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25-FEB-2019 :: Currency Puzzles
The Currency Markets remain the most liquid market of all in the World
and something equivalent to the Challenger Deep in the Mariana Trench
which is the deepest known point in the Earth's oceans. The Foreign
Exchange market trades in excess of $5.1 trillion a day. Within the 24
hour cycle, the market exhibits Liquidity peaks and troughs and we
have witnessed spectacular and exponential moves typically in the
early hours when most of the World is in the Land of Nod and liquidity
is at its lowest. You might recall a night when Sterling tanked ten
big figures, a night when the Rand flash-crashed and even this year we
saw the Aussie get creamed. Wizards and Gremlins stalk the night. Once
upon a time, the FX market was a ''voice-over'' market, today its
entirely screen-based and algorithimic and High Frequency Trading is a
big component and both are heavily reliant on complex mathematical
formulas and high-speed computer programs. HFT strategies utilize
computers that make elaborate decisions to initiate orders based on
information that is received electronically, before human traders are
capable of processing the information they observe. Algorithmic
trading and HFT have resulted in a dramatic change of the market
microstructure, particularly in the way liquidity is provided. The
attraction of the FX market is that it allows all Participants to
deploy outsize leverage. Basically, You can deploy up to 200x
Leverage. There is no other market that allows this level of leverage.
The US Dollar [notwithstanding endless chatter over its imminent
demise] remains the dominant currency representing around 60% of the
market. Of course The [Petro] Dollar underpins US Power and this is an
observable fact. The US has frequently deployed coercive financial
warfare strategies and it works a Treat and in fact President Trump
has lobbed the odd Tweet to good effect but more than that You can see
how coercive financial warfare has ground the likes of Venezuela and
Iran into the dust. Thats the background.
The Market View pivoted big time on the Dollar at the end of last year
and priced out further interest rate increases and has now priced in a
rate cut. Typically, a reduction in interest rate expectations would
soften a currency. However, the market has now absorbed the view that
it will be a synchronised global slowdown and that the US will likely
outperform. I stand by my view that the Dollar will appreciate about
10% in 2019.
The currency markets in Africa, however, have been idiosyncratic and
endlessly fascinating. The Ghana Cedi slumped to an all time low last
week, has weakened 8.6% Year to Date and is the worse performing
currency in the World.
Tito Mboweni the South African Finance Minister delivered a currency
Yehudi Menuhin level master-class last week. He delivered his Budget
Speech last week and began by presenting the aloe ferox which he says
is resilient, sturdy and drought resistant. He then started with all
the bad news, the proposed and expensive rescue of Eskom and this sent
the Rand into an almighty Tail-Spin and an orgy of Rand selling. At
one point the Rand was -2.00% on the day. Then he rowed back and he
had all the Rand Shorts where he wanted them. The Rand ended the day
marginally positive. Mr. Mboweni's Budget Speech and the finesse with
which he skewed his delivery [negative first and then gradually more
positive] set the Trap. He exhibited a feel for the markets which was
Zimbabwe finally overhauled its dysfunctional,''whack'' and even
Voodoo FX regime. Zimbabwe’s government dropped its insistence that a
quasi-currency known as bond notes are at par with the dollar as it
overhauled foreign-exchange trading and effectively devalued the
securities. While the government has previously insisted that bond
notes and RTGS dollars are worth the same as U.S. dollars, the units
currently trade at between 3.66 and 3.8 to the dollar respectively on
the black market [Bloomberg]
“The introduction of a Zim dollar will be just in name, but the RTGS$
is essentially the Zim dollar.”
Tendai Biti is predicting a 6-8 range whilst the Government is looking
for it to appreciate to 2.5 which is best characterised as
''Hail-Mary'' economics. This is the right move but I would definitely
be short at 2.5, if it ever gets there which is entirely unlikely.
The Sudanese Pound has been in FreeFall and its consequences are
self-evident with Omar Al-Bashir imposing a State of Emergency.
Nigeria maintains a two tier FX Regime a little like King Canute. Its
entirely unlikely that Nigeria can accelerate out of the GDP slow lane
with the current FX regime.
The Stand-Outs in Africa from a currency perspective are Egypt and
Kenya. Egypt's Al-Sisi devalued big and early and the consequences of
that bold economic pivot is there for all to see, Egypt GDP is likely
to have a 5 handle in 2019 and the economy overtook South Africa. And
in Kenya, The Shilling has appreciated by +1.6% in 2019 and is testing
the key 100.00 level.
I first met Priya Ramrakha on a back street in Kampala, Uganda, in 1966. @NewYorker
I first met Priya Ramrakha on a back street in Kampala, Uganda, in
1966. I was helping him and his editor at Time/Life, where I worked as
a stringer and a fixer, to rent an aircraft to fly to Bukavu, in the
eastern Congo, where some white mercenaries had taken over the town.
Hiring the small plane required tedious paperwork in a government
office, so, while the editor filled out an application, Priya wandered
outside, into the equatorial sunshine and the broken road, his camera
around his neck, and I followed. A large, dark snake, probably a
mamba, highly poisonous, lay dead in the road. Priya stood over it. He
cocked his head, then he raised his camera and looked through the
viewfinder. He did not snap a picture; he paced around the snake and
continued to examine it through his camera lens, bringing it into
focus, enlarging it, studying it. I realized then that that was how he
saw the world—that the camera was an extension of his brain and his
eye, and that it did not shy away from danger or death.
In those years, the sixties, when African countries were becoming
independent, a job was more than a job, it was a mission. I was
teaching then, at Makerere University, and felt that I was part of a
pan-African movement, helping to create a more literate and more
productive society. I was that bore, that monomaniac, that
moralizer—an idealist. Priya was, too. Kampala was the center of a
great deal of cultural activity—we had a literary magazine,
Transition, and two decent English-language newspapers; the National
Theatre put on plays by local writers; Makerere University had a film
society; and all along Kampala Road there were bars and bistros where
writers and activists and publishers met and argued. Uganda by then
had been independent for four years; though there were tensions
between the Kingdom of Buganda and the central government, no one
foresaw the attempted coup d’état, the government assault on the
Kabaka’s palace, or the later usurpation by and rise of Idi Amin. We
still believed we were helping to make Uganda a better place.
they were easily assimilated in Britain and elsewhere, because they
had learned how to be aliens. One of Priya’s gifts—again, it is
evident in his photographs—is that he was at home in the wider world.
30-APR-2018 :: "A new history starts now. An age of peace, from the starting point of history."
Law & Politics
The Events that took place on Friday at the truce village of Panmunjom
and during the Inter-Korean Summit were breathtaking for the Hollywood
Optics. The Opening Shot of Kim Jong Un surrounded by a Phalanx of
North Korean Officials [later replayed as Chairman Kim sat in his
Presidential Vehicle surrounded by his Ninja bodyguards] was almost as
good as the opening Sequence in PT Anderson's Boogie Nights [Steadicam
operator Andy Shuttleworth]. This was Cinema of the highest level
which is no surprise when You consider that Kim Jong-Il the Father was
obsessed with Cinema and amassed arguably the world’s largest personal
film collection: over 20,000 bootlegged 35mm screening copies. Kim
Jong-Il also had a penchant for Hennessy Paradis cognac and for two
years in the mid-1990s, he was the world's largest buyer of Hennessy
Paradis cognac, importing up to $800,000 of the stuff a year. Kim
Jong-Il began his career as the head of the state’s propaganda and
agitation department and its clear that Kim Jong-Un's sister Kim Yo
Jong who holds the same role and evidently handles all the optics, is
a chip off the old Block. Friday was tip-top Geopolitical Optics. Mike
Pompeo, the newly minted US Secretary of State [His predecessor was
fired via Twitter] had visited Pyongyang the previous week and
pronounced; that the young North Korean leader was "a smart guy who's
doing his homework"
12-FEB-2018 :: he is the buffer state between China and more than 30,000 US soldiers parked on their doorstep in South Korea.
Law & Politics
“Water is fluid, soft, and yielding. But water will wear away rock,
which is rigid and cannot yield. As a rule, whatever is fluid, soft,
and yielding will overcome whatever is rigid and hard. This is another
paradox: What is soft is strong,” Lao Tzu
South Korea is set to be peeled off and going by his puppy dog smiles
President Moonriver will be in PyongYang before you can pronounce Kim
Yo Jong correctly. Russia always had their back. China was never
interested in bringing him to heel. After all, he is the buffer state
between China and more than 30,000 US soldiers parked on their
doorstep in South Korea.
18 SEP 17 :: "A screaming comes across the sky" North Korea. @TheStarKenya
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” and North Korea.
“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.’’
Israel opens its first embassy in Rwanda @France24_en
Law & Politics
"This country shares a lot of similarities with state of Israel and
offers a lot of ground for mutual cooperation," new Israeli ambassador
Ron Adam said after meeting with Rwanda's President Paul Kagame.
The two countries, both with histories largely defined by genocide,
already have close ties, including being embroiled in a controversial
2018 deal that sought to deport African refugees and asylum seekers
The top Chinese negotiator, Vice Premier Liu He, laughed out loud. @business
Law & Politics
An exasperated Robert Lighthizer, the U.S. trade representative, tried
to gently educate his boss, Donald Trump, on the meaning of a
“memorandum of understanding” in the Oval Office on Friday, leading to
a presidential lecture in front of television cameras and a top
The exchange between the president and his top trade negotiator
unfolded Friday when the president was asked during a meeting with a
Chinese trade delegation about how long so-called memorandums of
understanding would last in an eventual accord with Beijing.
Negotiators have been drafting MOUs on areas such as agriculture,
non-tariff barriers, services, technology transfer, currency and
intellectual property as the two nations work toward a deal.
Trump told gathered reporters that the memorandums would “be very
short term. I don’t like MOUs because they don’t mean anything. To me,
they don’t mean anything.”
Lighthizer then jumped in to defend the strategy, with Trump looking
on. “An MOU is a binding agreement between two people,” he said. “It’s
detailed. It covers everything in great detail. It’s a legal term.
It’s a contract.”
But the president, unswayed, fired back at Lighthizer. “By the way I
disagree,” Trump said.
The top Chinese negotiator, Vice Premier Liu He, laughed out loud.
“The real question is, Bob,” Trump said, “how long will it take to put
that into a final binding contract?”
The exchange marked the latest instance in which Trump tried to
reshape the branding of a major trade agreement during high-stakes
Last year, he persuaded leaders from Canada and Mexico to change the
name of the North America Free Trade Agreement, known as Nafta, to the
U.S.-Mexico-Canada Agreement, or USMCA.
Trump said the prior agreement carried the baggage of closed
factories, while his new acronym evoked the U.S. Marine Corps.
Derek Scissors, a China expert at the American Enterprise Institute,
said that Lighthizer is in a bind because he wants China to treat a
deal with the U.S. as binding even though it’s not.
“The Trump administration originally chose MOUs because no truly
binding agreement can be made on the exchange rate or large future
purchases of corn, much less technology coercion China denies has ever
happened,” he said.
“If the administration switches to calling it a binding trade
agreement, members of Congress will want to vote on it. If they don’t
get to, this looks exactly like Obama not wanting Congress to vote on
the Iran nuclear deal.”
But in Friday’s debate over memorandums of understanding on Friday,
Lighthizer eventually deferred to his boss.
“From now on we’re not using the word memorandum of understanding
anymore. We’re going to use the term trade agreement,” Lighthizer told
reporters. “We’ll have the same document. It’s going to be called a
He then turned to Liu to ask if the Chinese would accommodate the new
terminology, winning a nod from the Chinese leader.
“Good, I like that term much better,” Trump said, before again
complaining that memorandums of understanding were not that
“We’ll never use that word again!” Lighthizer responded.
As Trump turned to take another question from reporters, Lighthizer
whispered to Liu about not calling the agreements an MOU.
10-DEC-2018 :: Truce dinner @Huawei
Law & Politics
Sirloin steaks, Catena Zapata Nicolas Malbec  Huawei
Technologies Co. and Wanzhou Meng
You will recall that Presidents Trump and Xi Jinping enjoyed a much
anticipated ''Truce'' Dinner at the G20 in Buenos Aires and quaffed a
Catena Zapata Nicolas Malbec  wine with their sirloin steaks and
finished it all off with caramel rolled pancakes, crispy chocolate and
fresh cream, a dinner that ran over by 60 minutes and one where the
dinner Guests broke out into spontaneous applause thereafter.
18-FEB-2019 :: #NigeriaDecides
Last week President Cyril Ramaphosa closed a speech quoting Ben Okri
We dream of a new politics
That will renew the world
Under their weary suspicious gaze. There’s always a new way,
A better way that’s not been tried before.
This week Nigerians [84m people are registered to vote] were intending
to go to the Polls in the country’s sixth general election since
military rule ended in 1999. In fact, The Nigerian vote is ''the
largest democratic event in African history'' [@TheEconomist]. The
Elections were postponed at 2.40am on election day. The Nigerian
electoral commission pronounced that the general elections were
postponed by a week. Charlie Robertson tweeted
“#Nigeriadecides but not yet. Postponement is typical. 2011 elections
were pushed back twice, the 2nd time when the parliamentary vote had
already begun ... In 2015 they were delayed by 6 weeks (roughly a week
ahead of time)”
Like Ben Okri's preferred literary genre of “magic realism” Nigerian
Politics has spun some surreal narratives of its own. Who can forget
the legendary Pleasure- Seeker General Sani Abacha, President Umaru
Yar'Adua who allegedly was kept alive [or not] for a number of days in
an ambulance in the State House grounds, even the austere President
Buhari went missing for a few months.
“The significance of the Nigerian elections for Africa is tremendous,”
said Professor Nic Cheeseman [Bloomberg]
“A flawed election and the political instability that this could
generate would not only undermine confidence in the feasibility of
democracy in one of Africa’s most important states, but also slow
economic growth in West Africa and the wider region.”
‘In a system where candidates jump between political parties as if
they were changing buses, personality & money trump policy discussion’
tweeted David Pilling
It’s a Nollywood Level drama but permit me to give you some context.
GDP growth has lagged Population growth, GDP grew by 1.93 percent last
year, up from 0.82 percent in 2017 and grew 2.4 percent in the fourth
quarter. Nigeria was the second biggest economy in Africa in 2018,
using the market exchange rate of NGN362/$ or the biggest economy
using the fixed rate [@RencapMan]. Unemployment has risen from 8.2% to
23.1% under President Buhari's watch which would be a plain untenable
position for any incumbent Politician seeking re-election in most
parts of the World. The President is a victim of low oil prices which
provide 70% of government revenue. ''Baba Go Slow'' has to be
contrasted with President Al-Sisi's Egypt. Al-Sisi [and I for one
disagree with him on many things particularly with his
''incarceration'' strategy] made bold moves when it came to the
Economy. Egypt devalued its currency early, took a brutal punch in the
solar plexus but is now reaping the dividend from its bolder economic
policy, Nigeria is still muddling along with its ''Voodoo'' level FX
economics. Since President Buhari came to power in May 2015, Nigeria's
stock market has fallen more than any other in the world, dropping 50%
in dollar terms. There is a Message in that performance. The Stock
Market has perked up over the last few sessions, however.
Atiku Abubakar, the main challenger to Mr Buhari, is also in his 70s.
It is an extraordinary Outcome that as the Continent becomes younger,
Our Leaders in many cases are getting older. This Elastic Band [the
difference between the average of leadership and the average of its
Citizens] is now stretched to breaking point and will snap.
Abubakar has struck a Bill Clinton circa 1992 when he kept chanting
"It's the economy, stupid"
Atiku Abubakar's mantra is “Let’s Get Nigerians Working Again”. Citing
Margaret Thatcher, he says he wants to privatise state-owned firms,
which frankly is the optimal economic policy if it’s done fairly and
increases ownership in the Nigerian economy. I saw The Thatcher
Revolution up close and personal and it worked. From Ethiopia to
Nigeria to many other parts of Africa, Governments are running out of
headroom and they absolutely need to embrace Thatcherism. It is a
We have seen a number of elections in Africa. Overturning Incumbents
is a thankless task but not too long ago we saw a number of Upsets in
West Africa. However, recently we witnessed a Nollywood level Plot
Twist in the DR Congo and its clear the Will of the People was not
expressed in the result.
Mr. Mbeki said “They are aware that the rest of the world is busy with
bigger issues, In Africa, things are most likely to get worse before
they get better.”
Cedi falls to weakest on record as foreign investors shun Ghana's bonds @business.
The cedi has weakened 8.6 percent this year, the most among more than
140 currencies tracked by Bloomberg, after the central bank
unexpectedly cut its benchmark rate in January and signaled more
easing may be in store
Out of the 2.1 billion cedis ($391 million) of two-year and
longer-dated maturities sold by the government through Jan. 31 this
year, foreign investors bought just 6.3 percent, according to data
from the Central Securities Depository Ghana Ltd. That compares with
more than 30 percent in 2018.
he cedi declined as much as 0.5 percent on Friday to the weakest level
since Bloomberg started keeping the records in 1994, before reversing
losses to trade 2.2 percent stronger at 5.3772 per dollar by 4:38 p.m.
in the capital, Accra.
Multiple Raids Occurred Near Anadarko Mozambique Site @markets
An attack on an Anadarko Petroleum Corp. convoy in Mozambique was one
of multiple raids that took place Thursday in an area where companies
plan to develop $50 billion of liquefied natural gas projects,
according to two people familiar with the matter.
An Anadarko contractor was beheaded in the violence, the people said,
asking not to be identified because they’re not authorized to discuss
the matter publicly. Anadarko confirmed one person died and at least
six people were injured in the raids.
The violence could signal a major shift in tactics by suspected
Islamist militants who’ve waged an insurgency in northern Mozambique’s
Cabo Delgado province since October 2017. It could be the first
significant coordinated attack by the Islamists, as well as the first
time an oil and gas company has been targeted.
Anadarko said there were two related attacks on Thursday, with one
contractor killed, according to a statement on its website. Both raids
occurred on the road from the coastal town of Mocimboa da Praia to
Anadarko’s project in Afungi about 60 kilometers (37 miles) north, it
said. The company’s project-construction site has been placed on
lockdown, the company said.
At least six separate assaults took place in the area between Palma
and Mocimboa da Praia in Cabo Delgado, according to one of the people
who asked not to be identified. The assailants targeted an Anadarko
convoy and vehicles operated by contractors, as well as villages near
the main highway, he said. Two other Anadarko contractors died in one
of the incidents, he said.
The raids were carried out by suspected Islamists, the second person said.
The attacks demonstrate that “militants now possess the capacity to
threaten LNG operations on the mainland,” said Nick Branson, senior
Africa analyst at Verisk Maplecroft.
“Further incidents could potentially jeopardize Anadarko’s plans for
an onshore processing facility,” he said in an emailed note Friday.
“Beyond the short-term disruption to operations, the attack could
delay Anadarko’s final investment decision on its Rovuma Basin assets
until the second half of the year.”
Anadarko is expected to spend at least $20 billion on its project in
Palma, near the Tanzanian border, where more than 100 people have died
and hundreds of homes have been destroyed since a shadowy insurgency
began in October 2017. Exxon Mobil Corp. and Eni SpA are also planning
natural gas projects in the area.
Augusto Guta, a spokesman for the Mozambican police in northern Cabo
Delgado province, said the authorities are investigating the
“Attacks occurred and we’re still gathering information,” Guta said by
phone. “We’ll issue a statement after field work.”
Amor e um fogo que arde sem se ver Love is a fire that burns unseen,
Amor é um fogo que arde sem se ver,
é ferida que doi, e não se sente;
é um contentamento descontente,
é dor que desatina sem doer.
É um não querer mais que bem querer;
é um andar solitário entre a gente;
é nunca contentar-se de contente;
é um cuidar que ganha em se perder.
É querer estar preso por vontade;
é servir a quem vence, o vencedor;
é ter com quem nos mata, lealdade.
Mas como causar pode seu favor
nos corações humanos amizade,
se tão contrário a si é o mesmo Amor?
Love is a fire that burns unseen,
a wound that aches yet isn’t felt,
an always discontent contentment,
a pain that rages without hurting,
a longing for nothing but to long,
a loneliness in the midst of people,
a never feeling pleased when pleased,
a passion that gains when lost in thought.
It’s being enslaved of your own free will;
it’s counting your defeat a victory;
it’s staying loyal to your killer.
But if it’s so self-contradictory,
how can Love, when Love chooses,
bring human hearts into sympathy?
Closing Price: 6.48 Market Cap: $403.795m EPS: 1.2 PE: 5.400
HY Revenue 22.185b -0.618%
HY PAT 4.124b +0.708%
HY EPS 0.63 +1.613% Cash and cash equivalents balance at 31st December
.@LittleCabs_Ke which competes with global players @Uber and @Taxify_ke in Kenya, is valued at about $70 million to $75 million, Chief Executive Kamal Budhabhatti said @ReutersAfrica
Kenyan ride-hailing company Little is expanding to Tanzania and Ghana
by May and plans to raise about $50 million more from investors, its
chief executive officer said on Friday.
Little, which competes with global players Uber and Taxify in Kenya,
is valued at about $70 million to $75 million, Chief Executive Kamal
Budhabhatti said, a minnow compared to rivals but it has aims to
expand across Africa.
The company will offer rides in Tanzania’s commercial capital Dar es
Salaam from next week and plans to launch in Accra by May, Budhabhatti
said, adding to operations in Kenya, Uganda and Zambia.
“We want to get into a lot more countries than what we are in at the
moment,” Budhabhatti said.
He said Little was talking to investors to raise about $50 million in
series A funding, the financing received when a start-up opens up to
outside investors for the first time. It aims to finalise this by
“We are meeting a couple of investors, both on the continent and in
Silicon Valley. The interest is there,” he said, adding that new funds
would be used to develop technology and to expand to more countries.
He did not name the potential investors.
Without the deep pockets of its ride-hailing rivals in the region,
Little has been attracting drivers by encouraging them to offer extra
services to earn money, Budhabhatti said.
“Our drivers are agents, they can sell insurance to you, they can sell
(mobile) airtime, they can pay light and/or water bills, they can do
all those little things around that increases that income,” he said.
Little, which has a marketing partnership with Kenya’s biggest mobile
operator Safaricom, is also available to Kenyan customers who do not
have a smartphone.