Welcome to RICH.CO.KE - Satchu's Wrapup

Satchu's Rich Wrap-Up

Wednesday 06th of October 2021

Morning

Africa

Macro Thoughts

World Of Finance

The lights must never go out, The music must always play

Misc.

Love Fellini. So brave, with that whiff of insanity. @DiAmatoStyle Federico Fellini's 8 1/2 @tcm

Misc.

"The market is like a large movie theater but with a small door." Dynamic Hedging, 1996 @nntaleb

World Of Finance

In one of his books Nassim Nicholas Taleb @nntaleb described his Trading Strategy as one which lost money 364 days of the year but made more than on one day than was lost in those preceding 364 days

World Of Finance

He makes the point that Few People or Trading Desks have the mental stamina to last those 364 days for that extreme one day pay out.

The Music has been playing for Eternity and its about to stop

World Of Finance

Tabla wizard, Aref Durvesh @thenitinsawhney

Misc.

Home Thoughts

Africa

Mt Kilimanjaro nights. @Tintseh_

Africa

"We come spinning out of nothingness, scattering stars like dust."- Jalaluddin Rumi

Misc.

There are dead stars that still shine because their light is trapped in time. Where do I stand in this light, which does not strictly exist? DON DELILLO, Cosmopolis

Misc.

"The nitrogen in our DNA, the calcium in our teeth, the iron in our blood, the carbon in our apple pies were made in the interiors of collapsing stars. We are made of starstuff" - Carl Sagan, Cosmos

Misc.

Just some ducks on a misty winter morning #IndiAves @adityadickysin

Misc.

The Crossing. Moments in Amboseli. @just_sham_it

Africa

Zebra Crossing Amboseli

Africa

Political Reflections

Law & Politics

BREAKING: France has threatened to cut the UK’s power off @PoliticsForAlI

Law & Politics

IS THIS A CRISIS? UK'S JOHNSON SAYS: NO @GuyReuters

Law & Politics

Now Is The Winter Of Our Discontent

Law & Politics

“Now is the winter of our discontent” is the opening of a speech by William Shakespeare from Richard III.
It was also used to describe the profound industrial unrest that took place in 1978—9 in the United Kingdom.
Prime Minister Callaghan was asked by a reporter
"What is your general approach, in view of the mounting chaos in the country at the moment?" and replied:
Well, that's a judgment that you are making. I promise you that if you look at it from outside, and perhaps you're taking rather a parochial view at the moment, I don't think that other people in the world would share the view that there is mounting chaos.
The next day's edition of The Sun headlined its story "Crisis? What crisis?"

GREGGS GRG.L CEO SAYS DESPITE PRESSURES IN UK PORK SUPPLY CHAIN "THE SAUSAGE ROLL IS SAFE" @GuyReuters

Retail & Manufacturing

ON IMMIGRATION, UK'S JOHNSON SAYS: WE SAW OVER 25 YEARS BUSINESSES MAINLINE LOW-WAGE IMMIGRATION @GuyReuters

Law & Politics

The immediate challenges facing the U.K. stem from the loss of a vital pool of labor after its transition out of the EU ended on Jan. 1. @business

Law & Politics

The biggest con of this govt has been to turn apt working class resentment of greed into disdain for those in need. That is how they won a landslide election @thenitinsawhney

Law & Politics

The biggest con of this govt has been to turn apt working class resentment of greed into disdain for those in need. That is how they won a landslide election. By attacking immigrants, asylum seekers and any other desperate human beings asking for help. It sickens me every day.

.@BorisJohnson spoke of ‘’Smart cities [which] will pullulate with sensors, all joined together by the “internet of things”, bollards communing invisibly with lamp posts..... [and asked] How do you plead with an algorithm?’’

Law & Politics

.@BorisJohnson Vs. Kermit: “…he was unnecessarily rude to Miss Piggy.” @AmichaiStein1

Law & Politics

"Some" people = everybody "Issues" = complete shutdown From the ministry of propaganda @nntaleb

Law & Politics

We’re aware that some people are experiencing issues with WhatsApp at the moment. We’re working to get things back to normal and will send an update here as soon as possible. Thanks for your patience! @WhatsApp

Information & Communication Technology

19-JUL-2021 Many Folks seem to feel we are in the final Act of the COVID-19 Play. I would be limit short that particular narrative.

Misc.

#COVID19 vaccines may have to be "adapted" to new virus variants in 2022, says BioNTech chief Ugur Sahin (FT) @disclosetv

Misc.

23-AUG-2021 :: We have now crossed peak Vaccine Euphoria

Misc.

What happens next depends not only on vaccination,but also on how the virus might mutate. @derspiegel

Misc.

"This virus keeps surprising us," agrees Mary Bushman, a mathematician and population biologist at Harvard University’s T.H. Chan School of Public Health.

"No one expected such large jumps in contagiousness.”

International Markets

World Of Finance

Currency Markets at a Glance WSJ

World Currencies

Euro 1.1582
Dollar Index 94.11
Japan Yen 111.77
Swiss Franc 0.9253
Pound 1.3602
Aussie 0.7259
India Rupee 74.5734
South Korea Won 1186.45
Brazil Real 5.4552
Egypt Pound 15.7120
South Africa Rand 15.0527

Dollar Index Chart INO 94.11

World Currencies

Euro versus the Dollar Chart 1.1582

World Currencies

Commodities

Commodities

Commodity Markets at a Glance WSJ

Commodities

Gold INO 1751.00

Commodities

Crude Oil INO 79.00 [Target much higher]

Minerals, Oil & Energy

American benchmark Henry Hub gas futures closed the day at their highest settlement price in >12 years, above $6.3 per million Btu @JavierBlas

World Of Finance

The U.S. is joining the frenzy. American benchmark Henry Hub gas futures closed the day at their highest settlement price in >12 years, above $6.3 per million Btu (but note that’s peanuts compared to the >$40 per Btu that European and Asian consumers are paying).

December Nymex contract gas up 52.6c to settle at $6.432 @TradersCom

Commodities

Emerging Markets

Emerging Markets

EM during COVID: @RobinBrooksIIF

Emerging Markets

1. Huge currency devaluations (vertical)
2. Sharp rise in local currency bond yields (horizontal)
3. EMs that did G10-like GDP stimulus got hit hardest
4. Turkey for its credit boom, Brazil for fiscal stimulus
5. Markets give EM no fiscal & monetary policy space

EM is another matter (blue). The Dollar keeps rising & rising & rising. That's not about Dollar strength, but EM weakness. Markets think the EM growth model is broken and EM FX needs to adjust. @RobinBrooksIIF

Emerging Markets

The Dollar rose sharply vs the G10 in 2014/5 (black) & has been stable since then. But EM is another matter (blue). The Dollar keeps rising & rising & rising. That's not about Dollar strength, but EM weakness. Markets think the EM growth model is broken and EM FX needs to adjust.

EM is in a de facto taper tantrum, even if US yields have gone nowhere (black). Hardest hit: Turkey (red), Brazil (blue) & Colombia (orange). @RobinBrooksIIF

Emerging Markets

Markets have no tolerance for the kind of demand stimulus the US did. If EMs try that, they get whacked with weaker FX & higher yields...

GDP growth in 2021 is massively overstated in EM, as base effects are so big. @RobinBrooksIIF

Emerging Markets

We look at true growth taking out base effects (lhs, red) & compare to the GFC recovery (rhs, red). The GFC recovery was much stronger, thanks to China's massive infrastructure stimulus that lifted EM.

Sub Saharan Africa

Africa

Pandora Papers: 'We have secrets of more African leaders than ever' @BBCAfrica

Africa

Since the latest peak early July, the number of weekly cases has been decreasing continuously for almost three months; while weekly deaths remain elevated. @WHO

Africa

19-JUL-2021 Many Folks seem to feel we are in the final Act of the COVID-19 Play. I would be limit short that particular narrative.

Africa

The 7-day rolling avg #COVID19 test positivity in South Africa currently at 3.7% is lowest it's been since breaching this point in May 2020 before 1st wave @rid1tweets

Africa

‘We haven’t been spared, we’re just not counting’: Sudan’s hidden Covid death toll @Telegraph

Africa

Ethiopia civil war: Thousands of troops assemble on highway to front line in bloody conflict @SkyNews @sparkomat

Africa

Ethiopian Prime Minister Abiy Ahmed's forces are preparing new engagements with the Tigray Liberation Front, as thousands train on gravel roads off the A2 highway, near to the front line of the conflict.

Heading north along Ethiopia's A2 highway, we quickly noticed that the road had turned into an elongated car park for the country's military - the Ethiopian National Defence Force (ENDF).
Near the city of Dessie in the region of Amhara, we saw dozens of trucks, tanks and armoured personnel carriers parked by the side of the road.

We were heading towards the front line in a nasty civil war between the national government and their partners in Amhara, and the rebellious region of Tigray.

The two sides have been massing their forces - and trading blows - on the fields and mountain slopes close to the highway.
The Ethiopian prime minister, Abiy Ahmed, sent troops into Tigray last November as he tried to oust the Tigray People's Liberation Front (TPLF) from power.

A series of events, culminating in an attack on a number of federal army camps, had raised the political temperature to boiling point.
The war took a stunning turn in June when rebel fighters forced Mr Ahmed's forces out of the Tigrayan capital, Mekelle.

The prime minister declared a unilateral ceasefire, but the fighting continued as the TPLF moved south into neighbouring Amhara.
Their advance has now been checked, it seems, with members of local militia units telling us the Tigrayans have made a series of significant retreats.
Clearly, the ENDF is preparing for new engagements. We saw thousands of troops using and training on the gravel roads which branch off the A2.
The majority were male, but some soldiers were female and many looked extremely young.

In Amhara, middle-school and high-school students - along with their teachers - were called up last month with explicit instructions to "bury the enemy".
Motivation is unlikely to be an issue.
Our guides from a local militia unit drove us up the side of a mountain and stopped in a village called Uruga.

They said the Tigrayans had held this community for three or four days and incinerated the local clinic and its grain mill.
I asked a local farmer why he thought they had done it.
"To cause us pain, to cause us pain," said Seid Gebeze.
"What do you want to happen to the TPLF, the people of Tigray?" I asked.
"Have them eliminated, I personally want them to be eliminated. I want them eliminated. How many people have we lost? How many animals have we lost, how much livestock have we lost? My father is dead. I am prepared to fight."
Most men in this village are prepared to fight, and we found them under an olive tree, clutching a variety of weapons.
They call themselves "Sheret Lebashoche", a militia of sorts - and a symbol of mass-mobilisation in Amhara.
Their leader, called Jamilu Teferu, told us they would die for their nation and their land.
"If their intention is to break up Ethiopia and put pressure on Amharans, if that is their mission, it will never work. If the Tigrayans try to deny our identity or claim our land, I say it's never going to happen."

Locals told us that most village residents had fled before TPLF fighters reached Uruga, but the rebels killed a number of elderly people who had been unable to run.
The Tigray Communication Affairs Bureau has described allegations in places like Uruga as, "totally wrong" and called for an independent investigation.
Human rights groups say atrocities have become common place on both sides in this conflict and have appealed for dialogue and negotiation.

The falcon cannot hear the falconer;

Turning and turning in the widening gyre
The falcon cannot hear the falconer;
Things fall apart; the centre cannot hold;
Mere anarchy is loosed upon the world,
The blood-dimmed tide is loosed, and everywhere The ceremony of innocence is drowned;
The best lack all conviction, while the worst Are full of passionate intensity.

#NobelPrize laureate #AbiyAhmed claims that his ascent to power in #Ethiopia is #God’s will, based on a prophecy his mother made when he was a child. @KjetilTronvoll

Africa

Any politician asserting #religious legitimacy arguing they are doing God’s work, presents an ersatz claim.

PM Abiy His inner war cabinet includes Evangelicals who are counseling him he is "doing Christ's work"; that his faith is being "tested". @RAbdiAnalyst

Africa

Food Inflation Hits 42pc @addis_fortune

Africa

Last month, headline inflation reached 34.8pc, an increase from 30.4pc in August 2021. The non-food component of inflation also upped from 20.8pc to 25.2pc during the same period.

‘The genie out of the bottle’ @AfricanBizMag

Africa

The Tigray War has cost $2.5 billion and international investors are staying away, according to Louw Nel, a senior political analyst at NKC African Economics CGTN

Africa

November 8, 2020 Ethiopia which was once the Poster child of the African Renaissance

Africa

From Minerals to Beer, Congo’s Finance Minister Hunts for Cash @bpolitics

Africa

The Democratic Republic of Congo is intent on revisiting mining contracts, rescinding and reselling unused oil permits and boosting taxes on beer to fund its development plans, according to Nicolas Kazadi, the country’s finance minister.
A country the size of Western Europe with 80 million inhabitants, Congo had a budget of just $4 billion last year and poverty is rampant, despite its vast riches of copper, cobalt and other natural resources.

The government needs more money to meet President Felix Tshisekedi’s pledges to provide free education and expand access to health care and the task of raising it has fallen to Kazadi, 55, an economist who previously served in the central bank and finance ministry.
While the International Monetary Fund has agreed to give the central African nation $3 billion in financing since Kazadi took up his post in April, and the African Development Bank and the World Bank will provide hundreds of millions of dollars more, that won’t be enough to fund the country’s proposed $10.5 billion budget for 2022.
The finance chief has his sights set on raising additional revenue domestically -- a condition of the IMF loan -- in part by revising deals made by the previous administration.

He also sees potential for an international bond sale, possibly by 2023.
Tax Compliance
“We are fully aware that governance wasn’t good, and there are a lot of things that need to be revisited,” Kazadi said in an interview in the capital, Kinshasa, last month.

That will include scrutinizing mining contracts and making sure companies are paying their taxes.

The terms of two of Congo’s biggest mining deals -- a $6.2 billion minerals-for-infrastructure agreement with China, and China Molybdenum Co.’s contract to run the Tenke copper and cobalt mine -- are already under investigation, according to Kazadi.

The government has also begun an audit of state-owned copper mining company Gecamines “to know what kind of contracts they signed and who’s behind them,” he said.

The government is also trying to improve operating conditions for the mining industry, including reforming its value-added tax system with a view to making it more transparent and efficient, the finance chief said.

It’s also working on a payment plan to reimburse what may be more than a billion dollars owed to companies, Kazadi said.

Tshisekedi’s administration has backed a deal between state-owned mining company Sakima and closely held Dither Ltd. to process Congolese minerals including gold and coltan at new refineries in Rwanda, despite a long history of violence between the two countries.

The idea today is to turn the page and to cooperate,” Kazadi said. “We can’t stop ourselves from profiting from opportunities offered to us.”

The government is also intent on raising more money from its crude reserves and is still set on reclaiming the rights to two undeveloped oil blocks on the Uganda border that were awarded to Israeli billionaire Dan Gertler, who’s under sanctions by the U.S. for alleged corruption in Congo.

It is in the country’s interests that the government “facilitate the sale of these blocks, which have incredible value,” Kazadi said.

Gertler declined to comment, according to a spokesman.
An initiative to raise more money from the beverage industry that’s being undertaken with Swiss company SICPA SA will see bottles being stamped to ensure taxes are paid and could raise hundreds of millions of dollars, although companies oppose the plan, Kazadi said.
A more favorable tax regime and better border controls will also reduce trafficking of natural resources from eastern Congo into neighboring Rwanda and Uganda, he said.

Kinshasa

Africa

A Picture I took of the Marche De Valeurs Kinshasa DRC Twitpic

Africa

Dan Gertler

Africa

South Africa All Share Bloomberg

Africa

Dollar versus Rand Chart INO 15.0845

Africa

Egypt Pound versus The Dollar Chart INO 15.712

Africa

Egypt EGX30 Bloomberg

Africa

Nigeria All Share Bloomberg

Africa

Ghana Stock Exchange Composite Index Bloomberg

Africa

MTN Uganda to Offer 20% Stake in IPO @markets

Africa

MTN Group Ltd. is seeking a valuation of about $1.4 billion for its unit in Uganda, according to people with knowledge of the matter, in what will be the nation’s biggest initial public offering.

Africa’s largest wireless carrier plans to sell 20% of the unit raising about $280 million, one of the people said, asking not to be identified before a public announcement.

The move by the South African company is aimed at ensuring broad-based ownership in its operating subsidiaries, according to a statement on Tuesday.
MTN plans to invest $281 million in three years to expand its coverage in the East African nation.

The IPO follows listings of MTN’s units in Nigeria, Ghana and Rwanda, which to some extent took place after pressure from government and local regulators.

The creation of a Lagos-listed entity was part of a deal to settle a multi-billion dollar fine for being slow to disconnect customers without proper documentation.
MTN is in the middle of a scaling back of the company, with the focus turning primarily to African telecom and mobile-banking services.

The Johannesburg-based carrier abandoned its business in Syria and is looking to sell the Afghanistan and Yemen units.

An upcoming initial public offering of IHS Holding Ltd. will allow MTN to reduce its stake in the pan-African towers company.

The IPO, the first in Uganda since 2016, will be the biggest since Umeme Ltd. raised about $66 million selling shares in 2012, according to data compiled by Bloomberg.
Investors in Uganda will be able to bid for MTN’s IPO via their phones.

The weather cycle responsible for these episodes is a climate-change-enhanced “La Niña”. La Niña is driven by the cooling of ocean temperatures in the eastern Pacific sea, causing dry spells in eastern Africa. @TC_Africa

Food, Climate & Agriculture

Human-induced warming in the western Pacific ocean is making things worse.

Global emissions have resulted in the rapid warming of the west Pacific, resulting in more rain around Indonesia and concerning but predictable rainfall deficits in arid, food-insecure eastern Kenya, Somalia, and Ethiopia.
As described in my book, Drought Flood Fire, typically eastern East Africa receives two rainy seasons every year, October to December and March to May.

Now, with climate change, we are seeing more frequent and extremely dangerous back-to-back failures of these rains.

Before 1999, a drought – when there is poor or a failed rainy season – might happen once every five or six years. But since 1999, poor March to May rains are coming every two or three years.

From 2010 to 2011, back-to-back droughts helped push Somalia into famine. More than 260,000 people died, half of them children.

Then, in 2016/2017 and 2020/2021, consecutive droughts struck the region once more.
Fortunately, we can now often predict these droughts using climate models and Earth observations.
For instance, I was part of a group of scientists that raised the alarm and predicted that food security across the eastern Horn of Africa was likely to deteriorate in 2020, driven by below-average rainfall in the coming months.

We did this through the Famine Early Warning Systems Network, a leading provider of early warning and analysis on acute food insecurity around the world.

We now think that a devastating drought is likely to happen again, in 2021/2022.

The sea surface temperature forecasts look almost exactly the same as last year, and we are predicting that exceptionally warm west Pacific Ocean conditions, combined with cool east Pacific La Niña temperatures, are likely to produce another sequence of dry seasons.

Kenya has already declared a drought emergency. With more drought shocks likely on the horizon, it will be important for governments and other actors to be proactive.

For instance, when the East Pacific is warmer it amplifies the intensity of droughts in northern Ethiopia and Southern Africa.

If this extra heat is in the western Pacific and eastern Indian Oceans, it contributes to sequential droughts in Kenya, Somalia and southern Ethiopia.

Understanding how climate change contributes to exceptionally warm ocean conditions helps us make these forecasts. And it means we can help to anticipate food insecurity.
In 2016/2017, we used observed sea surface temperatures to help motivate a joint alert that supported improved humanitarian responses; when the 2017 rains failed in Somalia, assistance was already arriving for millions of people.
Now, in 2021/2022, we are using La Niña analogs and long-lead forecasts of western Pacific Ocean conditions to make even earlier drought predictions – anticipating that the 2022 March-to-May rainy season, which ends eight months in the future, is likely to be poor.
Our ability to make skilful climate forecasts is improving, but more needs to be done.

Dead animal carcasses lie outside of the village of Dambas in Kenya during a drought in 2006. Chris Jackson/Getty Images @TC_Africa

Africa

In chaos theory, the butterfly effect is the sensitive dependence on initial conditions in which a small change in one state of a deterministic nonlinear system can result in large differences in a later state.

Misc.

23-NOV 2015 I cannot help feeling we are like frogs in boiling water. We have created massive interference in the "cosmic tuning" phenomenon

Food, Climate & Agriculture

In this book, Martin Rees puts forward six equations which govern our universe, a universe so big that we are like a grain of sand on a beach. The mathematics of these equations is so miraculous that Rees speaks to a “cosmic tuning” phenomenon.
For example; Ω ≈ 0.3: the ratio of the actual density of the universe to the critical (minimum) density required for the universe to eventually collapse under its gravity. Ω determines the ultimate fate of the universe.

If Ω is greater than one, the universe will experience a big crunch. If Ω is less than one, the universe will expand forever.

If there’s one thing we know about climate breakdown, it’s that it will not be linear, smooth or gradual. @guardian

Food, Climate & Agriculture

Kenya

Africa

@EABL_PLC issues a Medium Term Note targeting to raise up to Kshs 11B. @MwangoCapital

N.S.E Equities - Industrial & Allied

- Tenor: 5 years
- Offer dates: 6th to 21st October
- Status: Unsecured
- No offer outside Kenya
- Interest rate: fixed at 12.25% payable semi-annually