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Satchu's Rich Wrap-Up
Wednesday 15th of May 2019

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Macro Thoughts

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2019 Returns...@charliebilello

Bitcoin $BTC: +116%
Oil $USO: +33%
MLPs $AMLP: +18%
REITs $VNQ: +18%
Nasdaq 100 $QQQ: +17%
Small Caps $IWM: +14%
S&P 500 $SPY: +14%
EAFE $EFA: +9%
Commodities $DBC: +9%
High Yield $HYG: +7%
Investment Grade $LQD: +7%
EM $EEM: +5%
Bonds $AGG: +3%
Gold $GLD: +1%

Home Thoughts

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Or as T.S Eliot said in The Hollow Men

Between the idea
And the reality
Between the motion
And the act
Falls the Shadow
For Thine is the Kingdom.

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Hannah [my ten year Old] and I had been yearning to get out of town, see the Milky Way, go somewhere where there was a road and we would not know what we were going to find around the corner.

And what I have found is that those sorts of journeys always start at
Wilson Airport. i had wanted to go North into Laikipia and we decided
to go to the Samburu.

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China buys MUCH less from us than we buy from them, by almost 500 Billion Dollars, so we are in a fantastic position @ealDonaldTrump
Law & Politics

Make your product at home in the USA and there is no Tariff. You can
also buy from a non-Tariffed country instead of China. Many companies
are leaving China.....

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This is the. Point
Law & Politics

The US side released some signals to ease the situation these
days. It dare not play rough to the end. Hu Xijin 胡锡进. @HuXijin_GT


The US side released some signals to ease the situation these days. It
dare not play rough to the end. What it's doing is threatening China
while propping up US stock markets, keeping up the hope there will be
a deal finally. The Chinese have seen this through.

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China Vows 'People's War' as Trade Fight Takes Nationalist Turn @economics
Law & Politics

Among China’s most surprising responses to the trade war has been its
reluctance to use its vast state media empire to rally the home front.
That’s changed since U.S. President Donald Trump’s latest tariff
In recent days, the once-banned phrase “trade war” has roared back
into widespread use in Chinese media. Meanwhile, official news outlets
gave high-profile play to commentaries urging unified resistance to
foreign pressure, including an editorial from the nationalist Global
Times calling the trade dispute a “people’s war” and threat to all of
Such sentiments have found an eager audience, with a state television
video vowing a “fight to the end” attracting more than 3 billion views
since Monday.
The clip was the most-read piece on China’s Twitter-like social media
platform Weibo earlier Tuesday.
The rhetorical shift underscores the risks that China’s Communist
Party veers toward a more nationalistic position as the trade war
drags on and weighs on economic growth.
Chinese President Xi Jinping, like Trump, has promised to rejuvenate
his country and can’t afford to look weak in the face of foreign
So far, China’s state media have sought to tamp down the kind of
patriotic passions that fueled a backlash against Japanese interests
when a territorial dispute flared in 2012.
Even now, state media commentaries focused the blame on the U.S.
government, rather than the country as a whole.
For instance, a commentary published in the Communist Party’s flagship
People’s Daily newspaper, avoids any mention of Trump’s name and
refers only to “certain people in America who brood over the so-called
massive trade deficit,” said David Bandurski of the China Media
The article “tries to avoid any sense of general animosity toward the
U.S., and stresses that the American people and businesses are losing
out as a result of tariffs,” Bandurski said. “Right now the messaging
from the leadership through the state media is all about treading the
Although increased use of the term “trade war” in official media
suggest a hardening of rhetoric, some media outlets are still
prohibited from using the term, according to a person familiar with
the matter.
The suggested alternative is “an unclear external environment,” the
person said, adding that publicity authorities have directed outlets
to stress the stability and resilience of Chinese economy.
Maintaining that balance is difficult in a country where all school
children are taught about the country’s “century of humiliation” at
the hands of colonial powers.
China’s top trade negotiator, Vice Premier Liu He, has already found
himself the targeted by unflattering comparisons to the Qing dynasty
official who signed an 1895 treaty with Japan that surrendered the
island of Taiwan.
Liu stressed in remarks to state media after failed trade talks Friday
in Washington that any deal should be “balanced” to ensure the
“dignity” of both nations.
On Wednesday, the People’s Daily ran another commentary saying China
will never make decisions that "give up power and humiliate the
country," a phrase used in school textbooks to describe the treaties
China signed at the turn of the 20th century.
"The Chinese people’s belief in upholding the rights and dignity of
the nation, their determination, is rock solid."
The “people’s war” mentioned in the Global Times editorial was
introduced by party patriarch Mao Zedong in an oft-cited 1938 speech
in which he argued that China would eventually repel the Japanese
Mao argued that while conflict was affected by political, economic
military and geographic elements, the people are the decisive factor.
Earlier on Tuesday, the People’s Daily, the mouthpiece of the
Communist Party, posted an image on its WeChat account of the Chinese
flag with the words “Talk -- fine! Fight -- we’ll be there! “Bully us
-- delusion!” superimposed over it.

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Law & Politics

When President Trump’s top national security advisers met for a
classified meeting at the Pentagon last Thursday, Acting Defense
Secretary Patrick Shanahan laid out several U.S. military options for
Iran, separated into two distinct categories: retaliatory and
The revised Iran options ordered by John Bolton, President Trump’s
national security adviser, have different degrees and redlines for
escalation, ranging from airstrikes to targeted incursions, Pentagon
officials told Newsweek.
Defense Department officials who have been briefed on the details of
the updated military plans for Iran agreed to speak with Newsweek on
condition of anonymity. Pentagon officials confirmed a report
published in The New York Times on Monday outlining an option to
deploy as many as 120,000 U.S. troops to the Middle East if Iran
initiates an attack on U.S. forces or continues to work on what the
U.S. has alleged were secret nuclear proliferation objectives.
Pentagon officials told Newsweek that if deployed, the role of the
120,000 U.S. forces would center on logistical support and developing
infrastructure to preposition U.S. forces for the option of a ground
The original 120,000 would integrate into an additional surge of U.S.
forces sent into the region.

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The Gulf of Tonkin incident was a false flag event which was used as a pretext for the Vietnam War.
Law & Politics

The Gulf of Tonkin incident (Vietnamese: Sự kiện Vịnh Bắc Bộ), also
known as the USS Maddox incident, was an international confrontation
that led to the United States engaging more directly in the Vietnam
War. It involved either one or two separate confrontations involving
North Vietnam and the United States in the waters of the Gulf of
Tonkin. The original American report blamed North Vietnam for both
incidents, but eventually became very controversial with widespread
belief that at least one, and possibly both incidents were false, and
possibly deliberately so. On August 2, 1964, the destroyer USS Maddox,
while performing a signals intelligence patrol as part of DESOTO
operations, was pursued by three North Vietnamese Navy torpedo boats
of the 135th Torpedo Squadron.[1][5] Maddox fired three warning shots
and the North Vietnamese boats then attacked with torpedoes and
machine gun fire.[5] Maddox expended over 280 3-inch (76.2 mm) and
5-inch (127 mm) shells in a sea battle. One U.S. aircraft was damaged,
three North Vietnamese torpedo boats were damaged, and four North
Vietnamese sailors were killed, with six more wounded. There were no
U.S. casualties.[6] Maddox "was unscathed except for a single bullet
hole from a Vietnamese machine gun round."[5]

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This level of financial and coercive sanction warfare is simply unprecedented. President Trump has been a big proponent of coercive, financial and sanction warfare and its expression vis a vis Iran is its apogee
Law & Politics

Iran has not been able to sell a single barrel of Oil since the
beginning of May as Not a single ship has been seen leaving Iran's oil
terminals so far this month [HelenCRobertson]  They once sold 2.5m bpd
which equated to $100m a day. Since the beginning of May, their daily
income has been $0.00 from Oil sales. This level of financial and
coercive sanction warfare is simply unprecedented. President Trump has
been a big proponent of coercive, financial and sanction warfare and
its expression vis a vis Iran is its apogee.

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MK BhadraKumar writes "If there can be a lethal game of Russian roulette in international politics, this is it"
Law & Politics

Russian roulette is a game of chance where players spin the cylinder
of a revolver with a single bullet in turns, put the muzzle against
their head and pull the trigger.The player has 16.67% chances of
firing a bullet into his head if there is one bullet in the 6-chamber
revolver. Each player starts by spinning the cylinder, thus each
player has an equal chance of being killed by the bullet. Quite
obviously, it’s an insane game that US President Trump started on May
8 last year. A big question can be put whether Trump himself wants
another Middle Eastern war. The Price of Oil has surged +34.173% in
2019 and in big part because of the ratcheting higher of tensions with
Iran. No number of Trump Tweets will dampen down the price.

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The attack on pumping stations of the East-West pipeline in Saudi Arabia is significant. @anasalhajji
Law & Politics

1- The attack on pumping  stations of the East-West pipeline in Saudi
Arabia is significant.  It reflects the realization that these
pipelines replace the passage through Hormuz Strait. In other words,
these pipelines reduce Iran’s ability to influence oil flow in the

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What we know is this. Iran is at the Hunter S. Thompson[Ian] edge
Law & Politics

"The edge... There is no honest way to explain it because the only
people who really know where it is are the ones who have gone over,"

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@realDonaldTrump expected to sign order paving way for U.S. telecoms ban on @Huawei @Reuters
Law & Politics

President Donald Trump is expected to sign an executive order this
week barring U.S. companies from using telecommunications equipment
made by firms posing a national security risk, paving the way for a
ban on doing business with China’s Huawei, three U.S. officials
familiar with the plan told Reuters.

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10-DEC-2018 :: Truce dinner @Huawei and a "diss"
Law & Politics

Canada will face "grave consequences" [Xinhua: (Ch.) 严重后果] if it does
not immediately release Meng Wanzhou. The Vancouver Real Estate market
which has boomed for decades on the back of Chinese demand looks
horribly exposed.

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Currency Markets at a Glance WSJ
World Currencies

Euro 1.1213
Dollar Index 97.472
Japan Yen 109.51
Swiss Franc 1.0062
Pound 1.2914
Aussie 0.6925
India Rupee 70.219
South Korea Won 1188.60
Brazil Real 3.9763
Egypt Pound 17.048
South Africa Rand 14.2702

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Traders Look to China Tech Earnings to Stem Losses: Taking Stock @economics
International Trade

Investor hopes that Wednesday’s nascent equity market rebound will
continue likely depends on the imminent results from two of China’s
biggest companies -- Tencent Holdings Ltd. and Alibaba Group Holding
The two technology giants -- the ‘A’ and ‘T’ in the BAT complex -- are
set to report today against a backdrop of renewed anxiety over the
Sino-American trade war and ongoing concern about the health and
resiliency of China’s economy.
Investors stand to get fresh insights on both fronts when the
companies unveil their latest quarterly earnings.
Expectations are high for the two biggest stocks in the MSCI Asia
Pacific Index, with a combined weight of almost 6%, according to data
compiled by Bloomberg.
Alibaba and Tencent have been key drivers for gains in the benchmark
with the pair up 28% and 19% respectively so far this year, bouncing
back from losses in 2018.
Morgan Stanley raised its price target for Tencent ahead of the
results, to HK$430 from HK$408, while also boosting earnings estimates
by 5% in 2019 and 6% in 2020 on expectations the tech conglomerate
will win market share and outperform peers in coming quarters thanks
to its game pipeline.
Meanwhile Alibaba is forecast to post a 48% increase in revenue from a
year ago, according to data compiled by Bloomberg. The company hasn’t
had quarterly revenue growth of less than 40% since 2016.
The options market is also pointing to more earnings-day volatility
than normal following results, implying a 6.9% move that is more than
double than the two-year average.
Looking beyond the results, analysts forecast continued substantial
upside for both stocks. Tencent, with 53 buys, 6 holds and no sell
ratings, is expected to climb 14% from its current price according to
its consensus 12-month target price of HK$428.53.
Alibaba, with 52 buys, 1 hold and 1 sell, has 21% upside by the same measure.
At the moment, Asia equities are getting a lift from a relief rally in
the U.S. overnight, with the MSCI Asia Pacific Index 0.4% higher to
halt a two-day slide.
Stocks in Shanghai and Hong Kong are leading gains, as disappointing
April economic data from China is spurring speculation the government
will introduce more stimulus measures. U.S. stock-index futures are
also higher Wednesday.
China’s industrial output rose 5.4% year-over-year, falling short of
median estimates, while retail sales slowed to 7.2%, also short of
“Assuming we see further easing soon, we think growth should stage a
mild recovery in the second half of this year,” said Julian
Evans-Pritchard, senior China economist with Capital Economics in a
note to clients.

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Jumia Wins Over Wall Street for Its African E-Commerce Strategy @technology
International Trade

Wall Street is finally turning more bullish on Jumia Technologies AG
as its debut results as a public company quelled some fears after a
nearly 50 percent decline in the stock this month and a scathing
report from short-seller Citron Research.
Results from the e-commerce firm -- which has been dubbed the
Amazon.com Inc. of Africa -- prompted analysts at Raymond James and
Berenberg to upgrade shares to a buy-equivalent rating, citing revenue
growth. The banks’ ratings changes followed Stifel’s Scott Devitt, who
became the company’s first bull on Monday afternoon.
“Strong first-quarter results confirm continued progress," Berenberg
analysts wrote. “For the first time ever, Jumia’s gross profit covered
total fulfillment costs, having previously achieved this only in
However, the firm stressed that “it is obviously not easy to take a
firm view on what should be exactly the right price for this company”
given the early-stage nature of the business.
The Berlin-based company is higher by 4% in trading prior to the U.S.
market open, on track to add to a more than 80% rally since last
month’s public offering.
The stock now has buy ratings from three analysts and is rated as a
hold by three others with Morgan Stanley maintaining a
Raymond James analyst Aaron Kessler cited expectations for strong
merchandise growth, improving margins and the recent sell-off as
reasons for his upgrade.
He expects robust ecommerce growth in Africa and notes that Jumia has
significant potential beyond its core marketplaces including payments
and other services.
On May 9, Citron founder Andrew Left attacked the company, saying it
was "worst abuse of the IPO system since the Chinese RTO fraud boom
almost a decade ago."
 The cautious mention triggered a share sell-off, however, sell-side
analysts remained quiet ahead of Monday’s earnings.
The company’s co-chief executive officer Sacha Poignonnec shrugged off
the comments on an earnings call with analysts saying, “we will not be
distracted from executing on our strategy and carrying out our mission
by those who seek to create doubts to profit at our expense and that
of our long-term stakeholders.”

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Jumia's Nigeria chief stands by sales figures queried by short-seller Citron
International Trade

African ecommerce company Jumia is trying to encourage more prepayment
to discourage returns or cancellations, the head of its Nigerian
business said after a report last week by Citron Research questioned
some of Jumia’s sales figures.
Jumia became the first African tech stock to list on Wall Street on
April 12. Its shares initially soared, but fell sharply on Friday
after the publication of the report by Citron Research, run by
short-seller Andrew Left.
“We stand by what we disclosed... the way GMV (gross merchandise
value) is calculated in the industry is gross of cancellations and
returns,” Juliet Anammah, chief executive of Jumia Nigeria, told
Reuters by telephone after cancelling a trip to address a retail event
in Amsterdam at short notice.
She said many customers in Nigeria, Jumia’s biggest market, still only
pay by cash when they receive their orders, but Jumia was trying to
move customers to its Jumia Pay solution to pay in advance when they
check out online.
Loss-making Jumia was making progress towards reaching its goal of
breakeven by the end of 2022, Anammah added.
It plans to make its marketing spending more efficient, charge
merchants for storing their goods in its warehouses, boost sales of
advertising on is site and charge sellers to create content, such as
images of their products, she said.
“We are going to monetise value-added services such as Jumia Express
and add on more advertising. We have just started a whole lot of
opportunities,” she said.
Jumia shares were trading 3.5 percent higher at $27.52 by 1658 GMT
after two brokerages raised their ratings.

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Sudan's military reaches deal with protesters on three-year transition @FinancialTimes.

Sudan’s military leaders have reached an agreement with the country’s
popular opposition movement for a three-year transition to a fully
civilian administration after President Omar al-Bashir was toppled in
a military coup last month following four months of demonstrations.
At a joint press conference in the early hours of Wednesday morning
the military council said that a deal would be signed within 24 hours,
which will include the formation of two ruling bodies — a sovereign
council and a 300 member legislature — to run the country until
elections are held.
“We agreed on a transitional period of three years” Lieutenant General
Yasser al-Atta said, according to al-Jazeera. “We vow to our people
that the agreement will be completed fully within 24 hours in a way
that it meets the people’s aspirations” he said.
Two-thirds of the seats in the legislature would go to members of the
opposition movement that spearheaded the protests, the Declaration of
Freedom and Change Forces, while the rest would be taken by groups not
part of the alliance, Lt Gen Atta said.
The announcement came after at least four people were killed on Monday
in new clashes between protestors and the security forces. Many in the
protest movement remain suspicious of the military leaders, most of
whom had loyally served President Bashir for decades.
Talks between the two sides had previously stalled over the
protestors’ demand that the transition is led by a civilian, a
contentious point which is yet to be agreed.
Despite the new tone of cooperation, Lt Gen Atta did not say whether
the sovereign council would be headed by military or civilian leaders.

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After Omar al-Bashir was deposed on April 11, Western diplomats made
no mistake about who was in charge. Ambassadors from the United
States, Britain, and the European Union did not shake hands with the
transitional military council’s president, the little known army
general Abdel Fattah al-Burhan; they met with his younger deputy
Mohamed Hamdan Dagolo, better known by the nickname “Hemeti.”
The story of how an uneducated 40-something chief of the janjaweed—the
Arab militias that brought death and destruction to Darfur 16 years
ago—became more powerful than his seasoned mentors in the Sudanese
junta is, to many, a mystery.
In fact, Hemeti is the main legacy of Bashir’s 30-year rule. Bashir
himself was a product of an alliance of the army and the Muslim
Brotherhood, unseen elsewhere in the Arab world, but the army grew
tired of the wars it had to fight in Sudan’s south, and the Islamists
When a new war began in Darfur in 2003, Bashir was convinced by
Darfuri Arab hard-liners that turning their youths to militias would
allow him to win. But by creating the janjaweed and relentlessly
empowering them under Hemeti, the Sudanese regime has created a
monster it cannot control and who represents a security threat not
only for Sudan but also for its neighbors.
I met Hemeti a couple of times in 2009, first in a vaguely Orientalist
furniture shop he owned in South Darfur’s state capital of Nyala (one
of his early business efforts), from which I was driven to a more
private office setting.
He was a tall man with the sarcastic smile of a naughty child—yet he
was then the newly appointed security advisor to South Darfur’s
governor, his first official government position, obtained through
blackmail and threats of rebellion.
Hemeti hails from a small Chadian Arab clan that fled wars and drought
in Chad to take refuge in Darfur in the 1980s.
As he told me, his uncle Juma Dagolo failed to be recognized as a
tribal leader in North Darfur state, but South Darfur authorities
welcomed the newcomers and allowed them to settle on land belonging to
the Fur tribe, Darfur’s main indigenous non-Arab group.
The place, called Dogi in the Fur language, was rebranded Um-el-Gura,
“the mother of the villages” in Arabic, an old name for Mecca. The
authorities also armed Dagolo’s followers, who, as early as the 1990s,
began attacking their Fur neighbors.
Hemeti was then a teenager who, as he told me, dropped out of primary
school in the third grade to trade camels across the borders in Libya
and Egypt.
When the Darfur rebellion began in 2003, he became a janjaweed amir
(war chief) in his area, leading attacks against neighboring Fur
To justify joining the government-backed militias, he said the rebels
had attacked a caravan of fellow camel traders on their way to Libya,
allegedly killing 75 men and looting 3,000 camels. That fell short of
his own brutal record as a militia leader.
In 2006, armed with new equipment, he led several hundred men on a
raid across the rebel-held area of North Darfur. The janjaweed rammed
non-Arab men with their pickup trucks and raped women in the name of
jihad—according to witnesses I met at the time. His violent methods
even created tensions with accompanying army officers.
At the same time, Chad and Sudan began a proxy war through their
respective rebel groups. The Chadian government used its own Arab
officials to push the janjaweed to betray Khartoum.
Bichara Issa Jadallah, a cousin to Hemeti, was then the defense
minister in Chad. In 2006, he invited the janjaweed leader to the
Chadian capital, N’Djamena, and had him sign a secret nonaggression
pact with the Darfur rebel Justice and Equality Movement, behind the
back of Khartoum.
Shortly afterward, Hemeti announced that he had become a rebel. He
then received a visit from a TV crew working for Britain’s Channel 4,
which shot a documentary in his camp—his first exposure to TV—a medium
to which he has become addicted since.
But the journalists reportedly came late, and, as they were filming,
government negotiators were also in the camp, bargaining over the
price to bring Hemeti back into the government fold.

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Malawi is Southern Africa's next big election @mailandguardian

On a superficial reading, Malawi’s story seems to epitomise many
preconceived narratives about sub-Saharan Africa.
It is one of the world’s least developed countries. It labours under
astronomical unemployment numbers. It has low life expectancy, high
infant mortality and a high prevalence of HIV and Aids.
Its population is predominantly rural and it has to rely
disproportionately on foreign aid. It has been ranked the fourth
poorest country in the world — more than half of its 18-million people
live below the poverty line.
The May 21 elections will mark 25 years of multiparty democracy in
Malawi — a trend that began only after the one-party regime, mediated
by Hastings Kamuzu Banda, came to a halt in 1994. Before then, Malawi
had, in effect, been a democratic dictatorship for 30 years.
This wasn’t a terrible state of affairs, according to some accounts.
Even Africa historian Martin Meredith, known for his pessimism,
insists that under the eccentric Banda, Malawi’s economy was “often
cited as an example of how a poor, landlocked, heavily populated,
mineral-poor country could achieve progress in both agriculture and
industrial development”.
Yes, Banda deployed his country’s wealth to build his own business
empire, but his actualised vision was for that empire to benefit the
country, eventually producing a third of the nation’s GDP and
employing more than 10% of its workforce. The top boarding school he
built, Kamuzu Academy, was ultimately gifted to the nation.
The Economist commended his avoidance of “grand socialist plans, which
lured other African countries to destruction”, praising him by saying
that “instead, he gathered the most valuable parts of the economy into
a company”.
But dictators maintain their stranglehold at great cost, and Banda was
no exception — banning women from exposing their knees, prohibiting
kissing in public, unleashing spies on his compatriots, banning books,
putting more than 250 000 people in jail, supervising the murder of
political opponents and locking others up. In 1971, the legislature
named him president for life.
At the end of his 30-year rule, Malawians remained poor. In 1994, they
had had enough, electing him out of office and putting him on trial
for the murder of four politicians in 1983.
For more than a decade afterwards, the country continued to suffer the
consequences of his dictatorship, plunging on crucial indices until
sustained competitive democracy pulled them back up.
It is also possible to blame this on the fact that the ruling party,
the United Democratic Front, did not win a majority in Parliament.
By 2005, under President Bingu wa Mutharika (who died in office),
Malawi had turned a corner. With the Democratic Progressive Party
(DPP) in charge of both the presidency and Parliament, reliance on aid
began to decrease and its economic outlook began to improve, showing
progress in the economy, education and health from 2007.
The country was praised for its economic reform and for its food
security policies. In 2009, its ministry of finance reported that the
number of citizens living in poverty had fallen, over a period of four
years, from 52% to 40%. Mutharika was praised as a champion of the
Then power appeared to get to Mutharika’s head. After being re-elected
in 2009, he moved his attention from policy to politics — expelling
ambassadors, cutting off ties with donors, attacking political
opponents and battling (unsuccessfully) his own vice-president, Joyce
Growth began to slow and the country began to suffer. The first big
symptom of it was the huge “Cashgate”’ scandal, in which some
$32-million was stolen over the course of just six months in 2013 from
government funds.
The scandal was revealed by an audit commissioned by Joyce Banda when
she took office after Mutharika’s death. The funds went from
government to vendors for goods and services that were never supplied.
The current president Peter Mutharika, Bingu’s brother, came into
office in 2014 promising to wipe away the corruption, but his party
can’t seem to get rid of this virus.
In 2017, there was “Maizegate”, in which the minister of agriculture,
George Chaponda, was found to be breaking the law, and was fired after
a court injunction.
Last year, the president himself was linked in a leaked
anti-corruption report with misappropriating funds in a police
This, alongside a controversial 2016 land reform law that took power
away from community leaders and centralised authority in government,
has led to widespread dissatisfaction.
Mutharika and his ruling party face stiff competition this year from
his vice-president, Saulos Chilima, who is running under the banner of
the United Transformation Movement; and from the Malawi Congress
Party, which has entered into an alliance with Joyce Banda’s People’s
There may well be a new face in Lilongwe’s State House next month. But
even if Mutharika does survive, it will be in the knowledge that there
is credible opposition to his rule —and that fortunes can change very
Chude Jideonwo is founder of Joy, Inc and sits on the board of
StateCraft, Inc, which has worked in elections and for governments in
Nigeria, Ghana, Kenya and Senegal

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South Africa Burdened by Utility's @Eskom_SA Near $35 Billion Debt Load @markets

The embattled South African state power utility’s debt burden,
described by Goldman Sachs Group Inc. as the biggest threat to the
nation’s economy, has burgeoned, compounding the difficulty the
government faces in formulating a turnaround plan.
Eskom Holdings SOC Ltd.’s debt is approaching 500 billion rand ($35
billion), according to data compiled by Bloomberg from public records,
including bonds and issued loans, up from about 370 billion rand a
year ago.
While the utility declined to comment on the current number, its Chief
Executive Officer Phakamani Hadebe last month put total debt at about
450 billion rand.
The composition of the utility’s debt has also changed, with loans
accounting for just more than half of its total burden, up from 40% a
year ago.
The switch to short-term financing hasn’t been smooth sailing -- a
loan agreed with China Development Bank failed to come through as
scheduled earlier this year and Eskom had to take out an urgent 3
billion rand bridge loan from Absa Group Ltd. to avoid a call on
existing guarantees.

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Military Stake Stymies $4 Billion Zimbabwe Platinum Project @markets

A plan to build Zimbabwe’s biggest platinum mine at a cost of about $4
billion is floundering because a military stake in the project has
deterred potential backers, according to people familiar with the
funding discussions.
The African Export-Import Bank has the mandate to raise money for the
mine, a joint venture between Russian and Zimbabwean investors.
While the bank provided $192 million of its own funds, meetings in the
past year with investors including South Africa’s Public Investment
Corp., the continent’s biggest fund manager, failed to bring
additional commitments, one of the people said, asking not to be
identified because the talks are private.
Zimbabwe has the world’s third-largest reserves of platinum, palladium
and related metals such as rhodium -- which typically occur together
-- after South Africa and Russia.
President Emmerson Mnangagwa is trying to lure investment to the
country to help rebuild the economy, devastated during the 37-year
rule of Robert Mugabe.
The sticking point is a Zimbabwe military company that once was
subject to U.S. sanctions. Zimbabwe Defence Industries Ltd. and
Zimbabwe Mining Development Corp. together hold 30% of the joint
venture, known as Great Dyke Investments, through Pen East (Pty) Ltd.,
a company they control, according to documents seen by Bloomberg.
Vi Holding, led by Russian entrepreneur Vitaliy Machitski, has a 50%
stake in Great Dyke, and 20% is held by undisclosed Zimbabwean
investors, the documents show.
While the documents are dated 2012, the shareholdings are about the
same today, two of the people familiar with the discussions said.
The $4 billion figure is a government estimate of the cost to develop
the mine and associated infrastructure.
“If there is any kind of military shareholding it will make western
investors very uncomfortable, especially the banks,” said Peter Major,
a mining analyst at Mergence Corporate Solutions Ltd. in Cape Town.
“Who is going to risk it? I think they will battle to get funding from
traditional and western institutions.”
South Africa’s PIC declined to comment. Zimbabwe’s defense ministry,
ZDI and Vi Holding didn’t respond to phone and email requests for
The U.S. Treasury imposed sanctions on Zimbabwe Defence Industries, or
ZDI, and several politicians in 2004 because of violence and
irregularities in the nation’s 2000 and 2002 elections.
Vi Holding groups Russian companies including state-controlled Rostec
Corp. and development bank VEB, according to the people.
Both companies also have been sanctioned by the U.S. because of
Russia’s 2014 annexation of Crimea.
Global Witness has previously tied ZDI to diamond mining in eastern
Zimbabwe through an indirect shareholding in a Chinese company. Mugabe
said his government lost large sums to theft from that deposit, and
Human Rights Watch in 2009 accused the military of shooting and
killing 200 miners there.
This wouldn’t be the first time military involvement thwarted a mining
project. In 2000, Oryx Diamonds Ltd. scrapped plans to trade in London
after its adviser withdrew support under pressure from the U.K.
Oryx had planned a diamond mine in Democratic Republic of Congo with
investors that included another Zimbabwe military company at a time
when Mugabe’s forces were fighting in Congo.
Mugabe handed the Great Dyke concession to Russian investors in 2006
after the government repossessed land from a unit of South Africa’s
Impala Platinum Holdings Ltd., or Implats.
The first joint venture to try to tap the deposit was Ruschrome
Mining, according to the Zimbabwean government. Vi Holding took over
Ruschrome’s shareholding in 2014, the people said.
An offer about eight years ago by a “large international mining house”
to buy out Pen East from the project for $30 million was rejected,
according to a proposal prepared by CDF Trust & Consulting BV, a
Zimbabwean consultancy, that was seen by Bloomberg.
CDF Trust Managing Director Caleb Dengu declined to comment.
Agreements signed by Great Dyke, Afreximbank, Vi Holding, the Russian
Export Center and African Finance Corp. to develop the mine were
exchanged at a meeting between Russian President Vladimir Putin and
Mnangagwa in Moscow in January.
The project could produce more than 800,000 ounces of platinum-group
metals a year, only one-fifth less than Zimbabwe’s total current
output from mines owned by Implats and Anglo American Platinum Ltd. A
freximbank is seeking funding at a time when supplies of the metal are
balanced and a significant increase in production could depress
Afreximbank, which is based in Egypt, will allow potential backers of
the mine at Darwendale, north of the capital, Harare, to use a $1.4
billion guarantee it provided to Zimbabwe, one of the people said.
Afreximbank is partly owned by African governments. African Finance
Corp., whose holders also include African governments, has agreed to
invest $75 million, said Hesphina Rukato, Great Dyke’s chairwoman.
Afreximbank will complete financing details for the project around
June, she said.
Afreximbank doesn’t comment on “ongoing transactions,” said Obi
Emekekwue, the bank’s spokesman.

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President Kenyatta in Rwanda for a one-day state visit, where he will address the 2019 Transform Africa Summit in Kigali. #MetropolTVKE @MetropolTVKE
Kenyan Economy

As requested yesterday in the email, below are the details of the issue.

Issuer:             The Republic of Kenya, acting through the National Treasury
Exp. Issue Ratings: B+ by S&P (stable) / B+ by Fitch (stable)
Form of Issuance:   Rule 144A/Regulation S
Status:                Senior Unsecured
Currency:            US$
Coupon:              Fixed, semi-annual, 30/360
Settlement:         [22] May 2019 (T+5)
Size:                  Benchmark          | Benchmark
Final Maturity:     [22] May 2027      | [22] May 2032
WAL:                   7yr                | 12yr
Redemption:         3 Instalments in   | 3 Instalments in
                       2025 / 2026 / 2027 | 2030 / 2031 / 2032
IPTs:               Mid 7%s            | Mid 8%s
Denominations:  US$200k x US$1k
Listing:            Irish Stock Exchange, London Stock Exchange
Law:                English Law
JLMs:               J.P. Morgan (B&D), Standard Chartered Bank
Timing:             Books open, today’s business
Target Market:      MiFID II - eligible counterparties and professional clients

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Kenyan Economy

Par Value:                  2.50/-
Closing Price:           54.75
Total Shares Issued:          188542286.00
Market Capitalization:        10,322,690,159
EPS:             5.9
PE:                 9.280

Nation Media Group Limited FY through 31st December 2018 vs. 31st December 2017
FY Revenue 9.6606b vs. 10.6249b -9.076%
FY Profit before tax 1.6340b vs. 1.9546b -16.402%
FY Other comprehensive income/ [ loss] [60.8m] vs. 40.1m -251.621%
FY Total comprehensive income for the year 1.0567b vs. 1.3509b -21.778%
FY Equity 7.8776b vs. 8.1663b -3.535%
Cash and cash equivalents at the end of period 867.1m vs. 1.6926b -48.771%
EPS 5.9 vs. 6.9 -14.493%
Total dividend per share 5.00 vs. 10.0 -50.000%

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Audiences have migrated to different platforms and they exhibit diverse consumption patterns Dr. Wilfred Kiboro, Chairman Board of Directors NMG on innovation within the media space. NMGFY2018 @NationMediaGrp
Kenyan Economy


Its a Top Quality Franchise but we have seen a more than 5 year
decline in Turnover, EPS and the Dividend Pay Out is at a decade low.
The Trend speaks to a perfect storm of the Switch to Digital [However,
In Africa we have not seen the switch to paid digital subscription
unlike the New York Times and the Washington Post and the FT, for
example]. So there has been a big macro gale force wind and Print has
been in the firing line and the Daily Nation was always the Cash Cow.
The violence of Dr. Kiboros comments speaks to a deep level of
unhappiness about the local conditions which have been adversarial for
quite a time [counterintuitively that absolutely informs us that they
have been meeting their watchdog role] The Share Price has retreated
dramatically over time and at todays valuation the business is worth
$115.18m which is clearly too low. The dividend is the equivalent of
8.09% which is in fact juicy. I would have thought this is a share
worth looking at more closely particularly on any reverses. Of course,
the question is about the PIVOT. It is after all a Schumpeter level
moment in this industry. And can the pivot lead to a rebound across
all the metrics. I would say Yes eventually.

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Kenya Shilling versus The Dollar Live ForexPros
Kenyan Economy

The NSE All Share is +4.42% in 2019 trading at a PE of 11.32
@RichEconomics -8.92% since May 2nd


Nairobi All Share Bloomberg +4.42% 2019


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.@KCBGroup invests Sh905m in Tanzania, Rwanda units @BD_Africa
Kenyan Economy

KCB Group   has invested an additional Sh905 million in its Tanzania
and Rwanda units to shore up their capital and position them for more
The lender provided Sh519 million to its Tanzanian subsidiary in the
year ended December, according to its latest annual report.
This raised its cumulative investment in the unit, which runs 14
branches, to Sh3.5 billion.
The Rwandan subsidiary, which also operates 14 branches, received a
new capital investment of Sh386 million in what raised total
investment in that unit to Sh2.2 billion.
The additional investments left KCB’s ownership unchanged at 100
percent in each case.

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.@KCBGroup share price data here
Kenyan Economy

Par Value:                  1/-
Closing Price:           38.20
Total Shares Issued:          3066056647.00
Market Capitalization:        117,123,363,915
EPS:             7.83
PE:                 4.879

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by Aly Khan Satchu (www.rich.co.ke)
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May 2019

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