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Tuesday 15th of August 2017 |
Morning Africa |
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Macro Thoughts |
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Lamu and the Muslim Admiral Zheng He Africa |
Of course, the first engagement between China and Kenya, occurred in the c15th, when the Chinese Admiral Zheng He [a Muslim and a Eunuch] visited the Swahili coast. Naturally, the Chinese have been keen on ventilating the story of Zheng He's c15th visit because it is a Soft Power Gift Horse. You will recall the discovery of Chinese DNA on Pate Island and the story is that the DNA belonged to Chinese Ming sailors who were shipwrecked and then married the local women.
🐘 Soaking that glorious light 🐘 @The_Mentalyst https://twitter.com/The_Mentalyst/status/897111582077067264
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It's "game on" if North Korea fires missiles that hit the U.S., Defense Sec. Mattis warns @Business Law & Politics |
Defense Secretary Jim Mattis warned it would be “game on” for war if North Korea fired missiles that hit the U.S. or its territories, including the Pacific island of Guam.
“It could escalate into war very quickly -- yes, that’s called war,” Mattis told reporters Monday at the Pentagon. “If they shoot at the United States, I’m assuming they hit the United States -- if they do that, then it’s ‘game on’.” Asked if he considers Guam part of the U.S., he said, “Yeah, it sure is.”
Kim discussed plans for Guam with his commanding officers during an inspection of military forces on Monday, the state-run Korean Central News Agency reported. The North Korean leader said he will watch the U.S.’s conduct "a little more" and praised his strategic force for drawing up "a close and careful plan,” KCNA said.
With military commanders waiting for orders from the Workers’ Party Central Committee, Kim added he would “watch a little more the foolish and stupid conduct of the Yankees spending a hard time of every minute of their miserable lot,” KCNA reported.
Mattis, who also sought last week to emphasize diplomatic efforts, said Monday that he wasn’t trying to reignite tensions.
“It’s not that I’m over here -- Dr. Strangelove,” he said, but “you don’t shoot at people in this world unless you want to bear the consequences.”
Conclusions
Both seem to be looking for a Ladder wit which to back down, now.
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India can defend itself from any attack, PM Modi says on Independence Day, amid Himalayan standoff with Beijing @AFP Law & Politics |
India can defend itself from anyone who seeks "to act against our country", Prime Minister Narendra Modi said in an Independence Day speech Tuesday amid a tense standoff with Beijing over a Himalayan plateau.
"Security is our top priority," Modi said in a speech before thousands at the landmark Red Fort in New Delhi as the country marked the 70th anniversary of the end of British colonial rule.
"Be it the sea or the borders, cyber or space -- in all spheres, India is capable and we are strong enough to overcome those who try to act against our country," the Hindu nationalist leader declared.
His remarks came as New Delhi's dispute with Beijing over a strategically key Himalayan plateau enters its second month on Wednesday, with hundreds of soldiers reported to be facing off against each other.
Conclusions
Xi Jinping has Narendra Modi where he wants him, on the back foot.
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Standoff with China prompts revamp of India's regional policies Asia Times Law & Politics |
The denouement of the dangerous India-China military standoff in Doklam near the Sikkim border is hard to predict. But on the diplomatic and geopolitical plane, one definite outcome of the standoff is going to be that the South Asian and Indian Ocean region will witness big-power rivalry in a way that eluded it even in the high noon of the Cold War era.
Arguably, such a shift could have been expected ever since India began wading into the South China Sea disputes with gusto over the past few years. The Doklam standoff has become a defining moment. An editorial in the Global Times newspaper on Friday gave notice that since India had been harming China’s interests, Beijing was now left with no option but to retaliate. The editorial blasted India’s neighborhood policies in South Asia:
In strategic terms, China seems to think that South Asia’s Gulliver can be tied down by the region’s Lilliputians. The old hackneyed thesis of the “string of pearls” seems to be coming true.
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"they may not actually fear Zuma very much at all at the moment." Daily Maverick Africa |
Amid the ongoing analysis of the relative power of the different personalities in the ANC, one of the big questions is whether those ANC MPs who voted to remove President Jacob Zuma last week will be disciplined. If they are, that will show that Zuma and his supporters still have much political power. If they are not, it will demonstrate that people can disobey Zuma and get away with it, which could inspire others to follow suit. Zuma has now said that those who disobeyed the party whip should be disciplined. But he may find it much harder to follow through in action.
Over the weekend, President Jacob Zuma went to his normal place, the place where he seems to have spent much of the year. You already know which province, don’t you? And while in his stronghold he said that he will go to an officials’ meeting and “express my dissatisfaction about the conduct of some members and why”. According to The Times, he also read out a part of the ANC’s constitution that prohibits members from working with “counter-revolutionary forces” and then said, “If you commit any of these acts, it means the ANC has to take you to the disciplinary committee, because it means you have broken the law.” We all know that former Tourism Minister, Derek Hanekom, is one of the people who had indicated they would vote against the ANC’s whip. Hanekom, of course, is the former tourism minister. He is also chair of the ANC’s disciplinary committee. To which Zuma pointedly remarked: “However, what is more shocking is that the chair of the very same committee also voted with the opposition.”
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Ghana Commercial Bank Takes Over Capital-Strapped Lenders Africa |
Ghana’s central bank approved a deal that will see Ghana Commercial Bank Ltd. take over the deposits and selected assets of UT Bank Ltd. and Capital Bank Ltd. after the two lenders failed to meet capital requirements.
PricewaterhouseCoopers LLP will sell the rest of the assets to settle liabilities, Raymond Amanfu, head of banking supervision at Bank of Ghana, said by phone on Monday. UT Bank and Capital Bank’s licenses were revoked “due to severe impairment of their capital,” the central bank said in an emailed statement.
“Their continuous operations would’ve jeopardized not only their depositors’ funds, but also pose a threat to the financial system,” Bank of Ghana Governor Ernest Addison told reporters Monday in the capital, Accra.
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EDITORIAL The Real Suspense in Kenya NYT Kenyan Economy |
Kenya’s national elections last Tuesday were closely watched around the world, less for the results than for the threat of violence that has marred past elections. Barack Obama, whose father was a Kenyan, had been among those urging the country’s leaders to “reject violence and incitement.”
That has not happened. Raila Odinga, a perennial loser, began crying foul long before the election commission declared that President Uhuru Kenyatta was re-elected with 54 percent of the vote to Mr. Odinga’s 45. Mr. Odinga’s unsubstantiated claims have already touched off rioting in parts of the country, and the violence could spread.
The presidency was one of 1,880 positions Kenya’s 19 million voters were to fill. It was the most closely and nervously monitored race because of the violence following past presidential elections, notably in 2007, when more than 1,300 people died and hundreds of thousands were displaced.
Since then the Kenyan government has made admirable changes to the Constitution, devolving considerable powers to 47 newly created counties so that the presidential race would not be a winner-take-all affair. But ethnic identity still plays a major role in Kenyan politics, with all but one president since independence, including Jomo Kenyatta, the first president and father of the current one, coming from the Kikuyu tribe, the country’s largest.
Both President Kenyatta and Mr. Odinga, a Luo, come from families and networks that have dominated Kenyan politics since independence, and both represent coalitions of ethnic groups. Mr. Odinga has once again fanned the embers of ethnic strife.
That is disgraceful and unnecessary. International monitors from the African Union, the United States and Europe said they witnessed no foul play; former United States Secretary of State John Kerry, co-leader of the Carter Center’s mission of election observers, praised Kenya’s election commission for its transparency and diligence. All observers have urged Mr. Odinga and other losing candidates to refer any allegations of fraud to the commission and the courts.
Mr. Odinga’s specific claim is that Mr. Kenyatta’s Jubilee party hacked into the election commission’s computers to manipulate results, using the identity of Christopher Chege Musando, the commission communications manager who was murdered a few days before the voting. His death remains unsolved. The commission said that there was an attempt to hack the computers but that it failed.
All that can and should be checked. But in the meantime it is imperative that Mr. Odinga strongly urge his followers to remain calm. At 72, he might mull the idea that a display of respect for the new Constitution would be a far better legacy than another bloody spasm of violence.
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Odinga has until Friday to file a lawsuit to challenge the election results, which would be heard by the Supreme Court @bpolitics Kenyan Economy |
“I don’t expect Raila Odinga to concede,” said Ndung’u Wainaina, executive director of the International Center for Policy and Conflict in Nairobi. “With the court constituted in the way it is, he doesn’t expect any justice. He is going for massive mobilization of his supporters. We are likely headed for a protracted political action.
The financial markets have shrugged off the possibility of protracted political turmoil, with the FTSE NSE Kenya 25 Index of stocks gaining for a fifth day on Monday. Kenya’s dollar debt returned 1.3 percent last week, more than any of the other 84 countries in Bloomberg’s main index for emerging-market Eurobonds.
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14-AUG-2017 :: Finding the Off-Ramp @TheStarKenya Kenyan Economy |
As the dust settles, it is crystal clear that President Kenyatta pulled off a serious political victory. The President's team out thought, out spent and out manoeuvred the Opposition at practically every turn. Mr. Musyoka's intemperate remarks that Central Province should lie low like an envelope just twenty four hours before the vote surely dialled up the vote in Jubilee strongholds. Mr. Odinga's call for rent controls put every Owner on notice and I think that too was an ill-advised call and underestimated the ''ownership'' Economy. There are many Kenyans today who after years of graft own a piece of the economy and they surely got nervous. It is time now for the Opposition to skip a generation and this is said with humility. It is also time for the Opposition to appreciate [once the trauma of losing subsides] that there are two audiences. The first audience is its own supporters, the second is everyone else. If You are going to argue the case that a cyber crime was committed then for goodness sake find someone who can make that argument credibly.
In fact, the Election had the potential to produce quite a bifurcated economic outcome. Kenya stands in the Van-Guard of Free market economics in Africa, it has taken more than 50 years to establish our credentials in that regard. An Odinga Administration would have taken a leftist tilt and the markets naturally were more aligned with President Kenyatta and hence the very positive market reaction; The Stock Market gained around 5% last week and Kenya's Eurobonds had their best week in 2017. We need to build on that positive momentum to crowd local and International investors into Kenya. What we have learnt is that 5%-6% GDP growth [whilst better than most of Africa] after being diluted by population expansion is not effecting meaningful trickle-down. It was this fact [re-characterised as a refrain ''You cannot eat GDP''] which the Opposition failed to leverage, to their own chagrin. Therefore, we have to find a GDP Off-Ramp, one where the Economy speeds up to 8% and more. Kenya has to dash for growth, thats a sine qua non for the next 5 years.
President Kenyatta has to be Saint George in his second administration and slay the corruption Dragon. I recall a period in 2002, when Citizens performed citizens arrests of Policemen [for asking for bribes] and marched them to the Police Station. It was a remarkable moment and shows that it is possible to do something. A big Effort on this front would release at least a $1b and more per annum and juice the GDP move towards 8%. The President needs to consider how to recapture that cathartic moment that we witnessed in 2002.
Infrastructure Spending like the Railway were absolutely necessary. If we are serious about entrenching our Pivot/Transit State status [i.e the Route to the Sea and the global markets for a number of adjacent states] then we absolutely needed to make these big-ticket investments in the Railways, the Roads, the Ports. Already President Magafuli has proven a fierce competitor and his recent Oil Pipeline win shows that. So these investments were necessary. Many commentators in my opinion have underestimated the positive economic spill-over effects that will arise from these investments. Today, Companies can tap into cheap Power [Geothermal is one example], they can situate themselves close to the Railways, they can export goods via the Railway to the sea and to a 3b People market on our doorstep in the Indian Ocean Economy let alone the Globe. We have a vast reservoir of good human capital that is hard-working and these all are the magic ingredients for creating a ''Mekong Delta'' Economy that becomes an accelerant.
Debt is an issue. Its blinking amber. We can argue that at a ratio of around 53% Debt-to-GDP we are comfortably within 60% [which was the Maastricht criteria for the European Project, for example] but we have now run out of headroom. We will need to eat more delicately at the Debt Table. We will have to sequence our Big Dreams. We cannot do everything at once. How we manage our debt will be important in the 2nd term. We need to aggressively interrogate ROI [Return on Investment] so that we push those projects that have a higher and quicker ROI profile. Tactically speaking, there is an opportunity to unload more Eurobonds in the short term but over the medium term, we need to now sequence better and bite off only what we can comfortably service.
We need to now also call a stop to the endless Bail-Out ''Ground Hog'' day rigmarole. Kenya Airways was a ''National interest'' issue. If we want to be a Gate-way to Africa and a hub, we absolutely needed a national airline. There was no choice around the Kenya Airways rescue. However, we know need to establish where that National Interest red line lies and companies that fall on the wrong side of that line, must be left to fail. This Government Put-Option has to end. One of the most progressive elements of our economic Policy over the last 15 years was the privatisation Policy which saw its culmination in the sale of Safaricom shares for 5 shillings way back in 2006. We need to re-gnite that Program. Its a Silver Bullet. It gets GOK out of business, it gives citizens a stake and those who have a stake tend not burn things down. The secret of such a program is not to ''milk the cow'' but to ensure that Citizens are sold shares at prices that give them a profit. Optimal pricing keeps the Pipe flowing. There is a Tsunami of cash to be tapped internationally and domestically but never ever leave Citizens nursing losses.
Our Economy is not a mono-line economy. It is multi-faceted. It has multi-dimensional promise from the ubiquity of Mobile Money to the promise of the entrepreneurial spirit in every citizens DNA. I was transfixed by the long Queues of Kenyans waiting patiently to cast their votes and then I noticed a Fellow who had set up his own Coffee Stand and I thought thats my Kenya. If opportunity comes knocking, Kenyans seize it, we just need to ensure it comes knocking.
Finally, I liked the tone of President Kenyatta's acceptance speech. You are indeed the President of 43m Kenyans. The President needs to include everybody. Kisumu, for example, is about to receive a huge investment from EABL. There are plenty more investments that we can make or help others make. Its a Carpe Diem moment.
Over to you President Kenyatta.
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Kenya's main stock index rose 2.51 percent on Monday to a 14-month high @ReutersAfrica Kenyan Economy |
The NSE-20 index has risen nearly 7 percent since the election last Tuesday. Kenyatta was declared winner by a clear margin on Friday but his main challenger, Raila Odinga, has not yet conceded.
"The markets were concerned around a leftist 'Magufuli'-like tilt which would have eroded Kenya's hard won free market credentials. So part of this rally is a relief rally," he told Reuters, referring to President John Magufuli of neighbouring Tanzania.
Kenyan shares had slightly lagged this year's gains in other African bourses like Nigeria as investors waited to see how the election would go, market participants said.
"This means there is a tonne of liquidity that is set to enter the market and underpin valuations," Satchu said.
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@Barclays_Kenya reports H1 2017 EPS -13.333% Earnings here Kenyan Economy |
Par Value: 2/- Closing Price: 11.55 Total Shares Issued: 5431536000.00 Market Capitalization: 62,734,240,800 EPS: 1.36 PE: 8.493
Barclays 1 2017 Earnings versus H1 2016 H1 Kenya Government securities 52.649364b vs. 47.225521b +11.485% H1 Loans and advances to customers (net) 163.782554b vs. 153.304212b +6.835% H1 Total assets 268.186848b vs. 256.142225b +4.702% H1 Customers’ deposits 188.652234b vs. 182.875680b +3.159% H1 Total shareholders’ funds 40.786729b vs. 39.103237b +4.305% H1 Net interest income 10.544100b vs. 11.097121b -4.983% H1 Total non-interest income 4.394476b vs. 5.137897b -14.469% H1 Total operating income 14.938576b vs. 16.235018b -7.985% H1 Loan loss provision [1.353470b] vs. [2.009443b] -32.645% H1 Staff costs [5.123834b] vs. [4.875849b] +5.086% H1 Total operating expenses [9.786409b] vs. [10.411894b] -6.007% H1 Profit before tax and exceptional items 5.152167b vs. 5.823124b -11.522% H1 Profit after tax and exceptional items 3.542638b vs. 4.086689b -13.313% EPS 0.65 vs. 0.75 -13.333% Dividend per share 0.20 vs. 0.20 – Total NPL and Advances 8.765817b vs. 6.553440b +33.759% Net NPL and Advances 2.919576b vs. 1.746398b +67.177% Liquidity Ratio 36.1% vs. 36.6% -0.500%
Conclusions
In the context of the new Rate Cap Landscape these are actually better tan satisfactory results.
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N.S.E Today |
"The markets were concerned around a leftist 'Magufuli'-like tilt which would have eroded Kenya's hard won free market credentials. So part of this rally is a relief rally," I told Reuters Kenya's Eurobonds outperformed all emerging-market peers last week. The Shilling is gently gliding higher and was last at 103.72 versus The Dollar. The Nairobi All Share which had rallied +6.28% since 7th August closing [The Post Election Pop] eased 0.10 points to close at 168.71. The all Share is +26.52% in 2017 and at 27 month highs. The Nairobi NSE20 rallied +0.909% to close at 4114.01 a Fresh 22 month High. The NSE20 [The Post Election Pop] +7.75% since 7th August closing and is +29.12% in 2017. Equity Turnover of 842m continues to verify the bull move higher.
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N.S.E Equities - Commercial & Services |
Safaricom eased -1.00% off a record closing high to close at 24.75 and traded 11.607m shares. Any retracement is corrective ahead of a Run-Up to 28.00.
Kenya Airways popped over 5.00 and +2.02% higher to close at 5.05 and was 5.20 +5.05% at the closing bell. Kenya Airways traded a big chunk of shares 2.609m to be exact.
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N.S.E Equities - Finance & Investment |
Bank stocks have been on a tear this year. Some of that Bull Move is predicated on a reversal of the Rate Cap.
Barclays Kenya reported H1 2017 Earnings this morning where H1 Loans and advances to customers (net) grew +6.835% to clock 163.782554b, Holdings of GOK Government Bonds accelerated +11.485% to register 52.649b, H1 Profit before Tax clocked a -11.522% decline to 5.152b, H1 Earnings per share was 65cents versus 75cents last time and the Interim Dividend was eld at 20cents a share. In the context of the new Rate Cap Landscape these are actually better than satisfactory results. Barclays firmed +0.43% to close at a Fresh 2017 high of 11.60. Barclays Bank is +38.46% on a Total Return Basis in 2017. Equity Bank firmed +0.56% to close at a Fresh 2017 High of 44.25 and traded 3.830m shares. Equity is +54.166% on a Total Return Basis in 2017. COOP Bank rallied +3.24% to close at 17.50 and traded 1.1m shares. Housing Finance popped +8.916% higher to close at 13.20 and traded 477,000 shares.
CIC Insurance surged +9.02% to close at a 2017 high of 6.65. CIC Insurance is now +75% in 2017.
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N.S.E Equities - Industrial & Allied |
KenGen eased -1.515% off a 2017 high to close at 9.75 and remains +68.1% in 2017.
Mumias Sugar rallied +4.166% to close at 1.25 and had 10 Buyers for every Seller.
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