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Macro Thoughts

Home Thoughts

Revisit the most revered destination in the Bahamas now that it has
opened its new 125-foot infinity pool and adjoining Ocean Grill,
serving fresh seafood and other snacks.

“Have a heart that never hardens, and a temper that never tires, and a
touch that never hurts.” ― Charles Dickens

“A wonderful fact to reflect upon, that every human creature is
constituted to be that profound secret and mystery to every other.” ―
Charles Dickens, A Tale of Two Cities

“Now bomb-makers and gunmen have taken that territory. They make raids
on human consciousness.”

“Powerful events build their own networks of chaos and ambiguity,”
DeLillo wrote in a 2004 essay on Oswald; the mass of facts that
accumulated on these events has its own interconnections, missing
pieces, buried meanings. The Tsarnaevs’ story is a grand banquet for
conspiracy theorists, involving the FBI, the Russians, terror cells in
Dagestan and Chechnya, the unsolved murder of Tamerlan’s best friend
and two others in 2011. Within hours of the bombing you could find
pictures online that claim to show government agents standing near the
site of the first bomb right before it went off. Tamerlan himself
frequented conspiracy websites—did he anticipate the endless
conspiracy-theorizing that his bombing would give rise to? Conspiracy
thinking is similar, in a way, to a terror plot; both lend structure
to ambiguous reality. The more demonstrably false the theory, the more
powerfully it serves as a protest against reality.

On Friday, as the hereditary Azeri despot was on the plane back to
Baku, Azeri troops were already launching an offensive against the
breakaway Republic of Nagorno-Karabakh. One of the first casualties
was a 12-year-old Armenian boy.

What is Mossack Fonseca?
It is a Panama-based law firm whose services include incorporating
companies in offshore jurisdictions such as the British Virgin
Islands. It administers offshore firms for a yearly fee. Other
services include wealth management.

Where is it based?
The firm is Panamanian but runs a worldwide operation. Its website
boasts of a global network with 600 people working in 42 countries. It
has franchises around the world, where separately owned affiliates
sign up new customers and have exclusive rights to use its brand.
Mossack Fonseca operates in tax havens including Switzerland, Cyprus
and the British Virgin Islands, and in the British crown dependencies
Guernsey, Jersey and the Isle of Man.

How big is it?
Mossack Fonseca is the world’s fourth biggest provider of offshore
services. It has acted for more than 300,000 companies. There is a
strong UK connection. More than half of the companies are registered
in British-administered tax havens, as well as in the UK itself.

How much data has been leaked?
A lot. The leak is one of the biggest ever – larger than the US
diplomatic cables released by WikiLeaks in 2010, and the secret
intelligence documents given to journalists by Edward Snowden in 2013.
There are 11.5m documents and 2.6 terabytes of information drawn from
Mossack Fonseca’s internal database.

North Korea's top military body has accused US-led "hostile forces" of
laying siege to the country like Leningrad in World War II and Cuba
during the Cold War missile crisis.

In a statement carried Monday by the North's official KCNA news
agency, a spokesman for the National Defence Commission (NDC) also
said the latest UN sanctions imposed on Pyongyang over its nuclear
weapons programme were "anachronistic and suicidal" and could trigger
a nuclear strike on the US mainland.

The UN Security Council adopted its toughest economic sanctions to
date on North Korea after Pyongyang conducted its fourth nuclear test
in January and a space rocket launch a month later that was widely
viewed as a disguised ballistic missile test.

The NDC spokesman said the sanctions were the work of "the US and
other hostile forces" who were intent on attacking North Korea "in a
flock to swallow it up."

"The Leningrad blockade which struck terror into the hearts of people
... and the Caribbean crisis in the Cold War era can hardly stand
comparison with the situation," the statement said.

Far from breaking the North, such treatment would only strengthen its
resolve, it said, adding that Washington was engineering a crisis that
could see the North "make a retaliatory nuclear strike at the US
mainland any moment".

Conclusions

The Arrival of the THAAD has made China fall into line and undercut
North Korea.

As if things could not get any worse in the South China Sea, China’s
placement and testing of anti-ship missiles in the South China Sea all
but confirms Asia’s worst fears: America’s goal to ensure that China’s
rise is peaceful and that Beijing would take its place among nations
of the Asia-Pacific and larger Indo-Pacific as a “responsible
stakeholder” is dead and buried.

Euro 1.1384
Dollar Index 94.64
Japan Yen 111.52
Swiss Franc 0.9587
Pound 1.4224
Aussie 0.7626
India Rupee 66.335
South Korea Won 1148.74
Brazil Real 3.5536
Egypt Pound 8.8860
South Africa Rand 14.7304

Dollar Index 1 Year Chart INO 94.625 [Key Support is at 93.00+]
http://quotes.ino.com/charting/index.html?s=NYBOT_DX&v=d12&t=f&a=50&w=1

Euro versus the Dollar 1 Year Chart 1.1384 [edging towards Key
Resistance 1.1450]
http://quotes.ino.com/charting/index.html?s=FOREX_EURUSD&v=d12&t=f&a=50&w=1

Sterling fears mount as Britain nears vote on EU #Brexit


Sterling 1 Year Chart 1.4220 [1.3650 Target]
http://quotes.ino.com/charting/index.html?s=FOREX_GBPUSD&v=d12&t=f&a=50&w=1

Former Soros partner Rogers is short the #Fangs (#Facebook,
#Amazon, #Netflix and #Google). on.ft.com/1TmWmgy

Gold 1 Year Chart 1217.195 [1250 is the Key Pivot]
http://quotes.ino.com/charting/index.html?s=FOREX_XAUUSDO&t=c&a=50&w=1&v=d12

Crude Oil 1 Year Chart INO 36.36 [Now targets 30.00]
http://quotes.ino.com/charting/index.html?s=NYMEX_CL.K16.E&v=d12&t=f&a=50&w=1

Joseph Safra, 77, owner of the Safra group, is the latest member of
the elite in Brazil to be embroiled in a corruption scandal.

The financier, who owns London’s Gherkin tower, is worth an estimated
$18.3 billion, according to Fortune, making him the second richest man
in Brazil.

Each night in Monte Carlo, it is said, a recording of predatory birds
is transmitted through hidden loudspeakers in the main square to
prevent sparrows from soiling the famous casino's pristine lawn.

Frontier Markets

On Monday, 17 Angolan activists received sentences ranging from two to
eight-and-a-half years in jail for participating in a book club that
was discussing Gene Sharp’s “From Dictatorship to Democracy”. Far from
being just an isolated act of dissent, their book club was actually an
escalation of a decade-plus conflict between Africa’s
second-longest-serving president Jose Eduardo dos Santos and young
Angolans seeking a brighter, more democratic future.

The conflict was sparked on November 26, 2003, when a car washer in
the capital city of Luanda was caught singing a politically defiant
tune by popular Angolan rapper MCK. Presidential guard soldiers seized
the young man, Arsénio Sebastião. Against the cries of onlookers, they
tied his arms behind his back and marched him out to the Atlantic
Ocean.

While the presidential guard soldiers had intended to cultivate a
climate of fear in the Luanda population, they may have done quite the
opposite. The drowned Sebastião’s martyrdom continues to fuel the
flames of a growing citizens’ movement in his homeland.

Alexandre Ricard’s smile didn’t waver as he entered a tavern in the
South African township of Soweto and saw one of Pernod Ricard’s most
popular whiskies -- shelved behind steel grates capped with iron
shards.

The chief executive officer took a picture of the security precautions
and the meager layout on his iPhone, thanked the woman behind the bar
for her welcome and stepped out into the unpaved street.

“We have to be here,” said Ricard, 43, during a visit last month to
the slums to see two of the more than 2,000 makeshift taverns, called
“shebeens,” that Pernod sells to.

The world’s second-largest distiller is targeting Africa as the next
big market for its Jameson Irish whiskey and Absolut vodka, more than
50 years after what is now competitor Diageo Plc began producing
there. Continental spending on consumer goods is projected to reach
$1.4 trillion by 2020, according to the McKinsey Global Institute.
Africa has the potential to become as important as Asia, currently
Pernod Ricard’s largest region for revenue, the company says.

The timing isn’t optimal. Consumer confidence is eroding in South
Africa as the nation nears economic collapse under President Jacob
Zuma, whose tenure has been marred by corruption scandals and a
selloff in the country’s bonds and currency. Conditions for business
in Angola and Nigeria have deteriorated as the value of oil exports --
the single-largest contributor to economic development in West Africa
-- has declined by almost 70 percent since 2012. Pernod opened
subsidiaries in both countries that year.

“It would have been better to invest earlier as the environment in
Africa is very mixed at the moment,” Victor Lopes, Africa economist at
Standard Chartered bank in London, said by phone. The oil-price crash
has hurt such countries as Angola, while others, like Ivory Coast and
Ethiopia, are “doing very well,” he said.

Pernod Ricard SA also faces a tough opponent in Diageo, the
London-based maker of Johnnie Walker scotch and Smirnoff vodka. World
leader Diageo already sells to over 20,000 shebeens in South Africa
alone and dominates sales of spirits on the wider continent. Its
market share for spirits by volume in Africa plus the Middle East is
23 percent, versus Pernod’s 5 percent, according to researcher
Euromonitor.

“If Pernod wants to take over Diageo globally, they need to close the
gap in Africa,” Trevor Stirling, an analyst at Sanford C. Bernstein,
said by phone.

Pernod says it’s in for the long haul, seeking the kind of growth that
let it expand from a merger between two family businesses in the south
of France into a drinks conglomerate with a market value of 26 billion
euros ($30 billion). It’s invested 420 million euros in Africa and the
Middle East since 2010, less than Diageo’s $1 billion, and has hired
over 500 staff on the continent.
These efforts have done little to lift Pernod shares, which are
lagging behind the benchmark European food and beverage index. They’re
curbed by slower growth and a corruption crackdown that crimped demand
for high-end cognacs and whiskies in China, Pernod’s largest market
after the U.S. The shares fell 2.8 percent to 95.22 euros at 3:14 p.m.
in Paris, pushing them down 9.3 percent this year.

The company’s Africa initiative comes as its competitor is facing a
reality check. Diageo Chief Executive Officer Ivan Menezes signaled a
slowdown in Africa to investors in January, a year after he said the
continent could one day account for 20 percent of sales. The same
month, the International Monetary Fund cut its economic-growth
forecasts for sub-Saharan Africa for this year to 4 percent and
reduced next year’s estimate to 4.7 percent.

“It’s a tough part of the curve at the moment,” John O’Keefe, the
president of Diageo’s Africa division, said by phone. “We’ve been in
Africa a long, long time, and we’ve learned what it takes to operate
through the economic cycles.”

In South Africa, Pernod’s strategy is twofold. In places like Soweto,
it’s trying to lure low-income residents now in order to retain their
loyalty when they join a rising middle class later -- a phenomenon
that led CEO Ricard to call it the “Brooklyn of Johannesburg.”

At the same time, the company is targeting the wealthy, and has seen
an increase in demand for its so-called prestige brands at high-end
venues such as the Arque Champagne Crescent bar in Johannesburg’s
affluent Sandton district.

“These are the places where we really want to target the emerging,
high-net-worth black consumer,” said Paul Scanlon, managing director
for Pernod’s South Africa division. He was speaking at the Wine Bank,
a private club in Sandton where members pay to keep millions of
dollars worth of fine wine in climate-controlled vaults.

On a back road in Tembisa, a slum on Johannesburg’s outskirts where
the company pays local bikers to festoon shebeens with branded table
mats and pennants, field sales manager Werner Vosloo agreed. “When
millionaires born in the slums return to the townships in Maseratis
and Ferraris on the weekend, they sit at a table with a bottle of
Jameson,” he said from behind the wheel of his Range Rover.

“The liquor players, especially Pernod Ricard, entered the African
market very late,” Stefano Niavas, a Johannesburg-based partner in
Boston Consulting Group’s consumer practice, said by phone. “But you
can’t wait for it to be rosy, wade in and expect to make a lot of
money. Otherwise it’ll be later and later and you’ll miss the next
boom.”

KPMG Southern Africa, a member of the global advisory network, has
ended a 15-year stint auditing companies controlled by the
Johannesburg-based Gupta family, after the ruling party and the
national graft ombudsman announced investigations into its alleged
influence over the state.

KPMG Southern Africa Chief Executive Officer Trevor Hoole said the
“association risk is too great” following the recent “media and
political interest in the Gupta family,” Johannesburg-based Fin24
reported in a story carried on the website of Engineering News, citing
an internal e-mail.

“Our very clear understanding is that this was a very reluctant
decision on their behalf,” the Gupta family’s Oakbay Investments said
in an e-mailed response to questions on Friday. “KPMG confirmed to
Oakbay that no audit reason whatsoever contributed to this
development.‎”

In its ruling, the Constitutional Court said that in refusing to pay
back the millions spent on his home, Mr. Zuma had “failed to uphold,
defend and respect the Constitution as the supreme law of the land.”
That has been the story of Mr. Zuma’s leadership. The president of
South Africa is elected by Parliament, with is dominated by the
A.N.C., so a withdrawal of support by the A.N.C. national executive
committee would be tantamount to a demand that Mr. Zuma resign. It’s
time.

Dollar versus Rand 6 Month Chart INO 14.7303 [SELL THE ZAR 7.40 AM
4TH APRIL]
http://quotes.ino.com/charting/index.html?s=FOREX_USDZAR&v=d6&t=c&a=50&w=1

Egypt's General Prosecution is investigating around 15 exchange
bureaus after the central bank reported them for hoarding dollars and
contributing to Egypt's currency crisis, two prosecution sources told
Reuters on Sunday.

Central Bank Governor Tarek Amer is battling against a black market
which is sucking up hard currency liquidity from the banking sector
and hurting the pound, which has weakened to record lows of 10 per
dollar versus an official rate fixed at 8.78 per dollar.

Nigeria All Share Bloomberg -10.95% 2016
http://www.bloomberg.com/quote/NGSEINDX:IND

Ghana Stock Exchange Composite Index Bloomberg -4.28% 2016
http://www.bloomberg.com/quote/GGSECI:IND

Thirty per cent of all shipping in the world passes this point on the
north-east edge of Africa, where the water narrows to a few kilometres
opposite Yemen. A former French colony that became independent only in
1977, Djibouti sits at the southern entrance to the Red Sea, en route
to the Suez Canal — a waypoint between Africa, India and the Middle
East. Over the past 15 years, the country has set about capitalising
on its location at the nexus of international trade: once completed,
the Doraleh Multi-Purpose Port will be the largest of eight ports that
together will handle containers, livestock, oil, phosphates and more.

But the geostrategic ambition of the small, authoritarian state —
which at 23,200 sq km (8,950 sq miles) is only slightly larger than
Wales — does not stop there. The US, several European countries and
Japan have all pinned global military ambitions on Djibouti. Now China
is set to do the same.

China is planning its first overseas military base at Doraleh, within
a few kilometres of America’s largest military outpost in Africa. As
superpowers jostle for strategic influence, this impoverished state,
home to fewer than a million people, is helping to shape a new world
order.

One US soldier who served here describes it as “a hot hell box in the
armpit of Africa”. Temperatures reach into the mid-40s for nearly half
the year. Government offices shut down at 12.30, and an entire nation
of men, and many women, take up the national pastime: chewing for
hours on khat, a bitter leaf so renowned for its amphetamine-like
properties that it is banned in Britain and the US.

“If Djiboutians stopped chewing khat for seven days, they would
overthrow the government,” says one port worker. He is only half
joking. Eccentric and appealing as it is, Djibouti is authoritarian
and brittle too. President Ismaïl Omar Guelleh, a former head of the
secret police who has run the country since 1999, will seek
re-election for his fourth term on April 8, having altered the
constitution in 2010 to allow him to extend his rule. The opposition
complains regularly of illegal security crackdowns and the
impossibility of free and fair elections.

Amid the boom in construction, Djibouti’s growth rate is likely to
surpass 7 per cent this year. But the investments are having “limited
trickle-down effects”, according to the International Monetary Fund.
Nearly two-thirds of the population lives in poverty, and half the
labour force is unemployed. In the absence of many skilled domestic
workers, Chinese labourers have been flown in.

Djibouti is now the active centre for what US soldiers at the camp
refer to as “g-wot”: the global war on terror.

Nightlife. While parts of the city and many Muslims are dry, drinking
is common. ‘Everyone here drinks, and if they don’t, they drink in
private,’ one Djiboutian jokes © Nichole Sobecki
https://next.ft.com/content/8c33eefc-f6c1-11e5-803c-d27c7117d132

Photographing the Sudanese presents its own set of challenges. Many of
the non-Arab residents of Sudan have skin that ranges in tone from
deep brown to pitch black. They are shades found everywhere on the
African continent, but the people of Sudan in particular have not
always been photographed with a sensitivity that captures their true
likenesses. In too many pictures from the region, they are dim figures
in the background, unlit to the point of being shadows, their faces
blank or distorted. When the camera does capture their expressions,
they are often inscrutable, hinting at despair yet kept at a remove.
But the American photographer Adriane Ohanesian, who spent time with
some of the thousands of Darfuri women and children who have escaped
ground and aerial government attacks by hiding in Darfur’s Marra
Mountains, has produced photos that are striking in their closeness to
the people at the conflict’s center.

Back in January investors were demanding record premiums of 620 basis
points to hold African bonds rather than U.S. debt. That has now
fallen back to 550 bps, with oil importers Kenya and Ivory Coast
topping the list of winners as this chart shows: reut.rs/1MZUrYz .

An investor-friendly debt swap by Mozambique's state-run fishing firm
has also helped sentiment, as has struggling metal miner Zambia
starting talks with the International Monetary Fund.

Now some countries could leverage the improved mood. Kenya's
presentation, led by finance minister Henry Rotich, is billed as a
'non-deal' roadshow but it is likely to be at least a test of the
waters.

"(Kenya) could probably issue. Aside from the 8 percent budget
deficit, it's a pretty good story," said Kevin Daly, a portfolio
manager at Aberdeen Asset Management. "The currency is stable,
domestic rates are coming down, inflation is starting to fall and
growth is in the 5-6 percent range."

The World Bank this year singled out Kenya as an African bright spot,
with economic growth accelerating thanks to cheaper oil, a solid
agriculture sector, and infrastructure investment.

The yield on its existing 2024 dollar bond is down to around 7.75
percent from it 9.8 percent January high. But to warrant the extra
cash, any new 10-year bond will need to have a premium of up to 50
basis points on that, investors say.

But other African countries will have to pay much more.

The British government has offered to help Kenya trace and recover
assets looted by Moi-era power men named in the Kroll Report even as
the risk consulting firm said it has only completed a quarter of the
job.

UK authorities said they are currently in touch with Nairobi to help
identify and seize the more than £1 billion (Sh145 billion) looted
from taxpayers and stashed in offshore bank accounts and prime real
estate purchases in the UK.

The Kroll report uncovered systematic looting of public resources that
were subsequently hidden in more than 40 countries and tax havens
around the world in the form of cash in banks, land, ranches, and
shares in blue-chip companies.

“The UK continues to work closely with the Kenyan authorities, and has
asked for information necessary to take this forward,” said a
spokesperson at the British High Commission in Kenya.

The British High Commission said recent asset seizures and
repatriation, as was the case in the so-called Chickengate scandal and
confiscation of former Kenya Power boss Samuel Gichuru’s offshore
account funds, show that the UK is committed to the fight against
graft.

“Recent times have demonstrated we’re keen to support Kenya in this
area,” the spokesperson said.

Conclusions

The Key Triangulator is overseas.

The 12 per cent growth came as patrons increasingly turn to spirits
such as brandy, gin and vodka due to their affordability and
availability in smaller packs, according to market research firm
Euromonitor International.

This makes spirits one of Kenya’s fastest growing alcoholic beverages
category compared to beer, whisky and wines, a factor that has touched
of rabid competition by industry players for consumers’ throats.

“The growing young population in Kenya will also provide an
opportunity for strong growth,” said the London-based business
intelligence firm.

Kenya Shilling versus The Dollar Live ForexPros 101.573
http://j.mp/5jDOot

Nairobi All Share Bloomberg +1.19% 2016
http://www.BLOOMBERG.COM/quote/NSEASI:IND

147.44 +0.83 +0.57%

According to the dictionary, bifurcate means to divide into two parts
or branches, or forked or into two parts, as the Y-shaped styles of
certain flowers. What is clear is that the Nairobi Securities Exchange
has bifurcated and this trend has accelerated during the recent
earnings announcement season. The Nairobi All Share is up 1.19 per
cent this year and at a 17-week high. The Nairobi NSE20 Index is 1.09
per cent down and at an 11-week high. However, these benign year-to-
date returns are veiling a big bifurcation. Winners are winning big
and the losers are losing their shirts.

Bloomberg carried a report last week which was headlined: ‘In the new
emerging markets, alpha comes in the form of politics.’ “Situations
like that require being more on the ground, to be there to understand
what’s happening,” the report stated. ‘’The result is a dramatic
shift: firms now have analysts, learn the names of politicians,
prosecutors and supreme court justices, double the number of trips,
scan prices at foreign supermarkets, track footprints at stores, and
read facial expressions of policy makers. Global fragility, they say,
is unveiling institutional weakness, graft, poor governance, and low
labour productivity - and they need to track them all.’’ Now back to
the bourse and lets sift through the winners and the losers starting
with the big winners, the outliers. Standard Chartered Kenya has
soared by 26.66 per cent so far this year. That’s 22 times better than
the benchmark index. Co-operative Bank is plus 16.66 per cent, DTB
14.43 per cent up. Other big winners are KenolKobil which rose by
18.22 per cent, Bamburi Cement up by 10.85 per cent, BAT higher by
8.15 per cent. Safaricom is up 3.36 per cent year-to-date but I have a
plus 37.61 per cent price appreciation target (22.50) for the year.
For KCB I have a 37.14 per cent price appreciation target (60.00). If
you are clustered in these stocks, then you have ‘alpha’ this year.

On the flip side, we have had some dramatic price slumps. Let’s start
with National Bank which was planted in the headlines last week. It is
down 23.59 per cent in 2016 and worryingly on Friday there was not one
single buyer showing at the closing bell. NBK is trading at 13- year
lows. Barclays Bank Kenya is down by 19.485 per cent and slumped to a
2011 low Friday. High frequency social media commentary is signalling
a franchise under pressure and stress. Uchumi has declined by 53.42
per cent. TransCentury is down 40.571 per cent and at an all- time
low. I have to admit I missed some big clues. I remember being face to
face with an erstwhile grocer, the share price was riding high at 21
and not one facial expression synchronised with what I was hearing. I
give a shout-out to Sunil Sanger who spotted the NBK fiasco about nine
months ago.

@StanChartke +26.66% in 2016 and at a 2016 Closing High
https://rich.co.ke/rcdata/company.php?i=MjU%3D

@Barclays_Kenya -19.485% in 2016 and at a 5 Year Low share data
https://rich.co.ke/rcdata/company.php?i=MTQ%3D

.@National_Bank closed at a 2005 Low and is -25.39% in 2016 share data
https://rich.co.ke/rcdata/company.php?i=MjI%3D

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