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Monday 16th of October 2017 |
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Macro Thoughts |
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Chac Mool by Carlos Fuentes Translated by Jonah Katz Africa |
Not too long ago, Filbert died by drowning in Acapulco. It happened during All Saints’ week. Although he’d been dismissed from his job in the Ministry, Filbert couldn’t resist the bureaucratic temptation to go, same as every year, to the German pensión, to eat sauerkraut sweetened by the sweat of the tropical kitchen, to dance on the Saturday of glory in La Quebrada, and to feel himself a “regular” in the dark anonymity of evening on the beach of Hornos. Clearly, we know that in his youth he had swum well, but now, at forty, and in as bad shape as he seemed to be; to try to cover, and at midnight, such a distance! Frau Müller wouldn’t permit his vigil –such an old client– to be held in the pensión. On the contrary, that night she organized a dance on the little suffocated terrace, while Filbert waited, very pallid in his box, for the morning truck to depart the terminal, and passed the first night of his new life accompanied by baskets and bundles. When I arrived, early, to watch over the shipment of the coffin, Filbert was under a mountain of coconuts; the driver said we should arrange him quickly on the awning and cover him with tarps, so that the passengers wouldn’t get frightened, and to make sure we wouldn’t bring a curse on the voyage.
“Today I discovered that at night the Chac Mool leaves the house. Always, at dusk, he sings a song, out of tune and ancient, older than singing itself. Later, it stops. I knocked several times at his door, and when he didn’t answer me, I dared to enter. The bedroom, which I hadn’t seen again since the day the statue tried to attack me, is in ruins, and that smell of incense and blood that has permeated the house is concentrated there. But, behind the door, there are bones: dog bones, rats and cats. This is what the Chac Mool steals in the night to sustain himself. This explains all the frightening barking at dawn.”
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Iraqi army clashes with Kurds in operation to 'impose security' on Kirkuk Law & Politics |
Iraqi forces have reportedly advanced on Kirkuk’s oil fields and air base after the prime minister of Iraq, Haidar al-Abadi, ordered his army to “impose security” on the Kurdish city in the wake of a recent vote for independence.
Kurdish fighters seized Kirkuk in mid-2014, after Iraqi forces had fled from the Islamic State extremists advancing towards them after sacking Mosul.
Conclusions
The Kurds jumped the Gun and are now going to be squeezed from all sides.
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China's next five years: 'Only Xi is indispensable' Law & Politics |
“Mao beat the foreign invaders and Deng ended hunger,” says Li Xiguang, a professor at Beijing’s Tsinghua University and a Xi admirer. “Xi talks about having confidence in our [political and economic] system . . . it’s a total breakthrough.”
“Xi knows, like Machiavelli said, that it is better to be feared than loved,” says one person who advises Chinese policymakers but is wary of the authoritarian turn the country has taken. “Yet as a strategist Xi is much smaller than Mao and Deng in every respect. Deng rarely — and Mao never — took charge of everything. They only took charge of the big things. Xi Jinping takes everything, big and small, in his own hands.
“Mao and Deng paid attention to substance first,” the person adds. “Xi worries about appearance. When Mao and Deng made their minds up, they would stick with it because it can take years to see the real effects of your struggle.”
Mr Xi’s dominance is such that, as Shi Yinhong, professor of international relations at Renmin University in Beijing, says, “guessing who will be on the next standing committee is in a sense irrelevant — everyone will be Xi’s man. No one except Xi is indispensable.”
“We draw lessons from our own reference points,” the official adds. “China does best under strong central government, a strong leader and a unifying ideology. Then the country prospers.”
Reflecting this, Mr Xi has embraced a “confidence doctrine” that takes pride in the Chinese party-state’s unique political economy. US president Donald Trump’s chaotic start in office and the ructions from Britain’s decision to leave the EU have both given Beijing unprecedented faith in its political system and economic development model.
“Xi has problems to deal with but look at the US,” says Prof Shi at Renmin University. “Their president is crazy, Congress divisive and people divided, [while] Europe has a solvency problem. Xi believes China will continue to be vigorous, strong and rising. He has great hope that by the end of his tenure, China’s national resurgence can be fundamentally realised.”
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MALAYSIA AIRLINES FLIGHT 370 SEARCH: WHY GIVE HOPE WHEN THERE WAS NONE? Law & Politics |
It has been three years and seven months since flight MH370 vanished in the heart of a quiet night above the South China Sea. The Boeing 777 had been travelling northeast from Kuala Lumpur to Beijing, where it was scheduled to land at 6.30am on March 8, when the co-pilot signed off from Malaysian airspace with the now infamous words “Good night, Malaysia 370”.
Indeed, what the “pros” did next was remarkably successful in helping the authorities regain control of the media narrative, in helping to reassure a worried public that, even if the plane’s exact location was not known, everything was nevertheless under control.
Seemingly against all odds and logic, those in charge declared the plane’s final resting place to be somewhere in the Southern Indian Ocean – thousands of kilometres in the opposite direction from where it was heading.
“It is almost inconceivable and certainly societally unacceptable in the modern aviation era … for a large commercial aircraft to be missing and for the world not to know with certainty what became of the aircraft and those on board,” the Australian Transport Safety Bureau (ATSB) said in its final report, published on October 3.
That raises uncomfortable questions: to what extent did the authorities ever believe the search would succeed? Did they believe their own bluster and, if not, why not? Was the entire process an elaborate charade, aimed more at silencing a braying media than it was at finding the truth? An attempt to delay that admission of defeat until a time when pictures of the weeping relatives of 239 lost souls were not leading daily news bulletins across the world?
Launching the search then contradicted a maxim known to everyone involved in investigating plane crashes over water: “Find debris first, work out the crash zone second, look underwater third.”
“First and foremost, you must find pieces of debris and formally identify them as coming from the plane. The ocean is a dustbin – and from a long way out you arrive in the whirling currents of the Indian Ocean Gyre,” said Troadec, who led the search for AF447.
One question lingers: was this incredible fiasco due to incompetence on the Australians’ behalf or was it an orchestrated show primarily aimed at satiating a media hungry for MH370-related news?
The natural conclusion of this sad story, if we are to follow the official line, is that a plane as big as a Boeing 777, loaded with electronics and equipped with several redundant communications systems – not to mention the hundreds of mobile phones of its passengers – can become perfectly stealthy in a few seconds, in one of the most closely monitored regions of the planet.
MH370 managed to do what decades and billions in research have not yet achieved for the most sophisticated military plane. Each and every one of the 10 million passengers who board a plane every day must hope their plane won’t be up to the same trick.
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25-AUG-2014 The signal announcing this new arrhythmic normal was the disappearance of #MH370 Law & Politics |
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.’’
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16-OCT-2017 :: Taking SSA's economic Temperature Africa |
Last week The IMF released its World Economic Outlook #WEO and the World Bank released its 16th Edition of Africa's Pulse, both reports are important Thermometers for taking the Continent's temperature. SSA grew just 1.3% in 2016 which was the lowest rate of GDP expansion for two decades and just about everyone was scanning the horizon looking for a muscular rebound. The IMF is forecasting a GDP expansion rate of 2.7% in 2017 [around a full percentage below that for the world as a whole and less than half the 1999-2008 average of 5.6 percent] and the World Bank is predicting an SSA expansion of 2.4%. The World Bank said
''Regional per capita output growth is forecast to be negative for the second consecutive year, while investment growth remains low, and productivity growth is falling''
What the World Bank is saying is that the average African is going to be worse off notwithstanding the +2.4% expansion. There is a famous refrain that reverberates across the continent ''You cannot eat GDP'' and indeed for two years now our cake baking has not kept up with population growth giving more oxygen to that refrain.
As we all now know Africa is not a country its a Continent and to properly understand the situation we need to deconstruct the GDP number. South Africa and Nigeria make up 1/2 of SSA GDP and have been a significant headwind of late. South Africa which has experienced a bumper harvest because of a better rainfall [The Southern part of the continent had optimal rainfall, in fact] has emerged from two successive quarters of negative growth. Nigeria exited a five-quarter recession and is expected to post a positive number of around 0.8% this year. Neither of the two biggest Economies' rebounds are muscular but they are currently no longer contracting.
Bloomberg View carried an interesting article about Agriculture last week and noted that Agriculture still accounts for a quarter of gross domestic product and as much as two-thirds of employment in sub-Saharan Africa. In fact, agricultural growth has the biggest impact on non-farm income and reducing poverty. BV also noted that small-plot farmers account for 90 percent of all farms in sub-Saharan Africa. When the ''Farm'' Economy does well, Food prices stay under control and we see much better economic diffusion. The African Development Bank's President Adesina is making a big push in this space and its not difficult to see why.
Both Economic Updates show Ethiopia [even with its State of Emergency] is the fastest growing in Africa with the IMF forecasting a 9% growth rate for 2016/2017 fiscal Year. Ghana is also outperforming with expectations of a 6.3% GDP expansion this year.
When you set the 3 largest SSA economies aside [South Africa, Nigeria and Angola], SSA's aggregate-growth rate for this year rises from 2.5% to almost 4% says Brookings' Brahima Sangafowa Coulibaly
''That is faster than the 3.5% rate at which the global economy is currently growing. In fact, five of the ten fastest-growing economies in the world are in Africa. And over the next five years, around half of all Sub-Saharan economies will expand at an average rate similar to or higher than that which prevailed during the “Africa rising” heyday''
The IMF is predicting that Kenya will expand 5% this year and 5.5% next year. Politics has taken a very big bite out of Kenya's economy this year and that forecast is surely hostage to how the next few weeks play out.
The Real Economy needs a ''political'' Guillotine on October 26th.
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Death toll in Somalia bombing rises to 276 Africa |
The death toll from a twin bombing in the heart of Mogadishu on Saturday has risen to 276, making it the most deadly attack in Somalia since al Shabaab, the al-Qaeda-linked militant Islamist group, began its insurgency a decade ago.
The Aamin Ambulance group, an independent organisation based in Mogadishu, said the scale of the main blast, detonated on a truck outside a hotel at an intersection with many government offices nearby, was “massive”. ”In our 10-year experience as the first responder in #Mogadishu, we haven't seen anything like this,” it tweeted.
Rashid Abdi, the Horn of Africa director for the International Crisis Group, a think-tank, said the attack showed that “we cannot be complacent about what’s happening in Somalia”, which has not had an effective government since the collapse of the Siad Barre dictatorship in 1991. “It’s a clear signal that al Shabaab is not down and out; indeed it is escalating the war.”
Divisions between the central government and federal states are also hindering development, Mr Abdi said, with the Gulf crisis being a major source of conflict. “The regional governments have sided with the Saudi block, with many doing deals with the United Arab Emirates,” he said.
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"You either defend yourself or you are swept away," he said. Africa |
President Salva Kiir has presided over the world’s youngest nation as it descended into civil war, famine and a historic refugee crisis.
The United Nations says his military is responsible for ethnic cleansing. The United States has imposed sanctions on some of his closest associates.
But in a rare interview, Kiir presented himself as a defiant leader who has been maligned, a man too preoccupied with waging war to consider any possible mistakes, a onetime fan of Donald Trump who thinks America should worry about human rights abuses on its own soil.
“I did not do anything that can make me regret,” he said Thursday in his office in the country’s military headquarters, wearing the cowboy hat he received as a gift from George W. Bush during better times.
The Trump administration is so worried about South Sudan’s disastrous situation that it is sending Nikki Haley, the U.S. ambassador to the United Nations, to the country later this month.
“Kiir is the heart of the problem,” said Princeton Lyman, a former U.S. envoy to Sudan and South Sudan.
Yet even as the United States threatens to withdraw aid, Kiir has shown no sign of contrition, and no intention to reform.
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Emmerson Mnangagwa was allegedly targeted with a poison-laced vanilla cone. FT Africa |
Emmerson Mnangagwa was allegedly targeted with a poison-laced vanilla cone. The bizarre details of the alleged plot to murder Zimbabwe’s vice-president would have been comical if they were not so potentially destabilising for the economically battered southern African nation.
The airing in public of the supposed plan to assassinate Mr Mnangagwa, who became violently ill in August after eating the ice cream, has thrown into the open a vicious battle to succeed the ageing Robert Mugabe.
Hints by Mr Mnangagwa that deliberate poisoning lay behind his recent illness brought a ferocious response last week from Grace Mugabe, the ambitious wife of the 93-year-old president and, as it happens, the owner of an ice-cream dairy.
“Why should I kill Mnangagwa? Who is Mnangagwa on this earth?” Mrs Mugabe said in a fiery appearance on state television.
Behind Mrs Mugabe’s denial lies a violent history in Zimbabwe of political figures dying in suspicious circumstances. Solomon Mujuru, a feared former army chief who helped Mr Mugabe rise to power, died in a 2011 house fire that many doubted was an accident.
Mrs Mugabe in turn accused Mr Mnangagwa of plotting a coup. The vice-president, whose influence in the ruling Zanu-PF goes back decades, is said to have support from veterans of Zimbabwe’s war of independence, as well as parts of the armed forces.
On Monday, Mr Mugabe weakened Mr Mnangagwa further in a cabinet reshuffle, removing the justice ministry from his control and firing an ally, the finance minister Patrick Chinamasa.
The open warfare between Mr Mnangagwa and Mrs Mugabe comes in the run-up to next year’s presidential election when Mr Mugabe, who has ruled the country for almost four decades, is due to stand again. Elections must be held by next July at the latest.
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A Worsening Crisis in Congo And the Threat It Poses to U.S. National Security By John Prendergast and Sasha Lezhnev Africa |
For the last two decades, fighting has plagued the eastern region of the Democratic Republic of Congo, resulting in 5.4 million deaths, rampant corruption, and one of the highest rates of sexual violence in the world. The instability has already spread beyond the east as a constitutional and electoral crisis propels the fragile situation toward a larger conflict, and it is now threatening to destabilize a mineral-rich area known as Katanga.
Katanga is home to 50 to 60 percent of the world’s reserves of cobalt, representing the largest global supply of the mineral, as well as significant quantities of copper, and a conflict there would seriously affect U.S., as well as European, national security. The Pentagon has identified cobalt and copper as “strategic and critical minerals” for the production of military planes, missile guidance systems, and other hardware. According to the U.S. Department of Defense, cobalt is a critical material because it used as a superalloy in military and commercial jet engines, and it is very difficult to substitute because of its very high heat resistance. As of 2014, 16 percent of the world’s cobalt was used in superalloys, five percent was used in magnets, and 42 percent was used in batteries, all of which are essential in military hardware as well as in hybrid and electric cars, commercial planes, and consumer electronics. The global commercial demand for cobalt is also increasing significantly, particularly for building batteries in hybrid and electric cars as well as an array of electronics products.
A former mining official told us there were other mines, but Kolwezi was the main one. “Of course, the Congolese government would come down as hard as humanly possible to protect that road,” he said. “But it would shut down mineral flows for some time. There is no question that that would have a major impact on the price of cobalt.”
Such a cobalt crisis occurred in 1978 during the Shaba rebellion, when foreign-backed Katangese separatists captured the copper and cobalt capital of Kolwezi. The price of cobalt tripled in a matter of months. France and Belgium intervened by airlifting cobalt out of the region at great cost, and businesses panicked
The threats Congo’s leaders and their international collaborators pose can be countered if the United States and Europe utilize the strongest tools they have at hand: aggressively enforcing top-level, targeted sanctions on Kabila, his family’s business empire, and his commercial partners while ensuring that banks actively implement relevant anti-money laundering measures. The recent U.S. Treasury advisory to banks in South Sudan—which warned of potential money laundering—coupled with the limited but potent network sanctions are a good example of how these tools could be applied to Congo. The South Sudan case represents the first time the United States began using the full authority available to it with respect to tools involving financial pressure. By sanctioning individuals and their associated companies while notifying banks that suspicious financial activity is occurring, the United States put South Sudanese officials on more serious notice to signal that the days of total impunity for financial and human rights crimes are over.
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President Joseph Kabila and his wife Marie Olive Lembe di Sita: this is a First Couple that is not a hurry to leave. Africa |
THE Democratic Republic of the Congo’s presidential poll won’t happen until mid-2019, the country’s electoral authority said last week.
That’s well beyond the agreed end of year deadline for President Joseph Kabila to step down. What to do? There will be much international deliberation on that. But the Congo Research Group points out that what’s rarely discussed are the economic enablers that influence and shape the current crisis.
Large multinational companies are implicated in questionable mining deals, which have included big contracts to members of Kabila’s family. Any substantial financial support to the government by the IMF and World Bank should be conditioned on far greater transparency, the CRG argues. That goes for the election as well.
The enormous cost of the exercise – at between $800m and $1.8 billion it’s more than 20% of DR Congo’s annual budget – should give donors pause, the group notes. Not only does the process provide an opportunity for lucrative kickbacks, but also the potential skewing of the final result at this initial registration phase.
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Foreign retail chains get a foothold in Kenyan market Kenyan Economy |
Two foreign-owned international supermarket chains have been thrust into a rapid expansion to fill the void left by struggling local retailers that have dominated the market for decades. French retailer Carrefour, whose local franchise is held by Dubai-based conglomerate Majid Al Futtaim, is said to have received multiple invitations in recent weeks to move in as anchor tenant in Nairobi malls that are struggling to deal with the vacuum left by troubled Nakumatt. “Majid Al Futtaim is actively seeking opportunities to open stores in Kenya and the rest of the greater East African region in the coming years,” the firm said in a statement. Carrefour, which is the world’s second-largest supermarket chain after Wal-Mart, has accepted some of the invitations and is later this month expected to open its third shop at the Thika Road Mall (TRM) – taking over the space that Nakumatt vacated in July. It has two stores in Nairobi’s The Hub in Karen and Two Rivers Mall since May last year. Botswana retailer Choppies, which entered the Kenyan market last year by taking over nine Ukwala Supermarket stores, has since opened two new outlets, increasing its branch count to 11. Choppies said it plans to open seven new outlets by end of the year – including two at shopping malls originally occupied or booked by Nakumatt.
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N.S.E Today |
Iraqi forces have reportedly advanced on Kirkuk’s oil fields and air base after the prime minister of Iraq, Haidar al-Abadi, ordered his army to “impose security” on the Kurdish city in the wake of a recent vote for independence. It is reported that 1m barrels per day are exported out of Kurdistan and this news sent Brent Crude soaring over +1.60%. Emmerson Mnangagwa was allegedly targeted with a poison-laced vanilla cone as per the Financial Times, signalling the Mugabe succession Battle is becoming bloody. The Nairobi All Share could not snap its losing streak and closed -0.73 points at 158.52 The Nairobi NSE20 Index eased -2.86 points to close at 3623.76 Volumes were lacklustre at just 201.335m signalling we are near a floor with Sellers exhausted.
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N.S.E Equities - Commercial & Services |
Safaricom eased -1.00% to close at 24.75 and traded light with just 951,300 shares changing hands.
Kenya Airways’ got a boost with the news that Equity Bank is set to sign the deal to convert its Sh5 billion loan into shares. Documents seen by the Business Daily show that Equity and Ecobank – which have been opposed to the shares deal – are finalising an agreement which, if signed, will see their exposure in the airline spread more equitably alongside the eight other lenders. Equity, Ecobank and Jamii Bora, who are together owed Sh6.4 billion, have since September stalled the debt conversion plan, insisting it leaves them in worse positions than their peers whose debts are better covered by government guarantees. Apex Africa initiated coverage on Kenya Airways with a SPECULATIVE BUY recommendation and a Fair value of Ksh 5.70. Kenya Airways firmed +1.08% to close at 4.70 and traded 321,500 shares.
WPP-Scangroup traded 793,200 shares and closed +0.27% at 18.00. WPP-ScanGroup is -0.82% in 2017.
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N.S.E Equities - Finance & Investment |
KCB was the most actively traded share at the Exchange and closed unchanged at 37.00 and traded 1,505m shares. KCB trades on a Trailing PE Ratio of 5.728, has served up a +42.6% total return in 2017 and has corrected -11.90% over the last 4 weeks. Equity Bank closed unchanged at 36.00 and traded 943,100 shares. Equity trades on a Trailing PE of 8.219, has served up a +26.66% Total Return in 2017 and has corrected -7.69% over the last 4 weeks.
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N.S.E Equities - Industrial & Allied |
KenGen firmed +0.574% to close at 8.75 and traded 202,600 shares. KenGen is +50.86% in 2017 ahead of its Full Year Earnings release this week. I expect KenGen earnings to be muscular and surprise to the upside.
EABL closed unchanged at 241.00 and traded 119,300 shares.
KenolKobil predictably rebounded +2.41% to close at 14.85. KenolKobil is currently oversold.
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