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Thursday 18th of July 2019
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Morning Africa |
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0930-1500 KENYA TIME
Normal Board - The Whole shebang
Prompt Board Next day settlement
Expert Board All you need re an Individual stock.
The Latest Daily PodCast can be found here on the Front Page of the site
http://www.rich.co.ke
Macro Thoughts |
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"Memory is a snare, pure and simple; it alters, it subtly rearranges the past to fit the present." - Mario Vargas Llosa Africa |
Twilight was coming on, the most mysterious and most beautiful hour of
the day in Amazonia, as long as there isn't a cloudburst.
If something matters greatly to you, you surround it with mystery.
And that's precisely what moves me. That the Machiguengas consider
mere storytellers so important that they have to keep their existence
a secret.
The most important thing is not to be impatient and allow what must
happen to happen. If a man lives calmly, without getting impatient, he
has time to think and to remember. That way, he'll meet his destiny,
perhaps. He'll live content, maybe. He won't forget what he has
learned. If he gets impatient, rushing to outstrip time, the world
gets out of order, it seems. And the soul falls into a spiderweb of
mud. That is confusion. The worst thing that can happen, let's say.
Mistakes are always the result of confusion, it seems.”
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Currency Markets at a Glance WSJ Commodities |
Euro 1.1238
Dollar Index 97.058
Japan Yen 107.724
Swiss Franc 0.9852
Pound 1.2468
Aussie 0.7033
India Rupee 68.8725
South Korea Won 1177.55 BOK Cuts Interest Rate to 1.5% from 1.75%
Lowers 2019 growth to 2.2% from 2.5%
Brazil Real 3.7615
Egypt Pound 16.623
South Africa Rand 13.9075
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Making sense of chaos? Algos scour social media for clues to crypto moves @Reuters International Trade |
The 20% leap focused investors’ attention on one of the enduring
mysteries of cryptocurrencies: what moves the price of an emerging
asset in an opaque, largely unregulated market?
For some, the answer lies on social media. Hedge funds and asset
managers seeking an edge are training computers to scrape social media
sites for triggers that could move the price of digital currencies.
Their goal: crafting algorithms capable of picking out price “signals”
from the background noise of sites ranging from Reddit and WeChat to
Twitter and Telegram.
Many investors already use computer models to identify, and trade,
price differences across hundreds of cryptocurrency trading exchanges.
But with opportunities for arbitrage narrowing as the nascent sector
develops, big players are increasingly looking to build or buy more
sophisticated robots to find market-moving signals online, according
to interviews with six hedge funds and asset managers and three
software developers.
Yet while the use of algorithms, or algos, for parsing social media
may be growing, some of those interviewed said major challenges and
risks remain to their wider deployment, from cost to complexity.
“It’s an arms race for money managers,” said Bin Ren, CEO of Elwood
Asset Management, which specializes in digital assets and is owned by
Brevan Howard founder Alan Howard.
“Very few players are able to implement and deliver it, but I believe
it is highly profitable.”
Such “sentiment analysis,” as computer-driven reading of the social
media mood is known, is used as a tool in traditional markets like
equities and foreign exchange to trade on consumer feelings toward a
company or asset.
But it could be of greater significance in cryptocurrency markets,
where there are few authoritative sources of information, such as
central banks, scarcely any reliable data to gauge asset value like
economic indicators and financial statements, and a high proportion of
individual investors.
It is also early days for the technique in the crypto sector, with
scant industry-wide data on performance and many questions over its
effectiveness. None of the institutions Reuters spoke to would give
details of the performance of their algorithms, citing commercial
confidentiality.
To be sure, digital currencies do share some drivers with traditional
markets such as comments by policymakers. Bitcoin can be sensitive to
remarks by regulators in particular: It fell sharply last week after
the U.S. Federal Reserve chief called for a halt to Facebook’s planned
Libra cryptocurrency project.
But given cryptocurrencies have been entwined with the internet from
their dawn a decade ago, when the word was spread in forums and
chatrooms, it would seem to make sense to search for price triggers
online.
Still, it’s far from cheap or simple to design an algorithm that can
find market-moving signals in the cacophonous world of social media,
analyzing huge numbers of posts in dozens of languages while sifting
out unreliable information.
Andrea Leccese, president of Bluesky Capital, an investment firm in
New York, said upfront costs for a robot capable of only reading
Twitter in English were between $500,000 to $1 million, with most of
the money spent on skilled developers. That has deterred Bluesky from
using the technique, he said.
One daunting challenge is the sheer number of social media channels.
Beyond Twitter, sites often used by cryptocurrency aficionados include
Telegram, a messaging app with public channels and Reddit, a messaging
board.
In Asia, home to many retail traders, apps like Line in Japan and
Kakao in South Korea are popular.
Tens of thousands of comments on cryptocurrencies are pumped out
around the clock across both national and international channels.
Reddit’s main forum, or subreddit, for bitcoin alone has 1.1 million
members. Twitter also sees tens of thousands of posts mentioning
bitcoin every day, with between 14,000 and 32,000 daily for the last
three months, according to the BitInfoCharts website.
In an attempt to extract meaning from this mayhem, algorithms use
so-called natural language processing - identifying key words and
emotions that indicate changes in how social media users view certain
digital currencies.
Investors using algorithms say they can also identify patterns for
information that gains traction online.
”The information propagates not randomly, but through a very
well-defined structure - it’s like a tree,” said Elwood’s Ren, which
has used sentiment analysis for nearly two years after developing its
own software.
“It’s very similar to modeling the spreading of a virus.”
Other investors emphasized the challenges in teaching machines to spot
biased or inaccurate information.
A Reuters report (here) last November found that many social media
users take money for positive reviews of digital coins.
BitSpread, a cryptocurrency asset manager based in London and
Singapore, uses its own capital to trade using an algorithm it started
developing about a year ago, its CEO Cedric Jeanson told Reuters.
It is a relatively narrowly targeted software. Aggregating Twitter
feeds, it looks out for posts on the liquidation, or closing, of
positions at exchanges.
“It’s a matter of gathering all the info, trying to understand who is
trading where, what kind of liquidation can appear,” he said. “It’s a
strategy that makes sense.”
“The sentiment itself, what we see on Twitter, can be really geared
toward fake news. We are always very cautious about what we’re reading
in the news because, most of the time, we’ve seen that there’s a
bias.”
Many algorithms use machine learning, where they are supposed to
improve through experience and better understand how social media
posts translate into market movements.
Developers often identify key people with outsized voices and large
numbers of followers to weight more heavily in their algorithm, said
Bijan Farsijani of Augmento, a Berlin-based startup that launched an
algo for sentiment analysis last month.
He said a number of hedge funds had bought the software from his
company since the launch.
Bitcoin, the biggest cryptocurrency and a bellwether for the sector,
has surged over 180% this year, driving up the interest of bigger
investors from trading firms to hedge funds.
Bitcoin’s most recent rally, last month, was seen by analysts as
driven by expectations for a wider adoption of cryptocurrencies driven
by Facebook’s Libra.
That move was mirrored by a surge in interest online. Google searches
for cryptocurrencies hit their highest level in three months on June
18, when Facebook made the announcement.
It is, however, difficult to pinpoint the chicken and the egg: online
chatter or price moves.
“There may be some value in sentiment analysis in crypto, but most of
the time what people tweet may be a lagging indicator of the price
move,” said Leccese of Bluesky Capital.
“But there is potential,” he added. “People will start looking at this
more in the next five to 10 years because there will be diminishing
returns because of increased competition in traditional strategies.”
While there is a lack of data specifically for this technique,
“quantitative” cryptocurrency funds - which use methods from arbitrage
to sentiment analysis - significantly outperformed funds that make
longer-term bets in the first quarter of this year, a PwC report
shows.
Coders say they are in increasing demand.
Taiwan-based Marc Howard teamed up with over 500 machine learning
experts to crowdsource sentiment analysis algorithms, bringing in data
from sources including Google Trends, Reddit and development platform
GitHub.
Howard said his bitcoin investments using an algorithm beat funds
simply tracking the price of the cryptocurrency by 54% in the year to
June 24, adding that funds in New York and Taipei had tapped him for
help in developing their own analysis.
“It’s pretty hot right now,” he said. “Any fund that’s worth their
salt, they are devoting some of their resources and allocation for
sentiment analysis.”
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A one-time camel trader turned leader of a Sudanese militia known as the "devils on horseback" now holds the fate of Africa's third-largest nation in his hands. @politics Africa |
Known popularly as Hemeti, Mohamed Hamdan dominates the military
council that overthrew President Omar al-Bashir in April. He also
commands the Rapid Support Forces, a paramilitary group accused of
killing more than 100 protesters in June in Sudan’s capital, Khartoum.
Swaggering and unaccountable, his fighters have become the most
tangible obstacle to Sudan’s escape from three decades of
dictatorship.
“All roads forward in Sudan now run into the Hemeti problem,” said
Alan Boswell, an analyst with the Brussels-based International Crisis
Group. “Over time, his power will need to be reined in, yet any action
against him at the moment risks civil war.”
But in the short-term, any move to check Hemeti’s power risks
splitting the council, said Harry Verhoeven, author of ‘Water,
Civilisation and Power in Sudan.’
“It’s a dangerous proposition and very few actors in the army, RSF or
other security forces have a realistic vision of political order
beyond the next couple of weeks,” he said.
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Africa's population growth is making the continent the stage for the fastest and largest-scale urbanization anywhere on the planet, @WPReview Africa |
According to one recent study, online gamers in California by
themselves will soon use more electricity than all of Ethiopia, a
country of 100 million people, while global Bitcoin mining already
consumes more electricity than Nigeria, with its 200 million people
Africa has many problems, to be sure, but one of its biggest is its
largest states, such as Nigeria and the Democratic Republic of Congo,
which are badly underperforming. They will determine the destiny of
entire vast regions, for better or worse, and yet the State Department
traditionally favors deep engagement and public diplomacy with a
collection of smaller countries, places like Rwanda and Ghana.
Achieving better governance and economic performance in places like
Nigeria or Congo is, of course, first and foremost the duty of these
countries’ leaders and people, and under any scenario, what an outside
power can accomplish is limited. But given the stakes involved for
hundreds of millions of Africans, spanning many national borders, U.S.
engagement with the countries that will shape the rest of the
continent is woefully inadequate.
If helping shift the fortunes of big, developing nations in positive
ways is especially difficult, there is something else that’s genuinely
easy. One of the worst problems of governance across Africa, affecting
countries large and small, is a growing tendency of heads of state to
alter election and succession rules in ways that allow them to
effectively maintain themselves in power indefinitely, if not for
life. This trend is badly eroding democratic rule in many African
countries, deepening corruption and preventing the generational
renewal that is vital to keeping up in a fast-changing world. One of
the most notorious examples is 86-year-old Paul Biya, who became
president of Cameroon in 1982. Every year since then, he has run his
country for months at a time from a luxury hotel in Geneva.
Whether by introducing new laws or sanctions or through other
diplomatic pressure, the United States could freeze ties with leaders
who tinker with their constitutions in order to retain power for more
than two terms, and it could rally other countries to follow its
example in doing so. That is, if Washington is paying attention, and
even cares.
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Africa |
African local bonds are on a tear as investors flock to riskier
assets. But the continent’s stocks are missing out, despite being much
cheaper than their emerging-market peers.
The AFMI Bloomberg African Bond Index, which groups the local-currency
debt of eight nations including South Africa, Nigeria, Egypt and
Ghana, has gained 6.1% in dollar terms since the start of May, around
the time a dovish tilt by major central banks caused a surge in the
amount of negative-yielding securities. It’s bettered the 3.9% advance
of local bonds issued by overall developing nations.
Carry traders have been particularly attracted to Africa.
Egyptian-pound bonds, which yield 16%, have made total returns of
almost 8% over that period, extending their gain this year to 25%.
South Africa’s debt is up 6.9% since the end of April and Nigeria’s 4.7%.
But what’s good for bond traders isn’t necessarily so for equity
investors. While the former focus more on the short term, looking for
high interest rates and stable currencies, the latter want economic
growth. Aside from Egypt, the fastest-growing country in the Arab
world, Africa’s major economies aren’t providing much of it. South
Africa’s output contracted the most in a decade in the first quarter,
while Nigeria’s economy has been anemic since a crash in oil prices
five years ago.
South African stocks have slumped 1.6% in local currency terms since
April, though a rally in the rand means they’re up slightly in
dollars. Elsewhere on the continent, investors aren’t being attracted
by low valuations.
Excluding South Africa, African stocks trade at a forward
price-to-earnings ratio of barely 9, based on estimates for the next
12 months. Emerging- and frontier-market equities each trade at around
12.
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Egypt says its economy on right track after 5.6% growth in 2018/19 @Reuters Africa |
Egypt’s economy grew 5.6% in the 2018/19 fiscal year and is “on the
right track” as it completes IMF-backed reforms, Prime Minister
Mustafa Madbouli said on Wednesday.
The budget deficit came in at 8.2% of GDP, he said, which was slightly
below an official forecast of 8.4%.
Egypt is emerging from a three-year economic reform programme tied to
a $12 billion loan from the International Monetary Fund.
Madbouli said Egypt’s primary surplus stood at 2% for the fiscal year,
which ended in June, and also pointed to a recent drop in inflation as
positive signs. Economic growth was up from 5.3% in 2017/18 and in
line with a government forecast.
“At the same time, it induces us to complete the implementation of
reforms and the efforts exerted to achieve the targets for the new
fiscal year,” Madbouli said in a statement said.
Egypt has been praised by international lenders for swift reforms
implemented since 2016, though austerity measures and inflation have
left many Egyptians struggling to get by.
The reforms included a sharp devaluation of the currency, the
introduction of value-added tax and the elimination of subsidies on
most fuel products.
Headline annual inflation dropped to 9.4% in June from 14.1% the
previous month, though it is expected to rise over the rest of the
summer as the impact of the latest round of fuel subsidy cuts kicks
in.
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Tanzania's economy expanded 5.2% in 2018, the World Bank said on Thursday, the second major report this year from a multilateral financial institution contradicting rosier government figures. Africa |
Tanzania’s finance minister had told parliament last month that growth
was 7% last year
In a report, the World Bank, which makes its calculations based on
state data, also forecast 2019 growth at 5.4% - again lower than the
government’s estimate of 7.1%.
Last year’s growth was affected by a decline in investment, exports
and private lending, the report said.
“Data related to consumption, investment and net trade suggest that
growth softened in 2018,” it said.
The World Bank report follows an unpublished International Monetary
Fund (IMF) report in April that also raised questions over Magufuli’s
handling of the economy.
A leaked version of the report, seen by Reuters, accused the
government of undermining the economy with “unpredictable and
interventionist” policies, saying medium-term growth would be around
4-5 percent, again below official forecasts.
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HAWASSA, Ethiopia (Reuters) - Activists in Ethiopia were set to declare a new region for their Sidama ethnic group on Thursday in defiance of the central government Africa |
“Red berets, regional special police force are patrolling with grim
faces and guns pointed. Special forces can be seen in all corners and
small streets,” one resident in Hawassa told Reuters.
Some of his friends were so concerned that violence would erupt on
Thursday that they sent their wives and children to the national
capital Addis Ababa, he added.
The federal system in Africa’s second most populous nation is designed
to allow larger ethnic groups a degree of autonomy.
But smaller groups such as the Sidama, who make up about 5% of
Ethiopia’s 105 million people, say they have been sidelined. In
addition to the Sidama, at least eight more ethnic groups are
campaigning for their own regions.
Conclusions
Turning and turning in the widening gyre The falcon cannot hear the
falconer; Things fall apart; the centre cannot hold;
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The Second Coming BY WILLIAM BUTLER YEATS Africa |
Turning and turning in the widening gyre
The falcon cannot hear the falconer;
Things fall apart; the centre cannot hold;
Mere anarchy is loosed upon the world,
The blood-dimmed tide is loosed, and everywhere
The ceremony of innocence is drowned;
The best lack all conviction, while the worst
Are full of passionate intensity.
Surely some revelation is at hand;
Surely the Second Coming is at hand.
The Second Coming! Hardly are those words out
When a vast image out of Spiritus Mundi
Troubles my sight: somewhere in sands of the desert
A shape with lion body and the head of a man,
A gaze blank and pitiless as the sun,
Is moving its slow thighs, while all about it
Reel shadows of the indignant desert birds.
The darkness drops again; but now I know
That twenty centuries of stony sleep
Were vexed to nightmare by a rocking cradle,
And what rough beast, its hour come round at last,
Slouches towards Bethlehem to be born?
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More than 70 percent of fast-moving-consumer goods (FMCG) purchases are of products priced below Sh55 @nielsen via @BD_Africa Africa |
The traditional trade, according to Nielsen, accounted for 66.3
percent of the total FMCG spend in the year ending March 2019, a 10.7
percent growth when compared to a similar period the previous year.
Modern trade (supermarkets) accounted for 33.7 percent (Sh94.1
billion), a 0.4 percent growth over a similar period.
Nielsen’s study also found that household needs accounted for about 82
percent of the total retail spend with flour, cooking oil, toiletries,
milk products, diapers, non-bulk water, tea and sanitary essentials
among goods flying off the shelves and accounting for Sh243.5 billion
spend for 2018. It also found that spending on fresh milk, cooking
fat, spreads, cologne, concentrated juices had declined when compared
to toiletries, UHT-milk, shoe polish, energy drinks and chocolate
beverages.
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