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It was indeed a pleasure hosting the 21st century governor and now
Central Banker of the Year (according to African Development Bank) -
Dr. Patrick Njoroge at Mindspeak this weekend. It was a full house and
we had to turn people away. I was what’s called a ‘short-end’ trader
and ran ‘short- end’ trading desks. If you think of the maturity
spectrum as a continuum, the short-end is zero to two years, two to
five is the middle of the curve and further than five out to even a
100 years is the ‘long-end’.  e short-end of the curve is essentially
hyper-sensitive to interest rate moves and if you wish to develop some
expertise in this area, you, of course, have to concentrate fully on
the central banker, who is the individual with the pistol when it
comes to interest rates. I have studied central bankers for eternity,
from the folks at the Bundesbank, Trichet, through Greenspan. I have
weighed their words and even went as far as to study facial
expressions. My first point and take it from me, is that Dr. Njoroge
ranks right up there.

He was a viral ‘Tour De Force’ clocking close to 40 million
impressions ahead of and during Mindspeak forum.  at is a big number
pure and simple.The governor spoke for 90 minutes and covered just
about everything
USAID gives local firms Sh380 million to promote valuable agriculture projects

1. “The exchange rate is stable.”

 The currency is at a nine-month high and that is after a 100 basis
point rate cut.  The shilling is ‘teflon while currencies are crashing
all over Africa and its stability is entirely correlated to the
governor’s bona fides.

2. “Current account deficit for 2016 we expect 5.5 per cent to GDP”

This has been a perennial challenge for Kenya but the trend has
improved dramatically in part because the price of oil [even after a
near plus 80 per cent snap-back since January) remains benign and oil
is the single biggest expense item for Kenya Inc.

3. “Th e most important asset for any bank and the industry is trust”

Dr. Njoroge said: ‘’ The future in the banking sector is about
transparency, governance and effective business models’’. Going by the
first quarter earnings releases seen so far, the banks have gotten
with the Njoroge Programme.

4. “Our first duty is to the depositors”

These are real people not just numbers.

5. “How many people who collapsed banks are in jail?”

None. So we need to provide strong evidence to ensure they are jailed”

The governor said definitively that the ‘’perpetrators of Dubai Bank
fraud will be made accountable.’’
Regarding Imperial Bank, he said: “Never before had so few robbed so
much from so many.” He termed the fraud as ‘’a crime of opportunity
with the use of IT systems.’’
He called the Chase Bank ‘’Islamic banking’’ excuse a gimmick.  The
governor said he was likely to take an office in the Law Courts this
year as he prosecutes these cases.

6. ‘’The most important thing in most AGMs has always been on power
banks & umbrellas, that has to change”

 There was a heavy-weight Boxer called Evander ‘ e Real Deal’
Holyfield. I posit Dr. Patrick is ‘ The Real Deal’ Njoroge.

Macro Thoughts

Yellen’s remark that the Fed will raise rates "probably in the coming
months" drove benchmark two-year note yields higher for a third
consecutive week. The comments at an afternoon appearance at Harvard
University followed those from other Fed officials who signaled that
the Federal Open Market Committee’s June 14-15 meeting is "live.”

The market-implied probability of a rate increase next month has risen
to 30 percent, from 12 percent at the end of April. For the following
meeting, in July, the chances exceed 50 percent. The shift in
sentiment shows traders may be giving more credence to the Fed’s
projection of two more rate boosts this year, after policy makers
lifted their overnight benchmark from near zero in December.

Home Thoughts

Roberto Bolaño was an exemplary literary rebel. To drag fiction toward
the unknown he had to go there himself, and then invent a method with
which to represent it. Since the unknown place was reality, the
results of his work are multi-dimensional, in a way that runs ahead of
a critic’s one-at-a-time powers of description. Highlight Bolaño’s
conceptual play and you risk missing the sex and viscera in his work.
Stress his ambition and his many references and you conjure up threats
of exclusive high-modernist obscurity, or literature as a sterile
game, when the truth is it’s hard to think of a writer who is less of
a snob, or—in the double sense of exposing us to unsavory things and
carrying seeds for the future—less sterile.

We follow Bolaño into digressions, and with the weak intuition of a
dream we sense him playing with the tools of genre: halfway through, a
scene might vaguely take on a quality of thriller, porn, or fable.
Every so often a character might start to discuss the problems of
semblances and metaphors that reveal or conceal. This is the
doubt-raising problem of representation itself. Yet there are scenes
that feel like they could be there for no other reason than to
memorialize a vivid incident Bolaño might have witnessed, and which
arrive in the novel like assertive, physically present ambassadors
from life. Because there are many references to painting, and because
the plot seems at times to move invisibly, as if unable to break out
of stasis, the visual starts to take on great importance.

Seventy-one years ago, on a bright cloudless morning, death fell from
the sky and the world was changed. A flash of light and a wall of fire
destroyed a city and demonstrated that mankind possessed the means to
destroy itself.

Why do we come to this place, to Hiroshima? We come to ponder a
terrible force unleashed in a not-so-distant past. We come to mourn
the dead, including over 100,000 Japanese men, women and children,
thousands of Koreans, a dozen Americans held prisoner.

Their souls speak to us. They ask us to look inward, to take stock of
who we are and what we might become.

It is not the fact of war that sets Hiroshima apart. Artifacts tell us
that violent conflict appeared with the very first man. Our early
ancestors having learned to make blades from flint and spears from
wood used these tools not just for hunting but against their own kind.
On every continent, the history of civilization is filled with war,
whether driven by scarcity of grain or hunger for gold, compelled by
nationalist fervor or religious zeal. Empires have risen and fallen.
Peoples have been subjugated and liberated. And at each juncture,
innocents have suffered, a countless toll, their names forgotten by
time.

Yet in the image of a mushroom cloud that rose into these skies, we
are most starkly reminded of humanity’s core contradiction. How the
very spark that marks us as a species, our thoughts, our imagination,
our language, our toolmaking, our ability to set ourselves apart from
nature and bend it to our will — those very things also give us the
capacity for unmatched destruction.

Every great religion promises a pathway to love and peace and
righteousness, and yet no religion has been spared from believers who
have claimed their faith as a license to kill.

The wars of the modern age teach us this truth. Hiroshima teaches this
truth. Technological progress without an equivalent progress in human
institutions can doom us. The scientific revolution that led to the
splitting of an atom requires a moral revolution as well.

That is why we come to this place. We stand here in the middle of this
city and force ourselves to imagine the moment the bomb fell. We force
ourselves to feel the dread of children confused by what they see. We
listen to a silent cry. We remember all the innocents killed across
the arc of that terrible war and the wars that came before and the
wars that would follow.

For this, too, is what makes our species unique. We’re not bound by
genetic code to repeat the mistakes of the past. We can learn. We can
choose. We can tell our children a different story, one that describes
a common humanity, one that makes war less likely and cruelty less
easily accepted.

The world was forever changed here, but today the children of this
city will go through their day in peace. What a precious thing that
is. It is worth protecting, and then extending to every child. That is
a future we can choose, a future in which Hiroshima and Nagasaki are
known not as the dawn of atomic warfare but as the start of our own
moral awakening.

Harold Pinter, that it “never happened …Nothing ever happened. Even
while it was happening it wasn’t happening. It didn’t matter. It was
of no interest. It didn’t matter … “. Pinter expressed a mock
admiration for what he called “a quite clinical manipulation of power
worldwide while masquerading as a force for universal good. It’s a
brilliant, even witty, highly successful act of hypnosis.”

On Obama’s watch, a second cold war is under way. The Russian
president is a pantomime villain; the Chinese are not yet back to
their sinister pig-tailed caricature – when all Chinese were banned
from the United States – but the media warriors are working on it.

In its mammoth war game in 2015, Operation Talisman Sabre, the US
practiced “choking” the Straits of Malacca through which pass most of
China’s oil and trade. This was not news.

Writer Ben Rhodes is likely to have been a close collaborator but the
dominant voice will have been the president himself

Euro 1.1104
Dollar Index 95.89
Japan Yen 111.12
Swiss Franc 0.9948
Pound 1.4616
Aussie 0.7160
India Rupee 67.335
South Korea Won 1190.74
Brazil Real 3.6125
Egypt Pound 8.8901
South Africa Rand 15.7816

Dollar Index 1 Year Chart INO 95.89 [Higher still]
http://quotes.ino.com/charting/index.html?s=NYBOT_DX&t=c&a=50&w=1&v=d12

Euro versus the Dollar 1 Year Chart 1.1104 [Targets sub 1.1000]
http://quotes.ino.com/charting/index.html?s=FOREX_EURUSD&t=c&a=50&w=1&v=d12

Dollar Yen 3m chart INO 111.12 [Whoa!]
http://quotes.ino.com/charting/index.html?s=FOREX_USDJPY&v=d3&t=c&a=50&w=1

Average #OPEC @IEA @EIAgov data show another big #oil stock build
this year, more in 2017 @ReutersGraphics


Saudi oil output stable at high levels while Iran's production has
surged (via UBS)

The slump in crude prices has forced the government to sell bonds and
draw on its currency reserves, still among the world’s largest. Net
foreign assets fell by $115 billion last year, when the kingdom ran a
budget deficit of nearly $100 billion.

Oil based economies are going to contract, currencies which have
already collapsed are going to be routed and Greek- style austerity
will be the order of the day. The melt-down is coming.

Ryszard Kapuciski said: “If the crowd disperses, goes home, does not
reassemble, we say the revolution is over.”

The revolution is only just beginning.

CARACAS, Venezuela — The courts? Closed most days. The bureau to start
a business? Same thing. The public defender’s office? That’s been
converted into a food bank for government employees.

Step by step, Venezuela has been shutting down.

This country has long been accustomed to painful shortages, even of
basic foods. But Venezuela keeps drifting further into uncharted
territory.

In recent weeks, the government has taken what may be one of the most
desperate measures ever by a country to save electricity: A shutdown
of many of its offices for all but two half-days each week.

But that is only the start of the country’s woes. Electricity and
water are being rationed, and huge areas of the country have spent
months with little of either.

Many people cannot make international calls from their phones because
of a dispute between the government and phone companies over currency
regulations and rates.

Coca-Cola Femsa, the Mexican company that bottles Coke in the country,
has even said it was halting production of sugary soft drinks because
it was running out of sugar.

Last week, protests turned violent in parts of the country where
demonstrators demanded empty supermarkets be resupplied. And on
Friday, the government said it would continue its truncated workweek
for an additional 15 days.

Continue reading the main story

“There’s been plenty of problems, but one thing I haven’t seen until
now is protests simply to get food,” said David Smilde, a
Caracas-based analyst for the Washington Office on Latin America, a
human rights group, referring to the demonstrations last week.

The growing economic crisis — fueled by low prices for oil, the
country’s main export; a drought that has crippled Venezuela’s ability
to generate hydroelectric power; and a long decline in manufacturing
and agricultural production — has turned into an intensely political
one for President Nicolás Maduro. This month, he declared a state of
emergency, his second this year, and ordered military exercises,
citing foreign threats.

But the president looks increasingly encircled.

The economic situation of this country is collapse,” Pablo Parada, a
law student, who was participating last week in a hunger strike in
front of the O.A.S. office in Caracas. “There are people who go hungry
now.”

Frontier Markets

“For my four years of detention, I did not exist. I was like a tiny
coin, buried in a hole,” Abaifouta said.
http://www.theguardian.com/world/2016/may/29/former-chad-dictator-hissene-habre-learn-fate-after-alleged-victims-long-fight-for-justice

“For four years I went through terrible treatment, I slept on the
floor. You get sick and you don’t get medicine. You just wait for
death to come.

#Uganda on Sunday announced that it is breaking its military
cooperation with #NorthKorea during visit of @GH_PARK


South Korean president, Park Geun-Hye, the receives a banquet of
flowers from Megan Makanga at State House Entebbe yesterday. PHOTO BY
STEPHEN WANDERA.
http://www.monitor.co.ug/News/National/Uganda-cut-defence-ties-Korea/-/688334/3224344/-/tkvsuc/-/index.html

Hundreds of thousands of rands have been spent while Des van Rooyen's
official home is readied.

The government has splashed out at least R500 000 on a luxury
apartment for the controversial co-operative governance and
traditional affairs minister, Des van Rooyen, and his family at a
five-star boutique hotel in Pretoria.

This follows Finance Minister Pravin Gordhan’s warning in this year’s
budget speech that the government planned to introduce stringent
cost-cutting in all departments to allow additional spending on higher
education and other national priorities. The measures would include
national travel and accommodation.

The hotel, 131 on Herbert Baker, has a 180-degree view of Pretoria and
borders on a nature reserve in the wealthy suburb of Groenkloof.
“Enjoy spectacular sunsets over the city from the exclusive Ristorante
Grissini and extravagant high teas are served on the front lawn
daily,” its website gushes.

SOUTH African President Jacob Zuma toppled his highly respected
Finance minister Nhlanhla Nene on Wednesday, last week, and replaced
him with an apparent neophyte David Van Rooyen.

The response was real time. #Zumamustfall became the most trending
hashtag in South Africa and rand assets got crushed as investors
world-wide hit the eject [at any price] button.

The rand cratered to a record low 16.0543 per US dollar before paring
losses to trade 1.9 per cent down at 15.7648 by 7.04pm in Johannesburg
on Friday.

Helen Zille tweeted: “Nene’s firing is key to understanding how ANC
[African National Congress] works. Don’t cross Zuma’s path even if it
is SA’s interests, if you want to keep your job.”

Pierre Du Toit, a professor at the Universe of Stellenbosch told
Bloomberg: “It’s a disaster. The decisions he is taking are those of a
man who doesn’t understand that his own interests are tied to that of
South Africa within a global political economy. He doesn’t understand
the world we are living in.”

The markets are not interested in Zuma’s explanations, they are seeing
a South African president who has gone rogue.

The first- and second-round effects are going to shudder South Africa Inc.

And the scariest part for South Africans is this: The presi- dent just
doesn’t get it.

South Africa All Share Bloomberg +6.73% 2016
http://www.bloomberg.com/quote/JALSH:IND

Dollar versus Rand 6 Month Chart INO 15.7814
http://quotes.ino.com/charting/index.html?s=FOREX_USDZAR&v=d6&t=c&a=50&w=1

Egypt EGX30 Bloomberg +7.18% 2016
http://www.bloomberg.com/quote/CASE:IND

"We resolved to keep the Naira steady as, in the past, devaluation had
done dreadful harm to the Nigerian economy," Buhari said in the text
of a speech published by his office on Sunday.

"I supported the monetary authority's decision to ensure alignment
between monetary policy and fiscal policy. We shall keep a close look
on how the recent measures affect the naira and the economy," he said.

"But we cannot get away from the fact that a strong currency is
predicated on a strong economy," he said

Ghana Stock Exchange Composite Index Bloomberg -11.10% 2016
http://www.bloomberg.com/quote/GGSECI:IND

Donors are demanding that Mozambique makes full disclosure of the
state of its finances before they can resume aid that was withdrawn
after the government admitted to hiding more than $1.4 billion in
debt.

The southern African nation may have missed a May 23 deadline for a
state-owned company, Mozambique Asset Management, to make an interest
payment on a $535 million loan. The potential default has raised
concerns that the cash-strapped country won’t meet other obligations,
including on a $727 million Eurobond issued in March.

“The suspension of disbursements follows what is perceived by partners
as a serious breach of trust, poor governance and lack of fiscal
transparency,” the so-called Group of 14 donors said in a letter with
a raft of demands sent this month and obtained by Bloomberg.

In the letter, the donors ask Mozambican authorities to list all the
country’s existing and planned debt, with details on what the loans
were intended for, their terms and conditions and repayment schedules.
The country must also reveal the shareholding structure of MAM and a
second state-owned company, Proindicus, which was lent $622 million in
2013.
Restore Confidence

Budget support funding to the country has been falling since 2013,
Prime Minister Carlos Do Rosario said a speech to the nation after a
Washington D.C. meeting with the International Monetary Fund last
month. Aid was $297 million in 2015, down from $389 million a year
earlier and $457 million in 2013.

The IMF, which unearthed the secret loans to MAM and Proindicus, has
suspended $55 million in aid, the second tranche of a $110-million
program for 2016. The World Bank has also temporarily halted another
$276 million in budget support, according to London-based Standard
Chartered Plc.

Yields on Mozambique’s Eurobond fell by 2 basis points to 17.12
percent by 2:08 p.m. in London, after reaching a record 17.13 percent
on Thursday. The metical has depreciated 18 percent against the dollar
this year, extending its 32 percent loss in 2015.

“Political repercussions are likely,” Victor Lopes, a senior economist
for Africa at Standard Chartered, said in a note. “We see a rising
risk of increased social discontent against the ruling Frelimo party,
especially as inflation rises as a consequence of a weaker currency.”

East African Breweries Ltd (EABL) is locked in a row with a section of
its distributors over commissions, in a dispute that could see beer
prices rise by nearly Sh20 a bottle.

The suppliers under the Beverage Distributors of Kenya (BDK) are
pushing the beer maker to increase their commissions from the current
four per cent to between eight and 12 per cent of the recommended
retail price.

This sets the stage for another rise in beer prices following an
average increase of Sh20 in December with the introduction of new
taxes on a number of goods including water, cigarettes and cars.

The distributors currently earn a commission of Sh5.60 to supply a
bottle of Tusker and Sh6.40 on Guinness.

This will increase to between Sh11.2 and Sh16.8 on Tusker and Sh12.80
and Sh19.20 on Guinness should EABL agree to the distributors’
demands.

“KBL (Kenya Breweries Ltd) is concerned by the attempts of select
distributors and retailers who seek to control and raise consumer
prices beyond the recommended retail price,” said EABL in a statement
Sunday following a meeting held by BDK on Saturday.

“Artificial price inflation is not good for the Kenyan consumer and economy.’’

Treasury lifted the excise tax by 43 per cent to Sh100 per litre of
beer, driving up retail prices by at least Sh20 per bottle.

The rise in excise duty designed to shore up government revenues, was
the first in four years.

“Kenyan consumers are incredibly price sensitive so moving up by 20
shillings is a big deal,” Mr Charles Ireland, group CEO of EABL, said
in an earlier interview.

This explains the brewer’s opposition to the distributors’ push given
its implications on the firm’s profits and sales.

Par Value:                  2/-
Closing Price:           302.00
Total Shares Issued:          790774356.00
Market Capitalization:        238,813,855,512
EPS:             11.31
PE:                 26.702

Revenue 37.513921b vs. 34.657876b +8.241%
Cost of sales [20.084503b] vs. [17.527170b] +14.591%
Gross profit 17.429418b vs. 17.130706b +1.743%
Selling and distribution costs [3.244707b] vs. [3.188071b] +1.776%
Administrative expenses [5.094642b] vs. [4.397458b] +15.854%
Other income/ [expenses] 191.841m vs. [447.624m] +142.858%
Finance income 187.589m vs. 11.553m +1,523.725%
Finance costs [1.547213b] vs. [2.193056b] -29.449%
Profit before income tax 7.922286b vs. 6.916050b +15.549%
Profit for the period from continued operations 5.484510b vs. 4.723614b +16.108%
Profit /[loss] from discontinued operations 2.249428b vs. 0.101497b +2,116.251%
Profit for the period 7.733938b vs. 4.622117b +67.325%
EPS 9.13 vs. 5.23 +74.570%
EPS (continuing operations) 6.28 vs. 5.37 +16.946%
Net assets 43.116692b vs. 42.009009b +2.637%

Its a party Johnnie Walker #Nairobi @Diageo_News @NorfolkFairmont
cc @Ckirubi Charles Ireland
http://www.twitpic.com/dm2mm1

Par Value:                  2/-
Closing Price:           10.05
Total Shares Issued:          5431536000.00
Market Capitalization:        54,586,936,800
EPS:             1.55
PE:                 6.484

Q1 Loans and advances to customers (net) 152.442482b vs. 145.378553b +4.859%
Q1 Customers’ deposits 168.932598b vs. 156.054174b +8.253%
Q1 Total shareholders’ funds 42.315483b vs. 40.265422b +5.091%
Q1 Total operating income 7.988473b vs. 7.370213b +8.389%
Q1 Total operating expenses [4.936831b] vs. [4.249586b] +16.172%
Q1 Profit before tax and exceptional items 3.042642b vs. 3.120627b -2.499%
Q1 Profit after tax and exceptional items 2.181684b vs. 2.115557b +3.126%
EPS 0.40 vs. 0.39 +2.564%
Total NPL & advances 6.396395b vs. 4.407398b +45.129%
Loan loss provision 3.504980b vs. 2.757730b +27.097%

Nairobi All Share Bloomberg -0.11% 2016
http://www.BLOOMBERG.COM/quote/NSEASI:IND

Nairobi ^NSE20 Bloomberg -4.29% 2016
http://j.mp/ajuMHJ

3,867.50 -4.24 -0.11%

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

Equity Turnover slumped to just 166.934m.
The Nairobi All Share retreated 1.11 points to close at 144.43 which
is 12 week Low.
The Nairobi NSE20 Index eased 6.56 points to close at 3860.94.
The Shilling was last trading at 100.895 not far off a 9 month High
and it trades resilient given the 100 basis points of easing seen last
week.

Safaricom was the most actively traded share at the Securities
Exchange in what was a very subdued session overall. Safaricom eased
-0.292% to close at 17.05 and traded 2.567m shares. Safaricom is
+5.72% in 2016 and a Rebound is now due.

Barclays Kenya reported Q1 2016 Earnings where Q1 2016 [net] Loans and
Advances clocked a +4.859% increase to 152.442b, Q1 Profit After Tax
was +3.126%. Total NPL & advances rose +45.129% to 6.396395b and the
Loan Loss Provision was +27.097%. Barclays Bank has been caught in the
crosshairs of the Barclays PLC divestment, Barclays Bank firmed +0.5%
to close at 10.10 on very light trading of just 27,700 shares.
Barclays Kenya remains -25.73% in 2016.
Standard Chartered closed unchanged at 207.00 but closed the session
trading 215.00 +3.86% session Highs.There is very little Supply being
shown and StanChart is +6.153% in 2016 and has plenty of scope to the
Upside.
COOP Bank which received permission at its AGM to explore market Entry
into Ethiopia, shaved off -0.55% to close at 18.05 and traded 1.459m
shares.
Diamond Trust Bank was marked down 4.95% to close at 192.00 on light
trading of just 2,000 shares.

NIC Bank was the most actively traded Banking share today and firmed
+0.65% to close at 38.25 and traded 26.369m. NIC Bank is -11.5% in
2016 and trades on a Trailing P/E Ratio of 5.41

National Bank rallied +7.619% to close at a 2 month High of 11.30.
National Bank remains -28.25% Year to date but has rebounded +21.5%
this month.

EABL which had surged +10.622% Year To Date through this morning
retreated -3.311% off a 6 month Closing High to close at 292.00 and
traded 75,500 shares. The Catalyst for the Down-draft was a report in
the Business Daily which spoke to EABL being ''locked in a row with a
section of its distributors over commissions' '. The Argument could
see Beer Prices rise by up to 20/= a bottle as per Business Daily.

“Kenyan consumers are incredibly price sensitive so moving up by 20
shillings is a big deal,” Mr Charles Ireland, group CEO of EABL, said
in an earlier interview.

KenGen firmed +2.29% to close at 6.70 and traded 108,400 shares. The
Rights traded at 5cents 18,200x. There are surely many International
Accounts who will be looking at this Liquidity Event as an outstanding
entry Point.