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Satchu's Rich Wrap-Up
Thursday 30th of September 2021

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27 NOV 17 :: "Wow! What a Ride!"
World Currencies

Let me leave you with Hunter S. Thompson, “Life should not be a journey to the grave with the intention of arriving safely in a pretty and well preserved body, but rather to skid in broadside in a cloud of smoke, thoroughly used up, totally worn out, and loudly proclaiming “Wow! What a Ride!”

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Lao Tzu put it “Men are born soft and supple; dead they are stiff and hard. Plants are born tender and pliant; dead, they are brittle and dry. Thus whoever is stiff and inflexible is a disciple of death''

Lao Tzu put it “Men are born soft and supple; dead they are stiff and hard. Plants are born tender and pliant; dead, they are brittle and dry. Thus whoever is stiff and inflexible is a disciple of death. Whoever is soft and yielding is a disciple of life. The hard and stiff will be broken. The soft and supple will prevail.”

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03-SEP-2018 :: Belle at the ball

I remember a time my then 11 Year old daughter Layla attended the school disco and when I picked her up, her eyes glittered and she could scarcely stand still. 

I asked, ‘’Darling, how was it?’’ She said, “Daddy, I danced and I danced and I didn’t stop!’’ 

I wanted to pick her up, spin her as Jean Rhys wrote in her Novel ‘’Wide sargasso sea’’: 

Only the magic and the dream are true - all the rest’s a lie. And, “I must remember about chandeliers and dancing, about swans and roses and snow.”

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Now Is The Winter Of Our Discontent
Minerals, Oil & Energy

“Now is the winter of our discontent” is the opening of a speech by William Shakespeare from Richard III.
It was also used to describe the profound industrial unrest that took place in 1978—9 in the United Kingdom.
Prime Minister Callaghan was asked by a reporter
"What is your general approach, in view of the mounting chaos in the country at the moment?" and replied:
Well, that's a judgment that you are making. I promise you that if you look at it from outside, and perhaps you're taking rather a parochial view at the moment, I don't think that other people in the world would share the view that there is mounting chaos.
The next day's edition of The Sun headlined its story "Crisis? What crisis?"

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GAS MARKET: European natural gas closes at a fresh all-time high after rising >10% today (both for UK NBP and Dutch TTF benchmarks). @JavierBlas
Minerals, Oil & Energy

At the close, European gas was at the equivalent of ~$29 per mBtu, or close to $170 per barrel of oil equivalent. Yes, you read that correctly.

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Weekly epidemiological update on COVID-19 - 28 September 2021 @WHO

Globally, the numbers of weekly COVID-19 cases and deaths continued to decline. 

Over 3.3 million new cases and over 55 000 new deaths were reported during the week of 20 – 26 September 2021, decreases of 10% as compared to the previous week for both cases and deaths.

The highest numbers of new cases were reported from 

the United States of America (765 827 new cases; 31% decrease)

Brazil (247 397 new cases; 135% increase due to changes in reporting)

United Kingdom (230 494 new cases; 14% increase), 

India (204 582 new cases; similar to previous week)

Turkey (192 778 new cases; similar to previous week) 

highest numbers of new deaths were from 

United States of America (14 842 new deaths, a 17% decrease)

Russian Federation (5469 new deaths, similar to the previous week)

Mexico (3689 new deaths, a 13% increase)

Brazil (3727 new deaths, a 10% increase)

Islamic Republic of Iran (2967 new deaths, a 23% decrease) respectively.

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Currency Markets at a Glance WSJ
World Currencies

Euro 1.1607
Dollar Index 94.289
Japan Yen 111.90
Swiss Franc 0.9333
Pound 1.3450
Aussie 0.7206
India Rupee 74.3315
South Korea Won 1185.62
Brazil Real 5.416
Egypt Pound 15.7082
South Africa Rand 15.11

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EM FX needs to fall more @RobinBrooksIIF
Emerging Markets

Stylized facts about EM
1. Real exchange rates are down massively
2. Yet GDP growth is weak in many countries
3. Underlying shock is lower oil & commodity prices
4. Lack of growth means EM FX still too strong
5. Fair values may have shifted much weaker
6. EM FX needs to fall more

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‘Hidden debt’ on China’s Belt and Road tops $385bn, says new study @FT
Emerging Markets

China’s Belt and Road Initiative has left scores of lower- and middle-income countries saddled with “hidden debts” totalling $385bn.

New research suggests that many countries’ financial liabilities linked to President Xi Jinping’s hallmark foreign policy initiative have been systematically under-reported for years. 

This has resulted in mounting “hidden debts”, or undisclosed liabilities that governments might be obliged to pay.
The findings are part of a new report published by AidData, an international development research lab based at the College of William & Mary in Virginia, which has analysed more than 13,000 aid- and debt-financed projects worth more than $843bn across 165 countries, over 18 years to the end of 2017.
The AidData researchers estimated that existing debts stemming from Chinese lending are “substantially larger” than previously understood by credit rating agencies and other intergovernmental organisations with surveillance responsibilities.
“It really took my breath away when we first discovered that [$385bn figure],” Brad Parks, executive director of the AidData team, told the Financial Times.
The pace of lending on the Belt and Road has slowed over the past two years. 

And this year the US has led a G7 effort to counter Beijing’s dominance in international development finance.
But the report highlights the lasting effects of a sharp transition since Xi launched the Belt and Road plan in 2013.
Where Chinese lending was previously mostly directed to sovereign borrowers such as central banks, now, close to 70 per cent of China’s foreign debt is issued across state-owned companies, state-owned banks, special purpose vehicles, joint ventures and private sector institutions.
More than 40 lower- and middle-income countries (LMIC) now have levels of debt exposure to China higher than 10 per cent of their national gross domestic product, AidData estimated.
And the average LMIC government is under-reporting repayment obligations to China by an equivalent of nearly 6 per cent of GDP.
“These debts for the most part do not appear on government balance sheets in developing countries. The key thing is that most of them benefit from explicit or implicit forms of host government liability protection. That is basically blurring the distinction between private and public debt,” Parks said.
The report was released as international debate rages over fears that China has pushed developing countries into so-called debt traps, which could ultimately result in Beijing seizing assets when debts are not repaid.
Some critics argue that the concerns have been wildly overblown amid broader fears over the expansion of Chinese interests abroad under Xi.
A 2020 study by the China Africa Research Initiative at the Johns Hopkins University found that between 2000 and 2019 China cancelled $3.4bn of debt in Africa and a further $15bn was restructured or refinanced. No assets were seized.
Parks said, however, that while the “media myth that has developed over time is that the Chinese like to collateralise on physical, illiquid assets”, the latest research suggests that collateralisation of liquid assets is common.
“It is true that Chinese state-owned lenders have a strong preference for collateralisation: we find 44 per cent of the overall lending portfolio was collateralised, and when the stakes are really high, that’s when they turn to collateral,” he said.
“What’s happening is that the Chinese state-owned bank is set on requiring the borrower to maintain a minimum cash balance in an offshore bank account, or an escrow account, that the lender itself controls.”
Such contingent liabilities from the hidden debts loomed “almost like a phantom menace” for many countries, Parks said.
“If you’re in a finance ministry in a developing country the challenge of managing hidden Chinese debt is less about knowing that you will need to service undisclosed debts with known monetary values to China. It is more about not knowing the monetary value of debts to China that you may or may not have to service in the future,” Parks said.

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19-APR-2020 :: The End of Vanity China Africa Win Win
Emerging Markets

And the entire China Africa relationship has been an extraordinary exercise in Narrative Framing and linguistic control, accompanied by a chorus of Party Hacks chirruping Hosannas at every turn amplifying largely meaningless feel good Phrases artfully placed in the mouths of our Politicians and our Newspapers. It is remarkable.

"The red rising sun will light up the road ahead."

Interestingly, At that 2018 FOCAC Meeting Xi Jinping also delivered a thinly veiled warning
China's Xi says funds for Africa not for 'vanity projects' Reuters #FOCAC2018
So the first overarching Point, is that creditors are not Santa Claus and miscues will exact a very heavy price, Countries will be "Hambantota-ed"

Basically China has an Option to buy in SSA Assets at fire-sale Prices.
In an interview, The World Bank’s Malpass cited liens against Angola’s oil revenues associated with Chinese debt that were hidden by non-disclosure agreements, convenient for politicians and contractors.

“Let the people of the country see what the terms of the debt are as their government makes commitments,” Malpass said.
The Terms of these debts are hidden precisely because they are so egregious.

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Introducing the Global Gateway, Ursula von der Leyen emphasised partnerships with African countries, identifying February 2022 EU-Africa Summit as first venue in which EU will discuss its new connectivity strategy with regional partners. @ecfr
Frontier Markets

Yet can Europe really hope to compete with Chinese investment in Africa, totalling $47.4 billion?
It can.
When it comes to successful investment partnerships in Africa, bigger does not always mean better. 

Chinese investments across the continent have not brought about a China-style economic boom in a single African country.

Europe’s opportunity to fill the resulting gap lies in investment that creates large-scale, value-added production in Africa. 

But, to do so, the EU needs to deploy its resources in a coordinated, strategic manner. 

The key to ensuring that Europe becomes Africa’s leading growth partner is to combine the Global Gateway with the European Green Deal, the EU’s $1 trillion initiative for tackling climate change at home and abroad. 

Instead of separating its green agenda from its response to China’s Belt and Road Initiative, the EU should combine them into a coherent whole.
Africa provides the opportunity to do just that. Climate action in Africa is about greening the continent’s heavy industries and developing new, climate-friendly business sectors that use the digital economy. 

Sub-Saharan Africa has already leapfrogged the rest of the world in mobile banking and digital financial services. 

In 2019 these services and the new business sectors emerging from them generated $155 billion of value added in Sub-Saharan Africa. 

And much of this growth has been in Africa’s green economy. 

In east Africa alone, one million mobile phone subscribers have purchased off-grid solar power systems, as well as the energy-efficient lighting, televisions, and refrigerators powered by those systems. 

This has generated $86 million in income and $467 million in cost savings for households, and has prevented an estimated 2 million tonnes of CO2 emissions from entering the atmosphere.
If the EU is to create commercial corridors that shape the architecture of global trade, it will need to couple large investments in port and rail infrastructure with an industrial base integrated into manufacturing value chains
These sectors of Africa’s green economy could rely on the connective tissue created by the Global Gateway: infrastructure for green energy production, as well as advanced information and communications networks. 

Therefore, the EU should use the Global Gateway to implement the international aspects of the European Green Deal – not merely to enhance Africa’s exports of green energy (such as hydrogen) for European consumption. 

While this would require the bloc to think more strategically, bringing Europe into Africa’s green transformation would benefit both continents.
The strategic value of “smarter” investment
In her State of the Union address announcing the Global Gateway, von der Leyen acknowledged some of the shortcomings of European investment in Africa, declaring that “it does not make sense for Europe to build a perfect road between a Chinese-owned copper mine and a Chinese-owned harbour”

“We have to get smarter when it comes these kinds of investments”, she added. ‘Getting smart’ means investing in value-added production. 

If the EU is to create commercial corridors that shape the architecture of global trade, it will need to couple large investments in port and rail infrastructure with an industrial base integrated into manufacturing value chains.
Europe has done exactly that in one case in Africa. European partnerships with Rabat have turned Morocco into an African automotive manufacturing giant. 

Morocco’s Renault and Peugeot factories, supplied with components by the Morocco-based manufacturing plants of more than 200 global companies, have the capacity to produce around 700,000 vehicles per year. 

Morocco is becoming the central node in a commercial corridor that runs from west Africa to western Europe.
Although China invested heavily to expand Morocco’s main port, that port ships Moroccan-manufactured European vehicles – not Chinese vehicles – to international markets. 

Indeed, Chinese firms have felt compelled to integrate into the Moroccan-European value chain. 

China’s CITIC Dicastal, for example, opened a $400 million plant near Peugeot’s factory in Kenitra to supply the French automaker with up to 6 million components annually. 

Now, Peugeot’s sister company, German automaker Opel, is starting to use Peugeot’s Kenitra plant to produce electric cars – and providing Europe and Morocco with an important first-mover advantage in the development of carbon-free mobility in Africa.
Europe’s role in Africa’s green and digital economies
In outlining the Global Gateway’s goals to deepen trade links and strengthen supply chains, von der Leyen singled out the need to “develop new investment projects on green and digital technologies”. 

The European Green Deal can become the investment engine that achieves this objective, if it involves a European financial commitment on a scale large enough to match the Global Gateway’s ambitions.
Such European Green Deal partnerships with African actors have enormous potential to develop economies of scale and integrate value chains. 

To achieve this, the EU’s investment in Africa needs to be large enough to create local, value-added production that contributes to the continent’s emerging green and digital economies. 

The EU can merge the means of the Global Gateway with the European Green Deal to achieve their objectives in synergy with each other. 

In this way, the EU could establish a new foundation for its partnerships in Africa that enhances African prosperity, security, and sovereignty while promoting rules and business practices that are in line with European priorities and values.

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EU court cancels Morocco trade deals over Western Sahara dispute @FRANCE24 H/T @ChiedzaMadzima

The European Union's top court on Wednesday annulled the 27-country bloc's approval of agriculture and fishing agreements that allow Morocco to export goods from Western Sahara.
The ruling could damage the EU's relationship with Morocco, although the court said the effects of the 2019 agreements would be maintained over a certain period "to preserve the European Union’s external action and legal certainty over its international commitments."
The EU is Morocco’s leading trade partner and the biggest foreign investor in the North African kingdom, according to the bloc.
The case was brought to the court by the Polisario Front, the movement seeking Western Sahara's independence from Morocco. 

The movement challenged decisions by the European Council, the body that acts on behalf of EU member countries.
In its findings, the court determined that the Polisario Front was “recognized internationally as a representative of the people of Western Sahara," and that the EU did not ensure it secured the consent of the Saharawi people before sealing the agreements with Morocco.

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African Region Weekly epidemiological update on COVID-19 - 28 September 2021 @WHO

The African Region reported over 87 000 new cases and over 2500 new deaths, a 12% decrease and a 5% increase respectively as compared to the previous week. 

Since the latest peak early July, the number of weekly cases has been decreasing continuously for almost three months; while weekly deaths remain elevated. 

Approximately one third of countries (29%; 14/49) in the Region reported an increase in new cases, ranging from 17 to 61%, highlighting the heterogeneity of trends in the Region.
The highest numbers of new cases were reported from 

United Republic of Tanzania (24 307 new cases, a country which has not reported regularly)

South Africa (15 627 new cases; 26.3 new cases per 100 000; a 40% decrease)

Ethiopia (8842 new cases; 7.7 new cases per 100 000; a 5% decrease). 

The highest numbers of new deaths were reported from 

South Africa (885 new deaths; 1.5 new deaths per 100 000 population; a 35% decrease)

United Republic of Tanzania (664 new deaths this week)

Ethiopia (254 new deaths; <1 new deaths per 100 000; a 22% increase).

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Tunisian president Kais Saied appoints Najla Bouden Romdhane as Tunisia's 1st female prime minister @michaeltanchum

An engineer by training, she will need to pull an economic rabbit out of the hat


Subtle but its a tough call. 

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Mali junta wiping its feet on blood of French soldiers, says angry France @Reuters

France's Armed Forces minister defended her country's counterterrorism role in Mali and accused the military junta of hypocrisy, bad faith and wanting to delay a transition to democracy after the African country's prime minister said Paris was abandoning it.
Relations between France and its former colony have soured since Paris said in June it would reshape its 5,000-strong counterterrorism mission in the region and the junta began talks to bring Russian mercenaries into the country.
"The objective (of Mali) is not to keep the commitments made vis-à-vis the international community," France's minister of the Armed Forces, Florence Parly, said.
"I have the impression that the date (for the election) doesn't suit them perfectly, and that they want to prolong things. But from wanting that to wiping your feet on the blood of French soldiers, it's unacceptable," she said, referring to the death of a French soldier in Mali last week.
Speaking to state television ORTM and other media after returning to Bamako, Mali's interim prime minister, Choguel Maiga, said he did not want to comment on France's accusations at this stage. 

But he added: "the Malian people have never been and will never be ungrateful."
Mali's progress back to democracy following the August 2020 overthrow of President Ibrahim Boubacar Keita is being closely monitored in a region that has experienced four coups in 13 months, two of them in Mali.
Mali's military leaders agreed to an 18-month transition that would culminate with presidential and legislative elections on Feb. 27, 2022, but on Sunday Maiga said that date could be postponed.
He also told the U.N. General Assembly on Saturday that his country felt abandoned by the French move and signalled they were seeking other military help "to fill the gap which will certainly result from the withdrawal of Barkhane in the north of the country." 

Barkhane is France's counterterrorism operation in the Sahel region.
Denying Paris was abandoning Mali, Parly said Bamako had been kept informed at every turn on how France would reorganise its mission in the region.
"It's a lot of hypocrisy, bad faith and indecency especially because he made those comments on Sept. 25 and on Friday Sept. 24 a 52nd French soldier gave his life to fighting terrorism in the Sahel," Parly told students at Sciences Po university late on Monday.
Diplomatic and security sources have told Reuters that Mali's year-old military junta is close to recruiting the Russian Wagner Group, and France has launched a diplomatic drive to thwart it, saying such an arrangement is "incompatible" with a continued French presence. 
The French army started redeploying troops from its bases in Kidal, Tessalit and Timbuktu in northern Mali at the start of the month, French army sources have said.
France wants to complete the redeployment by January. It is reducing its contingent to 2,500-3,000 from about 5,000 by 2023, moving more assets to Niger, and encouraging other European special forces to work alongside local forces.

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Let's leave assumptions aside. Have you looked at the balance sheet of the @KenyaPower lately? @IEAKwame
N.S.E Equities - Industrial & Allied

If you have time to do, you will see that a reduction of the retail tariff will not be good news. Go figure.

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Unga Group PLC FY 2021 Earnings here
N.S.E Equities - Industrial & Allied


Par Value:                  5/-
Closing Price:           30.00
Total Shares Issued:          75708872.00
Market Capitalization:        2,271,266,160
EPS:              2.39 
PE:                12.55 

FY Earnings through 30th June 2021 versus through 30th June 2020 
FY Revenue 17.812638b versus 17.569967b

FY Operating Profit 616.202m versus 299.781m

FY Finance Costs [150.567m] versus [200.228m]

FY Profit before Tax 485.232m versus 118.090m

FY Profit after Tax 293.477m versus 66.161m

FY EPS 2.39 versus 0.45 

FY Assets 10.048779b versus 12.050876b

Cash at End of Period 1.521050b versus 661.486m


The Group’s revenue and profit for the year from continuing operations increased 1% and 343% respectively.

International wheat prices increased by at least 30% during the year due to poor harvest and adverse fiscal measures imposed by some of the leading exporting economies. 

The Company received payment for grain supplied in support of the government-led maize subsidy program in 2017. The interest element of the debt remains outstanding. 

The long outstanding tax refunds were also received during the year ending a protracted litigation process. Both receipts improved profit for the year.
Subsequent to the end of the financial year, the Company entered agreements with Nutreco BV to form two joint ventures; one to expand aquafeed production and marketing capability in the region, the other to manufacture animal feed and expand the sale of feed premixes in Uganda. 

Agreement was also reached with Big Cold Kenya Limited to buy its bake business and assets. Both transactions are expected to be closed in the first half the year 2021-22. 


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by Aly Khan Satchu (www.rich.co.ke)
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September 2021

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