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Wednesday 19th of May 2021
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Morning
Africa
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Register and its all Free.
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09-MAY-2021 :: The Lotos-eaters
World Of Finance
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It’s not about moving money without gatekeepers, it’s about moving information. Money is just a special case of information. @naval
World Of Finance
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09-MAY-2021 :: The liquidity of this complex is illusory, as the reflexivity embedded within creates a lurking shadow convexity that is vulnerable to predatory flows. @FadingRallies
World Of Finance
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The Markets Are Wilding
World Of Finance
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I sold at 8 cause I changed my mind. Never fear the consequences of your mistakes... @hendry_hugh
World Of Finance
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Only you know...@hendry_hugh
World Of Finance
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08-MAR-2021 :: The lights must never go out, The music must always play
World Of Finance
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Federico Fellini's 8 1/2 @tcm
Misc.
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28-MAR-2021 :: The Pandemic Is a Portal
World Of Finance
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One path to a happy life is to retain a sense of wonder. @naval
Misc.
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Good morning Cape Town. Let’s do this @buhlegoslar
Africa
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'Not Hate__Love' neon installation (detail) by Danish-Slovak artist Viera Collaro @womensart1
Misc.
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In case anyone was wondering whether or not the Bible Belt was a real thing @SantiagoAuFund
World Of Finance
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''Time is a flat circle. Everything we have done or will do we will do over and over and over again- forever."
Misc.
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Edward Ruscha Pool #2 1968, printed 1997
Misc.
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I’ve always heard of Kongo River @gufydox
Africa
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I’ve always heard of Kongo River and it’s meanders and the lush greenery then I got to experience a boat ride so peaceful and immersive. Diani is so beautiful
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Dec 30, 2014 Baobab Trees at kongo Mosque Beach
Africa
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Kongo River Estuary, Diani. Photo by Aga Szczepanska
Africa
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Sundown @Gabriel41557561
Africa
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The Pandemic is a Portal
Africa
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Boat ride along the Kongo River in Diani. @gufydox
Misc.
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09-MAY-2021 :: The Lotos-eaters
In the afternoon they came unto a land
In which it seemed always afternoon.
All round the coast the languid air did swoon,
Breathing like one that hath a weary dream.
Then some one said, "We will return no more";
And all at once they sang, "Our island home
Is far beyond the wave; we will no longer roam."
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Political Reflections
Law & Politics
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The father of a 12-year-old girl killed in an Israeli airstrike holds her body at al-Shifa hospital @AFP @RandaHabib
Misc.
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John Donne wrote: "... Therefore, send not to know for whom the bell tolls, It tolls for thee..."
Misc.
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Then what? A woman soldier shouted: Is that you again? Didn’t I kill you? I said: You killed me ... and I forgot, like you, to die. - Mahmoud Darwish, 'In Jerusalem' @ranjithoskote
Law & Politics
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@WHO Weekly epidemiological update on COVID-19 - 18 May 2021
Misc.
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Globally, in the past week, the number of new cases and deaths continued to decrease, although overall counts for both remained high with just over 4.8 million new cases and nearly 86 000 new deaths reported in the past week.
All regions reported a decline in new cases this week with the exception of the Western Pacific where the number of new cases were similar to the previous week.
The highest numbers of new cases were reported from
India (2 387 663 new cases; 13% decrease)
Brazil (437 076 new cases; 3% increase)
United States of America (235 638 new cases; 21% decrease)
Argentina (151 332 new cases; 8% increase)
Colombia (115 834 new cases; 6% increase)
Conclusions
The Invisible Microbe COVID19 posted two record high weeks of Infections and then declined -4% and -12% in the two following weeks
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09-MAY-2021 :: The Invisible Microbe COVID19 "My concern right now is that this virus has huge kinetic energy”, said @DrMikeRyan
Misc.
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Daily new confirmed COVID-19 cases @OurWorldInData
Misc.
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28-MAR-2021 :: The Virus remains an exogenous uncertainty that is still not resolved #COVID19
Misc.
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The Virus remains an exogenous uncertainty that is still not resolved though all the virologists who have metastasized into vaccinologists will have you believe its all sunlit uplands from here.
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"We are still in a perilous situation”, says @DrTedros @kakape
Misc.
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South America continues to deal with COVID-19 outbreaks. Argentina & Colombia are at their historical maximum for daily reported deaths. The decline of deaths in the region, due to the decline in Brazil, has stalled @Marco_Piani
Misc.
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Countries w/ high COVID-19 2wk avg death/day increase @jmlukens
Misc.
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Argentina 744 #COVID19 deaths yesterday above 494/day avg up 33% past 2wks
#Nepal: 495%
#SriLanka: 166%
#Malaysia: 143%
#Bolivia: 105%
#Japan: 85%
#CostaRica: 75%
#SouthAfrica: 62%
#Thailand: 41%
#Argentina: 33%
#Georgia: 33%
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We all know by now ''viruses exhibit non-linear and exponential characteristics''
Misc.
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New record daily #COVID19 cases in Argentina (35,543) and Bahrain (1,968) yesterday. @jmlukens
Misc.
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With a virus like #SARSCoV2, it's critical to think exponential: If you fold a piece of paper (0.004") in half, again and again, 50 times, it will be > 70 million miles thick. @EricTopol
Misc.
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Data from @sangerinstitute Indian variant B.1.617.2 is rapidly spreading and that it has a growth rate advantage of 13%/d [12-14%] over Kent variant B.1.1.7 and of 16%/d [13-20%] over B.1.617.1. @TWenseleers
Misc.
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Data from @sangerinstitute (which excludes data from travellers & surge testing) still how that in the UK the Indian variant B.1.617.2 is rapidly spreading and that it has a growth rate advantage of 13%/d [12-14%] over Kent variant B.1.1.7 and of 16%/d [13-20%] over B.1.617.1.
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09-MAY-2021 :: This might give The Winner of Hartlepool pause for thought because we all know now the microbe loathes hubris and visits its most violent revenge on those who express hubris.
Misc.
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We now see the share of S positive tests drastically increasing, which reflects the increasing share of the Indian variant B.1.617.2 (data from @PHE_uk). @TWenseleers
Misc.
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Non-amplification of the S gene (S dropout) has previously been used as a marker for the Kent variant B.1.1.7. We now see the share of S positive tests drastically increasing, which reflects the increasing share of the Indian variant B.1.617.2 (data from @PHE_uk).
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So let's take a look at the GISAID sequence data from India instead, where the incidence of B.1.617.2 has been high (skyrocketing in fact). @TWenseleers
Misc.
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Of course due to low case numbers in the UK any imported cases would have a comparatively large effect on the share of infections. So let's take a look at the GISAID sequence data from India instead, where the incidence of B.1.617.2 has been high (skyrocketing in fact).
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He was mocked for saying this. @SriniSivabalan @srinivasiyc
Misc.
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Here also with 95% confidence intervals. @TWenseleers
Misc.
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"My concern right now is that this virus has huge kinetic energy”, said @DrMikeRyan
Misc.
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Model estimates a growth advantage of 11% per day [9-13%] of B.1.617.2 over B.1.1.7 and of 9% per day [7-11%] over B.1.617.1. @TWenseleers
Misc.
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Assuming a constant and unaltered generation time of 4.7 days, a growth advantage of 10% per day would translate to a ~60% transmission advantage. @TWenseleers
Misc.
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"The greatest shortcoming of the human race is our inability to understand the exponential function." - Professor Allen Bartlett
Misc.
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In practice, a mix of increased contagiousness, longer duration of infectiousness and/or some immune escape could explain this growth advantage. This remains to be studied further. @TWenseleers
Misc.
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The Invisible Microbe COVID19
Misc.
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These multinomial fits can also be projected onto case data, which then show a clear association between the Indian variant B.1.617.2 becoming dominant and rising case numbers. @TWenseleers
Misc.
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“Kumbh Mela may end up being the biggest super spreader event in the history of this pandemic.” Professor Ashish Jha
Law & Politics
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"Do you understand what I'm saying?" he said "We are capable of delivering any message we want to the public - whether sweet or sour true or fake." said @AmitShah #CongressToolkitExposed
Law & Politics
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The Pandemic is a Portal
Misc.
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The Virus remains an exogenous uncertainty that is still not resolved #COVID19
Misc.
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The @GISAID lineage frequencies in cases exported out of India and sequenced in countries like Singapore (n=303) and Japan (n=70). @TWenseleers
Misc.
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“The variants are like a thoroughbred and our vaccines are like a workhorse,” noted evolutionary biologist Sally Otto.
Misc.
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Think Like a Dictator @ruthbenghiat @BasuAshis
Law & Politics
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Benito Modi whose hyper incompetence even the Die Hard BJP ''Deadenders'' are finding it impossible to defend
Law & Politics
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Frontline @RanaAyyub
Law & Politics
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Prime Minister Narendra Modi's approval ratings have fallen to a new low, a survey showed @ReutersIndia
Law & Politics
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States with such rulers can get “seized by senility and the chronic disease from which [they] can hardly ever rid [themselves], for which [they] can find no cure”
Law & Politics
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Ibn Khaldun explained the intrinsic relationship between political leadership and the management of pandemics in the pre-colonial period in his book Muqaddimah
Historically, such pandemics had the capacity to overtake “the dynasties at the time of their senility, when they had reached the limit of their duration” and, in the process, challenged their “power and curtailed their [rulers’] influence...”
Rulers who are only concerned with the well-being of their “inner circle and their parties” are an incurable “disease”.
States with such rulers can get “seized by senility and the chronic disease from which [they] can hardly ever rid [themselves], for which [they] can find no cure”
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He was mocked for saying this. @SriniSivabalan @srinivasiyc
Law & Politics
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India's holiest river Ganges is swollen with Covid victims @geetapandeyBBC
Misc.
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India's holiest river, the Ganges, has been swollen with bodies in recent days.
Hundreds of corpses have been found floating in the river or buried in the sand of its banks.
Those who live close to where they have washed up, in the northern state of Uttar Pradesh, fear they are Covid-19 victims.
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Funeral pyres are seen along the banks of the Ganges in Garhmukteshwar, Uttar Pradesh @geetapandeyBBC
Misc.
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There is something Karmic in this #COVID19
Misc.
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Cyclone Taukte. Over 20 dead & ~ 100 missing across country. Footage of scene outside Taj hotel by Mumbai’s marina: @Joyce_Karam
Asia
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International Markets
World Of Finance
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09-MAY-2021 The Markets The Lotos-eaters
World Of Finance
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In 1929, President Herbert Hoover assured the country that things were already “back to normal,” Liaquat Ahamed writes in Lords of Finance.
The US NFP printed 266,000 versus 1,000,000 expected which was the biggest miss relative to expectations in Non Farm Payrolls since at least 1998. @bespokeinvest
On 8th March when the Bears had gotten hold of the US 10 Year, I wrote that I expected the 10 Year to target 1.45% well we got real close on Friday before the market reversed
Ten- year yields initially plunged to a more than two-month low of 1.46%, then reversed to end the day at 1.58%. However, I am resetting my target Yield to 1.25% now.
Given the volume of money Printing and the extraordinary stimulusI have to say that the US Recovery is actually really weak and I believe it will be very short lived and the Penny will drop soon with the Bond Market and the Shorts will be forced to cover.
The Consensus View appears to be that the Global economy is going to accelerate big time and that its going to BOOM!
I beg to differ
Partying responsibly. @BobNeiwen
?s=20
Furthermore The Central Banks are in a corner.
They have fired a lot of bullets and even if there was a meaningful bounce they cannot raise rates.
Here is why central banks are trapped and cannot raise rates even if inflation rises: @dlacalle_IA Feb 2
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Why US inflation is not set for a takeoff View from IMF chief economist @GitaGopinath @BaldwinRE
World Of Finance
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Currency Markets at a Glance WSJ
World Currencies
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Euro 1.2239
Dollar Index 89.749
Japan Yen 109.0155
Swiss Franc 0.8971
Pound 1.4191
Aussie 0.7778
India Rupee 72.995
South Korea Won 1127.7
Brazil Real 5.261
Egypt Pound 15.6805
South Africa Rand 13.9877
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The US Dollar Index is (#DXY) down to its lowest level since early January @jsblokland 89.749
World Currencies
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Euro versus the Dollar Chart 1.2236
World Currencies
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$BTC #bitcoin @FXPIPTITAN [39,400 now [looking for < 30,000.00]
World Currencies
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''Yeah you good traders can spot the highs and the lows pit pat piffy wing wong wang just like that and make a millino bucks sure no problem bro."
World Of Finance
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GameKyuubi posted "I AM HODLING," a drunk, semi-coherent, typo-laden rant about his poor trading skills and determination to simply hold his bitcoin from that point on.
"I type d that tyitle twice because I knew it was wrong the first time. Still wrong. w/e," he wrote in reference to the now-famous misspelling of "holding."
"WHY AM I HOLDING? I'LL TELL YOU WHY," he continued.
"It's because I'm a bad trader and I KNOW I'M A BAD TRADER. Yeah you good traders can spot the highs and the lows pit pat piffy wing wong wang just like that and make a millino bucks sure no problem bro."
He concluded that the best course was to hold, since "You only sell in a bear market if you are a good day trader or an illusioned noob. The people inbetween hold. In a zero-sum game such as this, traders can only take your money if you sell."
He then confessed he'd had some whiskey and briefly mused about the spelling of whisk(e)y. [HODL Definition | Investopedia]
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The story of Sir Isaac Newton and the South Sea Bubble.
World Of Finance
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Graham writes,
Back in the spring of 1720, Sir Isaac Newton owned shares in the South Sea Company, the hottest stock in England.
Sensing that the market was getting out of hand, the great physicist muttered that he ‘could calculate the motions of the heavenly bodies, but not the madness of the people.’ Newton dumped his South Sea shares, pocketing a 100% profit totaling £7,000.
But just months later, swept up in the wild enthusiasm of the market, Newton jumped back in at a much higher price — and lost £20,000 (or more than $3 million in [2002-2003’s] money.
For the rest of his life, he forbade anyone to speak the words ‘South Sea’ in his presence.
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The debate about bitcoin now reminds me of a wedding I went to in 2006. @jnordvig
World Currencies
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$BTC Bitcoin Loses Cachet in Its Challenge to Gold @business @crypto
World Currencies
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The ratio of Bitcoin’s price relative to gold is down to the lowest since early February amid greater caution about speculative assets and the economic recovery from the pandemic.
One Bitcoin is now equivalent to about 23 ounces of bullion, down from a record of 36 ounces in April.
The largest virtual currency is also smarting after tycoon Elon Musk said Tesla Inc. would no longer accept it for payments over environmental risks from high energy usage.
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Build a circus and the clowns will come. @NorthmanTrader
World Of Finance
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My current theory is elon is cursed to forever drop hints that prop up the price of doge because he’s in too deep and if he stops people will lose money and get mad at him @NeerajKA
World Of Finance
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08-FEB-2021 :: The Markets Are Wilding
World Of Finance
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@elonmusk I am become meme, Destroyer of shorts And on February 4 He tested that hypothesis
No highs, no lows, only Doge @elonmusk Feb 4
Dogecoin is the people’s crypto @elonmusk Feb 4
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Commodity Markets at a Glance WSJ
Commodities
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There is an almost perfect relationship between the price of #gold and the real bond #yield. ('yes', levels!) @jsblokland
Commodities
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Real yields are getting more negative again, even as nominal 10-year Treasury yields remain somewhat rangebound. @lisaabramowicz1
World Of Finance
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09-MAY-2021 The Markets The Lotos-eaters Gold and Silver Have finally got the Big MO
Commodities
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Silver is the single most important asset that I’m focused on. @TaviCosta
1390696099229278213?s=20
If I had to boil down my entire macro thesis into one position, it would undoubtedly be that.
Once silver breaks above $30, I believe we will see an explosive move to new highs.
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28-MAR-2021 :: GOLD HAS COMPLETED ITS CONSOLIDATION AND IS HEADED BACK TO ATHS
Commodities
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04-JAN-2021 :: What Will Happen In 2021 I expect Gold to top $2,500 this year and Silver to reach $50.00
Commodities
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Gold 6 month INO 1871.00
Commodities
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Brent #oil rises to above USD 70! @jsblokland and then slumped
Minerals, Oil & Energy
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Remittances flows were resilient; down a little (-1.6%) but less than global fin crisis. Instead big hit for developing countries has been historic drop in foreign direct investment (FDI), via @WorldBank @emsovdebt
Emerging Markets
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Were fears money sent home as remittances by workers abroad would plummet in 2020. But flows were resilient; down a little (-1.6%) but less than global fin crisis. Instead big hit for developing countries has been historic drop in foreign direct investment (FDI), via @WorldBank
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"Remittances are indeed a wonderful ''silver bullet"
Emerging Markets
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Big earners of remittances are as follows. In terms of $$ and relative to size of economy @emsovdebt
Emerging Markets
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One senses that the caretakers of coronavirus on the continent are very nervous. The Indian variant has a foothold. Might it scale? @Africa_Conf
Africa
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09-MAY-2021 Africa which as to date emerged relatively unscathed from the health element of COVID19 might be casting a weary glance over its shoulder at India and would certainly be prudent to do so.
Africa
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I join @MoetiTshidi in welcoming @SuluhuSamia's leadership in strengthening national #COVID19 response and joining #COVAX. We stand ready to sustain our support and partnership. Only together can we beat this virus! @DrTedros
Africa
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I join @MoetiTshidi in welcoming #Tanzania President @SuluhuSamia's leadership in strengthening the national #COVID19 response and joining #COVAX. We stand ready to sustain our support and partnership. Only together can we beat this virus!
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Drinking The Kool Aid
Africa
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''viruses exhibit non-linear and exponential characteristics''
Africa
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Africa is currently reporting a million new infections about every 94 days @ReutersGraphics
Africa
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Botswana at peak
Angola at 97%
Cameroon crosses 75,000 reported COVID-19 infections
Réunion reports its largest number of new COVID-19 infections since the start of the pandemic: 1,100
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359,603 Active COVID-19 Cases in Africa @BeautifyData
Africa
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Active #Covid19 cases record 520,000 was in January 2021 @NKCAfrica
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Latest COVID report in South Africa: the daily positivity rate, according to tonight's official report, is 9.4%. That's the highest daily positivity rate in months @geoffreyyork
Africa
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High Seroprevalence of SARS-CoV-2 Eight Months After Introduction in Nairobi, Kenya @TheLancet Pre-Print H/T @DrAhmedKalebi
Africa
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Background: The lower-than-expected COVID-19 morbidity and mortality in Africa has been attributed to multiple factors, including weak surveillance.
We set out to estimate the burden of SARS-CoV-2 infections eight months into the epidemic in Nairobi, Kenya.
Methods: We conducted a population based cross-sectional survey using multi-stage random sampling to select households within Nairobi in November 2020.
Sera from consenting household members were tested for IgM and IgG antibodies to SARS-CoV-2.
Seroprevalence was estimated after adjusting for population structure and test performance.
Risk factors were determined using logistic regression and Infection fatality ratios (IFRs) calculated by comparing our estimates to reported cases and deaths.
Findings: Of 1,164 individuals from 527 households tested, the adjusted seroprevalence was 34·7% (95%CI 31·8-37·6), indicating that approximately 1·5 million Nairobi residents had been infected.
Some 261 (49·5%) households had at least one positive participant, and positivity rates increased in more densely populated areas (spearman’s r=0·63; p=0·009).
Individuals aged 20-59 years had up to 2-fold higher seropositivity when compared to those aged 0-9 years or ≥60 years.
The IFR was 40 per 100,000 infections, with individuals ≥40 years old having higher IFRs.
Interpretation: Over one third of Nairobi residents in half of the households were infected by November 2020, indicating extensive transmission in the city, comparable to countries reporting more severe forms of the pandemic.
However, the IFR was >10-fold lower than that reported in Europe and the United States, supporting the perceived low morbidity and mortality in sub–Saharan Africa.
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The success of Sudan's transition depends largely on the reconstruction of its economy, We are advocating for debt cancellation, purely and simply. That is our commitment to the young people of Sudan. @EmmanuelMacron
Africa
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The success of Sudan's transition depends largely on the reconstruction of its economy, but its debt is a burden. We are advocating for debt cancellation, purely and simply. That is our commitment to the young people of Sudan.
This is a clever move by @EmmanuelMacron.
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@EmmanuelMacron said, "I am from a generation for whom Nelson Mandela's victory is one of the best political memories." @Elysee
Africa
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10-JUN-2019 :: The "zeitgeist" of the Revolution in Khartoum was intoxicating
Africa
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President @MBuhari in Paris, received by President @EmmanuelMacron and First Lady, Brigitte Macron, today, at the Elysee Palace @BashirAhmaad
Africa
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Turning To Africa
Africa
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We are getting closer and closer to the Virilian Tipping Point
“The revolutionary contingent attains its ideal form not in the place of production, but in the street''
Political leadership in most cases completely gerontocratic will use violence to cling onto Power but any Early Warning System would be warning a Tsunami is coming
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Several years of drought and other factors have left millions in southern Madagascar hungry, with the World Food Programme warning that famine is looming. @D_J_Doyle has more @Reuters.
Africa
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Buy Out African Bondholders With @IMFNews Tool, @AfDB_Group Chief @akin_adesina Says @economics
Africa
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International Monetary Fund resources should be used to buy out holders of African bonds and avert a crisis as a global push for debt relief runs aground, the head of the continent’s biggest multilateral lender said.
Akinwumi Adesina, president of the African Development Bank, said the Common Framework -- created by the Group of 20 leading economies to get private sector creditors involved in debt workouts alongside public lenders -- is unlikely to be used again in its current state as countries fear ratings downgrades if they apply.
Yet many African nations are in desperate need of debt relief as they’ll struggle to meet huge repayments to investors in the coming years, Adesina said.
To get the private sector on board, he proposed buying back foreign bonds with some of the $650 billion of reserve assets known as Special Drawing Rights that the IMF is planning to issue this year.
“Those bullet payments when they become due -- and I don’t think Africa will be in a position to pay them -- will really cause a major, major debt crisis down the line,” Adesina said in an interview with Bloomberg News in Paris.
“We need to use some of the SDRs as a way of buying down some of that debt, but also conditionally asking the private sector to join the G-20 Common Framework.”
Adesina’s proposal comes as leaders gather in Paris on Tuesday for a conference hosted by France on the financing of African economies.
On Monday, speaking after a separate meeting on Sudan, French President Emmanuel Macron said France advocates outright debt cancelation for the country.
Yet efforts of international lenders have so far focused on suspending debt-servicing costs.
That does little to address the size of the $700 billion debt pile or involve the private sector, which holds more than half of that debt.
The framework is available to 73 poor countries, but only Chad, Ethiopia and Zambia have so far requested it.
Moody’s downgraded Ethiopia’s credit rating on Monday and maintained a review for further cuts, saying the protracted deliberations over country’s application to the Common Framework have increased the risk private-sector creditors will incur losses.
Fitch Ratings already downgraded Ethiopia in February.
There are also doubts over whether the IMF’s SDR allocation alone can restore the finances of African nations, with Fitch saying in March it would not be enough to solve imbalances.
“The debt of Africa right now is too much, it’s like running up a hill with a backpack of sand,” Adesina said.
“This issue is not going to go away unless we find a mechanism to buy down some of that private-sector debt.”
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In 2019, Africa paid $221 billion for debt service which was equivalent to 44% of the total government revenue of $501 billion in the same year. Sources: @AfDB_Group + @TheCitizenTZ @MwangoCapital
Africa
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15-MAR-2021 :: Africa Emerging from the Pandemic
Africa
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The amount of debt Africa has is not sustainable (70- 75% of GDP) and it is in the hands of commercial creditors ($370 bn).
Stiglitz added ''A Standstill is not sufficient You need to move to a Debt Restructuring ...It has to be comprehensive''
The share of commercial creditors in Africa’s external debt stock has more than doubled in the last two decades, from 17 percent in 2000 to 40 percent by the end of 2019.
At least 21 African countries accessed international capital markets between 2000 and 2020.
President Adesina made some typically pithy and forward looking comments
''There is good debt and there is ''hamburger'' debt'' and called for fiscal discipline....and closed ''There is light at the end of the Tunnel and we are running towards it''
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.@MoodysInvSvc downgrade #Ethiopia to Caa1 (Fitch were already on CCC, S&P B-). @emsovdebt
Africa
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Downgrade linked to "application for debt relief under the G20 Common Framework have increased the risk of private sector creditors incurring losses."
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Rating Action: @MoodysInvSvc downgrades Ethiopia's ratings to Caa1; ratings on review for further downgrade
Africa
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London, 17 May 2021 -- Moody's Investors Service ("Moody's") has today downgraded the Government of Ethiopia's long-term issuer and senior unsecured ratings to Caa1 from B2 and maintained the review for further downgrade.
The downgrade to Caa1 reflects Moody's view that protracted deliberations regarding Ethiopia's application for debt relief under the G-20 Common Framework have increased the risk of private sector creditors incurring losses.
The passage of time since Ethiopia's application to the Common Framework suggests a relatively complex decision by the Common Framework's creditor committee, which in turn indicates that an outcome that does not impose any losses on private sector creditors is less likely than at the time of Moody's previous rating action in March.
Moreover, heightened domestic political tensions risk interfering with official sector support and undermining foreign investment that is critical for the government's financing in the near and medium term.
While the rating downgrade indicates that the risks have risen to a point no longer consistent with the previous rating, the Caa1 long-term issuer ratings acknowledge that there remain a number of potential outcomes that do not involve private creditors incurring losses.
Maintaining the review for downgrade will allow Moody's to assess the progress of the official creditor committee deliberations regarding the extent of relief that Ethiopia requires, and the apportionment of that relief to the various creditors, including private creditors.
The review period will also allow Moody's to assess Ethiopia's financing situation following the IMF's executive board assessment of the first and second reviews under the IMF programme and the outcome of the spectrum license auction and asset sales.
The long-term local currency (LC) ceiling has been lowered to B2 from Ba3, while the foreign currency (FC) ceiling has been lowered to Caa1 from B2.
There has been little progress since Ethiopia's 1 February announcement that it intended to seek debt treatment under the Common Framework.
Prolonged deliberations about the precise application of the Common Framework to Ethiopia point to increased risk for private sector creditors.
Exposure to social risks is very high (S-5 issuer profile score), reflecting high income inequality, high levels of unemployment particularly among the youth, as well as high levels of poverty, which all have the potential to fuel social discontent.
Ethiopia has a low governance profile score (G-4 issuer profile). Weak governance in particular among some state-owned enterprises (SOEs) has contributed to high SOEs debt which, if left unchecked, could result in a further deterioration in the credit profile.
Ethiopia is susceptible to frequent bouts of social and political unrest in the Horn of Africa region characterized by political instability, which undermine the strength of the institutions and policy effectiveness.
GDP per capita (PPP basis, US$): 2,772 (2020 Estimate) (also known as Per Capita Income)
Real GDP growth (% change): 6.1% (2020 Estimate) (also known as GDP Growth)
Inflation Rate (CPI, % change Dec/Dec): 18.2% (2020 Actual)
Gen. Gov. Financial Balance/GDP: -2.8% (2020 Estimate) (also known as Fiscal Balance)
Current Account Balance/GDP: -4.1% (2020 Estimate) (also known as External Balance)
External debt/GDP: 27.2% (2020 Estimate)
Economic resiliency: b1
Default history: At least one default event (on bonds and/or loans) has been recorded since 1983
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Ethiopia which was once the Poster child of the African Renaissance
Africa
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#Ethiopia & #Kenya eurobond maturing in 2024 continue to tell a story. Conflict & request for debt relief increased Ethiopia's yield. @emsovdebt
Africa
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Meanwhile IMF program & expectation of issuance (including a tender of bonds) has compressed Kenya's yield. Yield down = lower cost of borrowing
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Africa’s major stock exchanges have produced decent returns in dollar terms this year: the JSE ALSI has outperformed the S&P500, and the Nairobi exchange is not far behind. @NKCAfrica
Africa
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Wines, spirits and cider maker @distellgroup a market capitalisation of $2.27 billion said @Heineken was interested in buying majority of its business sending its shares up more than 10% in early trade @Reuters
Africa
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South Africa's weak growth could fuel socioeconomic tensions - @MoodysInvSvc @Reuters
Africa
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South Africa’s low economic growth and rising debt burden could see socioeconomic tension intensify and impede policy reforms, ratings firm Moody’s said in a research note on Tuesday.
The note, an extract from the credit firm’s annual report published on Monday, said South Africa’s credit profile was balanced, with its low level of foreign currency debt and strong core of institutions counting in its favour.
Moody’s decided this month against making any decisions on the country’s credit ratings, currently two levels deep into subinvestment, at Ba2 with a negative outlook.
The two other major ratings firms, Fitch and S&P, also rate the country deep into junk.
“Credit challenges include structurally very weak growth and a high government debt burden that will continue to rise without comprehensive economic and fiscal reforms,” Moody’s said.
“Socioeconomic inequalities also intensify tensions that drive political risk and complicate policy efforts.”
South Africa has one of the world’s highest levels of income inequality, especially between Blacks and Whites.
This is partly because of decades of apartheid rule, which ended in 1994, and more recently an effect of government corruption and slow policy reforms.
The economy, already in recession before the coronavirus pandemic struck in March 2020, shrank by a record 7% last year. State debt is nearing 90% of gross domestic product (GDP).
“The coronavirus pandemic’s fallout will continue to weigh on South Africa’s economic growth and fiscal balance in 2021,” said Lucie Villa, a senior analyst at Moody’s.
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South Africa All Share Bloomberg
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Dollar versus Rand Chart INO 14.0076
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Egypt Pound versus The Dollar Chart INO 15.68
Africa
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Ghana Stock Exchange Composite Index Bloomberg
Africa
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.@afreximbank has successfully closed a $1.3bn dual tenor bond issuance, The bank printed a $600mn 5-yr note at a spread of T+185bps and $700mn 10-yr note at a spread of T+220bps. @BBoason @FrontierAFR
Africa
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What we have witnessed in the by-elections in Bonchari and Juja is an abuse of police powers and an arrogant display of IMPUNITY by a few overzealous and bellicose government functionaries. @RailaOdinga
Law & Politics
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Conclusions
He however has an Inside/Outside Issue. He cannot play it on both sides.
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Kenya External Debt to Exports @MihrThakar
Kenyan Economy
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.@KNBStats data shows that production of soft drinks dropped by 80.4 million litres in 2020 compared to 2019. First drop since 2012. via @BD_Africa @moneyacademyKE
Kenyan Economy
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Conclusions
Solid data point on the economy
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.@SafaricomPLC takes 56pc stake in Ethiopia firm @BD_Africa
N.S.E Equities - Commercial & Services
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Safaricom has raised its controlling stake in Global Partnership for Ethiopia, the consortium that has made a bid for one of two telecoms licences in Kenya’s northern neighbour, to 56 percent from the 51 percent announced previously.
Details of the consortium’s latest ownership structure was disclosed Tuesday by South Africa-based Vodacom Group which owns a 34.9 percent stake in the Nairobi Securities Exchange-listed firm.
“The consortium is 56 percent owned by Safaricom, six percent by Vodacom, 25 percent by Sumitomo the Japanese conglomerate and 10 percent by CDC, the UK sovereign investment fund,” Vodacom’s chief executive Shameel Joosub said at an investor briefing yesterday.
He did not explain the circumstances that led to the changes in the ownership.
The multinational’s stake has also gone up, having previously stood at five percent.
The percentages listed by Mr Joosub exclude decimal places which would bring the stakes to 100 percent.
Vodacom’s precise ownership in the consortium, for instance, is 6.2 percent according to regulatory filings.
Safaricom was allowed to lead the consortium for several reasons, including Kenya’s geographical proximity to Ethiopia.
Vodacom earlier said that it could raise its ownership in the consortium after a couple of years into the operation.
The Ethiopian Communications Authority (ECA) confirmed that the Safaricom group and another consortium led by South Africa’s MTN Group were the only parties to make bids in the auction for two operating licences.
“We now, of course, wait for the final outcome from the Ethiopian communications authorities which should be any day now … we are quite hopeful given that we have put our best foot forward as a consortium,” Mr Joosub said.
Ethiopian authorities have indicated that successful bidders will be announced by May 26.
Safaricom Plc’s chances of winning one of the licences got a boost after nine other firms that had expressed interest in the auction dropped out at the last stage.
Reports indicate that they were spooked by alleged lack of transparency in the process and requirements that winners build their own network infrastructure such as towers.
They also felt that they were not ready to pay the amounts expected by the Ethiopian government, with officials anticipating to raise billions of dollars from the sale of the licences in what they have described as “the deal of the century.”
The firms that dropped out of the race are Etisalat, Axian, Orange, Saudi Telecom Company, Telkom SA, Liquid Telecom, Snail Mobile, Kandu Global Communications and Electromecha International Projects.
The fact that only two bids were made has narrowed the agency’s options and the bidding process could be reopened, especially if the financial offers fall below the government’s targets.
The amounts that Safaricom and MTN put in their bids is expected to be disclosed when Ethiopia announces the results of the auction.
Besides selling the new licences, the Ethiopian government is also disposing of a minority stake in Ethio Telecom, which has a monopoly in that market.
Safaricom and its partners have signed an agreement to borrow up to $500 million (Sh53.7 billion) from America’s sovereign wealth fund US International Development Finance Corporation to fund their planned entry into Ethiopia.
The financial investment in Ethiopia is expected to top the $1 billion (Sh107.5 billion) mark, with the DFC loan deal seen as part of the project’s fundraising efforts.
The loan is expected to help finance acquisition of the licence besides building of the mobile network infrastructure.
The DFC loan offers the consortium long-term financing on relatively favourable terms.
The international financier says its loans typically mature between five and 25 years, with repayment schedules set on quarterly or semi-annual basis.
A grace period on principal repayment at the beginning of the loan term is also common. The interest rate is a “negotiated spread over the base-cost of funds.”
Long-term US government bonds currently have interest rates of below three percent, setting a low base on which to price the DFC loan.
Safaricom sees Ethiopia, a market with 117 million people and relatively lower uptake of mobile and broadband services, as presenting significant growth opportunities.
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.@SafaricomPLC share price data and FY Earnings here
N.S.E Equities - Commercial & Services
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Price: 38.35
Market Capitalization:1,536,509,163,800
EPS:1.71
PE:22.427
The Ethiopia Project is material because we are yet to understand the balance sheet intensity that will be required.
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Kenya Shilling versus The Dollar Live ForexPros
Africa
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Nairobi All Share Bloomberg
N.S.E General
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Nairobi ^NSE20 Bloomberg
N.S.E General
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Every Listed Share can be interrogated here
N.S.E General
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