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Satchu's Rich Wrap-Up
Friday 30th of November 2018

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Macro Thoughts

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Strange waves rippled around the world, and nobody knows why @NatGeo Dr. Maya Wei-Haas @WeiPoints

On the morning of November 11, just before 9:30 UT, a mysterious
rumble rolled around the world.
The seismic waves began roughly 15 miles off the shores of Mayotte, a
French island sandwiched between Africa and the northern tip of
Madagascar. The waves buzzed across Africa, ringing sensors in Zambia,
Kenya, and Ethiopia. They traversed vast oceans, humming across Chile,
New Zealand, Canada, and even Hawaii nearly 11,000 miles away.
These waves didn't just zip by; they rang for more than 20 minutes.
And yet, it seems, no human felt them.
Only one person noticed the odd signal on the U.S. Geological Survey's
real-time seismogram displays. An earthquake enthusiast who uses the
handle @matarikipax saw the curious zigzags and posted images of them
to Twitter. That small action kicked off another ripple of sorts, as
researchers around the world attempted to suss out the source of the
waves. Was it a meteor strike? A submarine volcano eruption? An
ancient sea monster rising from the deep?
“I don't think I've seen anything like it,” says Göran Ekström, a
seismologist at Columbia University who specializes in unusual
In a normal earthquake, the built-up tensions in Earth's crust release
with a jolt in mere seconds. This sends out a series of waves known as
a “wave train” that radiates from the point of the rupture, explains
Stephen Hicks, a seismologist at the University of Southampton.
The fastest-traveling signals are Primary waves, or P-waves, which are
compression waves that move in bunches, like what happens to an
extended slinky that gets suddenly pushed at one end. Next come the
secondary waves, or S-waves, which have more of a side-to-side motion.
Both of these so-called body waves have relatively high frequencies,
Hicks says, “a sort of ping rather than a rumbling.
Finally, chugging along at the end come slow, long-period surface
waves, which are similar to the strange signals that rolled out from
Mayotte. For intense earthquakes, these surface waves can zip around
the planet multiple times, ringing Earth like a bell, Hicks says.
However, there was no big earthquake kicking off the recent slow
waves. Adding to the weirdness, Mayotte's mystery waves are what
scientists call monochromatic. Most earthquakes send out waves with a
slew of different frequencies, but Mayotte's signal was a clean zigzag
dominated by one type of wave that took a steady 17 seconds to repeat.
Based on the scientific sleuthing done so far, the tremors seem to be
related to a seismic swarm that's gripped Mayotte since last May.
Hundreds of quakes have rattled the small nation during that time,
most radiating from around 31 miles offshore, just east of the odd
ringing. The majority were minor trembles, but the largest clocked in
at magnitude 5.8 on May 15, the mightiest in the island's recorded
history. Yet the frequency of these shakes has declined in recent
months—and no traditional quakes rumbled there when the mystery waves
began on November 11.
“It's like a music instrument,” says Jean-Paul Ampuero, a seismologist
at the Université Côte d'Azur in France. “The notes of a music
instrument—whether it's grave or very pitchy—depends on the size of
the instrument.”

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Clair De Lune - Poem by Paul Verlaine

Your soul is as a moonlit landscape fair,
Peopled with maskers delicate and dim,
That play on lutes and dance and have an air
Of being sad in their fantastic trim.

The while they celebrate in minor strain
Triumphant love, effective enterprise,
They have an air of knowing all is vain,-
And through the quiet moonlight their songs rise,

The melancholy moonlight, sweet and lone,
That makes to dream the birds upon the tree,
And in their polished basins of white stone
The fountains tall to sob with ecstasy.

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"The Chinese are looking for a floor from this meeting," said Dennis Wilder, a former senior director for Asia at the National Security Council under President George W. Bush. @business
Law & Politics

“Xi has got to find a way to stop the bleeding here; he’s trying to
stop the spiraling down from getting any worse.”
The outcome of the dinner will be closely parsed by investors and
companies looking for signs of whether the next step will be detente,
or more escalation.

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Peter Navarro, Trump's hardline trade adviser, will attend the meeting between the leaders, a U.S. official told @Reuters
Law & Politics

Another official said Navarro’s addition was meant to send a message
to China about the administration’s resolve on trade. Navarro has
advocated a tough stance against Beijing.

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Pentagon and MND confirm passage of US guided-missile destroyer, oiler through Taiwan Strait
Law & Politics

Taiwan's Ministry of National Defense (MND) has confirmed that, on
Wednesday (Nov. 28), two US military vessels proceeded southward from
the island country's northeastern waters and passed through the Taiwan
Strait, and the passage was later confirmed by the Pentagon.
The MND released a statement late Wednesday evening, four days after
the nine-in-one local elections, that a US combat ship and a support
ship had entered the country's northeastern waters in the early
morning, sailed through, and and then departed the Strait in the
evening on a routine passage, with the Taiwan Strait remaining defined
as international waters.
A Pentagon official, Christopher Logan, later confirmed the
guided-missile destroyer USS Stockdale (DDG 106), as well as
replenishment oiler USNS Pecos (T-AO-197) had transited the Strait,
saying "The US Navy will continue to fly, sail, and operate anywhere
international laws allow," according to USNI News.
It is also the third time this year that US military vessels have
passed through the Strait, according to local media reports. On July
7, the destroyers USS Mustin (DDG 89) and USS Benfold (DDG 65) entered
the 180-km wide Strait between China and the main island of Taiwan.
Beijing lobbied a protest immediately after the first passage.
On Oct. 22, an Arleigh Burke-class guided-missile destroyer, the USS
Curtis Wilbur (DDG-54) and a Ticonderoga-class guided-missile cruiser,
the USS Antietam (CG-54), sailed through the same area.

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"USS Chancellorsville sailed near the Paracel islands to challenge excessive maritime claims and preserve access to the waterways as governed by international law," US Navy Cdr. Nathan Christensen, a spokesman for US Pacific Fleet told @CNN
Law & Politics

The US warship conducted what is referred to as a "Freedom of
Navigation Operation" in the vicinity of the Paracel Islands to
challenge claims made by China, Christensen added.

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Is @wikileaks a Russian Front? @TheAtlantic
Law & Politics

“You know, they like to say every time WikiLeaks comes out, they say
this is a conspiracy between Donald Trump and Russia,” the
then–presidential candidate Donald Trump told a crowd in Kinston,
North Carolina, in October 2016. The idea was self-evidently
ridiculous, the Republican said: “Give me a break.”
Barely two years later, the idea of WikiLeaks serving as a medium for
Russia to boost the Trump campaign seems more and more plausible—even
Until recently, the connection between those Russian efforts and Trump
allies has remained somewhat obscure and speculative. But recent
developments have started to flesh out the picture.
Russia used WikiLeaks as a conduit—witting or unwitting—and WikiLeaks,
in turn, appears to have been in touch with Trump allies. The key
remaining questions are what WikiLeaks knew and what Trump himself
According to a draft document from Special Counsel Robert Mueller’s
team, which is investigating Russian interference in the election, the
conservative author Jerome Corsi tipped off Roger Stone, a Trump
friend and former political adviser, that WikiLeaks would release a
tranche of emails hacked from Clinton campaign chairman John Podesta.
The tip came in August, weeks before the October release. Corsi
provided the document to NBC News and then several other news
organizations. As per his practice, Mueller has not commented.
According to the document, Stone (identified as “Person 1”) wrote to
Corsi in late July 2016 telling him to get to WikiLeaks founder Julian
Assange at the Ecuadorian embassy in London, where Assange has been
holed up for years, and obtain the Clinton emails that WikiLeaks had.
The document says that Corsi forwarded the note to an individual
identified as Ted Malloch, a Trump ally who has also been interviewed
by the special counsel’s team. Per the document, Corsi replied to
Stone in August:
Word is friend in embassy plans 2 more dumps. One shortly after I’m
back. 2nd in Oct. Impact planned to be very damaging.… Time to let
more than [Podesta] to be exposed as in bed w enemy if they are not
ready to drop HRC. That appears to be the game hackers are now about.
Would not hurt to start suggesting HRC old, memory bad, has stroke --
neither he nor she well. I expect that much of next dump focus,
setting stage for [Clinton] Foundation debacle.
Corsi, however, told Mueller’s team that he had not gotten in touch
with Assange, which the document says constitutes lying to
investigators, a crime.
One important question that remains unanswered is the extent to which
WikiLeaks was aware that it was receiving hacked emails from Russian
agents. Assange has long denied that Russia was the source, and
implied baselessly that Seth Rich, a DNC employee whose 2016 murder in
Washington remains unsolved, was. He’s also cast doubt on the idea
that Guccifer 2.0 was Russian or affiliated with the Russian
The more consequential questions are what Trump knew about the back
channel to WikiLeaks and when he knew it. As my colleague Natasha
Bertrand has reported, Stone has repeatedly changed his story to
authorities about his communications with both WikiLeaks and Trump
campaign officials. Stone also pushed the Seth Rich conspiracy theory.
But while Stone was believed to be in touch with people in the Trump
campaign, it’s not clear whether the candidate himself was aware of
those communications.
There is not, at this point, any public information that connects the
president directly to Russian interference in the election, but the
emerging evidence strongly suggests that Trump confidants were given
forewarning about Russian moves designed to hurt Clinton and boost
Trump—and that WikiLeaks was the middleman that made it all possible.

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05-DEC-2016:: "We have a deviate, Tomahawk."
Law & Politics

The specialist is monitoring data on his mission console when a voice
breaks in, “a voice that carried with it a strange and unspecifiable
He checks in with his flight-dynamics and conceptual- paradigm
officers at Colorado Command:
“We have a deviate, Tomahawk.”
“We copy. There’s a voice.”
“We have gross oscillation here.”
“There’s some interference. I have gone redundant but I’m not sure
it’s helping.”
“We are clearing an outframe to locate source.”
“Thank you, Colorado.”
“It is probably just selective noise. You are negative red on the
step-function quad.”
“It was a voice,” I told them.
“We have just received an affirm on selective noise... We will
correct, Tomahawk. In the meantime, advise you to stay redundant.”
The voice, in contrast to Colorado’s metallic pidgin, is a melange of
repartee, laughter, and song, with a “quality of purest, sweetest
“Somehow we are picking up signals from radio programmes of 40, 50, 60
years ago.”

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05-DEC-2016:: I have no doubt that Putin ran a seriously 21st predominantly digital programme of interference which amplified the Trump candidacy
Law & Politics

POTUS Trump was an ideal candidate for this kind of support.
Trump is a linguistic warfare specialist. Look at the names he gave
his opponents: Crooked Hillary, Lyin’ Ted, Little Marco, ‘Low-energy’
Jeb — were devastating and terminal.

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Turning the desert into detention camps @Reuters investigates
Law & Politics

United Nations panel has accused China of turning its far-flung
western region of Xinjiang “into something that resembled a massive
internment camp shrouded in secrecy, a ‘no rights zone’.” It estimates
that there could be as many as one million Muslims who have been
detained there.
Former detainees describe being tortured during interrogation, living
in crowded cells and being subjected to a brutal daily regimen of
Communist Party indoctrination that drove some people to suicide. Most
of those who have been rounded up by the security forces are Uighurs,
a Muslim ethnic minority that numbers some 10 million. Muslims from
other ethnic groups, including Kazakhs, have also been detained.
China rejects the allegations that it has locked up large numbers of
Muslims in re-education camps. The facilities, it says, are vocational
training centers that emphasize “rehabilitation and redemption” and
are part of its efforts to combat terrorism and religious extremism.
A tender issued for the center at Turpan (pictured above), for
instance, canvassed bids for a telecommunications “control system,”
saying the facility was in “urgent need to know in real time” the
content of trainees’ telephone conversations so that they could be
forcibly interrupted.
Having identified 80 detention facilities using construction notices,
Reuters focused its analysis on 39 that were clearly identifiable from
satellite imagery. Earthrise then scrutinized hundreds of satellite
images spanning a two-year period.
“I was immediately struck by how many camps there were, how large, and
how quickly they are growing. In a matter of months they are throwing
up five-story buildings, longer than football fields, lined up in rows
in the desert,” said Edward Boyda, co-founder of Earthrise. “The
construction and arrangement of buildings is very similar from site to
site, in the new sites especially, which means there is a method
behind it.”
When Kairat Samarkan returned to his village in Altay prefecture in
February, he noticed many changes. “Men were missing from almost every
household in my village,” he said.
Photos of ancestors and prayer mats usually on display in Kazakh homes
were all gone. They were “burned,” the locals told him.
“These items,” he said, “were replaced with photos of the Chinese
president and Chinese flags.”

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@WMO pointed out that the 20 warmest years on record have been in the past 22 years @AFP
Law & Politics

"This would mean that the past four years – 2015, 2016, 2017 and 2018
– are also the four warmest years in the series," the UN agency said
in its provisional report on the state of the climate this year.
The "warming trend is obvious and continuing," WMO chief Petteri
Taalas told reporters in Geneva.
The report shows that the global average temperature for the first 10
months of the year was nearly 1.0-degree Celsius above the
pre-industrial era (1850-1900).
"It is worth repeating once again that we are the first generation to
fully understand climate change and the last generation to be able to
do something about it," Taalas warned.
With levels of greenhouse gases in the atmosphere, the main driver of
climate change, at a record high, "we may see temperature increase of
3-5C by the end of the century," Taalas said.

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Currency Markets at a Glance WSJ
World Currencies

Euro 1.1390
Dollar Index 96.787
Japan Yen 113.39
Swiss Franc 0.9965
Pound 1.2779
Aussie 0.7315
India Rupee 69.685
South Korea Won 1120.60 Bank of Korea raises interest rates for the
first time in a year
Brazil Real 3.8527
Egypt Pound 17.9010
South Africa Rand 13.66

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Commodities are poised for their first down year since 2015, in what's likely to be the first of many to come

Any way you measure it, the market for commodities is suffering. The
Bloomberg Commodity Index of 22 key raw materials ranging from oil to
copper to soybeans has dropped about 10 percent since reaching an
almost three-year high in May.  I’ve identified 10 forces that explain
the weakness and why it will persist.

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Congo's Ebola outbreak now 2nd largest in history, @WHO says

number of cases has reached 426. That includes 379 confirmed cases and
47 probable ones. So far this outbreak, declared on Aug. 1, has 198
confirmed deaths, with another 47 probable ones, Congo’s health
ministry said.
The alarmingly high number of infected newborns in this outbreak is
another concern, and so far a mystery. In a separate statement on
Thursday, WHO said so far 36 Ebola cases have been reported among
newborn babies and children under 2.

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Conflict Armament Research (CAR) said South Sudan arranged for the Ugandan government to provide end-user assurances for purchases of weapons and ammunition from Bulgaria, Romania and Slovakia. @ReutersAfrica

The weaponry, delivered to Uganda in 2014 and 2015, was then
transferred to neighbouring South Sudan, CAR said in a report based on
four years of research.
“We have a paper trail from point of manufacture, through export to
Uganda, through diversion to South Sudan, and to the recovery of the
weapons on the battlefield,” said James Bevan, head of CAR.

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Why's The West Painting Tanzania's President As The Latest "African Tyrant"? @AKorybko

The Mainstream Media is ginning up an infowar campaign against
Tanzania’s President because of his vociferously pro-family
socio-conservative policies and his recent decision to double down on
his country’s decades-long strategic partnership with China,
fearmongering about his allegedly “authoritarian” tendencies despite
him publicly declining to amend his country’s constitution to remain
in power beyond the end of his possible second term in 2025.
Tanzania, if the average Westerner has ever even heard of it, is
usually known for its foreign aid-dependency, safari expeditions, and
the island paradise of Zanzibar, rarely making international headlines
after the end of the Old Cold War once its legendary founder Julius
Nyerere’s proud support of socialism and anti-colonialism during his
two decades as president was no longer as geopolitically relevant as
it once was. Nowadays, however, the country’s back in the news for all
the wrong reasons, with the Western Mainstream Media ginning up an
infowar campaign designed to paint its current President John Magufuli
as the latest “African tyrant” after his committed support of
pro-family socio-conservative policies and his doubling down on
Tanzania’s decades-long strategic partnership with China.
His populist hands-on style of “leading from the front” in support of
his country’s sovereignty and the anti-corruption successes that he’s
presided over since his 2015 election have made many Western countries
wonder whether this promising but impoverished African country is
finally rising from its knees and beginning to take control of its own
destiny. That, however, will be much easier said than done after
former President Nyerere’s socialist experiment ultimately proved to
be a disaster and utterly destroyed the country’s economy, resulting
in the ignoble present-day distinction of this South African-sized
nation of over 55 million people being one of the most foreign-aid
dependent countries in the world where Western financial support
accounted for an astounding 33% of government spending in 2010-2011.
Western states and institutions therefore command significant
influence over Tanzania’s domestic and international affairs by dint
of their enormous financial contributions to the country’s budget,
which they’ve recently begun to weaponize after Magufuli started to
vociferously support pro-family socio-conservative policies that
contradict their Liberal-Globalist dogmas. Breaking with the
“politically correct” expectations imposed on African leaders by their
so-called “Western partners”, Magufuli spoke out against birth control
and encouraged his citizens to have as many children as possible,
which some observers see as troubling given that Tanzania already has
one of the highest birth rates in the world and the UN’s 2017 World
Population Prospects report forecasts that its population will
quintuple to more than 300 million people by 2100.
Furthermore, Magufuli controversially reaffirmed his country’s
immediate post-independence ban on pregnant schoolgirls continuing
their education in state schools, alleging that it contributes to
society’s immorality by setting a bad example for others. Together
with this, he also banned USAID and other foreign organizations from
promoting “family planning” policies in the country’s media space. Of
the many criticisms being leveled against his leadership, however, the
one thing that he’s not guilty of is the so-called “anti-gay witch
hunt” that the police forces of his country’s largest city of Dar es
Salaam were reportedly ready to carry out. The regional governor’s
personal comments on that matter were condemned by the Ministry of
Foreign Affairs, but that development was largely left out of
international coverage on the issue.
In response to his internationally contentious pro-family
socio-conservative policies, Western donors suspended a whopping $310
million in aid over the course of just two days after coordinating a
campaign of pressure against his government, hoping to force it into
backtracking on its positions under pane of further impoverishment and
potential unrest in the event that their financial support for his
country isn’t immediately resumed. Instead of bending to their will,
however, Magufuli stood up to the West by denouncing its meddling and
praising China for its apolitical approach to aid, emphasizing that
“China are true friends who offer help without any conditions.” In the
context of the ever-intensifying New Cold War, his backing of the Belt
& Road Initiative (BRI) was interpreted as a geopolitical ‘defection’.
It shouldn’t have been surprising that he’d turn to China in response
to the West’s financial pressure to reverse his socio-political
agenda, however, since Tanzania has been in a strategic partnership
with the People’s Republic for decades already. In fact, China’s first
modern-day Silk Road was the TAZARA railway that Beijing funded in the
1970s to connect to the copper-rich anti-Apartheid state of Zambia via
their shared socialist ally Tanzania. The coastal country still
functions as an irreplaceable Silk Road transit state in China’s
contemporary grand strategy, but its exploding population prospects
also make it attractive for reasons of its future labor and
consumption potential, be it in as a cheap offshore manufacturing
center for Chinese companies and/or a marketplace for their
overproduced goods.
Tanzania’s progressively pro-Chinese tilt, and especially over the
past year or so prior to its full-on pivot in recent days, hasn’t come
without its Hybrid War risks, however, which the author analyzed in
detail in a comprehensive risk analysis published in January 2017. The
forecasted scenario of jihadist-driven “Swahili Coast” destabilization
has evidently been the goal that foreign forces have been trying to
provoke, taking advantage of the largely porous and poorly governed
trans-border region between southern Tanzania and northern Mozambique
to generate a terrorist crisis in the latter that could easily travel
northwards all the way through Chinese-friendly Kenya and up to
Somalia in complicating China’s Silk Road access to the entirety of
East Africa and the continent’s resource-rich hinterlands.
Concomitant with the West’s suspension of $310 million of foreign aid
to his country and the festering terrorist threat along his country’s
southern borderland, the weaponized infowar narrative is being
advanced that Magufuli is a ‘dictator’, which wrongly implies that he
wants to ‘cling to power’ in spite of publicly declining to amend the
Tanzanian Constitution so that he could remain in office after the end
of his possible second term in 2025 like many other African leaders
have recently done. He may be ‘zealously assertive’ and ‘hands-on’,
but he’s not an ‘African tyrant’ in the stereotypical sense of what
the West often condescendingly portrays its geopolitical opponents in
the “Global South” as being because he’s committed to continuing his
country’s tradition of peaceful leadership transitions.
Tanzania is nowadays officially a multiparty democracy, albeit one
where Nyerere’s Chinese Communist Party-allied Chama Cha Mapinduzi
(CCM) party has remained in power since independence, and the 2020
election presents an opportunity for foreign forces to meddle in its
democratic process by fearmongering about China’s deepening influence
there if Beijing decides to replace Western aid with its own
combination of loans and grants. These infowar efforts could
potentially be focused on exacerbating the preexisting ethno-regional
tensions in the offshore semi-autonomous region of Zanzibar in order
to provoke post-election violence that could in turn be manipulated to
make the vote seem “scandalous”, thereby triggering (further?) Western
sanctions and contributing to Tanzania’s incipient Hybrid War
Tanzania’s Magufuli is fast becoming the latest “African tyrant” to be
talked about in the Western Mainstream Media, with his strong
pro-family socio-conservative policies being the main reason because
of how controversial they are outside of his country. As the
democratically elected leader of a sovereign state, he has the right
to implement whatever policies he sees fit so long as they’re within
the ambit of his nation’s laws, which they are, and his people can
always vote against him and the ruling CCM during the upcoming 2020
elections if they’re genuinely unhappy with the path that he’s taking
Tanzania down. At the moment, however, most of the grumbling about him
is coming from abroad, which is why his “Western partners” suspended
$310 million of aid to his country.
China will probably swoop in to fill the void with a combination of
loans and grants in order to prevent the West from shaking Tanzania’s
foreign aid-dependent system to its core, with the added benefit being
that Beijing has self-interested reasons for building its partner’s
capacities so as to see it sustainably succeed on its own as one of
the most strategic Silk Road hubs in Africa. There are still many
destabilization scenarios that could transpire before then, including
the spread of Mozambican-based terrorism northwards all along the
“Swahili Coast” and externally exacerbated separatist tendencies in
the semi-autonomous offshore region of Zanzibar, but provided that
Tanzania applies the proper “Democratic Security” measures for
countering these Hybrid War threats, then it might emerge as one of
East Africa’s leading states sometime in the future.

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South Africa's Rand Heads for Best November in Three Decades @BBGAfrica

November isn’t usually a great month for South Africa’s rand, but this
one’s turning into an exception.
Not only is the currency headed for its biggest monthly gain against
the dollar this year, but also its best November in 30 years. The gain
of 8.1 percent this month is surpassed only by the 9.1 percent advance
in November 1988.
South Africa’s currency gained 0.7 percent to 13.6863 per dollar by
12:38 p.m. in Johannesburg, after strengthening 1.1 percent on

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.@WorldBank expects Nigeria's economy to grow slightly less than 2 percent this year

“Nigeria’s emergence from recession remains sluggish, and sectoral
growth patterns are unstable. In the second quarter of 2018, the oil
sector contracted by 4.0 percent,” the bank said in a statement.
GDP grew by 0.83 percent last year after shrinking by 1.58 percent in
2016, its first annual contraction in 25 years. For this year,
Nigeria’s central bank is projecting growth of 1.75 percent.
The World Bank said growth in the farm sector, which has been
resilient in the past, had slowed to 1.2 percent under the impact of
security challenges in the north.

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Kenya | @AIRTEL_KE vs. @SafaricomPLC @TheAfricaReport
Kenyan Economy

Airtel Kenya is cutting prices to eat into Safaricom’s market share,
but it may not have a big enough war chest and sufficient patience to
succeed in knocking the Kenyan telecoms leader down a notch.
Shortly after Safaricom chief executive Bob Collymore returned to work
after a nine-month medical leave in August 2018, he found himself back
in the trenches. In the past two decades, the Kenyan telecoms sector
has had several scuffles over consumers, often ending up in slashed
costs. Airtel Kenya is using every tactic it can to get out from under
the shadow of its giant rival; these range from cutting the cost of
calls to seeking government intervention in order to level the playing
“We are seeing a new price war coming,” Collymore told a press
conference in Nairobi. Days before, Safaricom’s main competitor Airtel
Kenya, a subsidiary of Indian behemoth Bharti Airtel, had slashed call
rates. Airtel wants to trade revenue for market share.
So far, Collymore is insisting that Safaricom is unwilling to
participate in a competition over price and will accept to see its
vast market share somewhat eaten into by Airtel, which has been
picking up subscribers over the past two years. Airtel’s strategy will
test the patience of the shareholders of its Indian parent company, as
lower call tariffs will further reduce revenue. Airtel is fighting a
price war in India, and is planning to list about 25% of its African
operations on the London Stock Exchange in 2019 to help it deal with
its big debts.
Kenya’s telecoms and mobile- money markets are still growing,
especially with the uptake of mobile loans (see TAR103, Sept. 2018).
Between April 2017 and March 2018, the mobile- money market moved a
combined KSh3.5trn ($34.6bn), a KSh219bn increase from the previous
Safaricom’s M-Pesa platform was home to more than three-quarters of
the total amount transacted.
In April 2018, former central bank governor Njuguna Ndung’u, told the
Business Daily that M-Pesa “has generated a vibrant economy”. While
the M-Pesa journey began the year before his tenure started, it was
during his time that it became a household name.
The fight for Kenya’s lucrative telecoms market is dominated by
Safaricom and Airtel –the latter having had various incarnations as
Kencell, Celtel and Zain throughout its history. While there are
several smaller players, such as Telkom Kenya and Liquid Telecom, the
competition is primarily between these two main players, with
Safaricom the giant and Airtel the upstart.
66% Increase in tax on mobile money introduced in September’s budget,
from 12% to 20% As of 2018, Safaricom controlled 90% of revenue in the
traditional telcom markets of voice calls and text messages. It has
29.5 million subscribers: at least 20 million more than Airtel Kenya.
In a country with an estimated population of 51 million people,
Safaricom is in the lives of more than half of the country’s citizens.
But most consumers have more than one SIM-card, as one cellphone-user
explained during a lunch break in mid-October: “I have both so
whenever one lowers prices, I use that one, and then switch as they
fight on price.”
Airtel Kenya’s attempts to innovate in Kenya have not all been
successful. For example, it launched the farmer-focused Airtel Kilimo
in 2013 with the hope of signing up 200,000 customers by the middle of
2014 for a service that provides weather information, advice and
market prices. Only slightly more than 20,000 had subscribed by
December 2014, according to a study by the GSM Association.
Telecoms engineer Prasanta Das Sarma has been running Airtel Kenya
since February 2017. He has been looking to replicate the success of
Airtel Bangladesh’s major growth in customer numbers.
In its eight years of operation, Airtel Kenya has never made a profit,
despite the growth of the telecoms and mobile-money markets.
The company has tried to grow through acquisitions. It bought
yuMobile’s Kenyan customer base of 2.5 million subscribers in 2014,
while Safaricom purchased yuMobile’s Kenyan infrastructure. In early
2018 Airtel Kenya executives were in talks to acquire Telkom Kenya,
which has a subscriber base of about four million, but those
negotiations fell through.
Airtel Africa, the continental subsidiary within which Airtel Kenya
operates, has only begun reporting positive margins recently, with its
profits for the first quarter of 2018 tripling to $154.2m from $57.5m
the last quarter of 2017.
Airtel Africa was said to be considering selling some of its assets
after a prolonged period with no positive returns, but management has
now denied that.
Airtel Kenya has wrested some more market share (see table) as the
unit bleeds the mother ship. It has changed strategy and chief
executives several times. In 2015, its managing director at the time,
Adil El Youssefi, threatened that the company would quit Kenya if the
government did not intervene and solve the problem of Safaricom’s
dominance of the market.
“We’ve been trying for over five years,” El Youseffi told the Business
Daily, “We’ve lost over KSh50bn ($495m) and not made even a single
dollar in profit.” ElYoussefi eventually left to head yet another of
Safaricom’s competitors, Liquid Telecom, but his successor at Airtel
Kenya took up the same fight.
In February 2017, the Com munications Authority of Kenya debated a
report it had commissioned from the consultants at Analysys Mason
about competition in the telecoms sector. The report recommended that
Safaricom should be divided into two: a telecoms company and a
mobile-money company.
M-Pesa’s rapid growth has been Safaricom’s ticket to success (see
graph). The mobile-money platform has given a mere telecoms company a
commanding role in the new ecosystem that links telecommunications and
the financial industry. By offering such a compelling service –money
transfers, payments and now deeper banking services– it has made
Safaricom’s offer more ‘sticky’, in marketing jargon.
But the Analysys Mason report says that unless all existing mobile-
money players in Kenya can interoperate, then Safaricom’s current
position is dominant and unfair to other players. Earlier this year, a
platform-level inter operability system linking M-Pesa and Airtel
Money, Airtel Kenya’s mobile- money service, was launched in an effort
to solve the problem. The question remains of how exactly the
government can intervene without hurting Safaricom’s revenue or a core
part of the economy.
In mid-2018, Airtel Kenya and Telkom Kenya put up a united front
before the national assembly, which had invited senior executives of
all the telecom companies to appear before the information and
communications technology (ICT) committee.
During the audience, ICT committee chairman William Kipsang took
Airtel Kenya’s chief executive, Prasanta Das Sarma, and executives
from other companies to task. “Why would you want parliament to punish
success when one player is doing better than the rest of the
telecommunications firms?,” he asked.
In a document submitted by Airtel Kenya to the national assembly, the
company demanded that the government act on the recommendations of the
Analysys Mason report. It said either the government declare Safaricom
dominant or it must fully implement mobile-money interoperability.
The challenge proved to be an uphill struggle, partly because
Safaricom is a partially government-owned company while the other five
players are owned by foreign companies. Safaricom is currently
majority-owned by the Kenyan government and Vodacom of South Africa,
with a quarter of the company owned by the public. The laissez-faire
approach to regulation has given Safaricom the chance to grow into the
most valuable company in the East and Central African regions while
its competitors have continuously struggled.
Safaricom has also been more stable than its competitors, having only
had two chief executives in its 18-year history. A period of prolonged
growth was weakened somewhat by Collymore’s long medical sojourn. His
return should re-invigorate the brand.
The question of whether Airtel will eventually make money in Kenya is
difficult to answer, as the East African country enters a period of
austerity and possible changes within its economy and politics. The
Nairobi government is unlikely to declare one of its best assets and a
significant source of revenue dominant.
The Safaricom brand has become a part of the Kenyan state, especially
under the tenure of President Uhuru Kenyatta. In 2017, for example, it
was revealed that the treasury paid Safaricom KSh7.5bn to install
closed- circuit TV cameras and networks in Nairobi and Mombasa. The
system runs on the 4G+ spectrum, whose assignment to only Safaricom in
2015 was a trigger for Airtel Kenya’s chief executive’s threat that
the Indian company would exit Kenya.
But Airtel Kenya could still seek other means to achieve the same
result, such as using the courts to get anti-trust laws implemented.
After eight years without positive results, it is also possible that
Bharti Airtel could choose to quit Kenya, and perhaps other African
markets where it has been bleeding money. For the sector as a whole,
lower prices are likely to hurt profit margins as consumers become
more price-wary, with increased taxes on mobile money, data and
airtime. In September, President Uhuru Kenyatta’s government increased
taxes on mobile-money activity from 12% to 20%, while excise duty on
airtime went up from 10% to 15%. In the budget proposal, treasury
cabinet secretary Henry Rotich said the increased revenue would be
used to fund the universal healthcare budget.
While the two main telcos are financial behemoths that can survive,
their prolonged fight for market share is peaking at a time of
economic uncertainty. They are unlikely to stop and sue for peace,
though the government could be forced to implement the
interoperability system fully in a bid to reduce tensions. But, stuck
in an expensive war of attrition, the companies may be missing
opportunities to innovate. Mobile money launched more than 10 years
ago – will the next breakthrough happen in Kenya or someplace else?

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M-Pesa to send cash direct to China's WeChat users @bd_africa @WeChatApp #MPesaGlobal
Kenyan Economy

M-Pesa users are now able to send money instantly to users of China’s
largest payment and social media application, WeChat.
The partnership between Family Bank Limited and London-based financial
technology firm SimbaPay will enable the 23,946,174 active M-Pesa
users in Kenya to send money to over 1 billion active WeChat
subscribers in China.
To send the money, Kenyans will use an M-Pesa Paybill number belonging
to Family Bank and enter the phone number of the recipient in China as
the account number. The recipient will then access the money on their
mobile wallet.
Majority of Kenya’s imports come from China and have been growing
steadily over time, according to the Economic Survey 2018 report.
Representing an increase of 15.8 per cent, imports in 2017 amounted to
Sh390.6 billion. This is 2.8 times the value of United Arab Emirates
(UAE) imports which were the second highest.

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05-NOV-2018 :: @Safaricomplc Half-Year Earnings
Kenyan Economy

Safaricom have tweaked the Mpesa ecosystem with good effect. They have
made the Mpesa garden richer [the average user is transacting 12 times
a month] and have increased retention and circulation in the
ecosystem. This is a very big deal.
Now I expect some folks might have expressed some disappointment at a
+10.8% HY mobile data revenue acceleration to register 19.45b but this
would miss the point completely. Mobile usage in MB per user surged
+67.311% to 639.8 mbs versus 382.4 mbs. That is an eye-popping surge.
Safaricom have surged mobile data, have fuelled that surge with
cheaper prices and this is what a ‘’dash for growth’’
Its a bold move and appropriate and just what shareholders should be
happy to see.

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Safaricom share price data here
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 HY results for the period ended 30th September 2018 vs. 30th
September 2017
HY Voice revenue 48.03b vs. 47.35b +1.4%
HY Mpesa Revenue 35.52b vs. 30.05b +18.2%

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.@KenyaPower breaches terms of Sh60bn loans @BD_Africa
Kenyan Economy

Kenya Power   has breached the terms attached to Sh59.96 billion worth
of its short-term and long-term loans, signalling a biting cash crunch
at the State-owned electricity distributor.
The firm, whose total borrowings were Sh113 billion as at the end of
June, breached debt covenants for Sh49.99 billion long-term loans and
Sh9.98 billion short-term debt, prompting auditor general Edward Ouko
to qualify its financial statements.
In the year ended June 2018, its current ratio — a liquidity measure
of a firm’s ability to pay short-term and long-term obligations — fell
below the 1:1 ratio set by the lenders as a condition during the
tenancy of their loans. It sunk into negative working capital of
Sh51.6 billion.
Breaching debt covenants placed it at risk of being forced to
reclassify the entire Sh59.96 billion debt into short term loans to
make it repayable within 12 months.
However, it received a temporary reprieve in the form of a waiver by
the lenders, sparing it from a move that would have placed it on the
edge given the negative working capital position.
“Subsequent to the financial year end, the company received letters
from lenders waiving their rights to demand payment due to the breach
of the debt covenants even though the company did not have
unconditional rights to defer payment as at 30th June 2018,” notes Mr
The firm is yet to publish its full annual report for 2018. However,
as at June last year, it had commercial borrowings worth Sh73.8
billion and on-lend borrowings of Sh48.2 billion.
Commercial borrowings were from Standard Chartered Bank  (Sh51.48
billion), Equity Bank  (Sh7.38 billion), First Rand Bank (Sh10.89
billion) and Stanbic bank (Sh2.08 billion).
The loans were secured by letters of negative pledge.

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.@KenyaPower share price data here
Kenyan Economy

Par Value:                  20/-
Closing Price:           3.50
Total Shares Issued:          1951467045.00
Market Capitalization:        6,830,134,658
EPS:             0.98
PE:                 3.571

The energy company in charge of national transmission, distribution
and retail of electricity throughout Kenya.

FY Results through 30th June 2018
FY Non Fuel Revenue 95.463b versus 91.952b
FY Revenue 125.854b versus 120.742b +4.06%
FY Total Power Purchase Costs 84.1b versus 80.477b
FY Other Operating Income 8.670b versus 8.130b
FY Transmission and Distribution costs [39.628b] versus [34.745b]
FY Operating Profit 10.796b versus 13.650b
FY Finance Costs [7.807b] versus [6.040b]
FY Profit before Tax 3.089b versus 7.656b -59.65%
FY Profit after Tax 1.918b versus 5.280b -63.674%
FY EPS 0.98 versus 2.71 -63.83%
FY Dividend 0.00 versus 0.50B
Cash and Cash equivalents at end of Year [7.603b] versus [1.150b]

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Nairobi Business Ventures to List New Stock on Kenyan Bourse @BBGAfrica
Kenyan Economy

Kenya’s Capital Markets Authority gave Nairobi Business Ventures Ltd.
the green light to offer and list 15 million new shares on the
securities exchange after the company converted preference stock into
ordinary shares.
“The shares that will be issued will not exceed a principal amount of
30 million shillings ($292,626) at a rate of 2 shillings per share,”
the shoe maker said Friday in a newspaper statement.

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Nairobi Business Ventures Limited
Kenyan Economy

Par Value:
Closing Price:           1.35
Total Shares Issued:          23600000.00
Market Capitalization:        31,860,000
EPS:             0.187
PE:                 7.219

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Kenya Shilling versus The Dollar Live ForexPros 102.46
Kenyan Economy

Nairobi All Share Bloomberg -15.12% 2018


Nairobi ^NSE20 Bloomberg -24.83% 2018


Every Listed Share can be interrogated here


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

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