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Satchu's Rich Wrap-Up
 
 
Thursday 12th of May 2022
 
Morning
Africa


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Anybody can be decisive during a panic It takes a strong Man to act during a Boom.
World Of Finance


“The businessman bought at ten & was happy to get out at twelve; mathematician saw his ten rise to eighteen, but didn’t sell because he wanted to double his ten to twenty”

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Interview with Maria Joao Lopo de Carvalho about Luis de Camoes and her book which followed his c16th journey from Portugal to Macau via Cape of Good Hope
Africa


Interview with Maria Joao Lopo de Carvalho about Luis de Camoes and her book which followed his c16th journey from Portugal to Macau via the Cape of Good Hope Mozambique Mombasa Malindi Oman Hormuz Goa Sri Lanka Macau Malacca

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The relentless lying about the alleged success of the Ukrainian military reminds me of the US media's claims of imminent US victory in Vietnam. @ThaddeusRussell
Law & Politics



Russia now controls all the strategic population centers of the Donbas and will soon control the entire south, landlocking Ukraine.

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World War One brought an abrupt end to Bewegungskrieg. The defensive power of artillery, trenches, and barbed wire made operational maneuver nearly impossible. Instead of a war of movement, Germany was forced into their nightmare: a war of attrition.
Law & Politics

World War One brought an abrupt end to Prusso-German dreams of Bewegungskrieg. The defensive power of artillery, trenches, and barbed wire made operational maneuver nearly impossible. Instead of a war of movement, Germany was forced into their nightmare: a war of attrition.

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It's a parallel concept. My belief right now is that the Russians drove on Kiev to paralyze Ukrainian forces and prevent them from moving troops to either the Donbas or the Kherson front, but not to actually capture Kiev. @witte_sergei
Law & Politics


It's a parallel concept. My belief right now (this could change if new information becomes available) is that the Russians drove on Kiev to paralyze Ukrainian forces and prevent them from moving troops to either the Donbas or the Kherson front, but not to actually capture Kiev.

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May 2 Currency puzzles
World Of Finance


Andy Warhol's 200 One Dollar Bills sold at @Sothebys in 2009 for $43.8 million.
I include Andy Warhol because he managed to monetize the FX Market as effectively as the likes of George Soros and Stanley Druckenmiller amongst others.

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Currency Markets at a Glance WSJ
World Currencies

Euro 1.051065
Dollar Index 104.133
Japan Yen 129.6685
Swiss Franc 0.995820
Pound 1.220735
Aussie 0.688665
India Rupee 77.60550
South Korea Won 1289.880 
Brazil Real 5.137977 
Egypt Pound 18.368570 
South Africa Rand 16.212575 

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27 NOV 17 : Bitcoin Wow! What a Ride! #Bitcoin
World Currencies


T.S Eliot said in The Hollow Men 

Between the idea
And the reality
Between the motion
And the act
Falls the Shadow
For Thine is the Kingdom.


There are many cryptocurrency schemes which are sold on the same grounds as the greatest South Sea Bubble prospectus: 

“For carrying on an undertaking of great advantage, but nobody to know what it is.”
Let me leave you with Hunter S. Thompson, “Life should not be a journey to the grave with the intention of arriving safely in a pretty and well preserved body, but rather to skid in broadside in a cloud of smoke, thoroughly used up, totally worn out, and loudly proclaiming “Wow! What a Ride!”

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Anybody can be decisive during a panic It takes a strong Man to act during a Boom. VS NAIPAUL
World Of Finance


“The businessman bought at ten and was happy to get out at twelve; the mathematician saw his ten rise to eighteen, but didn’t sell because he wanted to double his ten to twenty.”

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How to make a >800 million dollars in crypto attacking the once 3rd largest stablecoin, Soros style: @OnChainWizard
World Currencies


Everyone is talking about the $UST attack right now, including Janet Yellen. But no one is talking about how much money the attacker made (or how brilliant it was). Lets dig in

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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. #Bitcoin
World Currencies



"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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U.S. crude in strategic reserve falls by record to lowest since May 2001, @EIAgov says @Reuters
Minerals, Oil & Energy

U.S. crude oil in the Strategic Petroleum Reserve (SPR) dropped by a record 7.0 million barrels last week to 543.0 million barrels, its lowest since May 2001, the U.S. Energy Information Administration (EIA) said on Wednesday.
The agency also said U.S. distillate stockpiles fell last week to 104.0 million barrels, their lowest since May 2005, with East Coast distillate inventories dropping to a record low of 21.3 million barrels, according to data going back to 1990.
U.S. crude output, meanwhile, slipped 100,000 barrels per day (bpd) last week to 11.8 million bpd, the first weekly decline since January, EIA said.

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An airport without planes, a revolving restaurant with no diners, a debt-laden seaport -- Sri Lanka's economic crisis @AFP @barronsonline
Emerging Markets


Many of the white-elephant projects that helped fuel the crisis now gather dust in Hambantota district, home of the powerful Rajapaksa clan, which used its political clout and billions in Chinese loans in a failed effort to turn the rural outpost into a major economic hub.

The Hambantota port was unable to service the $1.4 billion in Chinese loans rung up to finance its construction, losing $300 million in six years.
In 2017, a Chinese state-owned company was handed a 99-year lease for the seaport -- a deal that sparked concerns across the region that Beijing had secured a strategic toehold in the Indian Ocean.
Overlooking the port is another Chinese-backed extravagance: a $15.5 million conference centre that has been largely unused since it opened.
Nearby is the Rajapaksa Airport, built with a $200 million loan from China, which is so sparingly used that at one point it was unable to cover its electricity bill.
In the capital Colombo, there is the Chinese-funded Port City project -- an artificial 665-acre island set up with the aim of becoming a financial hub rivalling Dubai.

China is the government's biggest bilateral lender and owns at least 10 percent of its $51 billion external debt.
But analysts believe the true number is substantially higher if loans to state-owned firms and Sri Lanka's central bank are taken into account.

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Soaring food, fuel ramp up social unrest risk for emerging markets -report @MaplecroftRisk @Reuters
Emerging Markets


Rising fuel and food prices look set to stoke an “inevitable” rise in civil unrest, with developing middle-income countries such as Brazil or Egypt particularly at risk, a report by a risk consultancy said.
Three quarters of nations expected to be at high-risk or extreme risk of civil unrest by the fourth quarter of 2022 were middle-income countries, as defined by the World Bank, Verisk Maplecroft said in an update to its political risk monitor.
"Unlike low-income countries, they were rich enough to offer social protection during the pandemic, but now struggle to maintain high social spending that is vital to the living standards of large sections of their populations," the report found here.
Argentina, Tunisia, Pakistan and Philippines were also among the countries to watch in the next six months, the authors said, pointing to their high dependency on food and energy imports.
Russia’s war in Ukraine has accelerated a rise in food prices, which hit an all-time record in February and again in March. Energy prices also rose sharply.
“With no resolution of the conflict in sight, the global cost of living crisis will continue deep into 2023,” the report said.
Lebanon, Senegal, Kenya and Bangladesh face similar pressures.
The report pointed to Sri Lanka and Kazakhstan as examples of middle income countries that have already suffered unrest this year. 

The former saw rising food and fuel prices contribute to escalating tensions, while an attempt to cut fuel subsidies sparked protests in Kazakhstan.
Civil unrest could hamper a potential economic recovery but also deter investors focused on environmental, social and governance (ESG) factors, it said.
“Some countries risk falling into a vicious cycle, whereby worsening governance and social indicators make them ESG investment pariahs, impeding the inflows needed to improve economic performance and address societal needs.”
The report found that more than 50% of the almost 200 countries covered by the index have experienced an increase in civil unrest since the COVID-19 pandemic hit.

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The Phenomenon is spreading like wildfire in large part because of the tinder dry conditions underfoot.
Emerging Markets


Prolonged stand-offs eviscerate economies, reducing opportunities and accelerate the negative feed- back loop.

Antonio Gramsci wrote, “The crisis consists precisely in the fact that the old is dying and the new cannot be born; in this interregnum, a great variety of morbid symptoms appear. now is the time of monsters.”

Ryszard Kapucinski also said: “If the crowd disperses, goes home, does not reassemble, we say the revolution is over.”
It is not over. More and more people are gathering in the Streets.

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Paul Virilio Speed and Politics
Emerging Markets


“The revolutionary contingent attains its ideal form not in the place of production, but in the street, where for a moment it stops being a cog in the technical machine and itself becomes a motor (machine of attack), in other words, a producer of speed.’’



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Sri Lanka orders 'offensive' to contain riots @AFP
Emerging Markets


Sri Lankan police have been ordered to go on the offensive and use live ammunition to prevent "anarchy", a top official told AFP Wednesday after another night of sporadic arson attacks.
Police say eight people have died since Monday, when frustration at a dire economic crisis erupted into violence between backers and opponents of President Gotabaya Rajapaksa, injuring over 200.
Even with a curfew and thousands of security forces told to "shoot on sight" to prevent further unrest, a luxury hotel said to belong to a Rajapaksa relative was set ablaze Tuesday evening.
"It is no longer spontaneous anger, but organised violence," the senior security official said on condition of anonymity.
"If the situation is not brought under control, there could be total anarchy."
He said the 85,000-strong police "have been asked to adopt an offensive stance", and have been ordered to use live ammunition against troublemakers.
As well as the hotel fire, on Tuesday evening police said they shot into the air at two locations to disperse mobs trying to torch vehicles.
They also stepped up security for several judges, saying they were targeted too.
- Gota go -
On Wednesday, protestors defied the curfew and remained camped out in front of the president's office.
"We want the whole Rajapaksa clan out because they are so, so corrupt. They have been eating into Sri Lanka like a caterpillar eating into some fruit or leaf," activist Kaushalya Fernando told AFP.
In a tweet, Rajapaksa on Wednesday called for "all Sri Lankans to join hands as one, to overcome the economic, social & political challenges".
But the main opposition SJB party reiterated they will not be a part of any government with Rajapaksa still president, even after his brother Mahinda's resignation as prime minister on Monday.
Rajapaksa's government in 2020 restored the president's constitutional right to appoint and fire ministers as well as judges.
"In the guise of angry mobs, violence is being incited so military rule can be established," SJB head Sajith Premadasa tweeted.
"Rule of law should be maintained through the constitution not with GUNS. It is time to empower citizens not disempower them."
- Turning point -
Sri Lankans have been suffering shortages of essential goods, fuel and medicines for months in the island's worst downturn since independence in 1948.
But the crisis moved into a darker phase on Monday when government supporters with sticks and clubs attacked demonstrators who had been protesting peacefully for weeks demanding the president's resignation.
Mobs then retaliated across the country late into the night, torching dozens of homes of ruling-party politicians.
Mahinda Rajapaksa had to be rescued in a pre-dawn military operation on Tuesday and taken to a naval dockyard for safety after protesters tried to storm his official residence.
One ruling-party politician gunned down two people on Monday night after his car was surrounded. Another shot dead a 27-year-old man and them himself, police said.
Echoing the UN rights chief and the European Union, the United States on Tuesday said it was concerned both with the violence and the deployment of the military.
"We stress that peaceful protesters should never be subjected to violence or intimidation, whether that's on the part of the military force or civilian units," State Department spokesman Ned Price told reporters.
India, meanwhile, was forced to deny social media rumours -- some using old images of Mahinda boarding a helicopter -- that it was helping family members to flee.
"The High Commission would like to categorically deny speculative reports in sections of media and social media about India sending her troops to Sri Lanka," it said.
With vital tourism torpedoed by the pandemic, Sri Lanka last month defaulted on its foreign debts of $51 billion, some of it stemming from Rajapaksa vanity projects built with Chinese loans.
The International Monetary Fund this week began a "virtual mission" of staff-level talks on a possible bailout.
IMF mission chief Masahiro Nozaki said the lender aimed to be "fully prepared for policy discussions once a new government has been formed."


23. Sri Lankan police have been ordered to go on the offensive and use live ammunition to stop rioting, a top official told AFP (AFP/ISHARA S. KODIKARA) ISHARA S. KODIKARA


We need to ask ourselves; how many people can an incumbent shoot stone cold dead in such a situation – 100, 1,000, 10,000?

http://bit.ly/2PoFJTD

This is another point: there is a threshold beyond which the incumbent can’t go. Where that threshold lies will be discovered in the throes of the event.

The Event is no longer over the Horizon.

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Inflation Rate at 23.6% Puts Focus on Ghana’s Central Bank @markets
Africa


Ghana’s inflation rate climbed to the highest level in more than 18 years in April, underscoring the dilemma the central bank faces in trying to balance its efforts to stop intolerable price growth persisting and boosting the economy. 
Annual inflation quickened to 23.6%, the highest since January 2004, from 19.4% in March, Government Statistician Samuel Kobina Annim told reporters Wednesday in Accra, the capital. The median estimate of five economists in a Bloomberg survey was 21.2%.
Headline inflation, stoked by higher costs of imported goods such as cooking oil and gasoline due to the war in Ukraine and Indonesia’s ban on palm oil exports, is now more than twice the top of the central bank’s target band of 6% to 10% and has been above the range for eight months. 

For the first time in 29 months imported items surpassed locally produced items, Annim said.
Food-price growth surged to 26.6% year-on-year from 22.4% in March and non-food inflation accelerated to 21.3% in April from 17% the previous month. Prices jumped 5.8% in the month. 
“The monetary policy committee of the central bank will have a nail-biting decision to make,” Courage Martey, an economist with Accra based Databank Group, said by phone ahead of the release.  
While inflation is high it is also straining economic growth together with slowing global output and a 2.5 percentage point increase in March in the key interest rate, the biggest hike since at least 2002. 

The S&P Global Ghana Purchasing Managers’ Index has been below 50 since February, indicating a deterioration in business conditions. 
“Any attempt by the central bank to tighten monetary policy further will be an attempt to squeeze water out of stone,” Martey said. 

“Inflation hasn’t peaked yet, so the MPC would want to avoid creating a perception of chasing inflation when it should be ahead of the inflation curve.”
Ghana’s MPC is scheduled to announce its next rate decision on May 23.

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Kenya Presses On With Eurobond Plan as Yields Rise @markets @herbling
Kenyan Bills & Bonds - Short Term


Kenya’s Eurobonds are not exactly investors’ favorites. 

But the East African nation is forging ahead with a plan to issue another $1 billion of debt on top of existing securities that are the continent’s worst performers this year.
It could cost the country, which is approaching an election in August and whose debt is at high risk of distress, according to International Monetary Fund. 

Yields on benchmark 10-year notes have almost doubled since January to 11.22%, suggesting investors will demand a hefty premium for new issuance.

East Africa’s biggest economy needs to plug a budget deficit projected at 8.1% of gross domestic product in the year through June, at a time when economic growth is slowing and spending pressures are rising ahead of the vote. 

Meanwhile, foreign-exchange reserves are dwindling as the central bank shores up the currency, which is at a record low against the dollar.

“It is not an ideal time to be going to market,” said Yvonne Mhango, Renaissance Capital’s head of research for Africa. “Kenya may need to pay up to garner interest, which implies a costly issuance.”

Domestic financing, bank loans or concessional loans from multilaterals could be alternative sources of budget financing, Mhango said. 

But with $2 billion of eurobonds maturing in June 2024, the country will need external financing too, according to Moody’s, which rates Kenya’s foreign debt B2, or five steps into junk, with a negative outlook.

“While the government has alternatives in the near term, its ability to roll over its $2 billion 2024 maturity will rely on its ability to issue a eurobond because such a sizeable maturity would be difficult to meet from domestic sources, as well as drain FX reserves,” said David Rogovic, vice-president and senior analyst at Moody’s.

The government still intends to tap the market before the end of June, Treasury Secretary Ukur Yatani said last week, even after his department expressed concern in a document that rising global yields meant borrowing might be too expensive at this time.
Declining Issuance
Other emerging-market issuers are holding off as rising U.S. yields and risk aversion due to the war in Ukraine push up borrowing costs. 

Emerging-market eurobond issuance declined by 37% in the first quarter compared with last year, according to Moody’s Investors Service. Sales from Africa and the Middle East dropped by more than half.
Kenya’s “timing is out of necessity rather than preference,” said Connor Vasey, an analyst at Eurasia Group. 

Absent significant belt-tightening or cheaper financing sources, the need to balance the books by end-June is a constraint for the Treasury, he said.
President Uhuru Kenyatta, who is due to retire, is racing to wrap up legacy infrastructure projects in farming, housing, manufacturing and universal health care. 

Growth is seen slowing down to 6.7%this year after expanding at the fastest pace in more than a decade in 2021.
The world’s biggest exporter of black tea has seen its eurobonds shed 19.2% this year, the worst performance among African sovereign borrowers and on par with Sri Lanka, which is close to default. 
“The pricing prospects of June’s Eurobond are not rosy for the Kenyan government,” said Benjamin Hunter, an analyst at risk consulting firm Verisk Maplecroft.

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@SafaricomPLC reports FY EPS +1.75% earnings
N.S.E Equities - Commercial & Services


Par Value:                  0.05/-
Closing Price:           32.25
Total Shares Issued:          40065428000.00
Market Capitalization:        1,292,110,053,000
EPS:             1.74
PE:               18.53

Safaricom reports FY Earnings through 31st March 2022 versus 31st March 2021

FY Service Revenue 281.107b versus 250.351b +12.3%

FY Handsets & Other Revenue 16.527b versus 12.316b +34.2%

FY Total Revenue 298.077b versus 264.026b +12.9%

FY Direct Costs [91.467b] versus [80.015b] +14.3%

FY Provision for expected credit loss [ECL] on receivables [2.361b] versus [3.009b]

FY Operating expenses [55.187b] versus [46.034b] +19.9%

FY Profit before Income Tax 102.213b versus 93.635b +9.2%

FY Profit after Tax 67.496b versus 68.676b [1.7%]

FY EPS 1.74 versus 1.71 +1.75% 

Commentary 

M-PESA revenue rebounded strongly recording a 30.3% YoY growth to KShs 107.69Bn in financial year 2021/2022 (FY22). 

This was supported by resumption to charging of previously zero rated transactions beginning January 2021. 

Increased usage continues to fuel growth as one month active M-PESA Average Revenue per User (ARPU) rose 18.9% YoY while chargeable transactions per month per customer grew 16.6% YoY to 20.3 transactions. 

Velocity in the ecosystem continues to grow driven by our business and financial services solutions including payments, lending & savings and international remittances. 

Total M-PESA transactions value grew 34.0% YoY to KShs 29.55Trn while volume of transactions grew 34.9% YoY to 15.75Bn.
During the year, we launched the M-PESA Super App for customers and M-PESA Business App with Mini-Apps functionalities to power digital consumer lifestyles and empower businesses. 

Downloads for the Super App stood at 5.3Mn while business App downloads were 462k as at end of FY22.
Mobile data revenue recovered strongly in the second half (H2) FY22 growing 10.0% YoY to 24.81Bn, 6.3% in half one (H1) FY22 to KShs 23.63Bn and 8.1% YoY to KShs 48.44Bn in FY22, supported by our Customer Value Management (CVM) initiatives driving personalised offers to our customers. 

Average rate per MB declined further by 31.2% YoY to 8.88 cents while usage per chargeable data subscriber grew 60.5% YoY to 2.3GB. 

Mobile Data ARPU increased 10.4% to KShs 205.73. Active 4G devices rose 29.3% YoY to 10.95Mn of which 51.3% are 4G handsets using more than 1GB. 

Data customers using more than 1GB in our network grew 26.5% YoY to 7.7Mn. 

Mobile data now accounts for 17.2% of Service Revenue.
We remain committed to investing in a superior network quality for our customers and deepening mobile internet penetration through enhancing network coverage, increasing 4G handset penetration and driving affordability of data. 

Our 4G population coverage now stands at 97% and smart phones on our network grew 10.2% to 18.5Mn.
Fixed service and wholesale transit revenue grew 18.3% YoY to KShs 11.24Bn driven by increased activity and penetration of FTTH and growth in Enterprise fixed data revenue. 

The growth was supported by 16.9% increase in Enterprise revenue to KShs 7.05Bn as well as 20.6% growth in Consumer revenue to KShs 4.19Bn. 

FTTH customers grew 20.8% YoY to 165.98k. Fixed Enterprise customers grew 24.1% YoY to 48.31k, of which 58.9% account for LTE customers and grew 33.2% YoY to 28.47k.
Capital expenditure for the year ended 31 March 2022 stood at KShs 49.78Bn growing at 42.4% YoY. KShs 10.4Bn of this was spent in setting up our network in Ethiopia in readiness to launch operations within 2022.
Borrowings
As at 31 March 2022, borrowings were KShs 65.31Bn while cash and cash equivalents stood at KShs 30.78Bn leaving a net debt position of KShs 34.53Bn. 

To support the payment of license fees for the telecommunications license awarded to the Safaricom-led consortium by the Government of Ethiopia in 2021, we undertook a one-year bridge facility of USD 400Mn to finance this venture. 

During the year, the bridge facility was converted into a 5-year long term facility of USD 120Mn, and a KShs 31.1Bn (USD 280Mn KShs equivalent) 7- year facility with 2 years moratorium on principal repayment. 

The new facility was done through a syndication process where both local and international banks participated in.
Dividends
During the year, an interim dividend of KShs 0.64 per Ordinary share amounting to KShs 25.64Bn (2021: KShs 18.03Bn) was declared. 

At the AGM to be held on 29 July 2022, a final dividend in respect of the year ended 31 March 2022 of KShs 0.75 per ordinary Share amounting to a total of KShs 30.04Bn is to be proposed for approval. 

This brings the total dividend for the year to KShs 55.69Bn (2021: KShs 54.89Bn) which represents KShs 1.39 per share in respect of the year ended 31 March 2022 (2021: KShs 1.37 per share).

Conclusions

Fairly priced around here given the continuing Ethiopia spend.

M-PESA clearly the stand out. 

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TPS Eastern Africa Ltd. (Serena) reports FY 2021 Earnings here
N.S.E Equities - Commercial & Services


Par Value:                  1/-
Closing Price:           12.00
Total Shares Issued:          182174108.00
Market Capitalization:        2,186,089,296
EPS:             -3.4
PE:              

TPS Eastern Africa Ltd. reports FY 2021 Earnings versus FY 2020

FY 21 Revenue from contracts with Customers 3.287798b versus 2.034160b

FY 21 Profit / Loss before depreciation finance income [costs] results of associates and income tax credit [expense] 284.513m versus [437.785m] +165%

FY 21 Finance costs [325.002m] versus [586.137m]

FY 21 Depreciation on right of use asset [44.531m] versus [43.919m]

FY 21 Depreciation on property and equipment [577.742m] versus [496.064m]

FY 21 Share of loss of associates [41.225m] versus [95.004m]

FY 21 Loss before Income Tax [703.987m] versus [1.658909b]

FY 21 Income tax credit 71.046m versus 448.902m

FY 21 Loss for the Year [632.941m] versus [1.210007b]

FY 21 EPS [3.4] versus [6.32]
FY 21 Cash and Cash equivalents 93.234m versus [133.596m]


Commentary

second half of Year 2021 witnessed a reassuring improvement in business trends

Group managed to defer senior debt repayments 

Conclusions

an improving Trajectory but evidently a long haul back to even 

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@Serenahotels Mombasa Indian Ocean
Africa

Interview with: Mahmud Jan Mohamed, MD @SerenaHotels @YouTube
https://www.youtube.com/watch?v=qXiD7W9lIJ0

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by Aly Khan Satchu (www.rich.co.ke)
 
 
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May 2022
 
 
 
 
 
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