the most actively traded share at the Exchange and closed
unchanged at 620.00 with 835,500 shares worth 518.009m changing hands.
BAT is -15.00% in 2018 on a Total Return Basis, trades on a Trailing
PE Ratio of 18.585 and reported a -9.31% decline in H1 2018 EPS.

KenGen eased -0.76% to close at 6.50 and is egregiously oversold. The
Travails at KPLC have not been helpful and there has been some
unjustified cross-over contagion for no good reason other than a
knee-jerk one.

--



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