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Satchu's Rich Wrap-Up
 
 
Monday 30th of March 2020
 
Afternoon,
Africa

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Macro Thoughts

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24-FEB-2020 :: The Viral Moment has Arrived #COVID19
Africa


At this point I would venture Gold is correlated to the #Coronavirus
which is set to turn parabolic and is already non linear and
exponential ~

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"There's No Gold" - COMEX Report Exposes Conditions Behind Physical Crunch | Zero Hedge
Africa


While the demand for gold has been soaring as a safe haven asset amid
the multiple global crises we are currently facing, forced paper gold
liquidation (as leveraged funds scramble to cover margin calls) and
unprecedented logistical disruptions created a frantic hunt for actual
bars of gold.
Specifically, as Bloomberg details, at the center of it all are a
small band of traders who for years had cashed in on what had always
been a sure-fire bet: shorting gold futures in New York against being
long physical gold in London.
Usually, they’d ride the trade out till the end of the contract when
they’d have a couple of options to get out without marking much, if
any, loss.
But the virus, and the global economic collapse that it’s sparking,
have created such extreme price distortions that those easy-exit
options disappeared on them.
Which means that they suddenly faced the threat of having to deliver
actual gold bars to the buyers of the contract upon maturity.
It’s at this point that things get really bad for the short-sellers.
To make good on maturing contracts, they’d have to move actual gold
from various locations. But with the virus shutting down air travel
across the globe, procuring a flight to transport the metal became
nearly impossible.
If they somehow managed to get a flight, there was another major
problem. Futures contracts in New York are based on 100-ounce bullion
bars. The gold that’s rushed in from abroad is almost always a
different size.
The short-seller needs to pay a refiner to re-melt the gold and
re-pour it into the required bar shape in order for it to be delivered
to the contract buyer.
But once again, the virus intervenes: Several refiners, including
three of the world’s biggest in Switzerland, have shut down
operations.
“I realized it was going to be an extremely volatile day,” Tai Wong,
the head of metals derivatives trading at BMO Capital Markets in New
York, said of Tuesday.
“We watched this panic develop literally over the course of 12 hours.
Having seen enough market dislocations, you recognize that the frenzy
wasn’t likely to last, but at the same time you also don’t know how
long it would extend.”
“The case for gold is simple,” says Strauss.
“You want to own gold in times of financial dislocation and or
inflation. And that’s been the case since time immemorial. And gold
behaves well in those cases. In those cases stocks behave poorly. It’s
a great portfolio hedge. Gold does poorly when you’ve got strong
economic growth and low inflation. Tell me when that’s going to
happen. Gold held its value during 2008 and after all that money
printing it tripled over the next three years.”
When bullion banks issue more notices than stops, then they will lose
physical inventory as well. Normally, when bullion banks manufacture
waterfall declines in paper gold and silver prices, as they did
earlier this month, with the complicity of the CME’s largely
unreported rampage in raising initial and maintenance margins on
futures contracts many times within a 2-month period in the midst of a
stock market crash, they load up on physical gold and silver for their
house accounts while ensuring that their clients take almost zero
delivery of physical gold and silver ounces. However, if they are
unable to execute this clever strategy, this is when physical gold
supply problems can manifest.
In fact, I have not seen a single news site in the entire world,
except for my own, mention the relentless increase in initial and
maintenance margins in gold and silver futures contracts (the 100-oz
gold futures contract and the 5000-oz silver futures contract) for the
past two months, in a desperate attempt to knock long positions out of
the game and thereby prevent an increasing amount of physical delivery
requests.
Just recently, the CME raised margins yet again for 100-oz gold
futures contracts to $9,185/$8,350 for initial/maintenance margins,
representing a massive 86% increase in margins, and for 5000-oz silver
futures contracts to $9.900/$9,000 for initial/maintenance margins,
representing a gigantic 73% increase in margins, in just a couple
months’ time.
Normally, such relentless increases in initial/maintenance margins in
gold futures markets is sufficient to prevent physical gold supply
problems from afflicting futures markets, but the fact that even this
reliable manipulation mechanism failed recently is a sign of
additional tectonic earthquakes to come in the global financial
system.
However, as you can see for the data I have compiled for the behavior
of issues and stops for client and house accounts for bullion banks in
gold and silver from December 2019 to March 2020, this pattern of
normal behavior, in which bullion banks take advantage of their own
artificially manufactured paper gold and silver price plunges to load
up on physical metals at the expense of their clients, has strongly
reversed during this four-month time span. I have only included data
for the major gold (100-oz) and silver (5000-oz) futures contracts
below and not for the mini gold (10-oz) and mini silver (1000-oz)
silver futures contracts.
Therefore, when delivery notices are “issued” in house accounts, the
issuing bank is on the hook for delivering the physical ounces
associated with the underlying contracts. On the contrary, when
notices are “stopped”, then the stopping bank would receive
notification of the future delivery of the physical ounces associated
with the underlying contracts. The same holds true for client
accounts. Thus, all bullion banks desire more stopped than issued
notices for their house accounts, and desire more issued versus
stopped notices for their client accounts. This way they accumulate
more physical inventory during artificially engineered paper price
crashes.
As you can see, the massive engineered drop in paper silver prices
versus the massively higher physical silver prices for the past month
backfired on the bullion banks, as it led to a frenzy of clients
asking for physical delivery, whereas in the past, bankers had been
able to chase client long positions out of the market without ever
being on the hook for physical delivery.
Thus the amount of contracts stopped versus issued for clients was
nearly break even for silver futures contracts, a pattern I have not
witnessed in a long time during a banker raid on paper silver prices.
And in regard to house accounts, under past similar circumstances, I
had always observed JP Morgan bankers taking a tremendous amount of
physical silver delivery during engineered collapses in paper silver
prices.
However, during the last four months, this situation did not
materialize, perhaps due to the stress on physical stores of silver
created by so many clients asking for physical delivery.
As you can see in the data I complied above, this time around, JP
Morgan bankers were nearly absent in taking physical silver delivery
for their house account.
In fact, for the bullion bank house accounts, the amount of stopped
versus issued contracts, net, was only 74 contracts, or a mere 395,000
AgOzs for their House accounts.
As a basis of comparison, during similarly engineered collapses in
paper silver prices in the past, JP Morgan alone was able to
accumulate and take delivery of many millions of physical silver
ounces.
In regard to real physical gold delivery, the situation was even worse
for bullion bankers than their situation with real physical silver
delivery, which likely has given rise to physical gold supply problems
at the current time.
In their client accounts, physical delivery requests exploded, with
the net (stopped minus issued) totaling 8,095 contracts representing
800,950 AgOzs of real physical gold requested for delivery.
In their house accounts, the bullion banks were unable to yield a
positive net situation either, with issued contracts exceeding stopped
contracts by 6,107 contracts, representing 610,700 AgOzs.
Thus, when adding these two figures together, the bullion banks are on
the hook for delivering more than 1.4M AgOzs.
This unexpected demand on bullion bank physical gold reserves has
undoubtedly led to a disruption of physical gold delivery associated
with the gold futures markets, though various COMEX spokespeople have
claimed there is no shortage of physical gold whatsoever, and that the
disruption of delivery is simply due to a disruption in the supply
chain caused by the coronavirus pandemic, i.e., when in doubt, blame
the coronavirus pandemic for all manifested stresses revealed in the
global financial system. Earlier, here, on 24 February, I speculated,
well before US stock markets started to crash, that the coronavirus
pandemic would be scapegoated for the market crash, and I was 100%
right.
Is it possible that the coronavirus pandemic is now being scapegoated
for shortages of physical gold as well?
Oddly, a gold analyst, Ole Hanson stated in response to the shortages
of gold physical supply in the futures markets: “There is plenty of
gold in the market, but it's not in the right places. Nobody can
deliver the gold because we are forced to stay home." The explicit
function of COMEX warehouses is to store the physical gold that backs
gold delivery associated with gold futures contracts.
Consequently, why is the physical gold “not in the right places” and
in these warehouses, as if it is stored where it is supposed to be
stored, and the data is accurate (1.76M registered AuOzs and an
additional 6.98M eligible AuOzs in COMEX warehouses as of 26 March
2020), there should be no physical gold shortages to meet physical
demand right now?
Did Mr. Hanson, in his statement that gold is “not in the right
places” unwittingly reveal that the reported COMEX warehouse data is
fraudulent?
Secondly, some would suggest that ever since the COMEX mandate that
paper gold could be used to close out physical delivery requests
through EFP (Exchange For Physical) transactions by Exchange Rule
104.36 enacted on February 18, 2005, which allowed for the
substitution of gold ETFs for physical gold, that no physical shortage
of gold could ever result.
Since paper was allowed to replace physical, could not bullion banks
just literally “paper over” any physical supply deficit? And if the
answer to this question is yes, then why is the COMEX experiencing
physical shortages of gold right now?
Well, as I explained in an article that I published on my news site in
June 2011, in which I explained how EFP transactions operate (which
you can read here), “the Related Position [Physical] must have a high
degree of price correlation to the underlying of the Futures
transaction so that the Futures transaction would serve as an
appropriate hedge for the Related Position [Physical].”
Consequently, since there has been a massive price decoupling between
physical and paper gold prices, perhaps this price decoupling has
enabled the underlying holder of longs in gold that asked for physical
delivery to reject any EFP transaction, since there is no longer a
“high degree of price correlation” between paper and physical gold,
and to insist on physical gold delivery with no substitution for this
request.
And this rejection of EFPs and EFS (exchange for swaps) as acceptable
behavior is perhaps what is causing the physical gold supply problems
in the futures markets right now.

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Brothers Nelson Bunker Hunt and Herbert Hunt attempted to corner the world silver markets in the late 1970s and early 1980s, at one stage holding the rights to more than half of the world's deliverable silver.
Africa


During the Hunts' accumulation of the precious metal, silver prices
rose from $11 an ounce in September 1979 to nearly $50 an ounce in
January 1980.[2] Silver prices ultimately collapsed to below $11 an
ounce two months later,[2] much of the fall occurring on a single day
now known as Silver Thursday, due to changes made to exchange rules
regarding the purchase of commodities on margin.[3]
“Hunt had a paranoid world view and it made sense to him to amass
silver and hang on to it.”
Hunt died Oct. 21 at the age of 88 of congestive heart failure after a
long battle with cancer and dementia, according to The Dallas Morning
News.
When he began buying silver with his brothers in 1973, it cost $2 an
ounce and a big consumer was Eastman Kodak to make film.
Before the Hunts were through, seven years later, they’d stockpiled
more than 200 million ounces, the price was soaring past $45 an ounce
and regulators were preparing to take measures to make sure nothing
like what Nelson Bunker Hunt had done would ever happen again.
The Hunts “moved the price of silver around the world,” said Thomas
Gorman, a partner at Dorsey & Whitney in Washington, D.C., who
successfully sued the Hunts for market manipulation.
Most traders buy and sell paper. The actual stuff represented by that
paper is delivered to someone else.
Hunt wanted the silver. He chartered three 707 jet aircraft to haul
the metal to warehouses in Switzerland and hired a dozen sharpshooting
cowboys to provide security, according to Knight.
In the late 1970s, the Hunts were accumulating so much silver they
needed surrogates to buy it for them, said George Gero, who traded the
metal at the Commodity Exchange’s open outcry pit in New York for the
investment bank Drexel Burnham Lambert.
“The main buyer for Nelson Bunker Hunt was Conti Commodities, and when
we saw the Conti broker coming to the pit, we’d all buy some silver,”
raising the price, said Gero, now vice president, global futures, for
RBC Capital Markets in New York.
Through the 1970s the price rose slowly, steadily. Then, in 1979,
quickly. Silver started the year around $6 an ounce and ended the year
at more than $32.
Everyone got in on the trade. Grandmothers sold the family cutlery.
Thieves were making off with silver jewelry and melting it down.
It got so bad that Tiffany, the New York-based jeweler, bought an
advertisement in The New York Times that said, “We think it is
unconscionable for anyone to hoard several billion, yes billion,
dollars’ worth of silver and thus drive the price up so high that
others must pay artificially high prices for articles made of silver
from baby spoons to tea sets, as well as photographic film and other
products.”
On Jan. 7, 1980, in response to the Hunts’ position, Comex and the
Chicago Board of Trade imposed emergency rules, including higher
margin requirements.
“They broke the ascent by basically outlawing the buying of silver,”
said Knight, who blogs at slopeofhope.com. “Only liquidation orders
would be accepted. It’s almost criminal what they did.”
On March 27, 1980 — what came to be known as “silver Thursday” — Comex
asked Bache Group, the Hunts’ broker, for $134 million.
The three Hunt brothers had $4.5 billion in silver holdings, $3.5
billion of it profit, Knight said. But they didn’t have $134 million.
A $180 million judgment against them pushed the Hunts into bankruptcy.
All Bunker Hunt had left from his billions were a few million, a
stable of racehorses and a $90 million tax bill to be paid over a
15-year period, Knight said.

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Panic Buying Bullion? Raging Coronavirus Pandemic Reportedly Fuels Gold Rush in US. @sputnikint
Africa


US investors and bankers are facing “severe shortages” of gold bullion
and coins due the increasing coronavirus pandemic, The Wall Street
Journal reports.
“Dealers are sold out or closed for the duration. Credit Suisse Group
AG, which has minted its own bars since 1856, told clients this week
not to bother asking.
In London, bankers are chartering private jets and trying to finagle
military cargo planes to get their bullion to New York exchanges”,
according to the newspaper.
The news outlet added that the Royal Canadian Mint had been “swamped
with requests” to ramp up production of 100-ounce gold bars that could
be delivered to New York City.

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Rebel. Hero. Hustler. God Don't miss @asifkapadia's acclaimed @MaradonaMovie documentary on @All4 @C4Sport
Africa


I live on the outskirts of Nairobi and once upon a time it was a
Coffee Farm before the City expanded and over time The Farm was
converted into homes and now my Neighbours have departed and it is
very Naipaulian, particularly at night.

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"You felt the land taking you back to what was there a hundred years ago, to what had been there always." - V.S. Naipaul, A Bend in the River
Africa


“Going home at night! It wasn't often that I was on the river at
night. I never liked it. I never felt in control. In the darkness of
river and forest you could be sure only of what you could see — and
even on a moonlight night you couldn't see much. When you made a noise
— dipped a paddle in the water — you heard yourself as though you were
another person. The river and the forest were like presences, and much
more powerful than you. You felt unprotected, an intruder ... You felt
the land taking you back to something that was familiar, something you
had known at some time but had forgotten or ignored, but which was
always there. You felt the land taking you back to what was there a
hundred years ago, to what had been there always.”  ― V.S. Naipaul, A
Bend in the River

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I'M IN ITALY ON LOCKDOWN. THIS IS A WARNING FROM THE FUTURE. Melmagazine
Africa


Italy’s lockdown has lurched into its third week. Days have blurred
into nights; weeks into weekends; months into years. People aren’t
singing from their balconies anymore, at least where I live. The only
sound in my neighborhood in the past week was a hollow cry of “We will
make it!” from an apartment several blocks away. Spontaneous musical
outbursts now earn you a walloping with a milk crate, if you’re lucky.
Violating the quarantine risks up to 12 years in prison, which sounds
like a blessed relief. Because the joke’s on us: We’re already in
prison.
I came to Rome five months ago, unmoored from my previous job. I was
here sniffing out freelance work, with little success. But then, on
March 9th, I found myself at the center of the global media’s
attention, after the Italian government imposed a full-scale lockdown
on the country to slow the spread of the coronavirus. The virus had
hit the country especially hard, ravaging the wealthy north and
threatening the poorer townships down south. As of last week, it’s
killed more people in Italy than anywhere else in the world. The
country’s great cities would be put on hold; no going in, no going
out.
You’ll all be locked down soon enough, whether by choice or by
government decree. Some of you are probably quarantining yourselves
already, receding into the dark squalor of your homes like Quasimodo,
only emerging into sunlight for a frantic round of grocery shopping.
In the meantime, you might be wondering how to cope with the effects
of a potential total lockdown. How to stop your mind from getting all
twisted. How to keep the demons at bay. How to stay safe while staying
sane. How to make sense of being simultaneously bored and ashamed, as
your powerlessness in the face of mounting tragedy dawns on you. What
will you do with all of your free time? Is a day on Twitter a day well
spent? How much wall-staring is too much wall-staring?
Well, you’re in luck. I’m a messenger from the imminent-future, and I
bring depressing lessons from the quarantine.
The other day, we considered inviting Massimo over for a drink. He was
on the verge of psychological breakdown. But he spends a lot of time
with his nun friend, and we didn’t want to risk passing onto her any
COVID-19 we might have picked up, or conversely, risk him bringing the
contagion into our apartment. Such are the complex calculations
involved in doing the simplest of things in these dark times. You have
to carefully audit the trail of people you’ve encountered, the degrees
of separation between you and patient zero, working out who’s been
near who, who is now a danger to society. You hear people on the
street, where they shouldn’t be, thrashing out the probabilities: “I
met Clara, who met Marco, who met Pietro, who was in Lombardy last
week…”
Tinder, in some sick parody of philanthropy, recently made its
“passport” feature freely available to all users, meaning you can now
match with people in other countries with travel bans. Hinge has
rolled out depressing “digital dates.”
Quarantine can drive a person stir-crazy. But don’t let yourself be
drawn into a Shining-esque fugue state. Don’t let your mind drift in
untoward directions. At one particularly dark moment, I began to
wonder whether the coronavirus was even real, or if the world had made
it up to keep me indoors, because nobody likes me. Avoid this sort of
thinking. Focus your energies on productive tasks. Rick spends what
feels like dozens of hours a day playing one of those procedurally
generated survival games, 7 Days To Die, or otherwise disappearing
into the kinder, more loving world of VR. Tragically, although I mock
him for it, I just sit there watching him, blankly, whenever he plays.
Ah, La Dolce Vita…
Think of these weeks of extended silence as a non-denominational
equivalent of Yom Kippur, a time to reflect on all of the terrible
things you’ve done, and stare hopelessly into the abyss that is your
soul. I’ve spent many of these precious moments agonizing over
slightly ill-judged word choices in articles I’ve written. I passed
one entire day just waiting for an email to arrive (it didn’t).
Alternatively, as my friend Giulia recommends, learn Spanish.
Nightlife? This isn’t Prague under Nazi occupation. There are no
illegal underground quarantine raves where people sneeze on each
other, just to own the government. You’re a walking, talking Chernobyl
— why the hell would anybody want to go near you anyway?
So the weekends are pretty desolate, insofar as they even exist.
“There’s no difference between Saturdays and Tuesdays,” says the
impossibly bleak Massimo. “They’ve all blended into one.”
He considers. “I guess I read a lot and drink. But the specificity of
days has kind of faded away.” You can, at least, artificially recreate
what Massimo describes as “Sat vibes.” Put on some Nate Dogg and
Warren G, make yours a double, then dance fruitlessly around your
apartment until you collapse asleep at 8:30 p.m.
Dare you venture outside? In Rome, you have to fill out a form
detailing your motives. If they’re deemed “non-essential” you can be
fined up to $4,400 or imprisoned. Such activities include “playing
sports with multiple people,” “jogging,” “loitering,” “visiting family
members,” “being homeless” and even cycling, which the government
discourages on the grounds that falling off one’s bike would take up
valuable non-idiot hospital space. The form, called an
“autocertificazione,” is also continuously updated, and is currently
on its fifth iteration, even more oblique than the last. To get one,
those without a printer can ask for one at the local post office. To
get to the post office, you need to go outside. To go outside, you
need a… You get the idea.
Honestly, it’s best to slavishly lick the government’s jackboot and
remain in your miserable abode at all times. Especially if you live in
the U.S. That’s the best way to defy Trump’s lack of a quarantine
anyway, right? So barricade the front door. Don’t look out the window.
Don’t even open your eyes. Just stew in a soundless, sightless stasis.
When the government buckles and finally imposes a lockdown, you won’t
even notice the difference.
Why would you even want to go outside? Outdoor surfaces — walls, metal
railings, stone benches, wooden doors — seem to glow with radiation,
as if tainted by the virus. Psychosomatic paranoia abounds; a sneeze
feels like the kiss of death. To be sure, Rome has barely over a
thousand cases, fewer than in New York, but the outbreak up north is
still increasing. As of this morning, 74,386 cases have been reported,
and 7,503 people have died.
So I expect to be under house arrest for at least a couple more weeks,
if not months. To be frank, despite everything above, there’s
something quite appealing about the prospect. Like most prisoners,
I’ve somehow already become more comfortable on the inside than the
outside, dubious of life beyond my four immediate walls and my
stockpile of provisions, two-buck chuck and an internet’s worth of
minor distractions. Not to mention, the future — mine and everybody
else’s.
Lockdown, it seems, has grown on me.

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Ecclesiastes 1:2-11 2 Vanity[a] of vanities, says the Preacher
Africa


Vanity[a] of vanities, says the Preacher,
    vanity of vanities! All is vanity.
3 What does man gain by all the toil
    at which he toils under the sun?
4 A generation goes, and a generation comes,
    but the earth remains forever.
5 The sun rises, and the sun goes down,
    and hastens[b] to the place where it rises.
6 The wind blows to the south
    and goes around to the north;
around and around goes the wind,
    and on its circuits the wind returns.
7 All streams run to the sea,
    but the sea is not full;
to the place where the streams flow,
    there they flow again.
8 All things are full of weariness;
    a man cannot utter it;
the eye is not satisfied with seeing,
    nor the ear filled with hearing.
9 What has been is what will be,
    and what has been done is what will be done,
    and there is nothing new under the sun.
10 Is there a thing of which it is said,
    “See, this is new”?
It has been already
    in the ages before us.
11 There is no remembrance of former things,[c]
    nor will there be any remembrance
of later things[d] yet to be
    among those who come after.

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Turn up the volume and listen to the sound of a city in the grips of #COVID19 @laurie_garrett
Africa


Every siren wailing is carrying more lives to an already overcrowded
hospital. And every siren signifies an EMT crew risking their lives to
save others. #coronavirus

Political Reflections

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Hundreds of thousands of Indian migrant laborers last week begun long journeys on foot to get home, rendered homeless & jobless by PM Modi’s Covid-19 lockdown. Yawar Nazir/Getty Images @cobbo3
Law & Politics


Hundreds of thousands of Indian migrant laborers last week begun long
journeys on foot to get home, rendered homeless & jobless by PM Modi’s
Covid-19 lockdown. Others lined to board buses for home on the
outskirts of New Delhi. Most were turned away.

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At a rate of increase of 20% per day (as for the last week), the US cases of COVID-19 will be over 50 million by the end of April @Nouriel
Law & Politics


Even with a mortality rate of 1% only that will imply 500,000 dead
people by that time. This will the Easter gift of Trump to America

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SARS outbreak in 2003, they found that washing hands more than 10 times daily was 55 percent effective in stopping virus transmission, while wearing a mask was actually more effective — at about 68 percent.
Law & Politics


When researchers conducted systematic review of a variety of
interventions used during the SARS outbreak in 2003, they found that
washing hands more than 10 times daily was 55 percent effective in
stopping virus transmission, while wearing a mask was actually more
effective — at about 68 percent.
Wearing gloves offered about the same amount of protection as frequent
hand-washing, and combining all measures — hand-washing, masks, gloves
and a protective gown — increased the intervention effectiveness to 91
percent.

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If you do not have any respiratory symptoms, such as fever, cough, or runny nose, you do not need to wear a medical mask @WHOWPRO
Law & Politics


When used alone, masks can give you a false feeling of protection and
can even be a source of infection when not used correctly.

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Wuhan, endless queues for ashes of coronavirus dead cast doubts on numbers
Law & Politics


During the epidemic, the dead were cremated immediately, without
ceremonies and without specifying the cause of death. Now family
members are waiting to bury the urns containing the ashes of their
loved ones. About 45,000 urnes will be distributed in Wuhan alone.
The number of coronavirus deaths in China is deliberately
underestimated. In the days of the peak of the epidemic, the crematory
ovens worked for 19 hours a day. Journalists Li Zehua, Fang Bin, Chen
Qiushi have disappeared. Photos and videos of queues at Funeral
Parlors and cemeteries are blocked on social media.

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16-FEB-2020 :: #COVID19 #coronavirus #2019nCoV
Law & Politics


Let me tell you, world,
I—do—not—believe!
If a thousand challengers lie beneath your feet,
Count me as number thousand and one.

I don't believe the sky is blue;
I don't believe in thunder's echoes;
I don't believe that dreams are false;
I don't believe that death has no revenge.

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16-FEB-2020 :: I know the truth about the coronavirus outbreak. It is far worse than the media are telling you. @reddit Posted byu/Wuhanvirusthrowaway #COVID19
Law & Politics


I was one of those tasked to manage the fallout of the contamination.
Of course we could not keep such a huge undertaking secret, so we
decided to order our state media to report that a "coronavirus" had
broken out in Wuhan. Within a week, there were so many corpses that we
did not know what to do with them, so we ordered the surviving social
credit prisoners to drive the bodies into the countryside and bury
them in mass graves. My faith in the Party was shaken even more deeply
when I learnt what had happened to Dr Li Wenliang. He was one of the
few doctors who refused falsely to diagnose flu patients with the
"coronavirus". As a punishment, he was sent to help transport dead
bodies to mass graves. The expectation was that he would be infected
with the Agent and die an agonising death, but to our great surprise,
he did not contract the illness. Around the same time, it became clear
that the Agent was entirely beyond our control. It was spreading like
wildfire throughout Hubei Province and beyond, infecting tens of
millions and causing them all to die. The Agent is far, far more
contagious than that, and its fatality rate, unlike the "coronavirus",
is not 2%. No, its fatality rate is 100%. Nobody recovers from it.
Everybody who contracts it dies. And a lot of people are contracting
it. Hubei Province lies in ruins.

 Very soon, Hubei Province will be no more than a giant mortuary, and
the truth will come out. But then my superiors sent me to Huoshenshan.
I was shown around the installation by a military police officer
called Corporal Meng (this is not his real name). It was there that I
saw the truth. And so, wearing this special equipment, I went to
Huoshenshan with Corporal Meng. Whatever you want to call that place,
it is not a hospital.

There was one more set of doors, and beyond them lay what the Corporal
called the "Core". And it was there that I saw it — piles and piles of
dead bodies, stacked on top of one another all the way to the ceiling.
the Corporal led me to the Core. I cannot count how many there were,
but it was many, many thousands. And in the midst of the piles of
corpses was a kind of path, and I heard a roaring sound in the
distance. I simply could not believe what lay at the end of that path
in the Core. It was an enormous furnace, with great fires roaring
within.

Of course the World Health Organisation also helped us. For a long
time, the only issue with the WHO has been that we have been locked in
a contest with the Americans about who bribes them more. They released
all sorts of sophisticated misinformation about having decoded the DNA
of the so-called coronavirus. All this has allowed us to stave off a
global panic. For now. Yet the situation was worsening with
astonishing speed. I am reluctant to reveal too much on this point, as
it would make it too easy for my enemies to identify me, but we
quickly began to implement measures to protect our most senior leaders

If you look at the world news, you will see that Xi Jinping, our
President, disappeared for approximately one week after the outbreak,
before being seen again with the leader of Cambodia. You should know
that the person who met the Cambodian leader was not President Xi. It
was a body double who had, for many years, been trained to look and
sound just like our President.

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27-JAN-2020 :: @BillGates warned in October #COVID19
Law & Politics


“Bill Gates kept telling us a pandemic was coming, in Oct 2019 he ran
a simulation of a Coronavirus pandemic, just three months later the
real Coronavirus pandemic begins.” @HenryMakow.
In an article carried in Business Insider in October last year Bill
Gates said the following thinks a coming disease could kill 30 million
people within 6 months - and Gates presented a simulation by the
Institute for Disease Modeling that found that a new flu like the one
that killed 50 million people in the 1918 pandemic would now most
likely kill 30 million people within six months.
The likelihood that such a disease will appear continues to rise. New
pathogens emerge all the time as the world population increases and
humanity encroaches on wild environments.
It’s becoming easier and easier for individual people or small groups
to create weaponized diseases that could spread like wildfire around
the globe.
According to Gates, a small non-state actor could build an even
deadlier form of smallpox in a lab.

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Currency Markets at a Glance WSJ
World Currencies


Euro 1.1083
Dollar Index 98.678
Japan Yen 107.80
Swiss Franc 0.9556
Pound 1.2410
Aussie 0.6160
India Rupee 75.27
South Korea Won 1223.915
Brazil Real 5.1069
Egypt Pound 15.83
South Africa Rand 17.9197

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Petrostates Hammered by Oil Price Plunge and Pandemic's Spread @economics
Commodities


Kazakhstan’s long-standing leader calls it a “perfect storm.”
Venezuela’s government is shutting fuel stations across the country.
Chad is paying its sovereign debts using cattle.
Across the oil-rich states of Africa, the Middle East, Latin America
and the former Soviet Union, leaders accustomed to a steady flow of
petrodollars see trouble ahead as the oil price war promises to
destabilize their economies -- and perhaps their hold on power.
Of course, it’s not just oil-producing countries that are suffering a
dramatic economic shock as the coronavirus pandemic sweeps across the
world, but for the world’s petrostates, the collapse in oil prices
adds another layer of pain.
The plunge in export income is putting pressure on currencies and
pushing up bond yields just as the virus is ramping up the call on
social spending.
“There’s no sugar coating: It’s going to be very difficult for
producers,” said Russell Hardy, CEO of oil trader Vitol Group.
“With the exception of a few countries with deep pockets, everyone is
suffering. All oil producing countries will have to trim budgets and
may have to look at financing.”
The signs of economic malaise are everywhere. Oil and gas income for
key producing countries will fall by 50% to 85% this year to the
lowest in more than two decades if prices remain around current
levels, according to International Energy Agency estimates.
On Tuesday, the IMF said a dozen countries in the Middle East and
Central Asia have asked for financial support. Ecuador and Ghana have
also requested emergency funds.
For the ruling cliques in oil-dependent countries, there are few good
policy responses. Many failed to use the downturn in oil prices in
2014-16 to restructure their economies.
They now face the prospect of having to cut government spending just
as they most need to bolster it, or abandoning support for their
currencies -– or both.
Saudi Arabia, for example, needs an oil price of more than $80 a
barrel to balance its budget, higher than at almost any other time in
the past 20 years.
On Friday, it raised its government debt ceiling from 30% to 50% of
GDP amid plans to ramp up borrowing. In Nigeria, per capita GDP was
one-third less in 2018 than it was in 2014.
In Iraq, the second-largest producer in the Middle East, the budget
was based on an oil price of $56 a barrel and the government has said
it may not be able to pay salaries and keep up food imports.
And in Kazakhstan, Nursultan Nazarbayev, who stood aside as president
last year after ruling the Central Asian nation for more than a
quarter of a century, last week compared the twin shock of the oil
price plunge and the coronavirus pandemic to the collapse of the
Soviet Union.
“In terms of the difficulty of the challenges we must deal with, the
current moment is to some extent comparable with the early 1990s, when
things for us were really tough,” he said.
Kazakhstan initially hiked interest rates in an attempt to defend the
currency before allowing it to slide.
Markets are already flashing warning signs. Investors have pulled $83
billion from emerging markets in two months, according to the IMF, the
biggest outflow on record.
Many of the hardest hit are Saudi Arabia and Russia’s erstwhile
partners in OPEC+. Currencies from the Mexican peso to the Kazakh
tenge have fallen by more than 14% this month as Russia and Saudi
Arabia launched an oil price war in the face of a sharp drop in global
demand.
 And yields on the government bonds of Angola, Nigeria and Iraq have
soared to 30%, 12% and 14%, respectively, as investors fret about the
possibility of restructuring and defaults.“There are very few oil
emerging market countries that can handle a sustained oil price below
$40 and not risk multiple credit downgrades,” says Maximilian Hess,
head of political risk at AKE International.
On Thursday, S&P Global Ratings downgraded nine oil producing
countries including Saudi Arabia, Russia and Nigeria.
Smaller oil producers like Chad, Equatorial Guinea, Republic of Congo
and the semi-autonomous region of Iraqi Kurdistan are unlikely to be
immune to the price swoon.
Chad, Congo and the Kurdistan Regional Government all have sizable
loans against oil supplies from trading houses like Glencore Plc and
Trafigura Group, which are likely to be harder to service in the new
environment. Chad has started repaying a sovereign debt to Angola in
cattle.
Harvard University economist Carmen Reinhart called the combination of
falling crude prices and the coronavirus pandemic the “kiss of death”
for indebted oil producers, while Sanford C. Bernstein & Co. has
warned that the oil slump risks a wave of defaults that could result
in social unrest.
It wouldn’t be the first time that oil price wars had been the trigger
for upheaval. Saudi Arabia’s decision in 1985 to open the floodgates
and crash prices led to strains across the oil-producing world,
contributing to the economic crisis that precipitated the collapse of
the Soviet Union.
And Saddam Hussein’s invasion of Kuwait in 1990 was, at least in part,
retribution for its overproduction relative to its OPEC quota.
Analysts don’t see an imminent wave of revolutions in the current oil
slump. Hess at AKE International points out that the governments of
most petrostates survived the 2014-16 downturn intact.
Nonetheless, some are responding to the current price slump -– which
has already seen oil drop beneath the lows of January 2016 -– with an
authoritarian lurch.
In Azerbaijan, President Ilham Aliyev has promised to crack down on
“enemies” and “traitors” in the opposition.
“While the entire world has mobilized its resources to fight
coronavirus, the government in Azerbaijan is using the situation
against its political rivals,” Ali Karimli, leader of the main
opposition Popular Front of Azerbaijan Party, said in a statement on
Facebook.
Under most pressure are Venezuela and Iran, two countries that are not
only suffering from the drop in prices, but also a sharp decline in
exports as a result of U.S. sanctions.
In Venezuela, two-thirds of fuel stations in Caracas are now closed.
In Iran, the black-market value of the rial has plunged 30% since
October. Both countries have requested aid from the IMF.
For the oil market, the key question may be what gives first: The
debt-laden U.S. shale producers or debt-laden emerging market
governments.
“Cost of production counts for the U.S., but for OPEC nations it comes
down to social cost more than production cost,” says Olivier Jakob,
managing director of oil consultancy Petromatrix.
“OPEC can have short oil price wars but not long ones as otherwise the
social fabric disintegrates and puts the different regimes at risk.”

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The global oil market is broken, overwhelmed by an unmanageable surplus as virus lockdowns cascade through world's largest economies. @markets
Commodities


The global oil market is broken, overwhelmed by an unmanageable
surplus as virus lockdowns cascade through the world’s largest
economies.
Onshore tanks in many markets are full, forcing traders to store
excess oil in idle supertankers. Refineries are starting to shut down
because nobody needs the fuels they produce.
In physical oil markets, barrels are already changing hands for less
than $10, and in a few landlocked markets producers are paying
consumers to take away their crude.
“The physical oil market has seized up,” said Gary Ross, an
influential oil watcher and chief investment officer of Black Gold
Investors LLC.
“The logistics are struggling to cope because we are facing a
catastrophic loss of demand.”
Oil traders say it’s likely to get worse this week.
The root cause is an accelerating plunge in consumption that’s without
precedent since a steady flow of oil became essential to the global
economy more than a century ago.
The great crash of 1929, the twin oil shocks of the 1970s and the
global financial crisis don’t come close.
The world normally uses 100 million barrels of oil day, and traders
and analysts reckon as much as a quarter of that has disappeared in
just a few weeks.
The global airline industry is grounded, countless businesses and
factories are shuttered and billions of people have been forced to
stay home.
“Demand clearly is off, in some parts of the world, very
dramatically,” Chevron CEO Mike Wirth told Bloomberg TV.
The immediate problem is a lack of storage in the right places. With
demand running 20 million barrels a day below supply, the world won’t
have enough tanks to store the surplus in two or three months.
But the issue is even more pressing because global tank capacity,
mostly concentrated in a few hubs like Rotterdam, the Caribbean and
Singapore, isn’t available to every producer.
For those without access to pipelines and ports, local storage will
run out in days, traders and consultants say.
For those with access to the coast, one solution is to use the
supertanker fleet as floating storage tanks, and that’s happening at
an unprecedented rate.
The CEO of the world’s largest tanker owner, Frontline Ltd., said on
Friday that he’d never known such demand to hire ships for long-term
storage.
Traders could put 100 million barrels at sea, he estimated, but even
that accounts for just a few days’ oversupply.
In the U.S., one of the largest pipeline companies, Plains All
American Pipeline LP, has asked oil producers to voluntarily cut
output to avoid overwhelming the network that connects well heads to
refineries through thousands of miles of pipelines.
The world is running out of places to put oil because the shutdown of
vast swathes of the economy has been catastrophic for demand.
The collapse in commercial air travel has cut jet fuel use by up to
75%, or almost 5 million barrels a day.
As for gasoline, American drivers are the single biggest source of
demand, using more than 9 million barrels a day, according to the
Energy Information Administration.
As whole states, including California and New York, have told people
to stay home, billions of car journeys have been lost. It’s a pattern
repeated in Europe and Asia.
“Demand destruction is unprecedented,” said Ben Luckock, co-head of
trading at Trafigura Group, the second-largest independent oil trader.
He estimates the hit to consumption will total 22 million barrels a
day in April.
Around the world, about 700 refineries turn crude oil into gasoline,
diesel and other fuels. They are starting to dial down production and
even shut outright because demand for the fuel they produce is so
dire.
In India, for example, where 1.3 billion people are under lockdown
until mid-Aptil, the nation’s biggest refinery has cut processing
rates at most plants by as much as 30%.
A small refiner in Italy, the epicenter of Europe’s virus outbreak,
shut on Friday because demand for fuel plunged 85%.
As the refining system withers, the crude oil market is suffering.
Many crudes, especially sticky, sulfurous grades that refiners find
hard to process, trade at hefty discounts to international benchmarks.
Western Canadian Select, a tarry blend squeezed from Alberta’s oil
sands, reached a record low of $4.51 a barrel on Friday.
In the U.S., Oklahoma Sour is changing hands at $5.75, Nebraska
Intermediate at $8, while Wyoming Sweet prices at $3 a barrel.
In one obscure corner of the American crude market, prices have
already turned negative. Wyoming Asphalt Sour, a dense oil used mostly
to produce paving bitumen, was bid at minus 19 cents a barrel in
mid-March by Trading Mercuria Energy Group Ltd.
The surprise, perhaps, is that benchmark futures are still trading as
high as they are. Brent, the North Sea grade that sets the price for
about two-thirds of the world’s oil, ended last week at $24.93 a
barrel, well above the historic low of $9.55 a barrel in 1998.
Luckock at Trafigura says future prices are likely to fall another
$10. Black Gold’s Ross also says Brent and the U.S. benchmark, West
Texas Intermediate, will be trading in the teens within days.
The next stage of the oil market’s meltdown will be widespread
production shutdowns as drillers decide the only option is to leave it
in the ground until better days return. There are signs this is
starting to happen.
Brazil’s state oil company Petrobras has announced it will reduce
output by 100,000 barrels a day this year because of the lack of
demand.
In Canada, some producers have shut down output, and Glencore Plc.,
the world’s largest commodity trading house, has shut down its
production in Chad.
Many producers are reluctant to shut wells because even though they’re
losing money at today’s prices, some cashflow is often better than
none at all. But as more refineries idle, the pipeline system grinds
to a halt and storage tanks fill to the brim, they will soon have no
choice.
“The problem is no one wants to be the first to shut-in,” Black Gold’s
Ross said.

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22-MAR-2020 :: COVID-19 and a Rolling Sudden Stop
Commodities


We are moving from a World of Hyper Connectedness to a World of
Quarantine. A complete Quarantine
The Price of Crude Oil is perfectly correlated to the #COVID19 Sudden Stop

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"Oil creates the illusion of a completely changed life, life without work, life for free. Oil is a resource that anaesthetises thought, blurs vision, corrupts." - Ryszard Kapuscinski, Shah of Shahs
Commodities


“Oil kindles extraordinary emotions and hopes, since oil is above all
a great temptation. It is the temptation of ease, wealth, strength,
fortune, power. It is a filthy, foul-smelling liquid that squirts
obligingly up into the air and falls back to earth as a rustling
shower of money.”― Ryszard Kapuściński, Shah of Shahs

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Officials warn Africa is at 'break the glass' moment @FinancialTimes @davidpilling
Africa


Africa has reached a “break the glass moment”, an emergency in which
international actors need to take drastic action if the world’s
poorest continent is to avoid a human and economic catastrophe, Ken
Ofori-Atta, Ghana’s finance minister, told the Financial Times.
Mr Ofori-Atta, who is also chairman of the joint World Bank-IMF
Development Committee, said the two institutions had acted swiftly,
but would need to do much more.
They should provide governments with liquidity support as well as
money to fight the virus and debt relief, he said, adding that the
coronavirus threatened to overwhelm Africa’s inadequate health
systems.
Last month, Bill Gates warned that the pandemic could kill 10m
Africans if it were allowed to rip through the continent and Imperial
College London published a study saying that, if governments failed to
act, the virus could claim 40m lives worldwide.
Mr Ofori-Atta said the pandemic would also cause economic havoc. It
could wipe out 5-10 per cent of Africa’s gross domestic product at a
stroke, he said, as commodity prices sank and receipts from tourism,
trade and remittances shrivelled.
Moody’s on the weekend cut South Africa’s debt rating to junk, ending
the investment-credit rating it had had for 25 years.
Tito Mboweni, South Africa’s finance minister, said: “To say we are
not concerned and trembling in our boots about what might be in the
coming weeks and months is an understatement.”
Abebe Selassie, director of IMF’s Africa department, said the
continent faced its deepest economic challenge in several generations.
Bilateral lenders should consider immediate debt relief, he said,
while the IMF would waive debt payments for the poorest countries.
African governments must temporarily abandon fiscal austerity, Mr
Abebe added. “Even with constrained fiscal space, the right thing to
do is to expand fiscal deficits to counter the immediate impact of the
shock.”
Mr Ofori-Atta last week co-chaired a meeting in which African finance
ministers called for a $100bn stimulus package. The IMF said it was
making $50bn available for emerging countries, with $10bn for
low-income countries.
Mr Ofori-Atta said the poorest countries would be eligible to receive
up to 50 per cent of their IMF quota — a formula that determines
voting rights — but that this needed to quadruple to 200 per cent.
“The Fund and World Bank are moving quickly, the sentiments I hear
from G20 finance ministers are in the right direction,” he said.
“But we need to increase the pace and increase the amounts.” By the
time of the World Bank-IMF spring meetings in mid-April he expected
“we should be able to have an even more comprehensive and aggressive
posture”.
Charles Robertson, chief economist at Renaissance Capital, said
African economies would suffer a double hit: a collapse in revenue and
a need to ramp up spending both on emergency health measures and to
counter the economic impact of lockdown measures.
In an op-ed in the Financial Times last week, Abiy Ahmed, Ethiopia’s
prime minister, said that, if coronavirus were not controlled in
Africa, it would quickly bounce back to the rest of the world.
Mr Ofori-Atta said that trying to contain coronavirus through
lockdowns in a continent where most people were under 30 and many
lived from hand to mouth threatened mass unrest.
Social distancing was almost impossible when millions depended on
going out each day to earn a living and bought food from crowded
markets.
Ghana has nevertheless imposed a lockdown on its two main regions,
including Accra, the capital, from Monday.
South Africa’s police have resorted to tear gas to disperse crowds
since a lockdown there on Friday. In Kinshasa, capital of the
Democratic Republic of Congo, there were reports of police beating
people with canes as they tried to get on crowded buses.
Several countries, including Kenya, have imposed a curfew.
Mr Ofori-Atta said Ghana, considered one of Africa’s most stable and
best-run economies, would need to spend 0.5-1 per cent of GDP
bolstering a health service that had proportionately one-tenth the
number of hospital staff as Britain.
It would also have to consider direct cash transfers — via electronic
payments to mobile phones — to protect people from destitution.
Ghana was relatively lucky because it had a $900m stabilisation fund
from oil revenues and had in January managed to issue a $3bn Eurobond.
“Without it, we would have been in tatters completely,” he said,
noting that markets had now slammed shut to African issuers.
The African Development Bank on Friday said it had placed a $3bn
three-year “Fight Covid-19” social bond carrying a 0.75 per cent
coupon.
That showed there was a way back to the debt markets for African
sovereigns, Mr Ofori-Atta said.

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02-MAR-2020 :: The #COVID19 and SSA
Africa


The First Issue is whether The #CoronaVirus will infect the Continent.
We Know that the #Coronavirus is exponential, non linear and
multiplicative.what exponential disease propagation looks like in the
real world.
Real world exponential growth looks like nothing, nothing, nothing ...
then cluster, cluster, cluster ... then BOOM!

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#Angola now have a C rating reflecting massive strain country is under at lower oil prices. @emsovdebt
Africa


S&P say "IMF program support is likely insufficient to cover funding
needs, forcing Angola to pursue external commercial sources" (now
access difficult given turmoil in global markets)

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TPS @serenahotels share price data
Africa


Closing Price:           12.00
Total Shares Issued:          182174108.00
Market Capitalization:        2,186,089,296
EPS:             0.69
PE:                 17.391

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The Serena The Star
Africa


MY memories of the Serena start in Mombasa years back when the
managing director Mahmoud Jan Mohamed was the manager.
I was then a teenager and remember losing my heart to a girl, who
would beat me at table tennis, in a bikini. That table tennis Table is
still there.
The brand is established. Its got breadth, its not a mom and pop operation.

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@Kenya_Re reports FY 2019 PAT +74.095% Earnings here
Africa


Par Value:                  2.50/-
Closing Price:           2.24
Total Shares Issued:          2799796272 .00
Market Capitalization:        6,271,543,649
EPS:             2.55
PE:              0.9955

Leading reinsurance and insurance provider.

Kenya Reinsurance Corporation Limited FY 2019 results through 31st
December 2019 vs 31st December 2018
FY Gross premiums written 17.521343b vs. 14.838393b +18.081%
FY Less: retrocession premiums [1.077455b] vs. [823.408m] +30.853%
FY Net earned premiums 15.530618b vs. 14.205976b +9.325%
FY Investment income 3.714696b vs. 3.386177b +9.702%
FY Fair value gains on revaluation of investment properties 2.176592b
vs. 397.211m +447.969%
FY Share of associates 587.444m vs. 180.865m +224.797%
FY Total income 22.117061b vs. 18.266334b +21.081%
FY Gross claims incurred and policyholder benefits [11.447721b] vs.
[9.456217b] +21.060%
FY Reinsurer share of claims and policyholder benefits 385.781m vs.
625.967m -38.370%
FY Net claims and benefits [11.061940b] vs. [8.830250b] +25.273%
FY Cedant acquisition costs [4.092047b] vs. [3.890255b] +5.187%
FY Operating and other expenses [2.043452b] vs. [2.019834b] +1.169%
FY Provision for doubtful debts [743.428m] vs. [424.145m] +75.277%
FY Total claims, benefits and other expenses [17.940867b] vs.
[15.164484b] +18.308%
FY Profit before tax 4.176194b vs. 3.101850b +34.636%
FY Income tax expense [209.815m] vs. [823.568m] -74.524%
FY Profit for the year 3.966379b vs. 2.278282b +74.095%
EPS (Basic and diluted) 2.55 vs. 3.25 -21.538%
Dividend per share 0.10 vs. 0.45 -77.778%
Total Equity 31.950725b vs. 28.373033b +12.609%
Government securities 17.112941b vs. 14.314752b +19.548%
Total Assets 50.362970b vs. 44.362634b +13.526%
Cash and cash equivalents at 31st December 7.371305b vs. 5.797260b +27.152%
2,799,796,272 shares
3:1 bonus share to the shareholders existing in the register as at
14th June 2019

PERFORMANCE COMMENTARY

FINANCIAL HIGHLIGHTS
Gross written premiums grew by 18% from KShs 14.84 billion in the year
2018 to KShs 17.52 billion in 2019.
Net earned premiums grew by 9% from KShs 14.21 billion in 2018 to KShs
15.53 billion in 2019
Investment income grew by 10% from KShs 3.39 billion to KShs 3.71
billion,driven by adhering to the Corporation’s investment strategy
Claims incurred in year 2019 grew by 25% to KShs 11.06 billion up from
KShs 8.83 billion in 2018.
Cedant acquisition costs increased by 5% from KShs. 3.89 billion to
KShs. 4.09 billion in line with an increase of 18% in gross premium
written.
Operating expenses increased by 1% from KShs. 2,020 million as at 31
December 2018 to KShs.2,043 million as at 31st December 2019.
Profit before tax for the year stood at KShs 4.18 billion, an increase
of 35% from last year profit before tax of KShs 3 .1 billion.
The growth was due to high gross premiums written, significant growth
in the share of profit from our investment in associate in Zep Re and
gains on revaluation of investments property
The asset base increased from KShs 44.36 billion in 2018 to KShs 50.36
billion in 2019, a growth of 14%.
The Shareholders funds increased from KShs 28.37 billion in 2018 to
KShs 31.95 billion in 2019 a growth of 13%.
DIVIDENDS
The Board of Directors recommend a payment of Kes 0.10 dividend per share
AUDIT OPINION
The audit of the financials statements for the full year ended 31
December 2019 is not complete pending the appointment of the Auditor
General
KEY AUDIT MATTERS
Evaluation whether the disclosures made in the consolidated and
separate financial statements reflect the Group’s credit risk and
impair¬ment provision on the receivables.
Assessment of the completeness of the disclosures regarding the
reinsurance contract liabilities in the consolidated and separate
financial statements
Determination of the adequacy of the premium revenue recognition and
un-earned premium reserves are well supported.

Conclusions

The growth was due to high gross premiums written, significant growth
in the share of profit from our investment in associate in Zep Re and
gains on revaluation of investments property
The PE Ratio speaks to a level of scepticism which has been there for
many years.

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.@NSE_PLC reports FY 2019 EPS -58.904% Earnings here
Africa


Par Value:
Closing Price:           9.04
Total Shares Issued:          259503194.00
Market Capitalization:        2,345,908,874
EPS:             0.30
PE:              30.133

Nairobi Securities Exchange PLC FY 2019 results through 31st December
2019 vs. 31st December 2018
FY Revenue 567.382m vs. 626.191m -9.392%
FY Interest income 89.109m vs. 116.341m -23.407%
FY Other income 59.147m vs. 39.870m +48.350%
FY Total income 715.638m vs. 782.402m -8.533%
FY Administrative expenses [625.403m] vs. [560.565m] +11.567%
FY Profit before taxation 104.499m vs. 240.849m -56.612%
FY Profit for the year 80.153m vs. 190.678m -57.964%
Basic and diluted EPS 0.30 vs. 0.73 -58.904%
Total assets 2.242401b vs. 2.218388b+1.082%
Cash and cash equivalents at the end of the year 343.200m vs. 229.308m +49.668%
Ordinary dividend per share 0.08 vs. 0.29 -72.414%
Special dividend – vs. 0.20 -100%

OPERATING ENVIRONMENT – 2019
Locally the NSE’s All-Share Index (NASI), which tracks the market
value of shares of all listed firms, gained 18.5% to close the year
2019 at 166.41 points.
The strong performance of the international markets witnessed
increased allocation to the developed markets impacting the frontier
markets of which the NSE is a key constituent.

FINANCIAL HIGHLIGHTS
The Group reported a profit before tax of Kshs.104 Million in 2019 as
compared to Kshs 241 Million recorded in the year 2018.
Net profit declined by 58% to Kshs. 80 Million over the same period in 2018.
This was occasioned by a 9% decrease in revenues mainly as a result of
a decline in equity trading turn¬over which declined by 12% from
Kshs.351 Billion in 2018 to Kshs.307 Billion in 2019.
Equity trading levies equally declined by 12% from Kshs. 421.6 Million
for the year ended 31 De¬cember 2018 to Kshs. 369.1 Million over the
same period in 2019.
The reduced trading activity was largely as a result of a weak local
demand side which did not complement the inter¬national activity.
Bonds turnover however edged up 15.80% to settle at Kshs. 1,303
Billion for the year 2019 as compared to Kshs. 1,125 Billion recorded
in 2018.
Interest income in the review period decreased by 23% to Kshs. 89.1
Million from Kshs. 116.3 Million recorded over a similar period in
2018 due to utilization of cash deposits on acquisition of strategic
investments.
Administrative expenses increased by 12% from Kshs. 560 Mil¬lion in
2018 to Kshs. 625 Million in 2019 mainly arising from a one off staff
restructuring cost of Kshs. 52 Million in 2019.
This is not expected to recur in 2020. The ATS system upgrade and the
derivatives market were launched in the year. Both ATS and derivatives
systems were capitalized in 2019 resulting in an increase in
amortization and depreciation expenses by Kshs. 11.7 Million.
The Group recorded other comprehensive loss of Kshs. 17.2 Million for
the year under review mainly comprising of Kshs. 18.4 Million in
unrealised loss on the fair value of a quoted equity investment
acquired in 2019. This was passed through Other Reserves.
Total assets increased marginally by 1% from Kshs. 2.218 Billion as at
31 December 2018 to Kshs. 2.242 Billion as at 31 December 2019. Non
controlling interest of Kshs. 56.1 Million as at 31 December 2019
represents the minority shareholders arising from the 61% acquisi¬tion
in 2019 of an unquoted equity investment.
Non current liabilities as at 31 December 2019 include Kshs 35.2
Million contributions received from clearing mem¬bers towards the
settlement guarantee fund.

COVID 19
The outbreak of COVID-19 presents a new challenge to the market and we
anticipate that investors will remain cautious in the medium term. The
systemic global impact of this pandemic has been significant and as an
international market we will ex¬perience some volatility in the near
term.
It is impressive to note that local investors continue to exude
confidence in the market and are taking up more buy positions with
almost 50:50 local to foreign participation in the market.
The increased local investor participation and continued trad¬ing
inflows from the international markets is evidence of the attractive
valuation of stocks trading on the Exchange.
As a market we have put in place measures that will ensure continu-ous
seamless trading and access to all our investing publics.
We remain committed to ensuring that we complement the Gov¬ernments
efforts in containing this virus by ensuring availability of the
trading infrastructure through our remote automated processes.
The NSE has robust systems and highly committed market par¬ticipants
who have ensured uninterrupted trading, clearing and settlement in all
the securities listed and traded on its various segments.
The NSE is working closely with regulators, service providers, trading
members and various stakeholders in the capital markets ecosystem to
ensure an integrated contingency approach to safeguard integrity,
business continuity and un¬interrupted access to the markets during
this unprecedented period.

OUTLOOK – 2020
To increase listings, we have enhanced our engagements with the
Government to encourage privatization of publicly owned companies as
well as encourage the Government to reduce its shareholding in some
listed State-Owned Enterprises.
To grow the data and training business lines, we have reviewed our
offering, expanding the portfolio of data and training prod¬ucts and
will be partnering with institutions of higher learning to offer data
and training services.
We have commenced the implementation of our new strategy for
2020-2024. The strategy will be guided by accelerated in¬novation and
will place special focus on leveraging on technol¬ogy to increase our
reach as we seek to grow our retail investor footprint.
The company will focus on cost management as one of its key
deliverables this year. This will be achieved through increased
automation and leveraging on the new trading infrastructure.
Through these and other innovative initiatives the company is keen on
creating a cost-efficient organization to attain a cost income ratio
of 65%.

DIVIDENDS
The Directors recommend the payment of a first and final divi¬dend for
the year 2019 of Kshs. 0.08 per ordinary share (2018: Kshs. 0.49 per
share comprising of an ordinary dividend of Kshs. 0.29 per share and a
special dividend of Kshs. 0.20 per share).

Conclusions

Dividend Yield is 0.88%
obviously highly correlated to Trading volumes where Equity volumes
declined -12% in an environment where the All Share rallied +18.5%
I expect weakness trough 2020
At a PE of 30.133 its expensive unless The GOK starts a Privatisation
drive which is difficult in the current bearish market.

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@DTBKenya share price data
Africa


Closing Price:           78.50
Total Shares Issued:          279602220.00
Market Capitalization:        21,948,774,270
EPS:             24.27
PE:                 3.234

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by Aly Khan Satchu (www.rich.co.ke)
 
 
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March 2020
 
 
 
 
 
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