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September 23, 2018

Putin is a Grandmaster

Its all about political and geopolitical volatility now. And that volatility is emanating from one place which is quite extraordinary. 
The IMF characterised the situation as follows ''The Global Expansion: Still Strong but Less Even, More Fragile, Under Threat''
Russia's FM Lavrov said the Vladimir Putin and Donald Trump talks went "better than super" HelsinkiSummit. 
The Helsinki Summit presser was mind boggling and reminded me of a predator [Putin] who has his prey captured and cannot quite believe it and has to suppress his very natural instinct to kill the prey.
Putin is a GrandMaster and it all starts with recognising him as such ~ look at the Return on Investment. It is said Russia's economy is the size of Italy's
Netflix plunged 14% in after hours trading after announcing it added 5.2m users in the period and missed analysts expectations. 
Investors value Netflix at a far higher level than other media companies of similar size because of that potential for future growth. Its market valuation surpassed that of Walt Disney Co. this year, despite reporting less than a quarter of the revenue [Bloomberg]
But the Los Gatos, California-based company hit a milestone: International customers accounted for a bigger piece of sales than domestic users.
And thats the point - The new market is the international one and Netflix is only just getting started. Buy Netflix heavily at the current price of $349.00.
Its my second recommended trade of the year after Twitter which I recommended on January 2
WTI Crude Oil was last at 67.26 a barrel some ways off 2018 highs around $75.00.
In an interview with Reuters in Johannesburg, OPIC CEO Ray Washburne warned that the Chinese strategy created a debt trap for many poor nations.
“Just look at any project in these countries and they’re overbuilding the size,” he said. “We try to have countries realize that they’re indebting themselves to the Chinese.”
Washburne is not the first to warn of growing debt linked to Chinese infrastructure projects.
International Monetary Fund Managing Director Christine Lagarde in April cautioned China’s Belt and Road partners against considering the financing as “a free lunch”.
On June 18, I said  ''So the first overarching point, is that creditors are not Santa Claus and miscues will exact a very heavy price, countries will be "Hambantota-ed"''
Angola braved the #Eurobond market yesterday, issuing $500m to increase its $1.25bn deal from May. 
The Kenya Shilling was last trading at 100.63 and is +2.9% year to date and the best performing African currency versus the dollar in 2018, which is a noteworthy outcome. Sharply higher inward remittances and unexpectedly higher ''amnesty'' monies have supported.
Commercial and Services

Safaricom is in "advanced  talks" to introduce M-Pesa in Ethiopia, according to Reuters. Started in 2007, M-Pesa has nearly 30 million users in Kenya.
O June 6 said: '' I fully expect Vodacom to work through Safaricom PLC.
This can add up to 20% to Safaricom's share price. Its a big deal and Ethiopia is a 100m market and ripe for the taking for M-PESA in particular''
This is a big deal. Safaricom rallied +1.77% to close at 28.75 and traded 3.96m shares worth 113.899m. There is plenty of scope to the upside. Safaricom sits -12.21% below a record closing high set in early April and that is a near term target. 
Industrial and Allied 
The CS Energy said that although he supported the fight against corruption, the crackdown at the power utility firm that netted 19 top managers was in bad faith and a mockery of the rules of natural justice.
The CS compared the operation that almost crippled Kenya Power to the 1993 fatal plane crash that killed an entire Zambian national football team. 
The issue for investors is whether the current intervention is sufficient. Most investors I speak to were looking at a parachuting in of an independent turn-around specialist at the minimum. KPLC retreated -2.29% to close at 6.40 and traded 723,100 shares. 
KPLC is -29.67% in 2018. 
ARM Cement has been a white-knuckled roller coaster ride in 2018. ARM slumped -80.38% start of the year through early June when it closed at an 11 year low of 2.55. Like a Phoenix rising from the ashes ARM then rallied +88.23% early June through this mornings open. ARM corrected -6.25% today to close at 4.50 and traded 1.287m shares. After all that ARM remains -65.38% in 2018. 

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