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Wednesday 18th of October 2017 |
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Macro Thoughts
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Kirkuk redux was a bloodless offensive. Here's why Law & Politics |
The Battle of Kirkuk lasted less than 24 hours. In a lightning – and mostly bloodless – offensive, the Iraqi Security Forces (ISF) retook control of the North Oil Co. and North Gas Co. headquarters, the K1 military base, the Bai Hassan oil field, and two domes of the Kirkuk oil field on Monday.
Baghdad did what it had previously said it would do: reestablish federal authority over the key strategic assets of Kirkuk province, which had been controlled by the Kurdish Peshmerga since the 2014 Islamic State offensive.
But why did it take only 24 hours? There are two main reasons. One, the eternal, internal split between the Kurdistan Regional Government (KRG), led by wily tribal schemer Masoud Barzani, and the Patriotic Union of Kurdistan (PUK) party of the late Jalal Talabani; and two, a brokered deal for Baghdad’s advance. The Kurdish Peshmerga described the takeover as “a flagrant declaration of war” and vowed that Baghdad will pay a “heavy price.” That’s largely rhetorical.
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It is time to jettison the Myanmar fairytale FT Law & Politics |
Myanmar today presents a more worrying picture than at almost any time since the darkest days of military dictatorship. The world's attention has rightly been focused on the Rohingya crisis and the plight of hundreds of thousands of men, women, and children fleeing in one of the biggest refugee exoduses since the second world war.
The worst may not be over. Humanitarian needs are far from met and discussions have barely begun on possible refugee return or the investigation of human rights abuses.
There is a chance that western countries may respond with targeted sanctions. Even if formal sanctions are not imposed, international investor interest and tourism numbers will doubtless plummet. This is at a time when local business confidence is weak and banks unstable. Millions of the poorest people in Asia may soon face an unbearably bleak future.
Any economic downturn will directly threaten Myanmar’s already fragile peace process. The country is home to approximately 20 “ethnic armed organisations”, the largest of which is fielding more than 20,000 troops, and hundreds of local militia.
Fierce fighting has erupted at times during the past few years and there are nearly 500,000 internally displaced people along the Thai and Chinese borders. Economic growth alone will not lead to peace, but without the pull of an inclusive and fast-developing economy, the peace process will have no steam.
At the same time, almost no one is considering the long view. Just take northern Rakhine, site of today’s violence and tomorrow’s possible refugee return: what will it be in 10 or 15 years? A stop on a new super-highway between China and India? Or will climate change sink it into the sea?
Even an experienced government aided by super technocrats would struggle to manage what Myanmar is having to manage, let alone plan for the future.
The outside world is absolutely right to prioritise the crisis at hand. It is equally important, though, to jettison once and for all the Myanmar fairytale, and to appreciate that working in Myanmar means working with a near-failed state; to redouble efforts to boost the country’s own abilities, in particular through investments in health and education; and, perhaps most of all, to help inject fresh thinking about an exciting future for all.
Otherwise, the current crisis will be just the first of many to come.
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UBS Wealth Stands Pat on 20% Chance of North Korea War Law & Politics |
UBS Group AG’s wealth management unit got its in-house risk analysts to help gauge the threat of war on the Korean peninsula, mapped out the impact on its investments, and then decided to do nothing.
Even as North Korea’s deputy ambassador to the United Nations said a nuclear war “may break out any moment,” the money manager dismissed it as “saber rattling, drum beating.”
“It’s just two dogs barking at each other,” said Kelvin Tay, regional chief investment officer at UBS Wealth Management in Singapore, referring to the escalating rhetoric between North Korea’s leader and U.S. President Donald Trump. “Do you seriously think Kim Jong Un is going to fire a missile” at one of his enemies?
UBS Wealth Management is ascribing a 20 percent chance that war will break out, Tay, who helps oversee 2.2 trillion Swiss francs ($2.2 trillion) at the unit, said in an interview, while adding that even that figure is conservatively high.
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BREAKING: Britain's inflation rate climbs to 3%, the fastest pace since April 2012 @Brexit International Trade |
Consumer prices rose 3 percent from a year earlier, the fastest pace since April 2012 and up from 2.9 percent in August, the Office for National Statistics said on Tuesday in London.
The increase intensifies the squeeze on British households and may strengthen the case for Bank of England policy makers to raise interest rates for the first time in over a decade next month.
Inflation is a full percentage point above their 2 percent target, meaning BOE Governor Mark Carney will have to write a public letter of explanation should prices accelerate further this month.
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Goldman sees geopolitics haunting oil again as uncertainty swirls @business Commodities |
The oil market is grappling with intensifying geopolitical risks as uncertainty swirls over the impact of tensions surrounding nations such as Iraq, Iran and the U.S., according to Goldman Sachs Group Inc.
While Iraq’s government is clashing with Kurdish forces in the north of the OPEC nation, raising the prospect of output disruptions in the region, both sides have an incentive to keep oil flowing due to low production costs and “high revenue” available per barrel, according to the bank. And though the U.S. has hardened its stance against Iran, there’s still “high uncertainty” over whether it’ll reimpose sanctions curbing the Middle East country’s crude supply.
Oil jumped almost 3 percent over the past two sessions as weeks of tensions following a Kurdish referendum on independence from Iraq on Sept. 25 flared into open conflict in the oil-rich Kirkuk region. Still, the rally fizzled on Tuesday, with prices trading little changed, as two fields pumping a combined 275,000 barrels a day were shut amid the violence.
“The limited market response so far is therefore consistent with the high uncertainty on potential production disruptions, with larger moves only likely to occur should new disruptions actually occur,” Goldman analysts including Damien Courvalin wrote in a Oct. 17 research note.
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KenGenKenya reports FY 2017 PAT +34.317% Earnings #KenGenfullYearresults Kenyan Economy |
Par Value: 2.50/- Closing Price: 8.75 Total Shares Issued: 6243873667.00 Market Capitalization: 54,633,894,586 EPS: 1.37 PE: 6.386
FY Electricity revenue 29.369b vs. 29.544b -0.592% FY Steam revenue 5.189b vs. 6.856b -24.314% FY Other income 882m vs. 2.210b -60.090% FY Revenue 35.440b vs. 38.610b FY Operating expenses [9.691b] vs. [8.948b] +8.304% FY Steam costs [2.796b] vs. [3.167b] -11.715% FY EBITDA 22.953b vs. 26.495b -13.369% FY EBIT 13.709b vs. 16.271b -15.746% FY Compensating tax – vs. [2.431b] FY Finance costs [3.417b] vs. [3.132b] +9.100% FY Interest income 1.242b vs. 556m +123.381% FY Profit before tax 11.534b vs. 11.264b +2.397% FY Profit for the year 9.057b vs. 6.743b +34.317% Basic EPS 4.12 vs. 3.07 +34.202% Diluted EPS 1.37 vs. 1.08 +26.852% Total assets 377.197b vs. 367.249b +2.709% Cash and cash equivalents as at 30th June 7.831b vs. 6.756b +15.912% No dividend
KenGen announced FY 17 results this morning, reporting an EPS of KES 1.37, up 27% y/y EPS grew mainly on account of a lower effective tax ( 21% vs. 40% the year earlier) as well as reduced depreciation and amortization expenses (-10% y/y) Profit before tax grew a marginal 2% y/y to KES 11.5bn Electricity revenue was flat at KES 35.4bn due to reduced energy revenue following geothermal power evacuation constraints and hydro challenges over drought Steam revenue declined 24% y/y on account of lack of income from commercial drilling services OpEx inflated 8% y/y attributable to investment in capacity expansion. Interest income more than doubled to KES 1.2bn following investment of funds from the Rights Issue Finance costs rose 9% y/y to KES 3.4bn Profit after tax settled at KES 9.1bn (+34% y/y).
Conclusions
Some will be disappointed with the dividend miss. However Shareholders are up +50% YTD, which more than compensates. These were strong earnings.
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