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Satchu's Rich Wrap-Up
 
 
Tuesday 17th of October 2017
 
Morning
Africa

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Macro Thoughts

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Great intro here on how nobody cares about anything anymore in the market. @TheStalwart
Africa


Home Thoughts


“How will the ships navigate without stars? And then he remembered
that the stars were dead, long dead, and the light they shed was not
to be trusted, was false, if not an outright lie, and in any case was
inadequate, unequal to its task, which was to illuminate the evil that
men did.”  ― Jeet Thayil, Necropolis

“Because now there's time enough not to hurry, to light the lamp and
open the window to the moon and take a moment to dream of a great and
broken city, because when the day starts its business I'll have to
stop, these are night-time tales that vanish in the sunlight like
vampire dust” ― Jeet Thayil, Necropolis

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Jeet Thayil Narcopolis
Africa


Mount Whitney was the start point for his FKT attempt on the iconic
340km trail 📷 @DROZPHOTO

https://twitter.com/SalomonRunning/status/919491536144003072

read more







Russia emerging as new player in Middle East balance of power Asia Times
Law & Politics


Russia intervened in Syria primarily because the country’s civil war
had turned into a Petri dish for jihadists from the Russian Caucasus
to Southeast Asia. America’s longstanding support for Sunni jihadists
had the unintended consequence of strengthening al-Qaeda and its
offshoot Islamic State, as Lt. Gen. Michael Flynn famously warned. And
the Sunni jihad threatened to spread to Russia’s own Muslim
population, which is overwhelmingly Sunni. Backing the Shi’ites was
the Kremlin’s obvious course of action. Moscow has achieved its
objectives in Syria: the Assad regime is stabilized, the Sunni jihad
is dwindling and Russia’s other perquisites in Syria, for example its
naval port facility at Tartus, are secure. Evidently Russia now wants
to take some risk off the table on the other side.

read more




Trump's Iran strategy is a dream project for Saudi Arabia and the UAE - and for Israel.
Law & Politics


The US faces a Hobson’s choice. It has the option of extricating
itself from the Syrian conflict at this stage, claiming victory in the
defeat of ISIS in Raqqa. But this would mean abandoning its Kurdish
allies to their fate. Of course, if the US exercises this option, it
paves the way for mending relations with Turkey.

But then, the flip side is that it also means a seamless expansion of
Iranian influence in both Iraq and Syria and a possible Iranian
presence in the Eastern Mediterranean. That, of course, would make a
mockery of the tough strategy announced by Trump to counter Iran’s
regional policies.

On the contrary, if the US intends to play a greater role in Syria
following the capture of Raqqa (such as blocking Iran’s land route to
Syria), it would require substantial, open-ended troop deployment to
delay and harass the expansion of Iranian influence. Clearly, this is
what the US’s regional allies – Israel, Saudi Arabia and the UAE – are
hoping for and what Trump’s new Afghan strategy promises to do.

read more




18-SEP-2017 "A screaming comes across the sky" North Korea
Law & Politics


Gravity’s Rainbow is a 1973 novel by Thomas Pynchon which is about the
design, production and dispatch of V-2 rockets by the German military.
In particular, it features the quest undertaken by several characters
to uncover the secret of a mysterious device named the “Schwarzgerät”
(black device), slated to be installed in a rocket with the serial
number “00000”. As the world watches PyongYang, I cannot help
wondering if Kim Jong-Un has read Pynchon which speaks of “A screaming
comes across the sky”

“But it is a curve each of them feels, unmistakably. It is the
parabola.  They must have guessed, once or twice -guessed and refused
to believe -that everything, always, collectively, had been moving
toward that purified shape latent in the sky, that shape of no
surprise, no second chance, no return.’’

read more




Currency Markets at a Glance WSJ
World Currencies


Euro 1.1771
Dollar Index 93.39
Japan Yen 112.16
Swiss Franc 0.9778
Pound 1.3254
Aussie 0.7846
India Rupee 64.895
South Korea Won 1130.85
Brazil Real 3.1719
Egypt Pound 17.6003
South Africa Rand 13.3389

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Netflix shares rise in after hours trading after Q3 subscribers beat estimates @markets
International Trade


From Germany to Brazil, Netflix Inc. stormed ahead in its drive to
create a global television network, scoring the video-streaming
provider’s best third quarter on record and sending the shares to a
new high.

Shows such as thriller “Ozark,” starring Jason Bateman, “American
Vandal,” a spoof of true crime shows, and a Jerry Seinfeld stand-up
special helped lure 4.45 million customers abroad and 850,000 in the
U.S., both ahead of estimates. They came at a cost. The company is
paying $6 billion for programming in 2017 and said Monday it’ll
increase that by as much as a third next year.

The tricky part for Netflix is balancing its push for subscriber
growth with the need to cover its soaring programming budget. This
month, Netflix raised prices by $1 a month, or 10 percent, for its
most popular plan in the U.S. and U.K, funds that will help defray
soaring costs. In the past, price increases have led to more customer
turnover. Growth slowed for just that reason in 2016.

With prices rising, the Los Gatos, California-based company forecast
U.S. subscriber growth that’s less than analysts had estimated, though
its outlook for international growth surpassed their projections.

Netflix rose as much as 4.1 percent to $211 in extended trading after
the announcement before easing to $205.20. The stock gained 1.6
percent to $202.68 at the close in New York and is up 64 percent this
year.

read more






Iraq's $1 billion of Eurobonds due in 2023 slumped on Monday, with yields jumping to 7.29 percent, or 61 basis points higher
Emerging Markets

Investors placed bids almost seven times the amount on offer for
Iraq’s August bond sale, which came just three weeks after the country
declared victory over Islamic State in its second-biggest city. The
sale was part of a flurry of issuance from junk-rated countries
including Tajikistan and Ukraine as borrowers sought to take advantage
of demand for high-yield debt.

“We’re living in a very low-yielding world and people are stretching
their limits and going where they shouldn’t be going,” said George
Zois, director of emerging-market sales and trading at Mint Partners
in London. “People are starting to cotton on to the fact that the
Kurdistan issue has legs and things are going to get worse before they
get better.”

read more






Nigerian Exchange Rate to Decide Africa's Biggest Economy: Chart
Africa


Deciding which African economy will be the biggest at the end of this
year will depend on which exchange rate you use. While the
International Monetary Fund reckons Nigeria will come out on top with
$395 billion of output, it uses an average official exchange rate of
304 naira per dollar, which few companies or individuals get access
to. Using the market-determined price for the naira, known as Nafex
and around 20 percent weaker than the official one, means Nigeria’s
gross domestic product will be smaller than South Africa’s $344
billion, according to Renaissance Capital.

read more


South Africa All Share Bloomberg +14.83% 2017 [record highs]
Africa


Dollar versus Rand Chart INO 13.3368

http://quotes.ino.com/charting/index.html?s=FOREX_USDZAR&t=c&a=50&w=1&v=d12

Egypt Pound versus The Dollar 3 Month Chart INO 17.6003

http://quotes.ino.com/charting/index.html?s=FOREX_USDEGP&v=d3&t=c&a=50&w=1

Nigerian government faces criticism over 'embarrassing' Zuma statue

http://bit.ly/2yLrGCw

Nigeria All Share Bloomberg +37.57% 2017

http://www.bloomberg.com/quote/NGSEINDX:IND

Ghana Stock Exchange Composite Index Bloomberg +35.34% 2017

http://www.bloomberg.com/quote/GGSECI:IND

read more


Madagascar plague appears to have spread to Seychelles - @WHO
Africa


A probable case of plague in the Seychelles, imported from Madagascar,
is believed to have sparked the Indian Ocean country’s first outbreak
of the disease, the World Health Organization (WHO) said.

Plague, which is mainly spread by flea-carrying rats, is endemic in
Madagascar. A large outbreak has killed 57 people since late August,
according to the U.N. agency, the first time the disease has appeared
in non-endemic urban areas, including in the capital Antananarivo.

Seychelles health authorities reported a probable case of pneumonic
plague on Oct 10 in a 34-year-old man returning from a visit to
Madagascar, the WHO said.

read more


If the election went ahead without him, he said, "it will be a gross violation of the constitution basically a nullity, null and void".
Kenyan Economy


In an interview with the Financial Times in London, Raila Odinga said
he did not support the secession of western Kenya, where he has strong
support among the Luo and Luhya ethnic groups, but “the debate about
self-determination is gaining currency”.

“When people become desperate, they resort to desperate measures,” he said.

Mr Odinga dismissed recent developments in the high court and
parliament that could lead to a re-run on October 26 as
“inconsequential”.

If the election went ahead without him, he said, “it will be a gross
violation of the constitution . . . basically a nullity, null and
void”.

Abdikadir Hussein, a government lawyer, said Mr Odinga had boxed
himself in by withdrawing. “Raila is blaming everybody and anybody but
himself for his loss.”

John Githongo, a prominent Kenyan activist, said that although there
had never been strong secessionist movements in the country, the
impasse following the August election had ignited a discussion.

“It is a subject of intense debate. You have demonstrators walking
around with flags saying ‘People’s Republic of Kenya’,” Mr Githongo
said. “As a debate, I can categorically say this has legs.” But, he
added, the debate may not gain political traction because “the big
political beasts”, including Mr Odinga, had rejected it.

Last month, two residents of western Kenya lodged a petition at the
high court to hold a referendum on national and territorial rights for
the area formerly known as the Eastern Province of Uganda and
inhabited mostly by Luhya people.

David Ndii, a senior adviser to Mr Odinga who in August publicly
discussed secession, on Friday said he did not support it. “But we’re
clearly in a political environment that could start hurtling downhill
and it could go in any direction,” he said. “The country is very
divided.”

Conclusions

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09-OCT-2017 :: strategy of tension will be maintained via degrading and denigrating the entire process
Kenyan Economy


What is clear is that the advantage of incumbency in fact accelerates
in this round two of the election. Therefore, I expect the opposition
to boycott the election entirely. And that the strategy of tension
will be maintained via degrading and denigrating the en‘tire process.
Market participants need to model this scenario because this is the
direction of travel.

read more



"The revolutionary contingent attains its ideal form not in the place of production, but in the street''
Kenyan Economy


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

read more


Drawn-Out Vote in Kenya Increased Risks for Investors, IMF Says
Kenyan Economy


Kenya’s election rerun is raising the country’s risk profile among
investors and weighing down already sluggish economic growth, the
International Monetary Fund said.

“The prolonged election period has increased risks for investors and
traders,” Jan Mikkelsen, the Washington-based lender’s new resident
representative in Kenya, said in an emailed response to questions.
“This in turn has led to a slowdown in economic activity.”

The IMF has lowered its 2017 economic growth forecast for Kenya, the
largest economy in East Africa, to 5 percent after expansion slowed in
the first half of the year due to a drought that led to a contraction
in farming output and pushed up food prices. That would be the lowest
growth rate since 2012. Rain-fed agriculture in Kenya, which supplies
about a third of the flowers sold in the European Union, contributes
about 30 percent to the country’s total output.

Kenya’s Supreme Court last month overturned President Uhuru Kenyatta’s
win in an Aug. 8 election, citing “irregularities and illegalities” by
the nation’s electoral body. Opposition candidate Raila Odinga, who
has been demanding changes at the electoral commission, threw plans
for a rerun on Oct. 26 into disarray when he withdrew from
participating in the vote, saying the management of the vote “would be
worse than the previous one”.

Economic growth may pick up in 2018 “assuming a return to a more
normal, predictable political environment after the forthcoming
elections and a modest improvement in agriculture production,”
Mikkelsen said.

The IMF will hold talks with the Kenyan government on a $1.5-billion
standby facility that’s meant to buffer the nation from excessive
external shocks after elections are concluded. The facility ends in
March and “Kenyan authorities are not expected to draw on the
resources,” Mikkelsen said.

read more



Nairobi All Share Bloomberg +18.88% 2017
Kenyan Economy


NSE All Share
August 28th        173.47 (2017 High)
October 16th      158.52
-8.618%

read more


Foreign investors recoil from NSE on political temperature
Kenyan Economy


“During the period foreign equity outflow stood at Sh11.1 billion on
the back of heightened political uncertainty in the country, but is
expected to rebound, as long as the current situation does not become
protracted,” said Luke Ombara, CMA director, regulatory policy and
strategy.

“Clearly within this generalised upswing across sub-Saharan Africa
frontier markets we are witnessing more investors adopt a more
granular and nuanced strategy and I think with the elections looming
and political risk elevated, foreign investors became a lot more picky
and Kenya suffered because of that,” analyst Aly-Khan Satchu said.

The data shows there was a marked slowdown in foreign investor
purchases in the third quarter of the year. The investors were net
sellers in recent months.

read more


Nairobi ^NSE20 Bloomberg +13.73% 2017
Kenyan Economy


NSE 20 Share
August 15th        4,114.01 (2017 High)
October 16th      3,623.76
-11.917%

read more


According to OCHA, average prices of livestock in Kenya have declined by up to 40%
Kenyan Economy


According to OCHA, average prices of livestock in Kenya have declined
by up to 40%, and the combination of low household incomes and high
staple food prices has significantly reduced the livestock-to-cereals
terms of trade. In other words, goats, sheep, and cows are worth far
less maize than they used to be.

As a 2014 paper on pastoralism and climate change adaptation in
northern Kenya explains, pastoralists are especially exposed to
climate change because in east Africa it manifests itself in
increasing temperatures and higher rainfall variability with both
escalating the likelihood of more frequent and extended droughts.

According to a 2007 study by the International Panel on Climate
Change, Kenya is warming at a rate roughly 1.5 times the global
average.

read more




 
 
N.S.E Today


Raila Odinga was quoted as follows in the Financial Times
If the election went ahead without him, he said, “it will be a gross
violation of the constitution . . . basically a nullity, null and
void”.
David Ndii, a senior adviser to Mr Odinga who in August publicly
discussed secession, on Friday said he did not support it. “But we’re
clearly in a political environment that could start hurtling downhill
and it could go in any direction,” he said. “The country is very
divided.”
“The prolonged election period has increased risks for investors and
traders,” the IMF's Jan Mikkelsen, told Bloomberg. “This in turn has
led to a slowdown in economic activity.”
The IMF has lowered its 2017 economic growth forecast for Kenya  to 5
percent after expansion slowed in the first half of the year due to a
drought that led to a contraction in farming output and pushed up food
prices. That would be the lowest growth rate since 2012.
Economic growth may pick up in 2018 “assuming a return to a more
normal, predictable political environment after the forthcoming
elections and a modest improvement in agriculture production,”
Mikkelsen said.
The IMF will hold talks with the Kenyan government on a $1.5-billion
standby facility that’s meant to buffer the nation from excessive
external shocks after elections are concluded.
The facility ends in March and “Kenyan authorities are not expected to
draw on the resources,” Mikkelsen said.
The Nairobi All Share retreated -1.08 points to close at 157.44.
The NSE20 fell -25.91 points to close at 3597.85
Equity Turnover picked up speed to clock 826.772m.



N.S.E Equities - Commercial & Services


Safaricom
eased -1.01% close at 24.50 on bulked up volume action of
17.125m shares worth 421.248m. Safaricom is +33% on a Total Return
Basis and has corrected -8.411% since closing at an all time high of
26.75 at the end of the August.

Uchumi was high-ticked +7.94% to close at 3.40 on just 100 shares
worth of business. With Nakumatt waiting for someone to pronounce the
last rites, this moment should have been a ''blue-sky'' opportunity
for Uchumi but self-evidently it isn't.



N.S.E Equities - Finance & Investment


KCB closed unchanged at 37.00 [+42.6% Total Return in 2017] and traded
4.303m shares worth 159.315m.
Equity Bank closed unchanged at 36.00 [+26.66% Total Return in 2017]
and traded 3.815m shares worth 138.019m.



N.S.E Equities - Industrial & Allied


Ahead of its Full Year Earnings Release at the Kempinski tomorrow
morning [a results release which will be the first in KenGen's 63 year
history where a Woman Rebecca Miano KenGen MD will be pronouncing the
results], KenGen closed unchanged at 8.75 and +50.00% Year To Date. I
expect strong earnings and a Dividend Pay-Out would be the maraschino
cherry on top of the cake for Shareholders.

Bamburi Cement traded 215,000 shares all at 175.00 -2.23% a 3 1/2
month closing Low. Bamburi is +14.6875% on a Total Return Basis in
2017.

EABL eased -0.41% to close at 240.00 and traded 128,000 shares. EABL
closed at a 4 and 1/2 month low.

--



by Aly Khan Satchu (www.rich.co.ke)
 
 
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October 2017
 
 
 
 
 
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