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Monday 06th of November 2017 |
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Macro Thoughts
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I have been reading Mackinder's book about is visit to Kenya in 1899 and his ascent of Mount Kenya |
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And @Salmanrushdie's The Golden House Africa |
The book begins with the election of Barack Obama and ends eight years later on the eve of an election in which the lead contender refers to himself as “the Joker”. Nero’s character contains echoes of Trump, too; he is a man of fabulous wealth, with a beautiful Russian wife, and a fortune thought to be in part built on real estate. The novel’s transnational supporting cast includes an Australian hypnotist; a Burmese diplomat; Ivy Manuel, a night-club singer; a Somalian artist; and Nero’s assistants, Fuss and Blather. As the election nears, America is deeply divided. “It was a year of two bubbles,” René muses. “In one of those bubbles, the Joker shrieked and the laugh-track crowd laughed right on cue.” In that bubble, “knowledge was ignorance, up was down and the right person to hold the nuclear codes was the green-skinned red-slashed-mouthed giggler”. Thus, by the book’s end, the bubble of New York is where reality perseveres.
“I dream that I have found us both again, With spring so many strangers' lives away, And we, so free, Out walking by the sea, With someone else's paper words to say....
They took us at the gates of green return, Too lost by then to stop, and ask them why- Do children meet again? Does any trace remain, Along the superhighways of July?”
― Thomas Pynchon, Gravity's Rainbow
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Trump under siege from Mueller as he travels to Asia Law & Politics |
At the best of times, White House aides fret about Donald Trump’s capacity to make gaffes. The penalty for miscuing on Mr Trump’s 12-day Asian tour, which started on Friday, is higher than normal. It will be his first visit to China — and his first meeting with Xi Jinping since he joined the “immortals”, Mao Zedong and Deng Xiaoping, by having his ideas enshrined in China’s constitution. The contrast between the two presidents could hardly be sharper. Mr Xi was confirmed last month for another five-year term with no successor lined up. His grip on power is tightening. Mr Trump’s White House is under siege from Robert Mueller’s Russia collusion probe. The president is likely to be more distracted in the coming days than usual, even without the geopolitical landmines in his path. “Will Trump congratulate Xi on his election victory?” asks a former Bush administration official. “It is no joke. That is exactly the type of error he makes.” Mr Trump’s trip is vulnerable on two counts — domestic and global. The first is that he is engulfed by the crisis back home. The damage to his standing is already bad. On Monday, Mr Mueller indicted Paul Manafort, Mr Trump’s former campaign manager, on 12 counts, including tax evasion, money laundering and “conspiracy against the United States”. Several times earlier this year Mr Flynn dropped thick hints that he wanted to co-operate with the inquiry. He has gone silent in recent months. “The chances that Flynn is already co-operating with Mueller are reasonably high,” says a White House counsel to a previous administration. “Trump and his crowd are like a crew in Goodfellas,” said a veteran of the Reagan and Bush campaigns. “They are tight-knit yet distrusting of each other, impulsive, profane and remorseless.” Mr Mueller’s probe is as tentacular as Mr Trump’s business history. Whether he can prove Mr Trump directly colluded with Russia — let alone submit a charge sheet for impeachment — is secondary at this point. The world is being offered an X-ray vision of Mr Trump’s circle that tarnishes America’s values. “From China or Russia’s point of view, the Mueller probe is the gift that keeps on giving,” said the former Bush official.
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Saudi Purge Sees Senior Princes, Top Billionaire Detained Law & Politics |
Saudi Arabia’s King Salman removed one of the royal family’s most prominent princes from his ministerial role and arrested other royals and top officials in an anti-corruption drive that clears any remaining obstacles to his son’s potential ascension to the throne. Acting on orders from a newly established anti-corruption committee headed by Crown Prince Mohammed bin Salman, security forces arrested 11 princes, four ministers and dozens of former ministers, according to Saudi media and a senior official who spoke on condition of anonymity. Prince Miteb, son of the late King Abdullah, was removed from his post as head of the powerful National Guards. Prince Alwaleed bin Talal, one of the world’s richest men, was picked up at his desert camp, the senior official said. Authorities did not disclose the evidence that prompted the arrests. “Laws will be applied firmly on everyone who touched public money and didn’t protect it or embezzled it, or abused their power and influence,” King Salman said in comments shown on state TV. “This will be applied on those big and small, and we will fear no one.”
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King Salman's decree invests the new anti-corruption committee with draconian powers Law & Politics |
King Salman’s decree invests the new anti-corruption committee with draconian powers. The decree says that the anti-corruption committee shall be exempted from “laws, regulations, instructions, orders and decisions”, while performing its task of identifying “offenses, crimes, persons and entities involved in cases of public corruption.” It empowers MBS to issue “arrest warrants, travel ban, disclosure and freezing of accounts and portfolios, tracking of funds, assets” as well as take “precautionary measures”.
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Donald Trump's best new policy in the Middle East would be no new policy Law & Politics |
President Trump’s stance on conflict in the Middle East is a mixture of bellicose threats and demonisation of opponents combined with rather more cautious and carefully calculated action or inaction on the ground. Leaders in Baghdad, Damascus, Riyadh and Tehran face the same problem as those in Tokyo and London, uncertain where the rhetoric ends and the reality begins and unsure if Trump himself distinguishes much between the two.
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Currency Markets at a Glance WSJ World Currencies |
Euro 1.1611 Dollar Index 94.92 The priced-in probability of a Fed interest rate hike at the December 13 policy meeting is now 92.3% Japan Yen 114.37 touched 114.66. highest since March Swiss Franc 1.0004 Pound 1.3074 Aussie 0.7656 India Rupee 64.655 South Korea Won 1117.01 Brazil Real 3.3144 Egypt Pound 17.6415 South Africa Rand 14.2030
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Oil hits highest levels since 2015 amid tightening markets, Saudi purge Commodities |
Brent futures LCOc1, the international benchmark for oil prices, hit $62.44 per barrel early on Monday, their highest level since July 2015. Brent was at $62.27 per barrel at 0230 GMT, up 20 cents, or 0.3 percent from the last close and 40 percent above June’s 2017 lows. U.S. West Texas Intermediate (WTI) crude CLc1 hit $56.00 per barrel in early trading, also the highest since July 2015, and was at $55.79, up 15 cents, or 0.3 percent from the last settlement. WTI is a third above its 2017 lows. Crown Prince Mohammed bin Salman, also known as MBS, has tightened his grip on power through an anti-corruption purge by arresting royals, ministers and investors including prominent business billionaire Alwaleed bin Talal and the head of the National Guard, Prince Miteb bin Abdullah. RBC Capital Markets said in a note that although the “purge represents a stunning political development in Saudi Arabia,” it expected “no immediate changes” in the oil policy of Saudi Arabia, which is the world’s biggest exporter of crude oil. “MBS seems strongly committed to anchoring the OPEC agreement deep into 2018 and moving ahead with the Aramco sale,” RBC said.
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EXCLUSIVE: How South Sudan's elite looted its foreign reserves Mail and Guardian Africa |
On a hot, dusty day in April 2015, generals, ministers, senior ruling party officials and members of parliament descended on the offices of the ministry complex in South Sudan’s capital Juba. Some army men came in their uniforms, accompanied by a flock of AK-47 toting soldiers. Others, perhaps less willing to be seen, sent letters with requests, bearing the seal of whatever government institution they worked for. Some would simply pick up the phone to give instructions. At first sight, the gathering may have looked like an emergency meeting of the country’s leadership. In fact, South Sudan’s elites were scrambling to cash in on dwindling foreign reserves - the advanced stage of a systematic effort to loot the resources of the world’s youngest nation. At that time, South Sudan was well into the second year of a bloody civil war — a war that is yet to be resolved. Oil revenues had declined by a third, and the country’s dwindling foreign reserves had become its most sought-after commodity — especially for those in power. In order to address the country’s acute shortage of hard currency, the Bank of South Sudan earmarked $993-million in oil revenues between 2012 and 2015 to import vital goods like medicine and food. Ministries allocated the hard currency to selected traders at a preferential exchange rate through letters of credit (LCs), a documentary credit facility commonly used to facilitate international trade. But instead of helping South Sudan’s impoverished population, the LCs became one of the biggest corruption scandals in South Sudan’s short but troubled history, a Mail & Guardian investigation has found. Rather than using the lifeline to import badly needed goods like grains and medicine, many of those involved exploited it as a means to buy scarce oil dollars at a highly discounted exchange rate and resell them on the black market, potentially generating hundreds of millions of dollars in profit. “Many beneficiaries of the letters of credit seem to have managed to get their payments without delivering the intended goods or services to the country,” said the audit report, which was presented to President Salva Kiir in December 2015. The LCs “have caused the country huge financial losses [...] at the expense of the majority of the populace in the country,” it concluded. Initially launched when South Sudan shut down its oil production in 2012, the scheme took off just as conflict engulfed the young nation. Almost 90% ($875-million) of the funds were allocated in four rounds between May 2014 and April 2015. The practice flourished until the country finally ran out of foreign reserves, eventually forcing the Bank of South Sudan to abandon the fixed exchange rate in December 2015. The dollar allocations were disbursed through the Qatar National Bank and CFC Stanbic [a subsidiary of South Africa’s Standard Bank] in South Sudan and transferred mostly to banks in Uganda and Kenya, including Kenya Commercial Bank, Barclays Bank, Equity Bank and Stanbic Uganda. Since the transactions occurred in USD, and were cleared through US correspondent banks, US law enforcement agencies could assert jurisdiction to prosecute any transactions found to violate US anti-money laundering laws.
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'A military coup is likely in Zimbabwe' Africa |
Vice President Emmerson Mnangagwa's ally, controversial businessman Energy Mutodi says a coup is likely in Zimbabwe if President Robert Mugabe fails to "carefully choose his successor" amid rising succession tensions within the ruling Zanu-PF.
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As Mugabe clings on, his economy goes micro Africa |
At her dusty market stall, Anna Magaya doles out tiny portions of used cooking oil, measured carefully in miniature perfume bottles. She buys the bottles from rubbish recyclers, allowing her to sell her cooking oil in minuscule portions for 20 or 30 cents each – enough for a family's needs for a day or two. That's all her customers can afford. "People have no money," she says. Even the multinational food company Nestlé has opened a new packaging plant in Zimbabwe to sell its products in 35-cent packages. "We have doctors and engineers on the streets, selling tomatoes," says Sten Zvorwadza, head of the National Vendors Union of Zimbabwe. "If you remove the vendors from the street, the economy will collapse. The economy is almost totally informal now." Another economist, John Robertson, calculates that Zimbabwe's official money supply jumped by 36 per cent in the 12 months after August, 2016, because of heavy government borrowing from the banks. "That's a clear warning of inflation," he says. "Prices haven't ballooned yet, but they could." The state borrowing has sucked cash out of the banks and off the streets. Banks have been forced to limit withdrawals, and pensioners can't get access to their savings. Some banks in recent days have halted all withdrawals because they simply have no cash. "We've nearly hit rock bottom," Mr. Robertson says
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Rebellion fears grow in eastern Congo IRIN Africa |
While attention has focused on the raging conflict and humanitarian crisis in Kasai in the southern Democratic Republic of Congo, armed opposition groups in the east of the country have stepped up attacks and are threatening to wage all-out war. Tension and frustration are mounting across Congo as President Joseph Kabila clings to power well after his second and supposedly final term in office expired last year. Eastern Congo was the main theatre of two devastating civil wars, fought in 1996-1997 and then from 1998 to 2003. It still plays host to dozens of small, armed groups, many of them local “self-defence” militias known as Mai-Mai. But recent months have seen the emergence of at least two new insurgencies that claim to have increasingly broad support in their shared aim of toppling Kabila.
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Revealed: Glencore's secret loan to secure DRC mining rights Africa |
The documents confirm that in 2009, Glencore loaned Gertler $45m with the caveat that it would be repayable if agreement with DRC authorities was not reached to secure a mining contract for a company linked to Glencore. Gertler’s notoriety in the resource-rich but conflict-riven and corrupt DRC spans nearly two decades. He was cited by a 2001 UN investigation that said he had given the DRC president, Joseph Kabila, $20m to buy weapons to equip his army against rebel groups in exchange for a monopoly on the country’s diamonds, and a 2013 Africa Progress Panel report said a string of mining deals struck by companies linked to him had deprived the country of more than $1.3bn in potential revenue.
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Take your money out of SA, says economist Africa |
“Take your money out of South Africa. This country is in deep trouble.” This is the shattering advice given by Efficient Group’s chief economist Dawie Roodt following the release of the auditor-general’s report on national irregular expenditure. The report showed that irregular expenditure increased 55% since the previous year to R45.6billion and could rise to as high as R65bn. Auditor-general Kimi Makwetu said this amount could be even higher as it did not include the irregular expenditure where audits were still ongoing. This included the Passenger Rail Association of SA, at which irregular expenditure last year was almost R14bn. KwaZulu-Natal, Free State and Limpopo were among the provinces that were the main contributors to the significant increase in irregular expenditure. The sectors with the highest amounts of irregular expenditure were health at R11.77bn, transport at R6.38bn and education at R6.09bn.
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Nigerian writer Wole Soyinka on coup culture and challenging Castro FT David Pilling Africa |
It is just as the main course arrives that Wole Soyinka — playwright, poet, novelist, essayist and part-time agitator — reaches into his pocket and brings out a plump green chilli. “Actually, when I travel I always carry a special paste, which I have made for me — paste which I put in my pocket,” he offers by way of explanation in his plummy baritone. “This one,” he says, proceeding to dissect the dapple-green pepper, “I got when I arrived in London. Because I forgot my paste in the fridge in Sochi.” After attending Abeokuta Grammar School, where he won several writing prizes, Soyinka went on to University College Ibadan to study English literature, Greek and western history, and from there, in 1954, to Leeds University. Already prolific, after he graduated he wrote plays including The Lion and the Jewel, which attracted the attention of London’s Royal Court Theatre. His first work to appear there was a one-act play about apartheid South Africa called The Invention. It was preceded by a poetry recital to which Soyinka invited his cousin, a young musician called Fela Kuti, to accompany him on stage. That was a big break for Fela, who went on to become the legendary father of Afrobeat. The two shared a flat in Bayswater. “We were impecunious. We shared everything,” he says, polishing off the last sliver of octopus and mopping a dab of sauce from his prodigious beard. “Everything. I won’t say more than that. It was a wild apartment.” What about smoking? “I used to smoke hard cigarettes. Gitanes, Gauloises, cigars and cheroots especially. But I lost interest several years ago,” he says, draining the Montepulciano. We’ve been talking for nearly three hours, but he can’t resist one last story. “I had an argument with Fidel Castro about it,” he says, as if this might be a common occurrence. “By that time Castro had got religion about the perils of smoking and he rounded on a guerrillero, saying, ‘This is bad for you. I have medical evidence.’ He started bullying him. I said, ‘Wait a minute. Leave the man alone. Let him find his own time.’ ” Soyinka says this triggered a two-hour discussion. “Castro loved to argue. But I think that day he met his match.” The two called it an evening and Soyinka retired to bed. “The following morning a box of cigars — Cohiba — arrived at my hotel. It just said, ‘With compliments of the Cuban government.’ Who did it? To this day, I’ve no idea. But I still have some of them in Abeokuta.” He pauses. “That’s the story of my smoking career.”
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Kenya opposition ramps up campaign for new election Kenyan Economy |
The “economic liberation” programme began on Friday with a call for Kenyans to stop using the goods and services of Safaricom, the country’s dominant mobile telecom company; Brookside, the largest dairy company; and Bidco Africa, a manufacturer of edible oils and other consumer products. The opposition National Super Alliance (Nasa) is also planning to hold a “people’s assembly” and protests as part of its campaign to force a new election by the end of January. But James Wandayi, one of the two dozen Nasa MPs who unveiled the boycott, said: “There is no price too high to pay for democracy.” “The support enjoyed by the opposition in some areas borders on fanaticism and so the boycott might work,” said Duncan Otieno, an independent analyst. “But on the other hand it’s often hard to find alternatives to Safaricom and Brookside because they’re virtual monopolies.” Mr Otieno said he thought part of Nasa’s strategy might be “psychological warfare”. “The aim might be to bring the business community into the national political conversation,” he added. “If business owners are saying loudly that they’re suffering then the government might be more inclined to listen to the opposition.”
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Who owns Kenya? IRIN Kenyan Economy |
The election crisis is really a struggle over elite power It is within the context of this historically frustrated effort to bring the colonial state to heel that we must locate the current political impasse. It must not be made out to be about the Luo versus the Kikuyu (although there is an aspect of that), or Kenyatta versus Odinga (although that matters too), or election winners versus election losers (a much less convincing argument). The real question is whether the wenyenchi (the owners of the nation) will give up their control of the state to the wananchi (the people of the nation); whether they will allow the constitution to dismantle and remake the colonial state into one that works for all Kenyans.
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Kenya Opposition Calls for Boycott of Safaricom, Danone Unit Kenyan Economy |
Kenya’s main opposition alliance called for a boycott of three of the country’s biggest companies, including mobile operator Safaricom Ltd., to press its demands for electoral reform. The National Super Alliance said its supporters should also spurn Brookside Dairies Ltd., part-owned by Danone SA of France, and closely held Bidco Oil Refineries Ltd., a Nairobi-based manufacturer of edible oils. The boycott forms part of a so-called economic liberation program the alliance started on Friday after earlier rejecting the results of last week’s presidential-election rerun. “We’re calling for a boycott that will hurt, a boycott that will be painful, a boycott that will bring these corporations to their knees and to their senses until they stand up for electoral justice expressed through free, fair and credible elections,” the alliance said in a statement.
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06-NOV-2017 :: This is the Best Time to Buy Safaricom. @TheStarKenya Kenyan Economy |
Safaricom is the Big Beast at the Nairobi Securities Exchange, carries a market capitalisation of 1.021 Trillion shillings which represents 42.63% of the value of the entire Nairobi Securities Exchange. Safaricom has served up a mouth-watering +38.22% Total Return in 2017, which is close to twice the return of the Nairobi All Share in 2017. These raw numbers confirm the importance and centrality of last weeks Earnings Release to Kenya Inc. Mr. Collymore who has presided over a miraculous +420% share price appreciation [that is excluding the very juicy dividends that shareholders having received] during his tenure, a performance that has only been bettered by the likes of Apple, Amazon and Ali Baba. Safaricom under Bob Collymore exists in the very top percentile of world-wide performance and consequently last weeks Earnings Release resonates world-wide. The Value of Safaricom is much more than the share price performance, its produced a plain exponential return. KPMG estimates that the total value Safaricom created for Kenyan society in FY17 was KES 486 billion around 10 times greater than the financial profit the company made in the same year. its produced a plain exponential return. The ubiquity of M-PESA allowed us to re-invent our Brand [which by the way has been some very big hits of late] across the World. Last weeks Earnings release's importance cannot be gainsaid. Mr. Collymore is in London and I am reliably informed watched last weeks proceedings on the Live Feed. In his absence, Safaricom subtly sent a message of bench strength with the thoughtful chairman Nicholas Ng’ang’a, the CFO Sateesh Kamath and Joseph Ogutu [director of Strategy and Innovation] taking up the Baton. Safaricom reported a +12.0% shift higher in First Half Services Revenue which clocked 109.73b. Customer Numbers [the demographic dividend] grew +10.8% to 29.5m. First Half Net Income expanded +9.5% to 26.2b and if we exclude a one off positive adjustment from the previous set of results, H1 Net Income grew +21.4%. Voice Revenue grew +3.6% to 47.35b. Nearly every Year for as long as i can remember Folks have been keen to pronounce the last rites on Voice but year in year out Safaricom has confounded the naysayers. Voice at +3.6% is counterintuitively off the charts. SMS revenue clocked a +3.4% increase to 8.92b. I recall Bob telling me a few years ago, how he was increasing the spike limit of the SMS platform by a factor of 10, a few years ago and I thought to myself why on earth is he doing that. WhatsApp was lifting off just about that time. Today, when the Betting Companies blast via SMS, they utilise 100% of that spike capacity increase. Safaricom have proven skilful at maximising yield, really skilful. Lets now turn to the more ''Go-Go'' Trajectories. H1 Mobile data revenue accelerated +31% to 17.55b. Sateesh informed me that average per capita mobile data consumption accelerated +66% and this confirms Kenya Inc is surfing the new c21st Information Superhighway, something Ali Baba's Jack Ma also alerted us to when he visited. He was asked about our Infrastructure deficit and he replied ''But the most important infrastructure in the c21st is the Internet and Yours is fast!'' Safaricom have invested heavily in building out this c21st Information highway, it represents the democratisation of Data and Safaricom have given every Kenyan an Entry Ticket and not any old Entry Ticket but a Ferrari to this new c21st of ours. Calls for the boycott of Safaricom is ''kindergarten'' economics and will surely tip Opposition strongholds into economic recession. The ubiquitous M-PESA Platform grew H1 Revenue +16.2% to 30.05b. Higher Frequency Data confirms a slow-down in the velocity of the Mobile Money since August and I have to believe that within this First Half Revenue narrative is a story of two halves with the 2nd Half materially slower than the first. M-PESA continues to expand its Platform capabilities and is deeply embedded in the economic ecosystem. The Chairman Nicholas Ng’ang’a spoke of Safaricom casting its eyes beyond our borders. Shareholders, in my view, have not baked this news into the share price. M-PESA, for example, surely, can be inserted into many countries on this continent. Safaricom also launched their M-SOKO E-Commerce Platform. E-Commerce has exploded. Its made Jeff Bezos of Amazon the richest man on the Planet and Jack Ma cannot be far behind. E-Commerce is going to be a very big Thing and Safaricom have all the levers with which to secure a leadership position in this space. Their M-PESA Agents can double up as delivery points, for example. Any share price softness is an Opportunity for Investors to load the boat for the next leg higher. Stanley Druckenmiller said ''The way to build superior long-term returns is through preservation of capital and home runs...When you have tremendous conviction on a trade, you have to go for the jugular. It takes courage to be a pig''
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