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Macro Thoughts

The US dollar has dominated financial markets in the post-war period,
but countries across the globe are increasingly taking steps to reduce
dollar use in trade and finance. The consensus among most market
participants is that any shift in the monetary order away from the
dollar will happen gradually and take decades. After six of the past
seven years in which the dollar has risen against other currencies,
that may be understandable. But in our view, several factors point to
de-dollarisation gathering pace over the next few years.
In 2018 — potentially a watershed year — countries in the path of
sanctions, such as Russia, Iran and to some extent China and the EU,
began to accelerate ways to protect themselves from the consequences
of using the dollar. A special-purpose vehicle, Instex, was created
earlier in 2019 by the UK, France, and Germany to permit payments to
Iran.
Less surprisingly, Russia shifted $100-billion of dollar-denominated
reserves into renminbi, euros and yen in 2018. In general, the
increasing weaponisation of economic sanctions since President Trump’s
inauguration (but also before) is driving countries to seek refuge
from the long arm of US financial authority.
No country wants their main bank to be fined billions of dollars — as
occurred to France’s BNP Paribas in 2015 — for not adhering to another
state’s foreign policy. As if to underline the growing doubt in the
current monetary order, at the last European State of the Union
address European Commission President Jean-Claude Juncker emphasised,
“it is absurd that European companies buy European planes in dollars
instead of euros”.

Home Thoughts

After providing a history on magicians in East Africa, Vassanji
writes, "Babu (grandfather) of Loliondo… claims to cure all illnesses,
including AIDS and cancer with his herbal potion.… Hundreds, if not
thousands, go to see him every day in hired minibuses from as far away
as Nyeri in Kenya. The queues waiting for him are claimed to be miles
long."

Time to puncture Farage and his swagger. The Brexit party won 31.6
percent of the vote. The LibDems and Greens won 32.8 percent. Lets
have a LibDem Green coalition ready to fight the Brexit party in every
seat in Britain. It would be bold, imaginative and capture the
imagination

Trade War turns ballistic

For quite a while, the consensus view has been that the US and China
would after all the theatrics reach some kind of Deal. President Trump
is highly tuned to the markets and in fact something of a c21st
Artiste. His Positive ''Trade War'' Tweets are timed around the US
Market hours and designed to soothe, massage and finesse US asset
prices

''Trump predicts 'fast' trade deal with China''

and he turns more negative in Chinese Trading hours.

This is next-level Gaming of a very sophisticated nature and there are
few Leaders if any that I can recall that have appreciated the Purity
of the Market Signal and played the game at this Yehudi Menuhin
virtuouso level. Of course, Carl Icahn has stayed real close. Trump's
head spinning and high velocity tweets lulled the markets and as Joerg
Wuttke pronounced ''Xi got Trump wrong [and the Chinese economy is ill
prepared for what comes next]'' Xi misread the signals. The Point
being in the Trade War Trump is no longer the Decider. In the US,
There is clearly a consensus baseline for a Full-On Toe to Toe
Slugfest as it were.

In China, however, There is only one Decider that Decider was
pronounced as much by Xinhua in a historical announcement in March
2018

The Central Committee of the Communist Party of China “proposed to
remove the expression that ‘the president and vice-president of the
People’s Republic of China shall serve no more than two consecutive
terms’ from the country’s constitution.”  In one fell swoop, President
Xi Jinping was President for Life. President Xi is on a Pedestal and
is faced with the Strong Man Conundrum. The Political Brand will not
permit a retreat let alone a Surrender.
Friedrich Wu, a professor at Nanyang Technological University in
Singapore sums up the feelings of many when he describes them as “a
list of surrender demands for China to acquiesce to”. [FT]

“If there is a decoupling between the two economies, so be it. The
Chinese people can endure more pain than the spoiled and hubristic
Americans.”

The FT said
''Xi Jinping, the Chinese Communist president, is preparing to lead
his country into an all-out trade conflict with the world’s leading
economic and technological power,  But just as Chinese forces
ultimately fought the US to a stalemate in Korea by pitting sheer
troop numbers and a far greater tolerance for mass casualties against
superior American firepower, Mr Xi reckons he can direct a successful,
society-wide struggle in the trade dispute''
Notwithstanding all the hyperbole and very partisan commentary, the
following are the plain Truths. The US exported $120bn of goods to
China last year, China shipped $540bn of goods to the US. This
disequilibrium is the essential and overarching point. Furthermore, I
estimate that 80% of the Tariff Increase is actually going to have to
be absorbed by the Chinese Manufacturer and only 20% by the US
Consumer. If you study the basket of Chinese Goods, they are
commoditised and replaceable.  Furthermore, its now a racing certainty
that Trump will place 25% tariffs on around $300 billion of additional
Chinese imports, setting a 25% Tariff on all $540b of Chinese imports.
The US Economy is in fact more of an Island [autarkic] Economy than
China's.

Huawei is a Proxy and that has gone ballistic.

19 May - 01:34:34 PM [RTRS] (GOOGL.O) - GOOGLE SUSPENDS BUSINESS
ACTIVITY WITH HUAWEI THAT REQUIRES TRANSFER OF SOFTWARE, HARDWARE,
TECHNICAL INFO: SOURCE

Driving Huawei out of the United States and Europe is “10 times more
important” than a trade deal with China, according to former White
House chief strategist Steve Bannon. He also said he would dedicate
all his time to shutting Chinese companies out of US capital markets.

Essentially, My Base-Line is that the Trade War is headed off the
charts into Territory the market still continues to price as a
''Tail'' Risk. [Tail risk is the additional risk of an asset moving
more than 3 standard deviations from its current price, above the risk
of a normal distribution]
Sunchartist tweeted
The following commodities falling by > 3 standard deviation PTA,
Rubber, Zinc, copper,   Coking Coal in 3 std deviations.  The margin
calls on retail China oil futures meant they fell much more than Brent
or WTI  It will be an interesting few weeks ahead of us.

The Markets across the World shivered in May, some caught a Fever and
some on the Periphery have become as delirious as victims of cerebral
malaria. The Markets are still pricing in a benign [but much less
benign than a month ago] Outcome. We need to consider what a non
benign or even maximum non benign outcome looks like. The Chinese
Currency which is -8.8% on a Year on Year basis is surely a very
visible proxy. And if this all turns ballistic as is my baseline
scenario then this is going to fly through 7.00 like a hot knife
through butter and the Chinese will surely use the value as currency
as Push-Back. If they do they will be pushing at an open door. Its
clear that directionally money wants to leave China and a great deal
of the 2019 surge in Bitcoin is surely correlated to Chinese Flight
Capital. Therefore, my prediction is when the currency slides its
going to slide real quick and Dollar Call Options are an interesting
risk adjusted trade.

I would be adding to short positions in the Australia Dollar [a Global
Trade Proxy and Global Trade is slowing] and the South African Rand.
The Periphery will get smashed as we are seeing it unfold in Lusaka.

When the Shanghai Composite Index slumped almost 6 per cent to 2,906
points on the day after Mr Trump’s latest trade-war escalation, people
briefed on the Chinese government response said the national team was
told the “line in the sand” was 2,900. The next day the SCI rebounded.

Treasuries are in the vanguard of a bull run in global bonds, bringing
into sight the prospect of benchmark 10-year yields dropping to 2% for
the first time since late 2016.
Escalating U.S.-China trade tensions and faltering global growth have
seen U.S. 10-year yields tumble almost 40 basis points since mid-April
to as low as 2.24% on Wednesday.
Similar-maturity yields in Australia and New Zealand both dropped to
records in early Asian trading.
“The overarching theme of slower global growth, inflation not hitting
the mark of central bank targets, and the uncertainty of a protracted
trade war are all contributing to that rally,” said Tano Pelosi,
portfolio manager at Antares Capital in Sydney, which oversees the
equivalent of $22 billion.
“I can see U.S. 10-year yields heading toward 2% if the pressure from
the trade war continues.”
The renewed bout of risk aversion, brought on by President Donald
Trump’s comment that a deal with China isn’t imminent and tensions
between Italy and the European Union, reflects increasing bets major
central banks will cut rates to revive growth.
Traders are now focusing on an expected meeting between Trump and
Chinese President Xi Jinping at a Group-of-20 summit in June, even as
recent rhetoric from both sides indicates a hardening of positions.
Treasury 10-year yields fell as much as three basis points Wednesday
to the lowest since September 2017, after sliding five basis points
Tuesday.
Australia’s 10-year yield slipped five basis points to 1.49%, dropping
below the central bank’s cash rate for the first time since 2015. New
Zealand’s declined five basis points to 1.70%.
The spread between U.S. three-month and 10-year yields fell to as low
as minus 12 basis points, the most negative since 2007.
An Australian government bond sale for A$3 billion ($2.1 billion) of
2031 debt was met with strong demand Wednesday despite record-low
yields on offer.
Investors submitted bids for A$10.8 billion, above the A$8.5 billion
offered at a similar sale last year. That came after a $40 billion
auction of two-year Treasuries on Tuesday resulted in the lowest yield
since January 2018.
Fed funds futures are now fully pricing in three rate cuts by the end
of next year. Markets are also signaling two to three moves by the
Reserve Bank of Australia amid concern Chinese demand for commodities
is weakening.
“If the Fed cuts, will they cut by 25 basis points?” said Rajeev De
Mello, chief investment officer at Bank of Singapore Ltd., whose base
case remains that the U.S. and China will come to a compromise.
“Unlikely -- they probably will cut by 50 basis points, and that’s
what we’re starting to see priced into markets.”

My Guest at Mindspeak today is the preeminent China Scholar Professor
Howard French Author of most recently ''Everything Under the Heavens:
How the Past Helps Shape China's Push for Global Power'' and I look
forward to gaining further insights on this.

CARACAS (Sputnik) - Inflation in Venezuela reached 130,060 percent
last year, and was 33.8 percent in April this year, the country's
central bank said in its first inflation report in the past three
years.
Consumer prices in the country rose by 196.6 percent in January, by
114.4 percent in February and by 34.8 percent in March, the report
said.
In 2017, inflation in Venezuela was 862.6 percent, and in 2016 it was
274 percent.
The central bank also reported that the country's gross domestic
product (GDP) in the third quarter of 2018 fell by 22.5 percent
year-on-year.
Earlier in March, a member of the country's opposition-controlled
parliament, Jose Guerra, said that the annualized inflation in
Venezuela from February 2018 to February 2019 was 2.296 million
percent.
The long-lasting economic crisis in Venezuela has been aggravated by
the financial and economic sanctions imposed on the country.
The International Monetary Fund (IMF) expects Venezuelan GDP to fall
by a quarter in 2019, by another 10 percent next year. The IMF also
expects inflation in Venezuela at 10 million percent in 2019 and 2020.

The conundrum for those who wish to bet on the End of the World is
this, however. What would be the point? The World would have ended.

Turning and turning in the widening gyre
The falcon cannot hear the falconer;
Things fall apart; the centre cannot hold;
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.

Attacks on four tankers docked off the Emirati port city of Fujairah
earlier this month were caused by "naval mines almost certainly from
Iran", US National Security Adviser John Bolton said on Wednesday.
"It's clear that Iran is behind the Fujairah attack. Who else would
you think would be doing it? Someone from Nepal?" he told journalists
at a US embassy briefing in the UAE regarding the May 12 attacks.
"There is no doubt in anybody's minds in Washington, we know who did
this and it's important Iran knows we know." He did not provide any
evidence with his claim.
"We're very concerned by the Quds Force and Qasem Soleimani," he said,
referring to the elite foreign wing of Iran's Islamic Revolutionary
Guards Corps and its commander.
He warned that if there were "further indirect attacks" by Iranian
proxies, like the rocket attack near the US embassy on May 19, then
Washington would hold the Quds Force responsible.

Euro 1.1153
Dollar Index 98.002
Japan Yen 109.24
Swiss Franc 1.0061
Pound 1.2640
Aussie 0.6915
India Rupee 70.0045
South Korea Won 1195.77
Brazil Real 4.0248
Egypt Pound 16.814
South Africa Rand 14.8532

Kahn: The core pillar of our thesis is that Netflix has artificially
priced its product very low to build the subscriber base, to build
engagement and to demonstrate a lot of user value—to the point where
they create a product that is indispensable in the consumer’s mind.
And then they can gradually raise prices over time. The average
consumer is spending anywhere between $60 to $100 a month on the cable
bundle, and today they can have Netflix every month for only $9 to $12
per month.
On a per-hour basis, it is a fraction of the price. If you divide the
total number of hours they are watching Netflix versus the cost of
paying for it, it provides tremendous value and, therefore, allows
Netflix to dramatically raise prices over time.
Americans today watch about five hours of TV a day, and they spend a
little less than half that time on Netflix.
If you look at the total spend on linear traditional cable and
satellite plus over-the-top, or OTT products streamed like Netflix,
Netflix is only a fraction of their spending.
Today Netflix is extracting $11.64 in average monthly revenue per
user, or ARPU, in the U.S. They could double or triple that price over
time into the mid-$30s or so and not have a big effect on churn, given
that consumers are already trained to pay somewhere between $60 to
$100 a month per bundle.
That’s the pricing equation. We believe they can double or triple their ARPU.
Kahn: The other big driver is sub, or subscriber growth. Today they’ve
got about 150 million paid subs globally, with 88 million overseas and
the balance in the U.S. We expect that 88 million subscribers overseas
goes to 150 million to 250 million over the next five years.
The key to that is the creation of localized content. They hit a
tipping point recently in Japan, Brazil, and Europe by hiring local
producers and local talent and creating enough localized content to
compel the potential subscribers based in those countries to sample
Netflix and eventually subscribe.
That strategy of creating localized content is starting to get
traction in a lot of emerging markets.
What are your thoughts on Netflix, Glen?
Kacher: The big opportunity, as Jay mentioned, is that the average
consumer is starting to step back and say, for the price that I’m
paying my satellite or cable provider to curate a bundle of channels,
I can reallocate that and extract more value for myself as the viewer.
The opportunity is to take that budget of $100-plus a month for their
video bundle and reallocate it. That leaves plenty of room for
multiple winners. Some investors are worried that Disney ’s (DIS) low
introductory pricing of Disney Plus, scheduled to roll out later this
year, is going to somehow crowd out spending for Netflix. We think it
is the opposite and that both companies can be extremely successful,
because the consumer has $100 a month to spend—not $15.
Kahn: The average American subscribes to somewhere between two to
three paid TV products a month. This is in the old world. So most
linear subscribers typically have HBO or Showtime and one other paid
network. We don’t see it as unreasonable that the average American,
from an OTT perspective, might have Netflix and Disney. We very much
view it like Costco (COST).
There is at least one product at Costco that you love and want to buy
every month and you aren’t going to shut off your Costco membership,
despite the fact that you can also buy from Amazon.com (AMZN). We make
a similar analogy with Netflix versus other OTT products.
When will Netflix, which is losing a lot of money, become profitable?
Kahn: In the U.S. they are profitable before allocating for content
costs. We expect that within the next five years or so, they should be
profitable in the U.S. after content costs. Internationally, it is
probably a longer way off, given that they’re invading new countries
and starting new businesses.
Doesn’t it concern you that all of the content they are creating, much
of which is very good, is leading to losses?
Kahn: What we love about this business is that Netflix has total
control over pricing on the left side of the equation. On the right
side, they also have total control of their costs for their content.
Most companies that we invest in, unfortunately, only have one or the
other side. This company has total control over both the top and the
bottom line—and they can flex as they see fit to not only minimize
cash burn but keep out competitors. It’s super-powerful. The reality
is that this company could be profitable today if it wanted to be.
They could probably cut out three quarters of the content spending and
be massively profitable, but that’s the mote they are building.
Their CEO, Reid Hastings, is very much taking in Jeff Bezos’ playbook
in artificially pricing the product low to keep competitors out and
leveraging the credit markets to fund the cash for it until they’ve
built a global juggernaut.

The new high tech, millenial, crypto, avocado economy exhibits viral,
wildfire and exponential and even non-linear characteristics not
unlike Ebola.
The tipping point is that magic moment when an idea, trend, or social
behaviour crosses a threshold, tips, and spreads like wildfire”-
Malcolm Gladwell.

Commodities

African swine fever took a while to arrive in the green hills of
Guangdong, in southern China. But when it did it came with a
vengeance.
The first government-confirmed cases appeared late last year.
Authorities responded by culling more than 6,000 pigs and offering
farmers compensation — the playbook developed elsewhere in China,
where the disease has ravaged the country’s once 400m-strong pig
population.
There have been no official cases confirmed in Guangdong since Christmas Day.
Yet a trip to the outskirts of Guangzhou, the province’s flourishing
capital city, shows the difficulty of containing the disease.
As ASF has spread further south in China and on into south-east Asia,
questions have arisen whether Beijing’s response inadvertently helped
to compound the problem and flooded domestic markets with potentially
contaminated meat.
“No pigs here, they’re all dead,” said the groundskeeper at the
otherwise empty grounds of Guangzhou City Fine Breed Pig Farm. An
outbreak of the virus hit the compound in March, he said.
Fine Breed is not the only farm with an unacknowledged outbreak;
analysts say farmers in China have taken to sending entire herds to
the slaughterhouse at the first sign of ASF, rather than report to the
government and receive too little compensation.
The resulting oversupply helps explain why spot wholesale prices for
Chinese pork have risen only about 8 per cent since August, while
Chicago hog futures are up more than 35 per cent.
“At the local level there are strong incentives not to report cases,”
said Ernan Cui, China consumer analyst at Gavekal Dragonomics in
Beijing.
Ms Cui said the impact on pork prices from so-called “panic
slaughtering” usually finished working through markets around six
months later.
She tipped pork reductions from the latest round of killing, which
began sometime in December, to become evident in the second half of
2019.
ASF, which is fatal to pigs but harmless to humans, showed up in
north-east China last August, following outbreaks in Siberia the
summer before.
Once it had a foothold in China the disease swept swiftly south,
reaching Hong Kong in May.
This month, epidemiologists told Science magazine that it would soon
surface in Myanmar and Laos, with the potential to become an epidemic
in south-east Asia.
In February, pig breeder Sun Dawu in Hebei province took to Chinese
social media to insist that he had lost 15,000 hogs to the disease.
“We believe it’s African swine fever . . . please will the government
give us a way out!” his staff wrote on a banner in a photo posted
online by Mr Sun, along with a gruesome photo of piles of dead pigs.
Mr Sun’s case is one of the few known to have received confirmation
from China’s Ministry of Agriculture after initially being rejected at
the local level.
This year, a third of China’s national pig stock, the biggest in the
world, could be wiped out by the disease, according to Rabobank
estimates, sending shockwaves through protein markets across the
globe.
John Lin, portfolio manager of China equities at fund manager
AllianceBernstein, said expectations of better margins had boosted the
share prices of Chinese pork producers listed onshore, such as Jiangxi
Zhengbang Technology, which has more than tripled so far this year.
While shortfalls would probably drive Chinese consumers to eat more
alternatives such as soyabean-based tofu, he said, “ironically demand
for [products like soya] will actually go down because you have a lot
fewer hog mouths to feed”.
Part of the reason for the fever’s rapid spread in China may have been
a poorly designed compensation scheme. When the disease first
appeared, authorities ordered herds to be culled and, in an effort to
ensure farmers reported outbreaks, ordered payments of Rmb1,200 ($174)
a head for those who lost animals.
However, cash-strapped local governments balked at paying out so much,
forming a perverse incentive for farmers to sell their herds as soon
as one pig fell ill rather than report outbreaks and risk a heavier
loss.
Dirk Pfeiffer at the Chinese University of Hong Kong, who studies the
disease and trains veterinarians in China, said a lack of transparency
on domestic outbreaks had turned the situation into “a complete fog”.
At the Guangzhou Fine Breed farm, educational posters exhort the
culling and disposing of afflicted pigs. But the groundsman was
adamant: “We sold them!” Butchers at wet markets in Guangzhou,
equally, insisted that their meat passed muster. “It’s been inspected
— inspected!” said one butcher near the city centre, thwacking his
hand against government-issued papers for emphasis.
Yet expectations of higher pork prices have begun boosting interest
among farmers, Ms Cui said, as evidenced by the price of piglets
climbing rapidly since March.
When the shortage hits, said Mr Lin, China will pull in pork from the
rest of the world, and poorer countries from Brazil to Bulgaria will
feel the squeeze from higher prices.
“There simply isn’t enough animal protein in the world to fill this void.”

Emerging Markets

Frontier Markets

Sub Saharan Africa

Talks between the ruling Transitional Military Council (TMC) and the
Declaration of Freedom and Change Forces (DFCF) alliance are at a
standstill despite weeks of negotiations over whether civilians or the
military will have the upper hand after the ousting of long-time
president Omar al-Bashir last month.
Most staff in the medical sector, electricity offices and employees at
the central bank as well as commercial banks observed the strike but
other sectors were only partially affected.
Many shops remained open while buses were still transporting
residents, a Reuters witness said. The airport in Khartoum was
operating normally, a civil aviation authority source and state news
agency SUNA said.
The DFCF had said the two-day strike would encompass public and
private enterprise, including the civil aviation, railway, petroleum,
banking, communications and health sectors.
If an agreement was not reached with the TMC, the DFCF would escalate
by calling for an open strike and indefinite civil disobedience until
power is handed to civilians, Wagdy Saleh, a representative of a
coalition within the DFCF, told a news conference.
Saleh also said the TMC had demanded a two-thirds majority of eight to
three on the sovereign council that will lead the country. The DFCF
alliance wants civilians to dominate the council.
The deputy head of the TMC, Lieutenant General Mohamed Hamdan Dagalo,
said on Monday that the council was ready to hand over power swiftly,
but that the opposition was not being serious about sharing power and
wanted to confine the military to a ceremonial role.

“The market requires evidence of strong leadership to quell fears of
policy paralysis, which would require that members appointed to the
executive are free of controversy,” RMB analyst Nema Ramkhelawan-Bhana
wrote in a note.
“The deadline in which to appoint a cabinet is fast-approaching and
the onus lies firmly on the president to free the market of its
anxiety to stem the tide of rand losses.”

The economy of Africa biggest oil producer contracted in 2016 for the
first time in 25 years as oil output slumped. While the economy
expanded in the last two years, growth still lags an increasing
population, causing Nigerians to become poorer.
The Nigerian stock market delivered one of the worst returns globally,
according to data compiled by Bloomberg on the back of disappointing
corporate earnings, weak sentiments and Buhari’s reluctance to push
market friendly reforms.
The naira has lost 45% of its value against the dollar as a sharp drop
in oil prices reduced export earnings which make up about 95% of
Nigeria’s dollar income.

It’s a Nollywood Level drama but permit me to give you some context.
GDP growth has lagged Population growth, GDP grew by 1.93 percent last
year, up from 0.82 percent in 2017 and grew 2.4 percent in the fourth
quarter. Nigeria

was the second biggest economy in Africa in 2018, using the market
exchange rate of NGN362/$ or the biggest economy using the fixed rate
[@RencapMan]. Unemployment has risen from 8.2% to 23.1% under
President Buhari's watch which would be a plain untenable position for
any incumbent Politician seeking re-election in most parts of the
World. The President is a victim of low oil prices which provide 70%
of government revenue. ''Baba Go Slow'' has to be contrasted with
President Al-Sisi's Egypt. Al-Sisi [and I for one disagree with him on
many things particularly with his ''incarceration'' strategy] made
bold moves when it came to the Economy. Egypt devalued its currency
early, took a brutal punch in the solar plexus but is now reaping the
dividend from its bolder economic policy, Nigeria is still muddling
along with its ''Voodoo'' level FX economics. Since President Buhari
came to power in May 2015, Nigeria's stock market has fallen more than
any other in the world, dropping 50% in dollar terms. There is a
Message in that performance. The Stock Market has perked up over the
last few sessions, however.

Kenya’s headroom for new borrowing has shrunk since it tapped the
Eurobond market this month and it is time for the country to begin
reorganising its debt, central bank governor Patrick Njoroge said on
Tuesday.
Njoroge, whose term is due to end next month, told reporters that the
$2.1 billion Eurobond issuance in mid-May allowed Kenya to refinance
some of its existing loans and “hopefully (give) us more room to
expand the economy” and increase export capacity.
Kenya’s public debt as a percentage of gross domestic product (GDP)
has increased to 55% from 42% when President Uhuru Kenyatta took
office in 2013.
The East African government has defended the increased borrowing,
saying the country must invest in its infrastructure, including roads
and railways.
Critics of the borrowing spree have questioned the value of some of
the projects, particularly the billion China-backed railway project
completed in 2017.
“As advisers of the government, our point is this is the time to begin
working on reorganising our debt, not in a frantic way, so doing it
the Eliud Kipchoge way, which is (that) it’s a marathon (run) and you
have to do it in a steady way.”
The latest Eurobond was issued in tranches of seven and 12-year paper.
The seven-year portion of the latest issue was priced at 7.0%, while
the longer-dated tranche was priced at 8.0%.
“It is important to say that the moment for dealing with debt
reorganisation, looking at debt and itself reorganizing it,...that
moment has come,” Njoroge said. He did not spell out how the debt
could be restructured.
Kenya is also negotiating with the World Bank for a $750 million loan
for budgetary support, documents on the lender’s website showed on
Tuesday.
Njoroge declined to comment on whether his tenure will be extended for
a second and final four-year term.
The Kenyan economy expanded by 6.3% in 2018 as good rains boosted the
agriculture sector. But a delayed start to Kenya’s rainy season this
year could shave as much as 0.4% off forecasted growth, he said.
“We are not talking drought like we had in 2017,” Njoroge said,
“because the rains have arrived, and the question now is are they
adequate?”
The bank has forecast the same growth rate for this year, but the
first rains, which usually start in March, did not come until late
April.
First-quarter growth data, usually released in June, would make the
outlook for this year clearer, he said.
The central bank held its benchmark lending rate at 9.0% on Monday,
saying it would keep an eye on recent food and fuel price rises that
could fuel inflation.
The U.S.-China trade dispute had escalated to a “full-scale war”,
Njoroge added, and posed risks to the Kenyan economy.
Uncertainty over Britain’s planned exit from the European Union is
another external risk, he said.

Closing Price:           28.35
Total Shares Issued:  40065428000.00
Market Capitalization: 1,135,854,883,800
EPS: 1.58
PE:   17.943

Gladwellian level move. “The tipping point is that magic moment when
an idea, trend, or social behaviour crosses a threshold, tips, and
spreads like wildfire”- Malcolm Gladwell.
The new high tech, millenial, crypto, avocado economy exhibits viral,
wildfire and exponential and even non-linear characteristics not
unlike Ebola.