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Satchu's Rich Wrap-Up
 
 
Thursday 19th of May 2022
 
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Africa

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The @POTUS Official Who Pierced Putin’s Sanction-Proof Economy @NewYorker
Law & Politics


Singh said, “We’ve made him stare into an economic abyss. But he could choose to pull back.”
The markets are where these two systems touch—the supply of buckwheat, the joint energy ventures, the price of the ruble—and within this arena the sanctions were a demonstration that Washington still had levers to pull. 

“You know, we can play chess, too,” Singh said. “It was important for us to show that the fortress could come crumbling down.”

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When sanctions miss the target
Law & Politics


There is awful lot of self-congratulatory nonsense around about the EU's cohesion after Vladimir Putin's attack. 

We are not part of that consensus. We think they have not thought this through.
The data we are getting about money flows to Russia suggest that the sanctions have proved a giant own goal. 

We have succeeded in making oil and gas much more expensive, but we failed to reduce consumption to offset the price effect. 

The result is that we have provided Putin with a massive windfall gain from energy sales. 

This is worse than if we had done nothing, or if we had imposed a complete energy embargo from day one. 

This is an example where the EU way of lazy middle-ground compromise gives rise to very worst potential outcome. During the sovereign debt crises, we noted similar phenomena.
We reported yesterday on Russia’s all time record current account surplus for the first four months. 

Robin Brooks from the Institute of International Finance calculated that the April figure alone constitute a seven-fold (!) increase compared to the average of the last 20 years. 

How is this possible, given that Russian oil should be essentially off market by now? 

Data on shipping movements suggest that Greek tankers are making this possible, according to Brooks.
Janis Kluge, from the SWP think-tank in Germany, makes another important point: Putin is getting so much money now that he may be able to afford to impose gas sanctions on us later in the year.

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Sunday, April 10 ‘You can print money, but not oil to heat or wheat to eat’ wrote @CreditSuisse’s Zoltan Pozsar.
Law & Politics


Russia essentially gave the $ and the Euro the very same exorbitant privilege that King Abdul Aziz Ibn Saud of Saudi Arabia gave President Franklin D Roosevelt aboard the USS Quincy in Great Bitter Lake in February 14, 1945 when the petro dollar economy was symbolically born.

By insisting payments are made in Russian Rubles for Russian commodities Vladimir Putin has withdrawn that exorbitant privilege.
The Russian Ruble rally is real and has much further to go.

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Unprecedented windfalls for Putin that keep rising @RobinBrooksIIF
Law & Politics


Russia's current account surplus usually declines as temperatures in Europe rise and demand for energy falls. From 2007 - 2011, the surplus averaged $9.9 bn in Jan, $8.3 bn in Feb, $8.4 bn in Mar & $6.7 bn in Apr. Not in 2022. Unprecedented windfalls for Putin that keep rising...

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There's a Whiff of Fearful Symmetry in the Air @opinion @johnauthers
World Of Finance

The combined Walmart/Amazon market cap first passed $1 trillion in 2018, and then topped $2 trillion last year. In the last six months, they’ve jointly shed $850 billion

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Currency Markets at a Glance WSJ
World Currencies

Euro 1.049525
Dollar Index 103.67
Japan Yen 128.8625 
Swiss Franc 0.98591 
Pound 1.238500 
Aussie 0.701030 
India Rupee 77.6715
South Korea Won 1273.875
Brazil Real 4.9688000
Egypt Pound 18.2593
South Africa Rand 15.99365 

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Mali’s military ejects France but faces serious challenges @peoplesdispatch @vijayprashad
Africa


On May 2, 2022, a statement was made by Mali’s military spokesperson Colonel Abdoulaye Maïga on the country’s national television, where he said that Mali was ending the defense accords it had with France, effectively making the presence of French troops in Mali illegal. 

The statement was written by the military leadership of the country, which has been in power since May 2021.

Colonel Maïga said that there were three reasons why Mali’s military had taken this dramatic decision. 

The first was that they were reacting to France’s “unilateral attitude,” reflected in the way France’s military operated in Mali and in the June 2021 decision by French President Emmanuel Macron to withdraw French forces from the country “without consulting Mali.” 

France’s military forces moved to nearby Niger thereafter and continued to fly French military planes over Malian airspace. 

These violations of Malian airspace “despite the establishment of a temporary no-fly zone by the Malian military authorities” constituted the second reason for the new declaration, according to the statement. 

Thirdly, Mali’s military had asked the French in December 2021 to revise the France-Mali Defense Cooperation treaty. 

Apparently, France’s answer to relatively minor revisions from Mali on April 29 displeased the military, which then issued its statement a few days later.

Over the past few years, French forces in Mali have earned a reputation for ruthless use of aerial power that has resulted in countless civilian casualties. 

A dramatic incident took place on January 3, 2021, in the village of Bounti in the central Mopti region of Mali, not far from Burkina Faso. 

A French drone strike killed 19 civilians who were part of a wedding party. 

On the day that the Malians said that the presence of French troops on their soil was illegal with the ending of the defense accords, United Nations Secretary-General António Guterres paid a visit to neighboring Niger. 

When France’s army withdrew from Mali, they relocated to Niger, whose president, Mohamed Bazoum, tweeted his welcome to these troops. 

Guterres, standing beside Bazoum, said that terrorism is “not just a regional or African issue, but one that threatens the whole world.”

No one denies the fact that the chaos in the Sahel region of Africa was deepened by the 2011 NATO war against Libya. 

Mali’s earlier challenges—including a decades-long Tuareg insurgency and conflicts between Fulani herders and Dogon farmers—were now convulsed by the entry of arms and men from Libya and Algeria. 

Three jihadi groups appeared in the country as if from nowhere—Al Qaeda in the Islamic Maghreb, Movement for the Unification of Jihad in the African West, and Ansar Dine. 

They used the older tensions to seize northern Mali in 2012 and declared the state of Azawad. French military intervention followed in January 2013.


a famous 2017 audio message, Amadou Koufa said, “The day that France started the war against us, no Fulani or anyone else was practicing jihad.” That kind of warfare was a product of NATO’s war on Libya and the arrival of Al Qaeda, and later ISIS, to seek local franchise with local grievances to nurture their ambitions.

This landlocked state of more than 20 million people imports 70% of its food, the prices for which have skyrocketed in recent weeks, and could further worsen food insecurity in Mali. 

Part of the instability of the post-NATO war has been the military coups in Mali, Guinea and Burkina Faso. 

Mali faces harsh sanctions from the Economic Community of West African States (ECOWAS), sanctions that will only deepen the crisis and provoke greater conflict north of Mali’s capital, Bamako.

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For a while regime change was de rigeur
Africa


Muammar Gaddafi was decapitated and the domino effect only stopped when Vladimir Putin decided he was going to put a stop to it and intervened on behalf of Bashar Al-Assad in Syria.

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.@WilhelmSasnal Wilhelm Sasnal Gaddafi 1 2011 @Tate
Africa


Gaddafi 1 depicts the body of the Libyan dictator Muammar Gaddafi, who was killed by rebel fighters on 20 October 2011. 

Rather than show the corpse directly, Sasnal depicts an amorphous mass of paint resting on what appears to be a mattress. 

The thick impasto of the oil paint, alludes to the ripped and torn body of the dictator, contrasting sharply with the flat paint work of the surrounding space. 

Gaddafi 1 is the first in a group of three paintings based on digital images of the violent death of Gaddafi, the others being Gaddafi 2 2011 (Tate T14240) and Gaddafi 3 2011 (Tate T14242). 

It is the smallest painting in the group and the only one to focus exclusively on the body of the dictator.

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Perspective here is from below, looking up at the militia. This gives a posthumous view and a potential empathy with the victim. Posted on January 16, 2020 by Michaelpalmerstudio
Africa


In composition the painting in Sasnal’s typical style in that the original digital image has been cropped to great effect which focuses on the observers while the use of colour is economical, and a simple palette of pail pinks and greys used to present an image stripped bare of superfluous brushwork. 

The victim is powerless, and with perspective the viewer is equally bereft of agency with the shadowed militia bearing down upon them. 

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‘Gaddafi 3’ (2011) Wilhelm Sasnal Tate Modern @Tate
Africa


This is not portraiture. As with the entire series ambiguity and confusing permeate through each painting, graphic and disturbing and yet all seem to have a solemnness about them, maybe the enormity of what had transpired fell on the shoulders of those present? 

The scale and palette of this work gives it a direct physical relationship between the viewer and the militia who are observing their quarry. 

The dramatically foreshortened figure literally falling off the bottom edge of the canvas recalls Andrea Mantegna’s painting Lamentation of Christ (1480). 

And is a work driven by his internal conflict after the former leader’s corpse was displayed on a supermarket Refrigerator’s floor. 

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24 OCT 11 :: Gaddafi's Body in a Freezer - What's the Message?
Africa


The raw feed of the capture and then death of the Libyan dictator Muammar Gaddafi and his son Mo’tassim Gaddafi raise plenty of questions. 

The bodies are currently lying side by side, bloodied and half-naked on a filthy mattress in a meat locker, in Misrata.
John Donne wrote: “... Therefore, send not to know for whom the bell tolls, It tolls for thee...”
I am left thinking, this dead Gaddafi business is one powerful message. 

And today Marshall McLuhan’s prediction in The Gutenberg Galaxy (1962) that ‘The new electronic interdependence recreates the world in the image of a global village’ has come to pass. 

The image of a bloodied Gaddafi, then of a dead Gaddafi in a meat locker have flashed around the world via the mobile, YouTube and Twitter.
Who is in charge of the messaging? Through the fog of real time and raw footage, I note a very powerful message. The essence of that message being;
‘Don’t Fxxk with us! Be- cause you will end up dead and a trophy souvenir in a fridge.’ 

That same person is probably repeating Muammar’s comment, “I tell the coward crusaders: I live in a place where you can’t get me. I live in the hearts of millions.”
And asking ‘Really? Are You? Or are you now very dead and in a meat locker?’

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Oil blocks that the Democratic Republic of Congo plans to auction have reserves estimated at 16 billion barrels that would be worth more than $650 billion at current prices, according to the country’s oil minister. @markets
Africa


Preliminary data compiled by Texas-based GeoSigmoid still need to be confirmed by further exploration and “the discovery of economically profitable hydrocarbon deposits,” Minister Didier Budimbu said Saturday in a speech announcing the results. 

The estimates are based on an oil recovery rate of 35% and an average price of $107 a barrel. 
The 16 blocks will go on tender on July 28 and 29 in Kinshasa, the capital. 

The four blocks along the Tanganyika valley are forecast to have 7.25 billion barrels of reserves while the nine offered in the Cuvette Centrale, or central basin, have an estimated 6.4 billion barrels, according to Budimbu. 

The Ndunda block near the Atlantic coast has an estimated 130 million barrels, while Nganzi potentially has 2 billion barrels, and Yema/Matamba-Makanzi 800 million barrels, he said.
Congo is the largest country by landmass in sub-Saharan Africa with significant potential oil reserves but its current production is only about 25,000 barrels per day from aging oil blocks controlled by France’s Perenco SA on the Atlantic Ocean coast. 
While the blocks have potential to generate revenue in an impoverished nation whose budget for this year is projected at $11.1 billion, the tender offers have sparked concern among environmentalists over opening Congo’s massive rainforests and the world’s largest peatlands to exploration. 

The oil ministry said in a video presentation that the blocks were chosen “meticulously” and take into account the sensitivity of the country’s protected areas. 


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Politicians Drive Nigerian Naira to New Low Over Election Funding @bpolitics via @YahooFinance
Africa


Politicians in Nigeria are buying dollars to fund vote hunting in primary elections that start over the weekend, driving the local currency to new lows in the unauthorized parallel market.

The naira weakened to 600 against the greenback this week in the unregulated field, according to Abubakar Mohammed, a bureau de change operator that tracks the data in Lagos, the commercial capital. 

It’s the lowest the currency has traded this year in Africa’s most populous country, where the central bank maintains an official exchange rate that is tightly controlled.
The naira was trading at 417.72 as of 8.51 a.m Wednesday in the authorized market, where supplies are low. 

The parallel market thrives on the shortages in the official version, resulting in the 44% gap between rates.
There is huge demand for dollars in cash from politicians competing for support from delegates in the party primaries, Mohammed said by phone. 

“Demand is not going to abate soon, which means more pressure for the naira, and also because dollar supply is very low,” he said.
Nigeria’s two major political parties, the ruling All Progressives Congress and main opposition Peoples Democratic Party, plan to hold primary elections for legislative, governorship and presidential candidates from the weekend to early June. 

Some candidates give dollars to delegates as an incentive to get their votes.
Nigeria’s central bank could be forced to devalue the naira if it continues to weaken in the parallel market. It has done so with the currency three times since March 2020 in a bid to curb demand and close the gap between the official and unauthorized rate.
The central bank should improve supply of the greenback rather than suppress demand, Aminu Gwadabe, president of the Association of Bureau de change Operators of Nigeria, said by phone. There is a “lack of confidence in the local currency” Gwadabe said.

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@SafaricomPLC share data
N.S.E Equities - Commercial & Services

Closing Price: 29.45
Market Capitalization: $10.171b
EPS: 1.74
PE: 16.925

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Car & General (Kenya) Ltd reports HY Earnings
N.S.E Equities - Industrial & Allied


Par Value:                  5/-
Closing Price:           30.50
Total Shares Issued:          40103308.00
Market Capitalization:        1,223,150,894
EPS:             22.43
PE:                 1.360

Car and General reports HY Earnings through 31st March 2022 versus HY through 31st March 2021

HY Revenue 10.041278b versus 8.194696b +23%

HY Gross Profit 1.506238b versus 1.466985b

HY Other Income 119.252m versus 14.871m

HY Operating & administrative expenses [819.202m] versus [744.036m]

HY Share of profit in an associate 324.979m versus 188.773m

HY EBITDA 1.148056b versus 0.948345b

HY Finance Costs [268.197m] versus [192.687m]

HY Depreciation of Property Plant & Equipment [68.862m] versus [47.161m]

HY Depreciation of Right of Use Asset [72.266m] versus [50.112m]  

HY Profit before Taxation 698.010m versus 608.823m

HY Profit after Taxation 629.348m versus 460.615m +36% 

HY EPS 7.97 versus 5.75

Cash and cash equivalents 155.59m versus 214.574m


Commentary

The performance improved due to higher sales in all our businesses across East Africa. 

This is in spite of a challenging trading environment given global supply chain constraints which have led to significant price increases in all products and longer lead times from various destinations. 

The net result has been reduced margins and higher stock holdings. This has been exacerbated by a gradual devaluation of the Kenya shilling which also resulted in forex losses. 

From a balance sheet perspective, this has meant higher investments to fund continuous growth. 

We expect these conditions to persist for the remainder of this financial year.

Our trading operations, particularly in Kenya and Tanzania, have seen good growth in turnover but at reduced margins. Our Uganda trading operation has been stable.

The Poultry operation in Tanzania has also traded profitably due to stability in pricing and demand.
On Investment Property, Nairobi Mega on Uhuru Highway has seen higher footfalls due to fewer Covid restrictions and the near completion of the Nairobi Expressway.
Our joint venture with Cummins performed positively and is still striving to achieve targeted volume challenged by various constraints.
Our investment in Watu has performed well. Uganda, Tanzania and Sierra Leonne are operational.
Our helmet manufacturing subsidiary, Boda Plus, is making progress after 6 months of operation.

Conclusions

Its an attractive Prospect and attractively priced  

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