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Home Thoughts

"The emperor (of Ethiopia) began his day by listening to informers'
reports. The night breeds dangerous conspiracies, and Haile Selassie
knew that what happens at night is more important than what happens
during the day. During the day he kept an eye on everyone; at night
that was impossible. For that reason, he attached great importance to
the morning reports. And here I would like to make one thing clear:
His venerable majesty was no reader. . . . The custom of relating
things by word of mouth had this advantage: If need be, the emperor
could say that a given dignitary had told him something quite
different from what had really been said. . . . It was the same with
writing, for our monarch not only never used his ability to read, but
he also never wrote anything and never signed anything in his own
hand. Though he ruled for half a century, not even those closest to
him knew what his signature looked like."

An Egyptian minister suggested that a terrorist attack – either a
bombing or a failed hijacking – was the most likely explanation.

The A320 aircraft went down about halfway between the Greek island of
Crete and Egypt's coastline, around 175 miles offshore. There were no
signs of survivors.

Picking up the signal through the noise of our world in 2014 is no
easy thing. In fact, my view is the new normal is a very arrhythmic
world. When I plugged ‘’arrhythmia’’ into my computer, it threw up
this;

‘’For years he’d been studying the phenomenon of chaos, of which an
arrhythmic heartbeat was a perfect example’’

His excellency Johan Borgstam told me the signal announcing this new
arrhythmic normal was the disappearance of the MH370. Since then
planes have been falling out of the sky like flies. And the
uncertainty around MH370 and MH17 which is sharpened by the way the
story is seemingly turned on and off took me back to Don Delillo

‘’”We are not witnessing the flow of information so much as pure
spectacle, or information made sacred, ritually unreadable. The small
monitors of the office, home and car become a kind of idolatry here,
where crowds might gather in astonishment.’’

Euro 1.1212
Dollar Index 95.32
Japan Yen 110.22
Swiss Franc 0.9917
Pound 1.4606
Aussie 0.7239
India Rupee 67.345
South Korea Won 1190.15
Brazil Real 3.5636
Egypt Pound 8.8789
South Africa Rand 15.8135

Spot gold was little changed at $1,254.46 per ounce at 0348 GMT, near
a three-week low of $1,244 reached in the previous session. The metal
is down 1.5 percent for the week, its biggest drop since the week
ended March 25.

Gold 6 month INO 1254.24
http://quotes.ino.com/charting/index.html?s=FOREX_XAUUSDO&t=c&a=50&w=1&v=d6

Crude Oil 5 day Chart INO 49.05
http://quotes.ino.com/charting/?s=NYMEX_CL.N16.E

Frontier Markets

"You won't scare us!" was how the Congolese leadership responded this
week to Western threats of sanctions unless President Joseph Kabila
ends his 15 years in power by holding an election on schedule in
November.

It is a message that has also been delivered, in various ways, to
Moise Katumbi, a former close ally of the president now seeking to
replace him - a measure of Kabila's apparent determination to stay in
power and his mastery of the means to do so.

Hours before Katumbi announced he would run for president, he was
accused of hiring U.S. mercenaries for a coup plot. On Friday, police
fired tear gas at him and thousands of his supporters outside the
prosecutor's office hearing the case in Lubumbashi, the Democratic
Republic of Congo's second city.

The standoff in the vast central African country, which has never
known a peaceful transfer of power, could become a violent showdown
between Kabila, who succeeded his assassinated father, and Katumbi,
former governor of Katanga province in the southeast and owner of TP
Mazembe, African soccer's Real Madrid.

The government says it is unlikely to be able to organise the
presidential poll on time due to budgetary and logistical constraints.
The country's highest court ruled a week ago that Kabila would stay in
power until elections could be held.

The United States and Britain said last week they were actively
considering sanctioning Kabila's inner circle unless progress was made
towards holding elections on time.

In response, Henri Mova Sakani, the Secretary-General of Kabila's
party, accused outside forces of trying to split up the country in a
bid to restore colonialism.

"You can come up with anything you like - sanctions or whatever. You
won't scare us!" he declared in a speech to hundreds of people
gathered in yellow-party t-shirts on Tuesday to mark the 1997
overthrow of autocrat Mobutu Sese Seko by Kabila's father.

Leading opposition parties say the court ruling is part of a
"constitutional coup d'etat" and have called for nationwide marches on
May 26 to demand Kabila step down this year.

But Kabila allies won more than two-thirds of the elections for
governors of newly created provinces in March, shoring up local
control of security forces and patronage networks.

"Cohesion in the Kabila camp has been maintained these last months,"
said Hans Hoebeke, International Crisis Group's senior Congo analyst.
"At this stage there is little-to-no pressure on him."

"Our future president is Moise Katumbi whether Kabila likes it or
not," said Pierre Nyembo Muyeye outside the prosecutor's office in
Lubumbashi. Some Katumbi partisans threatened to burn down the entire
city if he was arrested.

Known during his governorship for distributing $100 bills to the
public, Katumbi has been keen to present himself as the face of the
people against a predatory state. "The greatest army in the world is
the people," he often says.

"The government fears him because he has the potential to mobilise an
electorate in different parts of the country," said Kris Berwouts, an
independent Congo analyst. "There is an aura of success around him."

"Delaying tactics will work for a certain amount of time and buy him
months, maybe several more years in power," he said. "But it's not a
long-term strategy."

The Democratic Republic of Congo’s government issued a warrant for the
arrest of presidential hopeful Moise Katumbi on charges that he
recruited mercenaries.

“The public prosecutor has charged Mr. Katumbi and issued a
provisional arrest warrant,” government spokesman Lambert Mende said
Thursday by phone from the capital, Kinshasa. “He is now at the
disposition of the judge who could detain him in prison or put him
under house arrest, but he is no longer free.”

Thursday’s announcement “represents a significant escalation in the
political crisis in the Congo,” Jason Stearns, a director of the Congo
Research Group, said by phone from New York. “This is an attempt to
politically eliminate the main challenger.”

Conclusions

Katumbi is a formidable Challenger. Kabila has to tread carefully
because he could get ''Ouagadougou-ed''

In his book ‘Speed and Politics’ he says: “The revolutionary
contingent attains its ideal form not in the place of production, but
in the street, where for a moment it stops being a cog in the
technical machine and itself becomes a motor (machine of attack), in
other words a producer of speed.’’

As we look around the world today, we can see a battle for the
‘street’ from the streets of Bujumbura to the streets of Baltimore. In
November last year, I wrote about Ouagadougou’s signal to sub-Saharan
Africa and concluded that: We need to ask ourselves how many people
can incumbent shoot stone cold dead in such a situation – 100, 1000,
10000?

This is another point: there is a threshold beyond which the incumbent
cannot go. Where that threshold lies will be discov- ered in the
throes of the event.

Therefore, the preeminent point to note is that protests in Burkina
Faso achieved escape velocity.

Zuma has been able to wriggle out of responsibility for every problem
and disaster he has found himself in up to now. Even though he was
found to have acted illegally and inconsistently with the
Constitution, and might have allowed liberties to his friends in the
affairs of government for their financial benefit, there could again
be no consequences for his actions.

It is no wonder that the president is so jolly and laughs so
frequently. When it comes to political survival, it seems Zuma is
simply unconquerable.

Dollar versus Rand 6 Month Chart INO 15.7672
http://quotes.ino.com/charting/index.html?s=FOREX_USDZAR&v=d6&t=c&a=50&w=1

Egypt EGX30 Bloomberg +7.04% 2016 [Fell -1.80% yesterday]
http://www.bloomberg.com/quote/CASE:IND

7,499.49 -137.55 -1.80%

Nigeria's central bank will devalue the naira in the next few months,
analysts in a Reuters poll said on Thursday, but will also hike
interest rates next week and again in November to control inflation.

All but one of 12 analysts polled in the past few days said the
currency would be devalued, with a median expectation it would be
weakened by 15 percent. Many were reluctant to be pinned down on when.

"(Nigeria) has again come under immense pressure to devalue the
official naira exchange rate, and the probability of this happening in
the near term is high in our view," said Cobus de Hart at research
consultancy NKC African Economics.

De Hart listed risks such as a severe production shock, forex
shortages spilling over to the monetary environment, unions becoming
more vocal and growing opposition to a stable naira within government
circles as pressure to devalue.

The naira traded at a record low versus the dollar in the
non-deliverable forwards market on Tuesday, with markets betting on a
devaluation to tackle a spiralling economic crisis.

On the official market the central bank has put in place controls to
make sure the currency does not fall below 199 per dollar.

Analysts were sceptical about saying the devaluation would be
announced next Tuesday when the central bank is due to announce any
changes to monetary policy, though say there may be some form of
extraordinary measures.

Bismarck Rewane, chief executive of Lagos consultancy Financial
Derivatives suggested the Bank could announce a dual currency
exchange.

Renaissance Capital's global chief economist, Charles Robertson, said
while authorities would be reluctant to float the naira they may
instead introduce Venezuela-style dual-exchange rates, with an
officially endorsed parallel rate around 285 per dollar.

Still, Aly Khan Satchu, an independent analyst and investor at Rich
Management in Nairobi said the President had been betting the
equivalent of a single number at the Roulette wheel.

"He has been betting against the curve of history: Soros, Thai baht
and there are (others) too numerous to mention."

"The President needs to try and stay in charge of the process and keep
it orderly, any further delay risks a disorderly and Caracas outcome,"
said Satchu.

Venezuela's dual-exchange rates, implemented earlier this year, has
not stemmed rampant inflation that has destroyed purchasing power.

The curve of history [from Soros skinning the Bank of England in 1992,
to the Mexican peso crisis in 1994, to the Thai baht crisis in 1998
and many more too numerous to mention] confirm that maintaining an
artificial foreign exchange rate is a fool’s errand and eventually
carries the risk that the breakdown spirals out of control and can
become seriously disorderly. The official naira rate is just below 200
to the dollar but no one is holding any store by that price and that’s
why absolutely no one is putting any more money in Nigeria because
they all know when the haircut is finally imposed it’s going to be a
big one. I find it just extraordinary that such a brilliant president
would risk it all on a bet on a single number in a game of roulette.
Those are the odds.

Ghana Stock Exchange Composite Index Bloomberg -11.16% [37 month Lows]
http://www.bloomberg.com/quote/GGSECI:IND

Kenya’s big vision for a ‘coalition of the willing (CoW)’ agreement
with Uganda and Rwanda to build a major rail line and oil pipeline
that would invigorate and open up East Africa’s economy may be going
up in smoke as its partners look elsewhere for more economically
pragmatic paths to achieve their goals.

First it was Uganda. In March, East Africa’s third largest economy
pulled the plug on a tentative agreement with Kenya for an oil
pipeline deal. Desperate bids to save the deal fell through as
Tanzania, the new ally in Uganda’s oil pipeline deal said it would
expedite the process for a lot less less than the Kenyan route had
been estimated. Then Rwanda did what took both Kenya and Uganda by
surprise: opting out of the standard gauge railway (SGR)with the two
partners, once ‘bosom friends’.

Tanzania’s Magufuli relishing in new gains that may usher in a radical
geopolitical shift in the East African region in his favor.

Nairobi All Share Bloomberg +0.03% 2016
http://www.BLOOMBERG.COM/quote/NSEASI:IND

Conclusions

Nothing is local anymore - Everything is Global

Par Value:                  1/-
Closing Price:           21.75
Total Shares Issued:          378865102.00
Market Capitalization:        8,240,315,969
EPS:             1.12
PE:                 19.420

Par Value:                  0.05/-
Closing Price:           17.30
Total Shares Issued:          40065428000.00
Market Capitalization:        693,131,904,400
EPS:             0.95
PE:                 18.211

AT A bar off Langata road, a main highway in Nairobi, Kenya’s capital,
business has been struggling of late. The problem, the manager says,
is that his bar is inconveniently positioned between two crossroads
where officers from the police and the National Transport and Safety
Authority (NTSA) often put up roadblocks to check if drivers have been
drinking. “It is right what the government is doing,” he says. “But it
is really squeezing us. These people with their alcoblow have taken
away all of our customers.”

The “alcoblow”—what Kenyans call a breathalyser— is relatively new in
Nairobi. An effort to introduce the devices in 2006 was thwarted when
drivers got a court to declare that their rights were being violated.
But a traffic act in 2012 toughened penalties for drunk-driving; since
then, breathalysers have been used at traffic stops. In March the NTSA
acquired 45 new vehicles, from which officers can patrol and pull over
drivers they suspect of imbibing.

Yet in a country where getting round annoying rules is a national
sport, and where cops are seen as extractors of bribes rather than
upholders of the law, many people find ingenious ways to get away with
driving drunk. In the bar on Langata road, the manager admits that
when the police are around he will use the speakers to issue updates
about where the road blocks are. The information comes from a network
of drivers who, on a Saturday night, run a thriving business driving
tired and emotional customers in their own cars past the checkpoints
(but not all the way home).

In 2013 as many as 13,000 people died on Kenya’s roads. In Britain,
which has a somewhat bigger population and vastly more cars, the
figure was 1,700. Of the ten most dangerous countries in the world for
road deaths, only two, Iran and Thailand, are not in Africa. And the
number of Africans who can afford to buy cars and lots more beer is
only going up.