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Satchu's Rich Wrap-Up
Monday 22nd of October 2018

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Macro Thoughts

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Beijing's Nuclear Option Why a U.S.-Chinese War Could Spiral Out of Control @ForeignAffairs

As China’s power has grown in recent years, so, too, has the risk of
war with the United States. Under President Xi Jinping, China has
increased its political and economic pressure on Taiwan and built
military installations on coral reefs in the South China Sea, fueling
Washington’s fears that Chinese expansionism will threaten U.S. allies
and influence in the region. U.S. destroyers have transited the Taiwan
Strait, to loud protests from Beijing. American policymakers have
wondered aloud whether they should send an aircraft carrier through
the strait as well. Chinese fighter jets have intercepted U.S.
aircraft in the skies above the South China Sea. Meanwhile, U.S.
President Donald Trump has brought long-simmering economic disputes to
a rolling boil.

A war between the two countries remains unlikely, but the prospect of
a military confrontation—resulting, for example, from a Chinese
campaign against Taiwan—no longer seems as implausible as it once did.
And the odds of such a confrontation going nuclear are higher than
most policymakers and analysts think.

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U.S. weighs new warship passage through Taiwan Strait @Reuters H/T @Lee_Saks
Law & Politics

The United States is considering a new operation to send warships
through the Taiwan Strait, U.S. officials tell Reuters, a mission
aimed at ensuring free passage through the strategic waterway but
which risks heightening tensions with China.
The U.S. Navy conducted a similar mission in the strait’s
international waters in July and any repeat would be seen in
self-ruled Taiwan as a fresh expression of support by President Donald
Trump’s government.
The U.S. military declined comment and U.S. officials who discussed
the deliberations, which have not been previously reported, did so on
condition of anonymity. They did not discuss the potential timing for
any fresh passage through the strait.
a U.S. aircraft carrier hasn’t transited the Taiwan Strait since 2007,
during the administration of George W. Bush.
Military experts say the balance of power between Taiwan and China has
shifted decisively in China’s favor in recent years, and China could
easily overwhelm the island unless U.S. forces came quickly to
Taiwan’s aid.
China has also alarmed Taiwan by ramping up military exercises this
year, including flying bombers and other military aircraft around the
island and sending its aircraft carrier through the narrow Taiwan
Strait separating it from Taiwan.

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Royal Navy chief vows to send ships through South China Sea @Financialtimes
Law & Politics

Britain will assert its right to freedom of navigation in the South
China Sea despite recent Chinese claims of provocation, the head of
the Royal Navy has vowed.
Admiral Sir Philip Jones said Britain had an obligation to “showcase”
physical support for its allies in the Asia Pacific region and to
resist what he sees as China’s flouting of international conventions
on the laws of the sea.
“If you are going to have a different interpretation of that
[convention] to the majority of nations then that has to be resisted,”
said Sir Philip in an interview with the Financial Times. “Otherwise
you could see right around the world nations who will start to make
their own interpretations.”
Beijing last month accused Britain of infringing Chinese sovereignty
when one of the navy’s amphibious assault ships, HMS Albion, sailed
close to the disputed Paracel Islands, which are also claimed by
Vietnam and Taiwan.
Asked whether he would continue to send British warships through the
disputed territorial waters, Sir Philip added: “I expect we will do
more of that as we transit through with the ships we have there.”

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Thousands rally in Taiwan, call for referendum on independence from China @Reuters
Law & Politics

Several thousand pro-independence demonstrators rallied in Taiwan’s
capital on Saturday to protest against Beijing’s “bullying” and called
for a referendum on whether the self-ruled island should formally
declare independence from China.

Beijing has already been irked by the Taiwanese government’s approval
for a referendum next month to decide whether to enter future Olympics
events as “Taiwan” rather than “Chinese Taipei”, the name agreed under
a compromise struck in the late 1970s.

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China's Dangerous Dollar Addiction @ForeignPolicy
Law & Politics

The trade war with the United States may soon hit China where it
hurts, making it hard for Beijing to satisfy its voracious appetite
for natural resources.
Every year, China spends roughly $350 billion just to purchase the
copper, coal, iron ore, aluminum, steel, and crude oil it needs to
keep the Chinese economy running.
And that bill could grow as China eats through even more raw materials
to build roads, railways, and ports across Eurasia as part of its Belt
and Road Initiative.
The problem is that these commodities are traded in dollars, and the
transactions are cleared through the U.S. banking system.
To buy them, then, Beijing needs to earn an equal amount of dollars by
selling its own goods. Yet Washington, by curbing imports from
China—for which it usually pays in dollars and usually to the tune of
$500 billion a year—is slowly limiting the number of greenbacks
Beijing can get its hands on.

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This is stunning. If this account by Turkish media is true and they release the evidence, very diffiuclt to see MBS surviving this: @tparsi
Law & Politics

Right before #JamalKhashoggi was murdered, MBS spoke to him on the
phone and demanded his return to Riyadh. Jamal refused. So he was

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Law & Politics

Turning and turning in the widening gyre
The falcon cannot hear the falconer;
Things fall apart; the centre cannot hold;
Mere anarchy is loosed upon the world,
The blood-dimmed tide is loosed, and everywhere
The ceremony of innocence is drowned;
The best lack all conviction, while the worst
Are full of passionate intensity.

Surely some revelation is at hand;
Surely the Second Coming is at hand.
The Second Coming! Hardly are those words out
When a vast image out of Spiritus Mundi
Troubles my sight: somewhere in sands of the desert
A shape with lion body and the head of a man,
A gaze blank and pitiless as the sun,
Is moving its slow thighs, while all about it
Reel shadows of the indignant desert birds.
The darkness drops again; but now I know
That twenty centuries of stony sleep
Were vexed to nightmare by a rocking cradle,
And what rough beast, its hour come round at last,
Slouches towards Bethlehem to be born?

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@BhadraPunchline Ex-Ambassdor to Turkey MK Bhadrakumar on Jamal Khashoggi and Future of West Asia Video
Law & Politics

MK Bhadrakumar joins Newsclick editor in chief Prabir Purkayastha to
discuss the killing of Saudi journalist Jamal Khashoggi and the
implications it will have for Saudi Arabia’s relations with US,
Turkey, and the rest of the world.

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"Why the outrage, MbS asked in English" in a call to Kushner. @ragipsoylu
Law & Politics

“He was really shocked that there was such a big reaction to it. He
feels betrayed by the West. He said he would look elsewhere and will
never forget how people turned against him before evidence was

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The Real Reasons Saudi Crown Prince Mohammed bin Salman Wanted Khashoggi 'Dead or Alive' @DailyBeast_
Law & Politics

Although the stories keep changing, there is now no doubt that
33-year-old Saudi Crown Prince Mohammed bin Salman, the power in front
of his decrepit father’s throne, had put out word to his minions that
he wanted Khashoggi silenced, and the hit-team allegedly understood
that as “wanted dead or alive.” But the [petro]buck stops with MBS, as
bin Salman’s called. He’s responsible for a gruesome murder just as
Henry II was responsible for the murder of Thomas Becket when he said,
“Who will rid me of that meddlesome priest?” In this case, a
meddlesome journalist.

Vidino traces the Saudis’ intense hostility toward the Brotherhood to
the uprisings that swept through much of the Arab world in 2011. “The
Saudis together with the Emiratis saw it as a threat to their own
power,” says Vidino.

For more than a year, it looked like the Brotherhood’s various
branches might sweep to power across the unsettled Arab world, and the
Obama administration, for want of serious alternatives, was inclined
to go with the flow.

But then the Saudis struck back.

In the summer of 2013, Gen. Abdel Fattah al-Sissi, the commander of
the Egyptian armed forces, led a military coup with substantial
popular support against the conspicuously inept Brotherhood
government, which had proved quickly that Islam was not really the
“solution” for much of anything.

His son, Mohammed bin Salman, became deputy crown prince. But bin
Nayef’s position between the king and his favorite son clearly was
untenable. As one Saudi close to the royals put it: “Between the onion
and the skin there is only the stink.”

“What drives MBS is a ruthless effort toward total control
domestically and regionally; he is Putin of the Desert,” says Bodine.
“He has basically broken the back of the princelings, the religious
establishment and the business elite, brought all ministries and
agencies of power under his sole control ('I alone can fix it'), and
jailed, killed or put under house arrest activists and any and all
potential as well as real opposition (including his mother).”

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Another world leader in a state TV bubble: "Initially the king...was unaware of the extent of the crisis...That was partly because MbS aides had been directing the king to glowing news about the country on Saudi TV channels."
Law & Politics

[wannabe] King in line to be  Custodian of Two Holy Mosques (خادم
الحرمين الشريفين), title that signifies Saudi Arabia's jurisdiction
over mosques of Masjid al Haram in Mecca and Al-Masjid an-Nabawi in


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Sheikh Yamani,Saudi's former the former Minister of Oil @FauzKhalid
Law & Politics

The OPEC "Go-Go" days of Sheikh Yamani, his prayer beads and delphic
pronouncements cc @FauzKhalid Ahmed Zaki Yamani (Arabic: أحمد زكي
يماني; born 30 June 1930)


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Since Spy-plane Downing, Russia Toughens Stance Against Israel in Syria Skies @haaretzcom
Law & Politics

Putin now has leverage over Israel, and no reason to give it up
The real issue behind the downing of the Russian plane
Downing of Russian plane: Israel fears Putin will clip its wings in Syria
Russia’s behavior is being interpreted in Israel as a response to the
incident in which a Syrian anti-aircraft missile downed an Ilyushin
Russian intelligence-gathering plane on September 17 at the end of an
Israeli airstrike near Latakia in northwestern Syria.
At the end of last week, the Russian newspaper Izvestia reported that
three air defense systems supplied to Syria by Russia in late
Septemeber, following the September 17 incident, were of the most
advanced model of the S-300 missiles with the highest radar and
target-identification capabilities.
Russia's moves do not spell the end of Israeli airstrikes in Syria.
But now, more than a month after the incident, it is clear that
something has fundamentally changed and that Israel will have to take
a new diplomatic and military approach in order to preserve at least
some of its freedom of operation.


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France says planned @EU_Commission mechanism to enable Iran trade may have wider use @Reuters
Law & Politics

France’s foreign ministry said on Thursday a so-called Special Purpose
Vehicle (SPV) that the European Union is considering creating to
enable trade with Iran could be used more broadly to help the bloc
avoid the extraterritorial reach of U.S. law.
EU foreign policy chief Federica Mogherini said in September that the
new mechanism would be in place by November as it seeks to keep trade
flowing even though new U.S. sanctions on Tehran will take effect from
Nov. 4.
The idea is to circumvent the sanctions under which Washington can cut
off from the U.S. financial system any bank that facilitates an oil
transaction with Iran.
Until now, the SPV appeared to focus solely on Iran. But in a reply to
Reuters, the French foreign ministry said the idea was for the SPV to
go beyond Iran and cover a wider range of EU trade.
“The ongoing work on the special purpose vehicle should facilitate
financial transactions for companies wishing to maintain trade
relations with Iran, in accordance with European law,” foreign
ministry spokeswoman Agnes Von der Muhll said.
“It aims to create an economic sovereignty tool for the European Union
beyond this one case. It is therefore a long-term plan that will
protect European companies in the future from the effect of illegal
extraterritorial sanctions.”
Many diplomats and analysts have expressed doubt over whether such a
mechanism could ultimately thwart U.S. sanctions given that the United
States could amend its sanctions laws to target the SPV itself.
Commission President Jean-Claude Juncker has proposed promoting the
euro as a global currency to challenge the dollar, potentially
allowing oil to be priced on world markets in euros.

.@stevenmnuchin1 said that the U.S. Treasury was already in
negotiations with SWIFT which intermediates the bulk of the world’s
cross-border dollar-denominated transactions, on disconnecting Iran
from the network
@zerohedge http://bit.ly/2S5VcJG

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Currency Markets at a Glance WSJ
World Currencies

Euro 1.1511
Dollar Index 95.67
Japan Yen 112.63
Swiss Franc 0.9965
Pound 1.3067
Aussie 0.7109
India Rupee 73.285
South Korea Won 1127.42
Brazil Real 3.7123
Egypt Pound 17.9210
South Africa Rand 14.3807

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Moody's downgrades Italy's credit rating to Baa3 from Baa2. @ReutersJamie
World Currencies

Cites “material weakening in Italy's fiscal strength, with the
government targeting higher budget deficits for the coming years than
Moody's previously assumed.”
Moody’s on Italy: “The government's fiscal and economic policy plans
do not comprise a coherent agenda of reforms that will address Italy's
sub-par growth performance on a sustained basis.”
Sees growth slowing back to trend around 1%.

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Fear of a Black Continent @nytimes H/T @cobbo3

Emmanuel Macron, the youthful and ambitious president of the French,
likes to talk about African birthrates. In the summer of 2017, he
answered a question about why there couldn’t be a Marshall Plan for
Africa by calling the continent’s problems “civilizational,” and
lamenting that African countries “have seven or eight children per

This was attacked by some as racist, defended by others as hardheaded
realism about development economics. Macron obviously felt comfortable
with what he’d said, because he returned to the idea last month at a
Gates Foundation conference. (Bill Gates himself has also been talking
a lot lately about population control and development in Africa.) “I
always say,” Macron told the assembled do-gooders, “‘present me the
woman who decided, being perfectly educated, to have seven, eight or
nine children.’”

This time there was a specifically female response: A Catholic
University of America professor, Catherine Pakaluk, posted a photo of
six of her eight children under the Twitter hashtag
#postcardsforMacron, and soon there was a flood of female Ph.Ds
posting pictures of their broods.

It’s a law of modern Western and East Asian history (we’ll call it
Macron’s Law hereafter) that with wealth and education birthrates fall
— and fall, and fall. The existence of occasional exceptions only
highlights how exceptional they are.

This plunge has happened without population-control interventions as
well as with them, and because Western-supported population control
efforts in the developing world tended to be inhumane and
not-so-mildly racist, over the last couple of decades they have fallen
somewhat out of fashion, with Gatesian philanthropists and politicians

So why are they creeping back into the discussion? For three reasons:
Because African birthrates haven’t slowed as fast as Western experts
once expected, because European demographics are following Macron’s
Law toward the grave, and because European leaders are no longer
nearly so optimistic about assimilating immigrants as even a few short
years ago.

In 2004, the U.N. projected that Africa’s population would level off
by 2100 around two billion. Today it projects that it will reach 4.5
billion instead. This change in the expected trend is more likely a
result of sluggish economic growth than proof of an African exception
to Macron’s Law — though it holds open the possibility that Africa
could be such an exception. But whatever the explanation, by century’s
end two in five human beings could be African.

This trend would have revived a certain kind of population-bomb
anxiety no matter what, but the anxiety in Europe is a little more
specific than that — because over the same period, Europe’s population
is likely to drop by about one hundred million. (Western Europe’s
leaders are a vanguard here: Neither Macron nor Angela Merkel nor
Theresa May have any biological children.) In the late 1990s Europe
and Africa had about the same population; a hundred years later there
could be seven Africans for every European. And the experience of
recent refugee crises has demonstrated to European leaders both how
easily populations can move northward, and how much harder
assimilation may be than they once hoped.

So Macron is not likely to be alone in his fixation on large African
families. An Afrophobia that a decade ago was confined to
white-identitarians is likely to become an obsession of Europe’s
technocratic center as well as its nationalist parties. The fixation
will be genteel and diplomatic and couched in the language of
development but the upshot will be clear: We must find a way to
convince African women to stop having so many babies.

However, in addition to being cruel, past population control campaigns
were often ineffective, so it’s likely that Macron and his successors
will mostly fail in their anti-natal efforts. And even the thing that
might lead to the falling birthrate they desire, rapid African
economic growth, might also accelerate migration in the short term —
because poor people who suddenly get richer also gain the means and
opportunity to move to somewhere richer still.

Which is why anyone who hopes for something other than destabilization
and disaster from the Eurafrican encounter should hope for a
countervailing trend, in which Europeans themselves begin to have more
children. This would not forestall the near-inevitable northward
migration, but it would make it easier to assimilate immigrants once
they arrived — European economies would be stronger, ethnic
polarization would not fall so dramatically along generational lines,
and in politics youthful optimism and ambition might help counteract
the fear and pessimism of white Europeans growing old alone.

Of course government efforts to raise the Western birthrate, France’s
included, have been no more obviously successful than
Western-sponsored efforts to cut birthrates elsewhere in the world.

But focusing on European fertility has at least one moral advantage
over Macron’s finger-wagging at African babymaking: It’s the part of
the future that Europeans actually deserve to control.

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This is very interesting. Firstly, it was confirmed that those who seized Dewji were 'Caucasion', White South African males involved in armed operations on the African continent tends to usually imply one thing and one thing only...

This is very interesting. Firstly, it was confirmed that those who
seized Dewji were 'Caucasion', now he claims that they were South
African? White South African males involved in armed operations on the
African continent tends to usually imply one thing and one thing

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Abiy Ahmed's Ethiopian exceptionalism Mail and Guardian

Autocracy is trending around the world. From Vladimir Putin, Xi
Jinping and Donald Trump to Recep Tayyip Erdogan, Jair Bolsonaro,
Rodrigo Duterte and Mohammed Bin Salman, a populist, nationalist,
conservative streak runs through the men shaping 21st-century

Abiy Ahmed is the exception.

Ethiopia’s new prime minister, just 42 years old, is single-handedly
attempting to shatter and then reshape the foundations of Africa’s
second-most populous state.

Only six months into the job, he has already overhauled the
intelligence agency, scrapped the controversial state of emergency,
welcomed back opposition leaders, released thousands of political
prisoners and ended a decades-old conflict with Eritrea.

He’s only just getting started. The futures of 107-million Ethiopians
depend on whether his ambitious reform programme succeeds or fails,
but the potential consequences of success will reverberate far beyond
Ethiopia’s borders. If he does make good on his promises to create a
country that is democratic, representative and bound by the rule of
law, he will have created a modern template for how to manage the
transition from one-party state to government of the people — and
delivered decisive proof that such transitions are possible.

These are early days, however, and Abiy has not yet done enough to be
held up as a global role model. His reforms are still being contested
at every turn, and he has made some serious missteps, such as the
illegal detention of thousands of youths accused of involvement in
ethnic violence. He is also grappling with the unintended consequences
of opening a Pandora’s box of long-held ethnic and communal grievances
that threaten to tear the country apart.

His new Cabinet, announced this week, is his attempt to put a lid on that box.

The new ministry is being led by another Muslim woman, Muferiat Kamil,
formerly the country’s first female speaker of Parliament.

“The security apparatus is now under the control of women with hijabs.
The symbolic relevance of this cannot be overstated. It is a very
strong statement for an inclusive and just political sphere,” says
Hallelujah Lulie, programme director at think tank Amani Africa.

In a world increasingly defined by the likes of Putin, Trump and Xi
Jinping, Abiy Ahmed offers a different — and more compelling — vision
of the future.

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Zimbabwe aims to clear its $2 billion arrears with the @WorldBank and @AfDB_Group in the next 12 months @ReutersAfrica

Ncube said in an interview the arrears clearance programme had the
backing of the United States government, which maintains sanctions
against Zimbabwe.

Ncube met international lenders as well as representatives of the U.S.
and British governments in Bali, Indonesia, last week on the sidelines
of the annual Internal Monetary Fund and World Bank meetings.

“My intention is that by this time next year we would have paid off
the AfDB and World Bank. All options are on the table, including the
Highly Indebted Poor Country (HIPC) option debt write-off, or the
HIPC-lite or the ad-hoc solutions, with sponsors,” Ncube told Reuters.

“For sponsors, we will be talking to the G7 members to see if one or
two of them, or all of them, could sponsor us and give us some lines
of credit, bridging finance to be able to clear those arrears.”

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@DP_World DP World Sees Key Role for Once-Isolated State in Port Strategy @markets

The Red Sea state of Eritrea may play a key role in DP World Ltd.’s
plans in the Horn of Africa, where a dozen ports could be needed to
service the region, Chief Executive Officer Sultan Ahmed bin Sulayem

The Dubai-based state-controlled harbor operator is evaluating its
strategy in the region after having its stake in a port in Djibouti --
the main trade route for Ethiopia, Africa’s fastest-growing economy --
nationalized by the government. Developing more ports in the Horn,
including one it’s already building at Berbera in the self-declared
republic of Somaliland, will help boost trade flows to Dubai, Bin
Sulayem said in an interview.

Eritrea’s strategic location near the Bab el-Mandeb Strait, a key
shipping lane used by oil tankers and other cargo vessels en route to
the Suez Canal, makes it an attractive investment destination for
logistics companies. It’s also a gateway to other nations in the
region, the CEO said.

“Eritrea is going to have a major role,” Bin Sulayem said. “We believe
that the way we should look at the Horn of Africa is not at Eritrea
alone, but add to the equation South Sudan, other parts of Sudan, and
Eritrea’s needs, and then the Ethiopian population.”

DP World will consider what the government’s plans are at the port
city of Assab and “will be there like everybody else” if asked to
invest, Bin Sulayem said. Eritrean Information Minister Yemane
Gebremeskel said he couldn’t comment on whether the ports of Assab and
Massawa will be opened for tender.

Eritrea may provide an alternative trade route for the region instead
of Djibouti, where DP World is in a legal dispute with the government
after it nationalized the Doraleh Container Terminal last month. That
followed a U.K. tribunal ruling that Djibouti’s cancellation in
February of DP World’s contract to run DCT was unlawful.

Elsewhere in the region, DP World is interested in helping develop
Kenya’s Mombasa port, and in helping Ethiopia establish a logistics
facility, he said.

Ethiopian Prime Minister Abiy Ahmed this year pledged to co-develop
four unidentified seaports in Somalia with Somalia’s federal
government. While DP World’s involved only in Somaliland and in the
Bossaso port in neighboring semi-autonomous Puntland, it will consider
more Somali ports if further offers are made, Bin Sulayem said.

Somaliland President Muse Bihi Abdi told reporters last week in
Hargeisa that Ethiopia may use three more Somali ports -- Bosaso in
Puntland, and Merca and Kismayo in southern Somalia.

Somaliland, which has declared independence from Somalia, hosts a
United Arab Emirates military facility at Berbera, though Bin Sulayem
said the base won’t have a bearing on its investment plans.

“Whatever the U.A.E. does is to improve trade relations because that
is our bread and butter,” Bin Sulayem said. “There is no political
agenda of the U.A.E. in Africa. Our agenda is trade.”

The company has been carrying out assessments throughout the region,
Bin Sulayem said. He declined to specify how many harbors it’s
targeting of the 10 to 12 it estimates the region requires.

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06-AUG-2018 :: The Indian Ocean Economy and a Port Race. @TheStarKenya

Professor Felipe Fernández-Armesto explains ''The precocity of the
Indian Ocean as a zone of long-range navigation and cultural exchange
is one of the glaring facts of history'', made possible by the
''reversible escalator'' of the monsoons. The Indian Ocean Economy
preceded the Atlantic Ocean Economy, where the Europeans only learnt
how to ''crack the code'' of the Atlantic winds [and a new 'Western'
culture arose on both sides of the ocean] long after the Indian Ocean.

As we scan the Blue Economy it is worth appreciating that Maritime
shipping is the lifeblood of Africa, with over 90% of the continent’s
imports and exports transported by sea. Today from Massawa, Eritrea
[admittedly on the Red Sea] to Djibouti, from Berbera to Mogadishu,
from Lamu to Mombasa to Tanga to Bagamoyo to Dar Es Salaam, through
Beira and Maputo all the way to Durban and all points in between we
are witnessing a Port race of sorts as everyone seeks to get a piece
of the Indian Ocean Port action. China [The BRI initiative], the Gulf
Countries [who now appear to see the Horn of Africa as their
hinterland], Japan and India [to a lesser degree] are all jostling for
optimal ''geo-economic'' positioning.

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.

Bloomberg reported that Hambantota Port has 'become a cautionary tale
for Xi’s Belt and Road aspirations. The idea was to take an
inconsequential harbor visited by fewer than one ship a month on
average and turn it into a modern, bustling seaport adorning a
southern Belt and Road maritime route. It hasn’t turned out so well.
Hambantota (population at the time 11,200) got a new port. The port at
Hambantota, was partly funded during the Rajapaksa administration by a
loan from the Export-Import Bank of China. By the time Rajapaksa was
voted out of office in 2015, more than 90 percent of Sri Lanka’s
government revenue was going toward servicing debt. Last year, with
Xi’s Belt and Road plan in full flow, a new Sri Lankan government
moved to ease the debt. In return for $1.1 billion, it basically
handed the seaport over to China.

 “All these huge projects are a waste,” says Sisira Kumara
Wahalathanthri, a local politician who opposes the current Sri Lanka
government. “No ships are coming to the port. No flights are coming to
the airport.”

I am bullish on the Blue Economy and in particular the Indian Ocean
Economy which is set to relive its glory days. Unlike the marvellous
song ''Everyones a Winner'' by Hot Chocolate, but There will be
Winners and Losers. Everyone is drinking the Indian Ocean ''Kool-Aid''
right now.

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South Africa All Share Bloomberg -12.46% 2018

Dollar versus Rand 6 Month Chart INO 14.3807


Egypt Pound versus The Dollar 3 Month Chart INO 17.9210


Nigeria All Share Bloomberg -14.12%


Basic food stuff increases, some over 100% in a year‘s span in
Ghana. @statsgh


Ghana Stock Exchange Composite Index Bloomberg +11.04% 2018


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22-OCT-2018 :: @SafaricomPlc - The most successful Start-Up in Kenya Inc.'s history
Kenyan Economy

Its Mobile Money Platform MPESA [launched in March 2007] is ubiquitous
and in fact its not a stretch to say it re-invented Kenya Inc.'s
positioning world-wide.

Safaricom was formed in 1997 as a fully owned subsidiary of Telkom
Kenya. It inherited 17,000 Customers.  In May 2000, Vodafone Group PLC
 acquired a 40% stake and management responsibility for the company.
in that same Year [2000] Michael Joseph began the Journey in earnest
with five Vodafone employees in an apartment in the Norfolk towers in
Kijabe Street Off Harry Thuku Rd in Nairobi. Today 18 years later,
Safaricom has morphed into the biggest communication company in East
and Central Africa, with over 29.57 million subscribers [as per the
Full Year Earnings Release]. Its Mobile Money Platform MPESA [launched
in March 2007] is ubiquitous and in fact its not a stretch to say it
re-invented Kenya Inc.'s positioning world-wide. One Tweet from Bill
Gates confirms its ubiquity and was probably worth the entire annual
Kenya Tourism marketing budget.

''By making it easier to send and receive money, M-Pesa is
transforming the daily lives of people in Kenya'' @BillGates

Throughout its 18 year history, Safaricom has bet big on Kenyans. You
might not recall but they were chasing Mo Ibrahim's Celtel at the
GetGo. In 2004, they launched the Mobile Internet. Whilst others built
a mobile Internet that looked like a murram road, Safaricom built an
Information Superhighway that connected us to the Future, the World
and the c21st.

When Jack Ma visited Nairobi last year and was asked about the
infrastructure deficit in Kenya, he said this [turning to Bob

''But your internet is fast!''

The Point is we live now in an Information Century and in order to be
connected to a world of 7b you need a ''Maserati'' connection
otherwise You are not even on the Pitch. The word ''democratisation''
is bandied around a lot but this one word that can be applied to
Safaricom. Leadership at Safaricom from Michael to Bob have believed
intuitively and instinctively in ''democratisation'' That Belief has
been evidenced consistently over its 18 years. Bamba 5 and Bamba 10
[scratch cards] are a clear example. These denominations were widely
considered plain uneconomic. I remember a time when I set up my
Company Rich Management and an FT Journalist scorned me in an article
for the name telling me Africa is poor, what are you talking about and
I said to her Africa is not poor its is unfathomably rich and its rich
not because of what can be dug out of the ground but because of the
People who walk upon the ground, the Human capital as it were. It is
this which Safaricom understood and has consistently sought to
unleash. And that is why KPMG methodology has shown that Safaricom’s
contribution to the economy – at six per cent of GDP – is almost 11
times higher than actual profits.

I do reside in the business pages of the newspaper so let me now pivot
to the share price because in a ''zombified'' Nairobi Securities
Exchange, Safaricom remains a Stand-Out and an Outlier.  Over a ten
year period, the share price has risen from 5 shillings to 23.75, that
is a 375% increase. Add in the dividends over the period 4.77 [without
factoring in the compounding effect which would juice it further] and
Shareholders have enjoyed a +470.4% return. These returns rank in the
top 1% world-wide.

Finally consider the amount of friction they have had to endure from
the Regulator [whose Philosophy has been a kind of reverse Darwinism -
the survival of the Unfittest] from the Government who have sought to
Tax this every which way imaginable. As I scan the Stock Market and
look at the Value destruction, the endless Ground Hog day of Bail-outs
of ''Zombie'' Companies, I am left wondering why we fail to appreciate
that we as Kenya Inc. do not appreciate  want 10 Companies like
Safaricom not just one and why we fail to appreciate that in order for
Kenya Inc. to thrive we need to bottle this magic Safaricom elixir and
douse the entire economy in it.

Safaricom closed at 23.75 on Friday. Frontier and Emerging Markets
have been coming under pressure. This is good a [Re] Entry level that
I can recall in at least 5 years. And if Bob has not been to see Abiy
yet in Ethiopia, I  propose to go on his behalf.

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.@SafaricomPLC share price data
Kenyan Economy

Par Value:                  0.05/-
Closing Price:           23.75
Total Shares Issued:          40065428000.00
Market Capitalization:        951,553,915,000
EPS:             1.38
PE:                 17.210

Safaricom FY Results for the year ended 31st March 2018 vs. 31st March 2017
FY Voice revenue 95.64b vs. 93.46b +2.333%
FY Mpesa Revenue 62.91b vs. 55.08b +14.216%
FY SMS Revenue 17.72b vs. 16.68b +6.235%
FY Mobile data revenue 36.36b vs. 29.33b +23.969%
FY Fixed service revenue 6.67b vs. 5.24b +27.290%
FY Other service revenue 5.24b vs. 4.32b +21.296%
FY Service revenue 224.54b vs. 204.11b +10.009%
FY EBITDA 112.83b vs. 103.61b +8.899%
FY EPS 1.38 vs. 1.21 +14.050%
Customer numbers 29.57m +5.1%
Mobile Data Customers 17.67m +6.2%
MPesa Customers 20.55m +8.0%
Service revenue 224.54b +10.00%
Voice Service Revenue 95.64b +2.3%
SMS Revenue 17.72b +6.2%
Mobile Data Revenue +36.36b +24%
Fixed Service revenue 6.67b +27.3%
MPESA Revenue 62.91b +14.2%
Non Voice service revenue 57.4% of total service revenues

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Mpesa has been a growth engine. Whenever theres a cash transaction, we see an opportunity. Transaction value in 2017 double #SafaricomFYResults @sateeshkamath
Kenyan Economy

Mpesa has been a growth engine. Whenever theres a cash transaction, we
see an opportunity. Transaction value in 2017 doubled. Were building
the ecosystem to monetise tomorrow. #SafaricomFYResults @sateeshkamath

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The Kenya Shilling has appreciated by 2.1% year to date @CytonnInvest #Cytonninvest
Kenyan Economy

High levels of forex reserves, currently at USD 8.4 bn, equivalent to
5.6-months of import cover, compared to the one-year average of

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Nairobi All Share Bloomberg -14.53%
Kenyan Economy

.@NSE_PLC  YTD performance declines of 14.5%, 24.4% and 16.2%, for
NASI, NSE 20 and NSE 25, respectively @CytonnInvest #Cytonninvest


The @NSE_PLC currently trading at a price to earnings ratio (P/E)
of 11.9x @CytonnInvest #Cytonninvest


.@NSE_PLC dividend Yield  @CytonnInvest #Cytonninvest


Nairobi ^NSE20 Bloomberg -24.38% 2018


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@KenyaPower share price data
Kenyan Economy

Par Value:                  20/-
Closing Price:           4.40
Total Shares Issued:          1951467045.00
Market Capitalization:        8,586,454,998
EPS:             3.72
PE:                 1.183

Market Capitalization: $85.094m EPS: 3.72 PE: 1.183

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.@CytonnInvest entered into a transaction with its leading institutional partner, @Taaleriteam of Finland, whereby @Taaleriteam has acquired the option to subscribe for up to 20.0% of shareholding in Cytonn at IPO;
Kenyan Economy


Ahead of the Curve and a Game Changer - The biggest challenge for
Kenya inc. is not enough Equity and too much debt. Edwin is ahead of
the curve.

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@CytonnInvest and @Taaleriteam of Finland Enhance Their Partnership via Agreement for Subscription of 20% Cytonn Stake
Kenyan Economy

Speaking at the signing of the agreement, Edwin H. Dande, CEO of
Cytonn Investments, noted that “We are thankful to Taaleri for the
continued support they have shown to the Cytonn brand. This
transaction is important for two reasons; first it affirms market
confidence in our brand and unique business model, and second it
provides a strong anchor investor as we prepare for our IPO, which we
hope to complete next year, either at a local or global exchange. We
have already engaged with two sets of transaction advisors, in Nairobi
and London, to explore a local listing either at the Nairobi
Securities Exchange, NSE, or a listing at the London Stock Exchange,
LSE, respectively. The ultimate listing jurisdiction will depend on
valuation, investor interest and ease of listing. We also hope to
broaden our partnerships by bringing on board one additional local or
global anchor institutional investor at the IPO.”

Speaking at the signing, Mr. Juhani Elomaa, CEO of Taaleri Group, who
recently visited Cytonn’s real estate projects noted that “Taaleri and
Cytonn are now in their fifth year of partnership, and Cytonn remains
our trusted partner for deploying capital to the East African Region.
Through Cytonn, Finnish Pension Funds and Investors have not only
earned attractive returns that are not available in the developed
markets, but we have contributed to growing the Kenyan economy,
creating jobs, and driving the deepening of capital markets through
structured finance transactions. The share options agreement for a 20%
stake is an opportunity to deepen the relationship beyond project
finance to shareholding.”

enhances the Cytonn & Taaleri relationship beyond project finance to
shareholding. -> A Game Changer Kudos @ehdande

read more

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

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