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Macro Thoughts

Home Thoughts

We are peering into the gun barrel of time itself. Perspective in the
largest sense.

“We succeeded in taking that picture, &, if you look at it, you see a
dot. That’s here That’s home That’s us On it, everyone you ever heard
of, every human being who ever lived, lived out their lives'' “The
Pale Blue Dot” Carl Sagan

Conclusions

This is an important Point. The Rear Guard Reaction will fail.

Khartoum Airport closed hakuna kutoka. Now they need to hold him and
hand him over to the ICC to face the law.

I thank you all from the bottom of my heart. The struggle for a
democratic and prosperous Sudan🇸🇩 continues. We will not bow down to
Al-Bashir, the tyrant dictator! #DemocraticSudan @iAlaaSalah
https://twitter.com/iAlaaSalah/status/1115989597983510528

 شعب صانع الايوقانات الكذب لن يهزم هذا الشعب @ArkoMinawi 🇸🇩
#Sudan #SudanUprising #SudanProtests ♥️
https://twitter.com/ArkoMinawi/status/1115873306371137537

The revolutionary contingent attains its ideal form not in the place
of production, but in the street, where for a moment it stops being a
cog in the technical machine and itself becomes a motor (machine of
attack), in other words a producer of speed

"The current regime can't distance itself from it and the army doesn't
want to inherit the catastrophe."

Euro 1.1280
Dollar Index 96.93
Japan Yen 111.16
Swiss Franc 1.0022
Pound 1.3089
Aussie 0.7160
India Rupee 68.989
South Korea Won 1139.33
Brazil Real 3.8255
Egypt Pound 17.3293
South Africa Rand 13.9276

Boeing has been grounded. The company’s decision last week to cut
production of its 737 Max, along with its admission that the
aircraft’s anti-stall software contributed to two fatal crashes that
together killed 346 people, marked the moment when it finally took
responsibility.
After the Lion Air crash in Indonesia in October, Boeing decided the
problem could be addressed by informing pilots and amending its
software.
When the Ethiopian Airlines accident followed in March, its initial
response was to insist that the 737 Max was airworthy. Global
regulators had to intervene to puncture the illusion that it knew
best. What took Boeing so long?
This is not an idle question, because I made the same mistake in
believing after the second tragedy that Boeing and the Federal
Aviation Administration could still be trusted to handle matters.
Passengers should remain confident about boarding the 737 Max, even
before a scheduled software fix, I wrote. That turned out to be wrong,
as Boeing and the FAA were forced to retreat.
My error was to confuse the general truth that flying has become much
safer, thanks to progress in automation, with the particular case of
the 737 Max.
Boeing’s failure was also human error: it was lured into hubris by its
commercial success and safety record. It could not believe it had
blundered so badly in trying to avoid harm.
With hindsight, the reaction of Boeing and the FAA on the day after
the second crash feels absurd. “To date we have not been provided data
to draw any conclusions or take any actions,” the FAA declared.
As Andrew Blackie, a consultant and former UK crash investigator,
says: “You’ve just lost two aircraft in similar circumstances. Why
would you still have confidence?”
That delusion, which has hurt confidence in both Boeing and the FAA,
has broader lessons. Companies in regulated industries employing many
specialists such as engineers often find it hard to concede errors
promptly, not just because of potential legal liability, but due to
faith in their expertise.
Carmakers and energy companies are also prone to such blindness.
Boeing’s delayed reaction now strikes me as the product of three
factors. First, it had a strong recent safety record, including with
the 737, the first model of which was launched in 1967.
The crashes have raised doubts about whether the FAA delegates too
much work on the safety certification of new aircraft models to their
makers, but the outcome was not alarming until now.
Its record was part of a trend of growing safety, especially among US
carriers that often favour Boeing aircraft for their fleets.
They had not experienced a fatal accident in the US for nine years
before the 2018 death of a passenger partially sucked through a window
on a Southwest Airlines flight. That created a temptation to believe
that Boeing’s equipment was inherently safe.
Second, it was riding high commercially, with its share price rising
strongly between October and the second crash. It had made sound
strategic moves in its tussle with Airbus, including creating the 787
Dreamliner while Airbus mistakenly built the huge A380.
The 737 Max was also selling well, gathering 5,000 orders.
Boeing has recently pleased investors by upgrading already certified
aircraft with new engines to fly further and more economically — both
the 737 Max and the new 777X.
The 787 was a success but accumulated $30bn in cash losses because it
was a new model with fresh technology, including composite materials.
Before the crashes, the Max derivative of the 737 came far cheaper.
Third, the MCAS anti-stall software used on the 737 Max to counter a
tendency when climbing for it to pitch upwards did not feel to Boeing
like a huge experiment.
It deliberately kept much of the aircraft like previous models to
avoid the need for expensive certification and pilot retraining.
Airlines seek “commonality” among models in their fleets to save
costs.
This turned out to be a tragic misjudgment. Boeing believed pilots
would rarely, if ever, be in a position where the software activated,
but its reliance on a single sensor, which failed in both crashes,
made what was intended as an invisible fix into a dangerous and
disruptive force.
Boeing failed to anticipate the worst case, or react to what had
happened quickly enough.
One lesson, says Richard Aboulafia, an aviation analyst at Teal Group,
is that Boeing has to refocus on engineering excellence and be less
dominated by marketing and sales.
That might make it more stringent about technologies with
unpredictable outcomes. “This is a great company commercially, but
engineering seems to have less priority,” he says.
Engineering is essential but the other moral is simpler: recognise
when you are wrong. Boeing and the FAA trusted in their mutual safety
record and depended on each other for reassurance.
When the tragedy happened, they clung to an absence of data rather
than using common sense.
Boeing will get past this failure: its shares rose last week when the
initial analysis of the Ethiopian crash indicated that the 737 Max
will be able to fly again once its software has been changed. But it
should not forget.

The lack of touch and finesse displayed by Boeing over the last seven
days is mind-boggling. They have stayed resolutely behind the curve
from the GET-Go.
The Message Boeing sent was the Safety came second, a simply untenable
position. Eventually the FAA capitulated and grounded the 737 Max.
Ethiopian and its Government acted with a lot of decorum. Concerns
about brand damage are overblown.
In contrast, Boeing have taken a big hit but more worryingly the
corporate’s reactions to a fast moving situation were a D-.

Coffee has been among the worst-performing commodities in the past few
years as the world became awash with beans, and there are few signs of
a meaningful rebound any time soon.
With arabica languishing near a 13-year low and robusta futures also
performing poorly, there are concerns that the industry’s stability is
under threat. Here’s a look at who’s winning and losing from the rout,
from speculators to coffee-shop customers.
The slump means roasters such as the makers of the Maxwell House and
Folgers brands, Kraft Heinz Co. and JM Smucker Co., are paying less
for their beans. That could benefit margins at companies like Smucker,
whose shares have climbed to an one-year high.
“There will be some good money made by large roasters,” said Jeffrey
Young at consultant Allegra Strategies Ltd. Still, the benefit may be
limited. For example, roaster Jacobs Douwe Egberts indicated that it’s
passing savings onto its customers.
Coffee-shop drinkers are actually paying more for a cup now than they
were in 2011 -- an espresso at Starbucks Corp.’s U.K. stores has risen
about 20 percent. But that that doesn’t mean they’re necessarily
getting a raw deal, Allegra’s Young said.
Like every industry, low prices are bad news for producers. In some
coffee-growing countries, the market price of arabica is below the
cost of production, and it’s hard for farmers to suddenly switch to
other crops. That’s because coffee trees last several years once
planted.
Growers in Vietnam, a key robusta producer, have been hoarding beans
while they wait for prices to improve, according to shipper Intimex
Group. In Honduras, low prices are preventing growers from harvesting
all their crop because they can’t pay pickers or cover the cost of
input such as fertilizers, according to the National Association of
Coffee Exporters.

Emerging Markets

Frontier Markets

Conclusions

.@KremlinRussia_E playing offence in Africa

Zimbabwe has signed an agreement with Russia to build a new platinum
mine in the southern African country, finalizing a deal that’s stalled
since 2014.
A deal to develop a new platinum-group metals mine on a prospect held
by Great Dyke Investment, a company jointly owned by a Russian
state-controlled company and Zimbabwe’s government has been sealed,
Polite Kambamura, the nation’s deputy mines minister said. The deal
hadn’t progressed since an initial agreement in 2014, Kambamura said,
declining to disclose the shareholding structure. He said the mine and
associated infrastructure will cost $4 billion.
“Two weeks ago we finalized the agreement and the Russians are ready
to come on the ground,” Kambamura said in an interview on the
sidelines of a conference in Johannesburg.
The mine would be built on one of the largest platinum mining
concessions in the country. Egypt-based Afreximbank may raise $2
billion to finance building the mine and a smelter at the project, the
state-owned Herald newspaper reported last year.

I congratulated him on Somalia’s economic reforms and urged sustained
engagement on this front. We discussed ways to deepen the strong
U.S-Somalia partnership on critical issues, including counterterrorism
and regional stability.

Conclusions

Just as in the Cold War, control of sea lanes essential; Somalia
centerpiece in the Red Sea Great Game.

One evening in March, as a warm breeze blew in from the Indian Ocean
and the call to prayer from the neighborhood mosque echoed in the
twilight, Omari Abdullah sat on a plastic chair outside his home,
preparing for his night’s work.
Like many in this sprawling seaside metropolis, Abdullah is a
migrant—a country boy drawn to life in the big city, who arrived 17
years ago and never looked back. A native of Kigoma, in western
Tanzania, he couldn’t afford high school and grew restless with his
job on a sunflower farm. So at 20 he made the 800-mile journey on the
back of a truck, stayed with a friend until he could find work, and
eventually started his own business: a small stand selling french
fries—known as chips in this former British colony—on the outskirts of
Tandale, one of the city’s largest informal settlements.
Scraping by here isn’t easy: Abdullah works seven days a week, often
until 2 am, to make a profit that averages around $60 a month. But as
he tells it, life is good.
“You can build a life in Dar es Salaam if you’re willing to work
hard,” he says in Kiswahili. His chips stand would never survive back
home, he adds: “In places like Kigoma there isn’t any cash flow.
That’s why so many people come here.”
Abdullah’s tale exemplifies a much larger story, one playing out in
cities all across Africa. Africa today is the world’s least urbanized
continent, with 43 percent of its population living in urban areas.
But high birthrates and rising internal migration mean African cities
are entering an era of unprecedented growth.
According to U.N. projections, the continent will have 18 cities with
more than five million people by 2030, up from eight in 2018. Today 21
of the world’s 30 fastest growing cities, including the top ten, are
African. Dar es Salaam—currently Africa’s fifth most populous
city—ranks second, behind Kampala in neighboring Uganda. It’s
projected to grow from six million people today to 13.4 million by
2035, crossing the “megacity” threshhold of 10 million people sometime
before 2030.
Until now, however, much of Africa’s urbanization has been what the
development economist Paul Collier terms “dysfunctional,”
characterized by insufficient infrastructure, a lack of formal jobs,
and haphazardly built and often squalid slums. Lack of planning, weak
regulations, and, in some countries, the difficulty of obtaining title
deeds for land, leads cities to grow out rather than up, making
commutes longer and more costly. That disconnects people and companies
from jobs and markets, stifling the economy.
“Dar es Salaam has one chance to urbanize right,” says Andre Bald, an
urban planner and program leader for sustainable development at the
World Bank in Tanzania. “Once a city hits ten million people, its
trajectory is hard to change. At that stage, it’s very difficult to
claw yourself back and do things better.”
If Majid bin Said could see Dar es Salaam today, he’d likely be as
wide-eyed as Abdullah when he first arrived here from the countryside.
As Sultan of Zanzibar, Majid established Dar in 1862 as a plantation
town to support his nearby archipelago, which had long been a hub of
Indian Ocean commerce. Endowed with a large natural
harbor—bandar-as-salaam means “harbor of peace” in Arabic—the new city
soon developed a life of its own. It grew rapidly during periods of
German and British colonial rule. By 1964 it was the capital and
largest city of an independent Tanzania.
Mpetula and her colleagues face two familiar impediments: money and
politics. Like most countries in sub-Saharan Africa, Tanzania is
urbanizing while still poor. According to the World Bank, the region
reached a rate of 40 percent urbanization at a GDP per-capita of
approximately $1,000. East Asia, by contrast, did so in the 1990s at a
GDP per-capita of $3,600. Smaller economies mean less money for
investments in housing and infrastructure.
According to government statistics, Tanzania, with a population of 60
million, had just 2.6 million formal jobs in 2016. More than half of
those workers earned less than the equivalent of $213 dollars per
month—hardly enough to afford a formal house, particularly as mortgage
rates run 15 to 19 percent. The Center for Affordable Housing in
Africa, a Johannesburg-based NGO, estimates that only 2.5 percent of
urban Tanzanian households can afford the roughly $16,000 needed for
the cheapest formally built home.
Tanzanian leaders and their partners are increasingly tackling the
city’s greatest environmental challenge: flooding. Dar’s low-lying
coastal geography and the polluted Msimbazi River, which slices
through its urban core, make it among the most vulnerable cities in
Africa. Residents die nearly every year in floods that are only
getting worse as climate change increases torrential rains and as the
spread of pavement in the sprawling city increases runoff. According
to Shahidi wa Maji, a civil society group, nearly a quarter million
people along the Msimbazi face serious health risks linked to the
river’s “toxic mixture of industrial effluent, chemicals, abattoir
waste and human sewage.” It all seeps into homes and drinking water,
particularly during floods.
Finally I reach the roadside stand where he fries chips on a charcoal
grill that glows a deep red in the moonlight. I ask him whether coming
here, and hustling for so many years, has been worth it.
He smiles and flexes his biceps. “When I arrived I was so thin,” he
says. Now, at 37, he’s got a noticeable paunch—a sign, for someone of
his background, that he’s made it.

“The rate must be allowed to float,” Bhekinkosi Nkomo, the chief
executive officer of RioZim Ltd., a gold and nickel producer, said at
a conference in Johannesburg on Wednesday. “If it’s not working, try
something different.”
“It’s like opening a pressurized can, you need to do it slowly,”
RioZim’s Nkomo said.

Zimbabwe finally overhauled its dysfunctional,''whack'' and even
Voodoo FX regime.  Zimbabwe’s government dropped its insistence that a
quasi-currency known as bond notes are at par with the dollar as it
overhauled foreign-exchange trading and effectively devalued the
securities. While the government has previously insisted that bond
notes and RTGS dollars are worth the same as U.S. dollars, the units
currently trade at between 3.66 and 3.8 to the dollar respectively on
the black market [Bloomberg]
“The introduction of a Zim dollar will be just in name, but the RTGS$
is essentially the Zim dollar.”
Tendai Biti is predicting a 6-8 range whilst the Government is looking
for it to appreciate to 2.5 which is best characterised as
'''Hail-Mary'' economics. This is the right move but I would
definitely be short at 2.5, if it ever gets there which is entirely
unlikely.

When Christophe Fofana, a 29-year-old taxi driver and student in Ivory
Coast, needed a birthday present for his daughter last year, he did
something he hadn’t done before. He went shopping online.
“It was a specific toy, an electric car, that I either couldn’t find
in stores or was very expensive,” he said in Abidjan, the commercial
capital. He found a gift for the big day on Jumia, the online retailer
and market place active in 14 African countries.
Fofana is one of more than 4 million customers Jumia Technologies AG
has amassed in the seven years since the company was founded, a number
that jumped 48 percent last year.
The accelerating growth rate has convinced the company’s co-founders,
former McKinsey & Co. colleagues Sacha Poignonnec and Jeremy Hodara,
to pursue an initial public offering in New York this week.
Jumia is planning to sell 13.5 million American Depository Shares at
$13 to $16, raising as much as $216 million. The listing is meant to
give the company financial flexibility and increase awareness of the
brand among investors, the firm said in a regulatory filing last
month.
Often tagged as Africa’s Amazon.com Inc., Jumia has been able to grow
in markets largely untapped by the U.S. heavyweight, which is hampered
by a lack of distribution infrastructure on the continent.
To tackle the issue of vague addresses in many African cities, Jumia
has built a network of leased warehouses, pick up and drop off
locations and brought in a string of delivery partners to ensure
reliable service.
Less than 1 percent of retail sales in Jumia’s African footprint are
conducted online compared with nearly 24 percent in China, the company
said in the filing, citing Euromonitor International data.
That makes the continent ripe for internet sellers as more Africans
adopt smartphones and get access to mobile broadband. Jumia’s revenue
jumped by almost 40 percent last year to 130.6 million euros ($147.3
million).
The company, which has headquarters in Berlin and got early funding
from German startup incubator Rocket Internet SE, isn’t profitable.
Jumia reported a loss for 2018 of about 170 million euros and has
warned prospective IPO investors that it has accumulated losses of 862
million euros since its inception and relies on external financing to
compensate for negative cash flow.
Still, investors tend to give e-commerce companies leeway because
customer growth and market share are seen as more important, according
to Seema Shah, a consumer analyst at Bloomberg Intelligence in New
York.
While the company competes with the likes of Amazon’s Souq.com and
Naspers Ltd. in individual markets, Jumia has said it believes it’s
the only pan-African e-commerce site.
“If an online retailer develops a name and offers a good consumer
experience, people feel safer to use it,” Shah said. For the IPO to be
successful, investors will have to see Jumia as “a chance to play in
Africa with less risk.”
French drinks firm Pernod Ricard SA, the maker of Absolut vodka,
invested 75 million euros in December, giving the firm a 5.1 percent
stake and vaulting Jumia into unicorn territory with a 1.4 billion
euro valuation.
Mastercard Inc. followed with an agreement to buy 50-million euros in
stock in a private placement alongside the planned IPO. Prior to the
offering, Jumia’s biggest shareholder is South African wireless
carrier MTN Group Ltd. with a 30 percent stake, followed by Rocket.
Other investors include Millicom International Cellular SA, another
mobile-phone company operating in parts of Africa, and Goldman Sachs
Group Inc.
Buenos Aires-based e-commerce firm MercadoLibre Inc. has a similar
profile, Shah said. The company also largely beat Amazon to the punch
in emerging markets, using a New York share sale in 2007 to expand in
Latin America, offering shares at $18 each.
The stock now trades above $500 and the group raised $1.85 billion in
a fresh share sale last month.
Jumia is also expanding its more nascent payment service, JumiaPay.
The app, first introduced in 2016, allows shoppers to settle bills
over their computer or phone, even if they are more used to cash
payments.
It’s now used to pay for most of the orders on Jumia’s platform in
Nigeria and Egypt, the company said.
“There are other online shopping services, but Jumia is definitely No.
1,” said Fofana in Abidjan. “In Ivory Coast, we’re sometimes skeptical
about online businesses. Jumia is fast, reliable and all you need to
register is a phone number and an email address.”

Dollar versus Rand Chart INO 13.93
https://quotes.ino.com/charting/index.html?s=FOREX_USDZAR&t=f&a=&w=&v=d12

Egypt Pound versus The Dollar 3 Month Chart INO 17.3293
http://quotes.ino.com/charting/index.html?s=FOREX_USDEGP&v=d3&t=c&a=50&w=1

Egypt EGX30 Bloomberg +15.89% 2019
http://www.bloomberg.com/quote/CASE:IND

Nigeria All Share Bloomberg -7.09% 2019
http://www.bloomberg.com/quote/NGSEINDX:IND

Ghana will be the fastest-growing economy in the world this year,
according to the International Monetary Fund. The lender’s growth
forecast of 8.8 percent for the producer of cocoa, gold and oil dwarfs
the 6.6 percent median in a Bloomberg survey.
The IMF’s projection in its latest World Economic Outlook published
Tuesday is “way too generous,” Neville Mandimika, an analyst at
FirstRand Group Ltd.’s Rand Merchant Bank, said on Twitter.

09:13 on Monday April 8th, over Africa: Pictures from the Earth
Polychromatic Camera on the @dscovr_epic DSCOVR spacecraft - the
effects of Cyclone Idai are clearly long gone, something else is
causing the lack of rain over Kenya, as evidenced the ITCZ is already
formed..@SandeZack
https://twitter.com/SandeZack/status/1115918945045946368

Nairobi All Share Bloomberg +12.65% 2019
http://www.BLOOMBERG.COM/quote/NSEASI:IND

Par Value:                  1/-
Closing Price:           11.70
Total Shares Issued:           432,155,985
Market Capitalization:        5,056,225,024.00
EPS:             1.37
PE:               8.54

The largest marketing services company in East Africa.

WPP Scangroup Limited FY 2018 results through 31st December 2018 vs.
31st December 2017
FY Billings 13.821790b vs. 14.118620b -2.102%
FY Revenue 4.504904b vs. 4.122869b +9.266%
FY Operating and administrative expenses [3.863870b] vs. [3.710602m] +4.131%
FY Operating profit 641.034m vs. 412.267m +55.490%
FY Net interest income 291.104m vs. 290.412m +0.238%
FY Share of profit in associates 25.131m vs. –
FY Impairment of goodwill [21.322m] vs. –
FY Foreign exchange losses [5.157m] vs.  [27.395m] -81.175%
FY Profit before tax 959.888m vs. 696.414m +37.833%
FY Profit for the year 612.209m vs. 477.943m +28.092%
Profit attributable to equity holders of parent company 554.481m vs.
454.696m +21.945%
Profit attributable to NCI 57.728m vs. 23.247m +148.325%
Basic and diluted EPS 1.37 vs. 1.20 +14.167%
Total Assets 11.240951b vs. 13.758912b -18.301%
Total Equity 8.489379b vs. 8.965169b -5.307%
Cash & cash equivalents at the end of the year 4.377820b vs. 3.396739b +28.883%
Final dividend per share 1.00 vs. 0.75 +33.333%
Special dividend 3.00

COMMENTARY

The Group faced a challenging economic environment during 2018 in
Kenya, its largest market, as a result of reductions in expenditure by
majority of the Group's key clients.
This led to a decline in the Group's revenue in the traditional
business activities of advertising, media and public relations.
On a positive note, there was growth in the digital and technology
offering and in research due to the acquisition of TNS Kantar research
business in July 2018.
Overall Revenue grew by 9.3%. Kenya accounted for 62% of the total,
down from the 73% in 2017, primarily on account of TNS Kantar
acquisition, which has a sizable presence in Nigeria and West Africa
resulting in growth of revenues from Nigeria to 11% of the Group's
revenues up from 6%.
Costs have been controlled and synergies achieved in all our businesses.
Operating profit was up by 55.5% from Ksh412m to Ksh641m. Interest
income remained the same despite lower interest rates due to increase
in available funds.
Overall Profit Before Tax was up 37.8% from Ksh696m to Ksh960m and
Profit after Tax was up by 28.1% from Ksh478m to Ksh612m.
Share of profit attributable to non-controlling interest increased as
a result of 20% minority shareholding in TNS Kantar.
Future outlook
Based on the year to date performance for 2019, it is expected that
there will be an improvement in operating profit for the full year
2019.
Proposed Dividend(s)
The Board of Directors recommend a Final Dividend of Ksh 1.00 per
share [ 2017: Ksh 0.75] for the year ended 31 December 2018 and a
Special Dividend of Ksh 3.00 per share, subject to shareholder
approval at the annual general meeting to be held on 10 May 2019 and
payable to shareholders on the Register of Members at the close of
business on 10 May 2019.
The dividend will be paid from retained earnings of the company which
stood at Ksh 1,794m as at 31 December 2018.

Conclusions

That Special Dividend + the declared dividend = 34.188% of Yield on
yesterdays closing price
Good to see West Africa beginning to gain Traction.
These results and the mouth-watering dividend means we have seen the
low for this share.

Every Listed Share can be interrogated here
http://www.rich.co.ke/rcdata/nsestocks.php