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Tuesday 22nd of August 2017 |
Morning Africa |
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The Latest Daily PodCast can be found here on the Front Page of the site http://www.rich.co.ke |
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Annie Dillard's Classic Essay: 'Total Eclipse' The Atlantic Africa |
"Empty space stoppered our eyes and mouths; we cared for nothing. We remembered our living days wrong."
“Seeing a partial eclipse bears the same relation to seeing a total eclipse as kissing a man does to marrying him.”
I turned back to the sun. It was going. The sun was going, and the world was wrong. The grasses were wrong; they were platinum. Their every detail of stem, head, and blade shone lightless and artificially distinct as an art photographer’s platinum print. This color has never been seen on Earth. The hues were metallic; their finish was matte. The hillside was a 19th-century tinted photograph from which the tints had faded. All the people you see in the photograph, distinct and detailed as their faces look, are now dead. The sky was navy blue. My hands were silver. All the distant hills’ grasses were finespun metal which the wind laid down. I was watching a faded color print of a movie filmed in the Middle Ages; I was standing in it, by some mistake. I was standing in a movie of hillside grasses filmed in the Middle Ages. I missed my own century, the people I knew, and the real light of day.
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The Worst Journey In the World Apsley Cherry-Gerrard Africa |
In June 1911, Bowers, Cherry-Garrard and Wilson started a hellish journey to collect eggs from an emperor penguin colony at Cape Crozier, more than 100 kilometres away.
A Victorian theory proposed that by studying the embryo of an organism, it was possible to learn about the evolutionary history of that species. Wilson believed penguin embryos could shed light on the evolutionary link between birds and reptiles. But emperor penguins breed in the middle of the Antarctic winter, when it is unimaginably cold and completely dark, and this would be the first substantial sledging journey ever made in these torturous conditions.
For five weeks, the three men battled ferocious winds and an average temperature of -40˚C. They travelled in darkness with only scant twilight at midday and occasional moonlight. They came very close to death when their only tent blew away in a violent blizzard and it was pure luck that they found it again.
When they finally reached the penguin colony, they collected five eggs with great difficulty. Only three survived the journey back.
Back in Britain, the study of the embryos was delayed by the First World War and the death of the embryologist who was assigned to analyse them. Meanwhile, science had moved on and the theory of a link between embryos and evolutionary history was largely rejected.
Despite this, the eggs and their embryos have scientific significance. They remain part of the Natural History Museum’s collections and, as some of the earliest examples of emperor penguin embryos, have important potential for future scientific research.
"The horror of the nineteen days it took us to travel from Cape Evans to Cape Crozier would have to be re-experienced to be appreciated: and any one would be a fool who went again." - Apsley Cherry-Garrard, The Worst Journey in the World
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Baburnama [The Best translation is Wheeler Thackston Junior] Strand Books Africa |
An official chronicle and a highly personal memoir, the Baburnmma presents a vivid and extraordinarily detailed picture of life in Central Asia and India during the late fifteenth and early sixteenth centuries. It is also the text most often quoted by historians and scholars of Mughal India. The prose of Zahiruddin Muhammad Babur, the first Mughal emperor, is described by its new translator Wheeler Thackston as frank, intimate, truthful, and unbiased. It is all the more astonishing, therefore, that the Baburnama is also the first real autobiography in Islamic literature. Babur had no historical precedent for his narrative, yet even today it is a remarkably engrossing volume to read. The interests that Babur expressed so eloquently in the memoirs - his profound curiosity about the natural world and human personalities, for example - defined also the directions that artists were to take. Dr. Thackston's translation provides many new insights into a particularly stimulating period in the world's history.
Like us many have spoken over this spring, but they were gone in the twinkling of an eye. We conquered the world with bravery and might, but we did not take it with us to the grave. Babur
In all Fergana no fort is so strong as Akhsi. Its suburbs extend some two miles further than the walled town. People say of Akhsi, "Where is the village? Where are the trees?" Its melons are excellent; one variety of them is known as Mir Timuri and may have no equal in the world. The melons of Bukhara are famous. When I took Samarkand, I had some brought from there and some from Akhsi. They were cut up at an entertainment and those from Bukhara could not compare with those from Akhsi. The fowling and hunting of Akhsi are very good indeed; white deer abound in the waste on the Akhsi side of the Syr-Darya; in the jungle on the Andijan side, abundant and well-fed bucks and does, pheasant and hare are had.
Samarkand has good districts and subdistricts. Its largest district, and one that is its equal, is Bukhara, 162 miles to the west. Bukhara in its turn, has several subdistricts; it is a fine town. Its fruits are many and good, its melons excellent, none in Mawara'u'n-nahr matching them for quality and quantity. Although the Mir Timuri- melon of Akhsi is sweeter and more delicate than any Bukhara melon, still in Bukhara many kinds of melon are good and plentiful. The Bukhara plum is famous; no other equals it. They skin it, dry it and export it from land to land with other rarities; it is an excellent laxative. Fowls and geese are bred in abundance in Bukhara. Bukhara wine is the strongest made in Mawara'u'n-nahr; that was what I drank while in Samarkand.
One of those on the south is Andijan, which has a central position and is the capital of the Fergana country. It produces much grain, fruits in abundance, excellent grapes and melons. In the melon season, it is not customary to sell them out at the fields. There are no pears better than those of Andijan. After Samarkand and Kesh, the fort of Andijan is the largest in Mawara'u'n-nahr (Transoxiana). It has three gates. Its citadel (ark) is on its south side. Water flows into it by nine channels, but, oddly, flows out by none. Round the outer edge of the ditch runs a gravelled highway; the width of this highway divides the fort from the suburbs surrounding it.
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Trump Offers Open-Ended U.S. Commitment to Shore Up Afghanistan Bloomberg Politics Law & Politics |
President Donald Trump announced an open-ended commitment to Afghanistan that will put as many as 4,000 more U.S. troops into the nation’s longest-lasting conflict and keep American forces there as long as it takes to deny terrorists a haven and bring about a political settlement with the Taliban.
“Our nation must seek an honorable and enduring outcome worthy of the tremendous sacrifices that have been made,” Trump said Monday in a nationally televised address from the Fort Myer Army base in Virginia. “The consequences of a rapid exit are both predictable and unacceptable.”
“We can no longer be silent about Pakistan’s safe havens for terrorist organizations, the Taliban, and other groups that pose a threat to the region and beyond,” Trump said. “Pakistan has much to gain from partnering with our effort in Afghanistan. It has much to lose by continuing to harbor terrorists.”
“My original instinct was to pull out, and historically I like following my instincts, but all of my life I heard that decisions are much different when you sit behind the desk in the Oval Office,” he told his audience at the base, which is adjacent to Arlington National Cemetery just outside the nation’s capital.
Trump said he will give more authority to military commanders and lift restrictions that he said were hindering the ability of troops in the field to target terrorist and criminal networks throughout Afghanistan.
“But we will no longer use American military might to construct democracies in far away lands, or try to rebuild other countries in our own image,” he said, “those days are now over.”
Conclusions
Afganistan to the US is like Yemen is to KSA - These are Wars that cannot be won.
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The tribalism that blights African politics is on the rise in Europe and America @dlknowles via @CapX Law & Politics |
The very first time I visited Kenya, several months before I started covering politics in Africa, I was introduced to a young, eloquent and interesting lawyer with a project to try to fix Kenyan politics. The problem, he explained, was that it is so difficult to persuade people to vote rationally. In Kenya, he explained, most people tend to vote according to their tribe. As a result, he argued, politics produces far too many scoundrels. In a Kenyan election, a politician who does not steal tends to get less votes than somebody who does – but redistributes it to his kin, and promises to stand up for them.
At the time, I was covering American politics, and even then, before Brexit and Donald Trump, I thought this man overly generous towards Western politics. In America, and in Britain too, I pointed out, voters are also tribal. Since, watching the fallout as dozens of neo-Nazis marched in Virginia, and Trump refused to denounce them, I have wondered if I was more right than I realised.
In the West, our tribes may be less clear cut. People in Washington, DC, do still tend to speak the same language as people in Alabama. But nonetheless, it would be a stretch to say that a lot of voters base their decision on a close look at the policies and records of politicians. No, they vote according to their sense of who they feel closest too. That is to say, they vote based on tribal interest.
The past few weeks, reporting on Kenya’s election, has given me a clearer insight into what tribalism means. Before polling day, politicians revved up their tribal bases to get out the vote. Going around slums in Nairobi, it was much clearer than usual what people’s tribal identities were.
I sat in a room in a tin shack listening to a smartly-dressed Kikuyu lady (the tribe of Uhuru Kenyatta, the president) explain her “problem with Luos” (the tribe of Raila Odinga, the main opposition candidate). Luos, she asserted, are violent, they don’t pay their rent, they never save or invest, and that’s why they hate Kikuyus. No doubt such views are always there, but you would rarely hear them articulated so readily outside of elections. This distrust, ultimately, is why elections in Kenya are such fraught affairs. They are fights over identity, not policy.
Yet the fights in America over Confederate statues shows much the same dynamic. The refusal of the president to condemn a minority of his tribe is what an essentially tribal politician does: stay loyal. And that loyalty is rewarded. How else does someone as obviously unfit for office get elected? He didn’t promise the people who voted for him a menu of policies designed to make their lives better. Instead, he promised an idea: that they would get “their” America back. The same is true of Brexit. “Taking back our country” was an obvious appeal to English tribalism.
America is still much less tribal than Kenya, where politicians routinely win 90 per cent or more in their home districts. Even in West Virginia, the most Republican state in 2016, 26 per cent of people still voted for Hillary Clinton. But the direction of travel is the wrong way. In 1960, 75 per cent of states were “swing states”; by 2012, it was just 30 per cent.
Most importantly we are losing ideology and class as the dividing line in politics. Instead, the big questions are about identity. Are we European or British? Is America a multicultural, liberal nation, or a traditional Christian one? Neo-Nazis marching on Charlottesville feel so emboldened by Mr Trump’s victory, precisely because he campaigned on a platform of racial – indeed, tribal – resentment. They want to continue being able to see the Confederacy a noble Lost Cause, instead of a failed act of treason. They certainly don’t want to have to think about how American history has contributed to America’s stark inequality. And as any Kenyan can tell you, history is what underpins tribal grievances and fear too.
Ultimately what brings about an end to tribalism is nation-building. In Europe, building nations took generations of war and forceful integration. America went through a brutal civil war and its southern states created a strange history afterwards to paper over their sense of grievance at their loss. But as nations change, the community needs constant reimagining. Nowadays, it seems as if in America and Britain, we are losing that ability. Our political future then, might be a little more African.
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Base Metals Extend Best Rally in Three Years on Growth Optimism @business Commodities |
Industrial metals extended their longest weekly rally in three years, with nickel pacing gains and zinc reaching the highest in almost a decade as investors grew more optimistic about the outlook for supply and demand.
An index of the six main metals traded on the London Metal Exchange advanced 1.2 percent, after climbing for a sixth straight week on Friday, the longest such rally since April 2014. Nickel jumped as much as 3.4 percent in London as Japan’s top refiner said it expects a larger global shortage, while trading volume ballooned on the Shanghai Futures Exchange. Most of the main contracts on the LME rose, with copper touching the highest since 2014.
Nickel rose 3.1 percent to settle at $11,315 a metric ton at 5:51 p.m. on the LME, after touching the highest since Dec. 16.
Copper climbed as much as 2.1 percent to $6,623 a ton.
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Vanilla price surge hits high-end ice cream consumers FT Commodities |
A surge in the price of vanilla pods after a cyclone this year hit Madagascar, the world’s top producer, has left ice cream makers scrambling to secure supplies of the flavouring extract.
Used in chocolate, cakes and drinks, as well as ice cream, vanilla is one of the world’s most popular flavours.
This year’s surge, which propelled the price to a record high of more than $600 a kilogramme, has forced one high-end London gelato chain to pull vanilla ice cream off the menu, and some bigger companies to raise prices.
Large food companies have also felt the impact. Nestlé, which says it manages volatility in its ingredient costs through “adapted procurement strategies, cost savings, innovation and, as a last option, price increases”, raised prices of its Mövenpick ice creams in Switzerland by 2.5 per cent this year.
However, he says that for the first time in their lives, Madagascar’s vanilla farmers are making enough money to build a home with cement, instead of the local palm plant, and can afford to educate their children beyond second grade.
“Vanilla farmers in Madagascar see it as the best market in recent memory,” he adds.
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South Sudan has grounded planes belonging to UN peacekeepers in a dispute over control of the airport in the capital Juba Africa |
The move threatens to further delay the deployment of the latest 4,000 peacekeepers to be assigned to the African country, where civil war broke out in 2013.
"It was because the forces that were brought went to the airport to control the airport, which is not part of their mandate," President Salva Kiir's spokesman Ateny Wek Ateny said, explaining the decision to stop U.N. flights.
"They cannot come here to control our airport. It is our airport and if they wanted to cooperate with us, they must refrain from (deploying in) places they are not authorized."
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Quick Guide for Those Who Can't Figure Out a Naira's Worth Africa |
Banks had been using a currency window for investors known as Nafex since April, but weren’t allowed to publish their trades. This month, the FMDQ OTC Securities Exchange, a Lagos-based platform that oversees naira transactions, asked banks to start quoting Nafex rates, effectively merging that market with the main interbank one.
The move immediately weakened the naira’s interbank rate 14 percent to about 365 per dollar, knocking $6.5 billion off the value of the stock market.
David Cowan, an Africa economist at New York-based Citigroup Inc., the world’s biggest foreign-exchange trader, called it a “devaluation by stealth.”
For foreign investors not already using Nafex, it made naira assets a lot cheaper. And even for those that were, it boosted transparency and allowed them to see live quotes on their screens for the first time.
“It has clearly put investors more at ease,” said Joe Delvaux, a money manager at Duet Asset Management in London, which oversees about $500 million of African bonds and stocks and started buying naira debt again this month. “Foreign currency trading volumes have already picked up and analysts are more and more inclined to recommend local-currency debt.”
Nigeria’s local-currency bonds could do with the attention. They’re currently the worst performers this year among 31 major emerging markets tracked by Bloomberg, losing about 6 percent in dollar terms.
They’ve long called for Nigeria to use a single exchange rate predominantly driven by market forces. For now, the country is keeping several exchange rates in place, but the spread between the black-market and interbank rate is negligible.
Still, the central bank hasn’t abandoned the official rate of 305 per dollar, which it uses to provide cheap dollars for some government transactions as well as fuel importers. After the changes, the gap between this rate and the interbank market has never been wider.
Nigeria’s foreign-exchange market remains more opaque than those in other African countries such as South Africa, Ghana, Kenya and Uganda, according to Duet’s Delvaux. A web of other rates continue to warp the market, keeping the naira artificially strong for pilgrims seeking dollars to travel to Mecca, small and medium businesses, or Nigerians who need to pay overseas school fees, to name a few.
Nigeria “is less compelling as a frontier market,” said Diana Amoa, a co-manager of JPMorgan Asset Management’s $2.8 billion emerging-markets local-currency debt fund in London. “Ideally, the central bank needs to move to a unified exchange system and let the currency levels settle at the point where there is a clearing up of the foreign currency backlog.”
Can’t Nigeria have one exchange rate?
That would entail an official devaluation, which President Muhammadu Buhari and central bank Governor Godwin Emefiele have long stood firm against, saying it would only boost an inflation rate at 16 percent. Early indications are that the government will keep the naira’s official value unchanged for now, with the 2018 budget to be based on an exchange rate of 305 per dollar, the Lagos-based Vanguard newspaper reported Aug. 10.
“Investors would love it if Nigeria moved to a single rate,” said Rick Harrell, an analyst in Boston at Loomis Sayles & Co., which manages $258 billion of assets and recently started investing in naira bonds again. “But the central bank is constrained because of the need to supply cheaper dollars to fuel importers.”
“It’s such a sensitive matter, especially with the economy still weak,” he said. “It’s still not ideal. But by Nigeria’s standards, this is good enough.”
Now what?
With the interbank rate at 361.95 per dollar as of Monday, its 55 percent slump since 2014 is the most among oil currencies. But even that might not be enough. Citigroup says a drop to 400 could be what it takes to attract enough inflows to end the country’s dollar shortages and boost an economy that’s contracted for the last five quarters.
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IN-DEPTH ANALYSIS: @RailaOdinga's last defeat via @FinancialMail MELANIE GOUBY Kenyan Economy |
It was an expected outcome — a scripted one, the opposition might say. Last Friday, Kenya’s electoral commission announced that the incumbent, Uhuru Kenyatta, had won the country’s presidential election with a little over 54% of the vote.
Just as expected, his rival, Raila Odinga, immediately challenged the result and proclaimed "a fraud of monumental gravity".
A second term for Kenyatta is no doubt the scenario that the region — and the markets — expected and hoped for. A sharp rise in equities and a big slide in bond yields since the election have signalled where the markets’ preferences lie.
"Kenya has built its free-market credentials over 50 years and Kenyatta’s election keeps us firmly on that track," Kenyan business analyst Aly-Khan Satchu says. "An Odinga administration would have downgraded and degraded those credentials. So I feel Kenyatta now has a unique opportunity to consolidate and accelerate economic gains."
The reaction of Odinga’s supporters in the coming weeks is less predictable. Street demonstrations began immediately after the first results trickled in, but clashes have been contained.
In Mathare, demonstrators clashed with police, and in Kisumu, a city on the shores of Lake Victoria, several hundred protesters confronted security forces, chanting "No Raila, no peace" — the slogan of 2007, when two months of postelection street fights left more than 1,300 dead, at least 600,000 displaced and the country deeply traumatised.
According to the Kenya national commission on human rights, 24 people have died, mostly from bullet wounds, indicating that they might have been killed in clashes with the police.
There is little the opposition can do now to contest the result. In the days following the election, Odinga’s opposition coalition alleged that the electoral commission’s system had been hacked. It claimed Odinga was the real winner based on the result obtained "from a confidential source" within the commission, but failed to provide proof. His party declared it would not go to the supreme court, saying the judiciary’s independence is compromised.
Election observers say they found the elections to be free and fair. The EU mission says it did not detect any signs of "centralised or local manipulation" of the votes, and has called for calm. Former US secretary of state John Kerry, now leading the Carter Center, has demanded that Kenya’s leadership "take its responsibilities", a way to underline that any incitement to violence could be punished.
Kenyan leaders know this perhaps better than most. In the aftermath of the 2007 violence, the International Criminal Court charged Kenyatta, then deputy prime minister in a coalition government, as well as William Ruto, at the time Odinga’s right-hand man, for organising the violence. The charges were finally dropped in the middle of the trial, but they left their mark in the minds of Kenyan politicians.
But perception matters as much as reality, and it is true that Kenya’s electoral commission could have managed the process better. Instead of taking time to resolve concerns about forms that needed to be signed by party agents, it rushed to announce the result late last Friday. This entrenched the impression that the organisation has been sloppy.
In a rare interview, Odinga told the Financial Times that challenging the results is "not about me .. I’m not going to be a candidate again. We just want Kenyans to know what happened, what the whole world is not understanding is happening."
On Sunday, he addressed supporters in Kibera, calling on them to boycott the state by refusing to work.
The opposition has felt time and again it has been denied victory: in 2007 because of claims of election rigging, and in 2013 because of electronic equipment that didn’t work. For it, protesting against this election is about the accumulation of this frustration as much as the result itself.
Odinga is, as he readily admits, facing his last defeat as a presidential candidate. For the son of Oginga Odinga, the losing opponent to Jomo Kenyatta, this is a story that has bitterly repeated itself in a second generation. His ultimate defeat is the end of a dynasty — the mourning of a political clan that never had the opportunity to rule the country.
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Kenya opposition outlines vote-rigging case ahead of court battle FT Kenyan Economy |
The appeal is based on analysis of the results forms from the almost 41,000 polling stations and 290 parliamentary constituencies, which aggregated the polling station results.
These “ought to have been accurate, legitimate and verifiable across the country [but] are demonstrably contradictory, defective and bear fatal irregularities affecting 14,078 polling stations”, the opposition petition states.
Conclusions
There is no Smoking Gun.
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@KeEquityBank releases H1 2017 EPS -7.836% Earnings #EquityHYResults Kenyan Economy |
Par Value: 0.50/- Closing Price: 43.00 Total Shares Issued: 3702777020.00 Market Capitalization: 159,219,411,860 EPS: 4.38 PE: 9.817
H1 Investment securities 115.595812b vs. 73.032331b +58.280% H1 Loans and advances to customers (net) 265.086161b vs. 269.032284b -1.467% H1 Total assets 504.944293b vs. 444.436850b +13.614% H1 Customer deposits 362.788342b vs. 319.230725b +13.645% H1 Total Shareholders’ Funds 85.893664b vs. 75.404004b +13.911% H1 Total interest income 23.005192b vs. 26.095743b -11.843% H1 Total interest expenses [5.062540b] vs. [4.862984b] +4.104% H1 Net interest income 17.942652b vs. 21.232759b -15.495% H1 Other fees and commissions income 6.286849b vs. 5.244938b +19.865% H1 Total Non-interest income 12.976624b vs. 10.847924b +19.623% H1 Total operating income 30.919276b vs. 32.080683b -3.620% H1 Total operating expenses [17.627060b] vs. [17.850607b] -1.252% H1 Profit/ [Loss] before tax and exceptional items 13.292216b vs. 14.230076b -6.591% H1 Profit/ [Loss] after tax and exceptional items 9.361478b vs. 10.111308b -7.416% Basic and diluted EPS 2.47 vs. 2.68 -7.836% Gross NPL and Advances 20.363500b vs. 12.931302b +57.474% Total NPL and Advances 17.495591b vs. 10.757755b +62.632% Net NPL and Advances 9.694174b vs. 5.958126b +62.705% Liquidity ratio 51.1% vs. 37.0% +14.100%
Regional Loan Growth Kenya 222.4b vs. 207.5b -7% DRC 19.6b vs. 15.6b +26% Tanzania 16.6b vs. 14.6b +13% Rwanda 11.1b vs. 7.4b +49% Uganda 10.2b vs. 8.7b +17% South Sudan 0.1b vs. 0.3b -65%
From @Twitter
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Dr. James Mwangi releases the #EquityHYResults @Engage_BM Kenyan Economy |
#EquityHYResults Dr. Mwangi; investment in GoK securities increased to 115.5 billion from 73 billion @JohnGachiri Intermediation has ceased to be the basis for our model because we have shifted to government paper. James Mwangi - #EquityH1Results @KeEquityBank subsidiaries in Tanzania, Congo, Rwanda & Uganda now contributes 10% of the group's total profit up from 5%. #EquityHYResults The banking industry has become skewed. The Top 10 banks share 92% of profits. The small banks share 8%. James Mwangi - #EquityH1Results
Conclusions
Strong results in the context of the Pivot to Government Securities. very bullish about the region.
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Kenya Orchards reports H1 2017 Earnings here Kenyan Economy |
Par Value: 5/- Closing Price: 97.00 Total Shares Issued: 12868124.00 Market Capitalization: 1,248,208,028 EPS: 0.33 PE: 293.939
H1 Revenue 32.235979m vs. 31.053103m +3.809% H1 Cost of sales [29.029105m] vs. [27.795187m] +4.439% H1 Administrative Expenses [0.186847m] vs. [0.553456m] -66.240% H1 Selling and distribution expenses [1.024082m] vs. [0.496124m] +106.417% H1 Finance costs [0.239714m] vs. [0.232017m] +3.317% H1 Profit before tax 1.722464m vs. 1.937640m -11.105% H1 Profit and total comprehensive income as at 30th June 1.205725m vs. 1.356348m -11.105% Basic EPS 0.09 vs. 0.10 -10.000% Shareholders’ funds 10.939385m vs. 7.381900m +48.192% Cash and cash equivalents at the end of the period [1.045508m] vs. [1.081268m] -3.307%
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N.S.E Today |
The Dollar remains under pressure in the FX markets [$5.1 trillion a day] ahead speeches from the European Central Bank President Mario Draghi and Federal Reserve Chair Janet Yellen at Jackson Hole Wyoming. The Euro has been on a roll higher and some folks feel Draghi might look to temper its rise but its difficult to see a rhetorical Path that will achieve this. The Shilling was at a 3 month high versus the Dollar around 103.02. The Nairobi All Share index eased 0.04 points to close at 166.57 and remains +24.9% in 2017 The Nairobi NSE20 Index closed +6.16 points at 4013.71. Equity Turnover was brisk at 993.024m.
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N.S.E Equities - Commercial & Services |
Safaricom closed unchanged at 24.75 and traded 2.932m shares. Safaricom's record closing high was 25.00, just 1% away and that record high is about to be sliced like a hot knife through Butter.
TPS Serena Hotels rallied +6.48% to close at a 2017 high of 28.75. TPS Serena has rebounded +40.24% in 2017 and the macro backdrop is a big Tail-Wind.
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N.S.E Equities - Finance & Investment |
Equity Bank released its H1 2017 Earnings pre the opening Bell at the Securities Exchange this morning. Equity Bank reported a -7.836% decline in headline First Half Earnings per share. Equity ramped its position in Government of Kenya securities +58.28% higher to 115.595b and its Customer Loan Book shrank -1.467% to 265.086b. In a very wide-ranging Investor briefing, Dr. James Mwangi said;
''Intermediation has ceased to be the basis for our model because we have shifted to government paper''
Dr. Mwangi was clearly excited by the acceleration in the regional subsidiaries, whilst Kenya declined -7.00%, DR Congo accelerated +26%, Tanzania +13%, Rwanda +49%, Uganda +17% with South Sudan now a statistical irrelevance.
Equity increased income from its non-lending business, such as mobile banking commissions and trade finance. Income from that segment rose 20 percent from the same period last year, to 13 billion shillings.
"The Group continued to evolve its business model to weather the interest capping effects by focusing on growing the non-funded income," it said.
There was no interim dividend and Equity trades at a Price to Book of 1.9x. I thought these were muscular results in the context of the Rate Cap and in the context of the Pivot to Government Securities, which necessarily is a spread compression trade. Equity Bank closed unchanged at 43.00 and was the most actively traded counter at the Exchange with 5.507m shares worth 236.805m. Equity is +50.00% in 2017 on a Total Return Basis.
KCB firmed +1.12% to close at 44.75 and was trading at 45.25 +2.26% at the Finish Line, KCB traded 3.855m shares and is +66.08% on a Total Return Basis in 2017.
The Nairobi Securities Exchange reported H1 2017 EPS declined -6.25%, H1 Operating income expanded +5.925% to 282.603m, but H1 Admin Expenses [outpaced Operating Income] grew +8.008% and H1 Profit After Tax declined -5.115% to register 77.77m. The Securities Exchange said the following in the commentary that accompanied the results ''Total Income increased by 4% from 334.3m in the six months ended 30 June 2016 to 346.8m for 6 months to June 2017. This was driven mainly by an 11% increase in equity turnover from 73.6b to 82b'' Its a volume Game and volumes are trending higher. NSE released its Earnings during the Trading session and therefore did not trade. The NSE is +63.95% on a Total Return Basis in 2017.
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N.S.E Equities - Industrial & Allied |
EABL eased -0.37% to close at 267.00 and traded 3rd at the Exchange with 605,700 shares worth 161.81m. EABL is +11.68% in 2017 and has underperformed the Benchmark indices by about half and has scope to get back to neutral on a benchmark basis.
KenGen ticked -0.54% lower to close at 9.20 and on heavy volume action of 15.345m shares worth 141.361m. KenGen is +58.62% in 2017. KPLC rallied +2.816% to close at 10.95 and missed closing at a 2017 high by just 0.09%. KPLC was well traded with 10.691m shares worth 117.517m. KPLC is +40.49% on a Total Return Basis in 2017.
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