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Satchu's Rich Wrap-Up
Thursday 13th of September 2018

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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.

The Latest Daily PodCast can be found here on the Front Page of the site


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27-NOV-2017 :: Bitcoin "Wow! What a Ride!" @TheStarKenya

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

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Word(s) of the day: "blue-bore", "blue-borie" - when the weather is gloomy or stormy, an opening in the clouds through which clear blue sky can be seen (Scots).

Word(s) of the day: "blue-bore", "blue-borie" - when the weather is
gloomy or stormy, an opening in the clouds through which clear blue
sky can be seen (Scots). Metaphorically, therefore, a glimpse of hope,
a hint of the imminence of coming change.

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How @jaredkushner Played Matchmaker Between Israel and Saudi Arabia, According to Woodward @haaretzcom
Law & Politics

Veteran journalist Bob Woodward’s new book on the Trump presidency
claims Jared Kushner has been working to encourage an alliance between
Israel and Saudi Arabia, sometimes against the advice of other senior
officials in the White House.
According to Woodward’s account in the just-published “Fear,”
Kushner’s efforts began during the first months of the Trump
administration in early 2017. Woodward says it was the president’s
son-in-law and senior adviser who first proposed that the president’s
first official foreign trip should include two stops: Saudi Arabia and
Israel. The idea was to send a message about the U.S.’ commitment to
forging closer relations between the two countries, who are both
regional enemies of Iran.
“Kushner told Harvey he had important and reliable intelligence that
the key to Saudi Arabia was the deputy crown prince, the charismatic
31-year-old Mohammed bin Salman, known as MBS,” writes Woodward. Some
intelligence chiefs in D.C. disagreed.
“The message from them was that Kushner better be careful,” Woodward
wrote. “The real solid guy was the current crown prince, Mohammed bin
Nayef, 57, who was known as MBN. He was the king’s nephew credited
with dismantling Al-Qaida in the Kingdom as head of the Interior
Ministry. Showing favoritism to the younger MBS would cause friction
in the royal family,” he added.
Woodward notes that MBS had lunch with Trump in the White House’s
State Dining Room, which is usually reserved for meetings between the
president and other foreign leaders. “This violated protocol,
unsettling officials at the State Department and the CIA,” writes
Woodward. “Lunch at the White House with the president for a
middle-rank deputy crown prince was just not supposed to be done.”

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Law & Politics

The training has only one purpose: to learn laws and regulations…to
eradicate from the mind thoughts about religious extremism and violent
terrorism, and to cure ideological diseases. If the education is not
going well, we will continue to provide free education, until the
students achieve satisfactory results and graduate smoothly.
—Speech by Chinese Communist Youth League Xinjiang Branch, March 2017

In May 2014, China launched its “Strike Hard Campaign against Violent
Terrorism” (严厉打击暴力恐怖活动专项行动) in Xinjiang. Since then, the number of
people formally arrested has leaped three-fold compared to the
previous five-year period, according to official figures and estimates
by the nongovernmental organization Chinese Human Rights Defenders.
The government has held people in pretrial detention centers (看守所) and
prisons (监狱), both of which are formal facilities, and in political
education camps, which have no basis under Chinese law. Those detained
have been denied due process rights and suffered torture and other

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Currency Markets at a Glance WSJ
World Currencies

Euro 1.1618
Dollar Index 94.80
Japan Yen 111.43
Swiss Franc 0.9698
Pound 1.3028
Aussie 0.7180
India Rupee 71.965
South Korea Won 1119.97
Brazil Real 4.1611
Egypt Pound 17.9095
South Africa Rand 14.9948

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The Turkish lira is facing its moment of truth as investors await the central bank's rate decision
Emerging Markets

Expectations ahead of the Turkish interest-rate decision could hardly
be higher and policy makers have mostly themselves to thank for that.

The lira touched its strongest level this month Wednesday amid
speculation that the central bank will follow through on a pledge of
action and raise borrowing costs Thursday after inflation surged to a
15-year high. However, the heightened anticipation risks a bigger
sell-off in Turkey’s markets should officials disappoint markets,
especially after they stunned investors at their last meeting in July
when they unexpectedly kept policy on hold.

Frontier Markets

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The European Union should offer a free trade agreement to the whole of
the African continent and a new investment alliance, European
Commission President Jean-Claude Juncker said on Wednesday. Among the
proposals for EU action to bolster prosperity in the world’s poorest
continent, the commission chief in a keynote speech called for a more
equal partnership and investment rather than aid. Europeans are
currently looking for ways to stem the economic divide driving
Africans to try to migrate northward. Juncker said he had talked with
African leaders and was proposing an alliance to boost sustainable
investment, which could create up to 10 million jobs in Africa in the
next five years, Reuters reports.


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Can Ethiopia's Reforms Succeed? @ForeignAffairs

Ethiopia is on the move. The resignation of beleaguered Prime Minister
Hailemariam Desalegn in February ushered in the most significant
reordering of political power in the country since 1991, when youthful
guerrillas toppled the long-serving Marxist strongman Mengistu Haile

The new administration, led by 42-year-old Prime Minister Abiy Ahmed,
has pursued an aggressive, reformist agenda. It wants to rewrite
Ethiopia’s old, authoritarian social contract and unite the country’s
fractured society. It isn’t yet clear whether Abiy will succeed, and
progress so far has been mixed. But if he does, Ethiopia will have a
chance not only to reinvent itself but also to bring a wave of reform
and perhaps even democratization to the wider region.

At the heart of Abiy’s reforms is a drive for national reconciliation.
The government has released political prisoners, allowed exiled
dissidents to return home, decriminalized armed opposition groups, and
lifted a contentious state of emergency. The speed of the changes has
been dizzying.

Alongside his domestic reforms, Abiy has shaken up Ethiopia’s
relations with its neighbors. In June, Abiy’s ruling Ethiopian
People’s Revolutionary Democratic Front (EPRDF) announced that
Ethiopia would at last implement a peace deal with Eritrea that the
two countries signed in 2000, which requires Ethiopia to hand over
occupied territories and paves the way for an end to the war that
began in 1998. The next month, Abiy became the first Ethiopian leader
to visit the Eritrean capital, Asmara, since before the war.


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These 90 or so days represent the most consequential arrival of an African Politician on the African Stage since Mandela walked out of prison blinking in the sunlight

He has been Prime Minster for 90 days. During those 90 days, he has
criss-crossed the country, ended a state of emergency, released
thousands of political prisoners, thawed relations with Eritrea [29
Mar 2018 HE Abiy Ahmed @PM_AbiyAhmed - It is time. Lets build a wall
of love between #Ethiopia & #Eritrea], bagged a $1b from the UAE,
announced a dramatic economic about-turn. In matters language and
linguistics, he has tapped into a ‘’Nelson Mandela’’ 1994 mood.  ese
90 or so days represent the most consequential arrival of an African
politician on the African stage since Mandela walked out of prison
blinking in the sunlight and constructed his ‘’rainbow nation’’.

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South Africa All Share Bloomberg -5.97% 2018

Dollar versus Rand 6 Month Chart INO 14.9948 [EM rebounds over
last 24 hours]


Egypt Pound versus The Dollar 3 Month Chart INO 17.9095


Nigeria All Share Bloomberg -15.56% 2018


Ghana Stock Exchange Composite Index Bloomberg +6.02% 2018


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Bank of Tanzania Rejects Claims of Printing $656 Million @BBGAfrica

Bank of Tanzania refuted social-media allegations about printing notes
valued at 1.5 trillion shillings ($655.9 million) for the government’s
“The central bank informs the public that the statement is incorrect
and intends to affect the trust of citizens and international
stakeholders on Tanzanian financial stability,” the central bank said
in an emailed statement.
The government’s overdraft at the central bank more than tripled to
1.94 trillion shillings in June, from 610 billion shillings in May,
the central bank said. In April, the amount stood at 1.55 trillion
shillings, it said.
The government can borrow from the central bank to plug funding
shortfalls provided the amount is capped at 12.5 percent of the
nation’s internal revenue from the previous fiscal year, the regulator

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It is not unreasonable. The absence of a standby facility is an assurance that the country will have the means to convert tax shillings to dollars @haiyay
Kenyan Economy

It is not easy to negotiate that clause away. Arguing about it signals
that you are unlikely to heed to good fiscal practices

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Chinese company running Kenya's new railway wins oil-terminal deal @business
Kenyan Economy

China Communications Construction Co., the firm running Kenya’s new
railway, won a bid to build an oil terminal that will boost discharge
capacity more than 10-fold from an existing facility, according to
port authorities.
Kenya and China signed infrastructure deals last week after bilateral
talks between their leaders, President Uhuru Kenyatta said in a
statement following an African heads of states summit in Beijing. The
accords included the establishment of a special-economic zone at Dongo
Kundu in the port city of Mombasa, where the new terminal will be
The Chinese company and the Kenya Port Authority are yet to sign a
contract for the facility, which will be able to store 400,000 metric
tons, acting Managing Director Daniel Manduku said Wednesday in an
interview in Mombasa.
The existing Kipevu terminal -- which handles about 90 percent of oil
imported into Kenya and petroleum products on transit to neighboring
nations -- can manage only one vessel of 35,000 tons at a time, he
said. The new terminal will replace the current site situated within
the Mombasa port and will have capacity to berth four ships of 100,000
tons each simultaneously, according to the KPA.
The Chinese company is also operating the $3.8 billion railway linking
Mombasa to the capital, Nairobi, for its first decade. China provided
90 percent of the financing for the 472-kilometer (293-mile) link
commissioned in June 2017. It was built by China Road and Bridge
Corp., a subsidiary of CCCC.

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Treasury on the spot over failure to release Sh600m for Lamu jetties via @BD_Africa
Kenyan Economy

The National Treasury is on the spot for failing to release Sh600
million for rehabilitation of key jetties in Lamu County.
Jetties in Lamu are the only entry and exit points to Lamu town and
other adjacent islands.
Most of the jetties are structurally unsound due to lack of maintenance.

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Abiy in Ethiopia [which is and-locked, of course but a key Future Taker of Port facilities] who has made peace with President Afawerki's Eritrea and is surely set to undercut Djibouti and even LAPPSET
Kenyan Economy

Overlay the Geopolitics and its worth noting that the Geopolitics has
become much more fluid. Fluidity has been engendered by the
spectacular arrival of Prime Minister Abiy in Ethiopia [which is
land-locked, of course but a key Future Taker of Port facilities] who
has made peace with President Afawerki's Eritrea and is surely set to
undercut Djibouti and even LAPPSET, both Projects which seem to me to
have been predicated to some degree on a permanent Freeze between
Ethiopia and Eritrea. Investments in Ports have a long lead time and I
am not certain that those same investments are able to re-calibrate at
the speed with which the Geopolitics is moving. The Big Risk is that
some these Port investments will be ''Hambanota''-ed.

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KPLC's share price has plunged from a high of Kshs. 12..to an all time low of Kshs. 5 @MihrThakar
Kenyan Economy

KPLC’s share price has plunged from a high of Kshs. 12..to an all time
low of Kshs. 5..Units of power sold have increased from 4.8B KWH in
2007 to 7.7B KWH in 2017 (+60%)..customer numbers have grown from 924k
to 6,180k (+569%)..the growth disparity is immediately noticeable.

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Kenya Power share price data here
Kenyan Economy

Par Value:                  20/-
Closing Price:           5.00
Total Shares Issued:          1951467045.00
Market Capitalization:        9,757,335,225
EPS:             3.72
PE:                 1.344

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N.S.E Today

 @Nike stock closed at $83/share, an all time high for the company.
The markets emit the purest Signal and the message is loud and clear
after what has been a ''controversial'' Kapernick Ad Campaign.
Turkey's central bank jacked up interest rates by 625 bps to 24%, more
than expected. The Lira jumped, but only back to where it was at the
end of August.
The US asked  China for a New Round of Trade Talks Led by Steve
Mnuchin. The Last Time the US offered Talks it was at an ''Intern''
The markets took this as a positive step and sold the dollar and
started to buy some ''riskier'' assets but I don't expect it to last.
Brent Crude topped $80.00 before trading lower.
The Bank of Tanzania refuted social-media allegations about printing
notes valued at 1.5 trillion shillings ($655.9 million) for the
government’s use [Bloomberg]
The government’s overdraft at the central bank more than tripled to
1.94 trillion shillings in June, from 610 billion shillings in May,
the central bank said
Here in Kenya the Central Bank bared its gangs, announced that the
Sheriff is in town and levied some serious fines on KCB Group, Equity
Bank, Diamond Trust Bank, COOP Bank and Standard Chartered.
These Banks are dealing with a fluid reputational issue scenario and
the Proof of the Pudding is going to be in the eating. Investors will
be watching and a ''whitewash'' would be sub-optimal and deleterious
for the share price. We are also in a bear market.
This morning we learnt via a Reuters report that Kenya’s stand-by
arrangement with the International Monetary Fund has expired.
Kenya says @IMFNews stand-by deal over, will continue engaging with
the fund @ReutersAfrica
“Yes, the program has ended,” Rotich told reporters, when asked about
the IMF stand-by arrangement.
I said the following to Constant Munda of Business Daily;
The IMF standby Facility was never drawn down and was always about
signalling. We have dived into the Eurobond Markets and the Facility
was a Signal to that market and others that we were deserving of a
Policy-making Premium and frankly the IMF Facility was cheap at the
price because it had a beneficial effect on our borrowing spread. I
also appreciate that we are sitting at a record high in regard to FX
reserves. However, if you look around the World today, what was once a
benign environment [for EM and the Frontier which were surfing a
Golden Wave of practically free Dollar liquidity] has become dark,
turbulent and violent. Look at Turkey where Erdogan's Turkish Lira is
in freefall, India where the rupee is trading new all time lows and
also the FED's balance sheet [reducing and choking off cheap dollars]
and here in Africa look at Zambia where the bond prices are pricing in
a default and therefore to forgo the Facility now would seem perverse.
You are throwing over an insurance policy just when you need it most.
So I for one think that the macho Talk is poorly advised. Therefore,
We should be prudent and not cavalier at this juncture.
Bloomberg reported the following
“There’s nothing unique about a program ending,” Rotich told reporters
Thursday in the capital, Nairobi. “We had a successful two-year
program, which is now coming to an end and we will continue to engage
with the fund with a view to enter into a new arrangement or
relationship. We can still engage and get back into it if we think it
is necessary.”
While Kenya isn’t facing a balance of payments crisis, “the
credibility that is attached to an IMF approval or acknowledgment
should not be discounted,” Jibran Qureishi, regional economist for
Stanbic Holdings Ltd. in Nairobi, said in an emailed research note
last month.
“We should be relying less and less on IMF facilities especially
because we have come of age in macroeconomic management and we are
able to go to the international capital markets with or without the
fund,” Rotich said.
Analysts at companies including Moody’s Investors Service and BMI
Research have expressed concern that Kenya is living beyond its means
with debt as a ratio of gross domestic product expected to reach 60
percent in the current fiscal year. Total debt increased to 5.04
trillion shillings ($49.8 billion) by June, according to Treasury
Kenya’s debt is sustainable at 49 percent of net present value and the
Treasury intends to keep it below 50 percent, Treasury Principal
Secretary Kamau Thugge said earlier on Thursday. The IMF recommended
the government not exceed a threshold of 74 percent of net present
value, he said.
The Shilling which has been one of the best performing currencies
world wide popped -0.32% lower and over 101.00 to trade at 101.17
Last, which is frankly an outcome that is worth taking in both hands.
Reuters's Duncan Miriri reported  Kenya’s central bank pumped in
dollars into the market late in Thursday’s trading session after the
shilling weakened due to the expiry of a stand-by loan facility with
the International Monetary Fund, traders said
The Equity market is being gored by the Bears with Kenya Power, Mumias
Sugar, Nation Media Group and Deacons are at record all time lows.
Bloomberg is reporting that  MTN Group Ltd.’s shares have been
pummeled by a regulatory crisis in Nigeria. With the company facing
$10 billion in claims from authorities, the plunge suggests a zero
valuation is being placed on the Nigerian business, according to
Morgan Stanley. The drop has seen Nairobi-based Safaricom Plc overtake
its Johannesburg-based rival in value even though it has less than a
10th of MTN’s 223 million customers and operates in Kenya, while MTN
has units in 21 countries.
I tweeted that Maybe @SafaricomPLC's @bobcollymore should now consider
a hostile Take-over of @MTNza. Its actually not tongue in cheek but
very serious. I hope Sateesh Bob and team are running the slide rule.
The Nairobi Securities All Share predictably slumped 2.51 points to
close at 157.44
The Nairobi NSE20 Index sliced through 3,000 like a hot knife through
butter to close at 2990.02

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

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