Morning Brief – De-Dollarization in Africa

De-Dollarization in Africa

More on this story with real life examples of countries or rather one country in particular not just talking about it, but actually doing it: China. Bank of China has operations in Kenya, South Africa and Zambia. But when arriving at Kenneth Kaunda International Airport in the Zambian capital of Lusaka, Bank of China advertisements feature prominently not just offering their services but promoting cash, trade and financing denominated in Chinese Yuan. Egypt has already issued so called Panda Bonds to the tune of just under $500 billion equivalent in Chinese Yuan and now Kenya is also contemplating coming to the Panda Bond market.

USD/CNY 7.1960.

Shrinkflation

This is the phenomenon when stressed retailers instruct their suppliers to make products in smaller packages and hope that their customers do not notice and continue to pay the same price for smaller amounts. Sometimes described as skimpflation, but pretty much the same thing. The real art of course is to stock the supermarket shelves with smaller amounts of the same product and at the same time raise the price. Surely not, you will be saying. Well here are a couple of examples: Listerine Mouthwash reduced in size from 600ml to 500ml but up in price by 52p making it a 21% rise for 17% less which makes a total increase of 46%. Lurpak Slightly Salted Butter smaller at 180g from 225g, Coffee Mate Whitener down from 500g to 450g and we could go on. UK supermarket Tescos are in the firing line and it may go some way in explaining its recent strong performance and the 20% rise in its share price over the past 6 months to its current 295p.

GBP/USD 1.2705.

Germany

According to Christian Lindner, German Finance Minister speaking at the World Economic Forum in Davos last week, Germany is not the sick man of Europe economically despite its 2024 zero growth outlook and anaemic -0.3% performance in 2023. Rather, Germany can be likened to someone who has had a heavy night out with little sleep and is in need of a cup of coffee. Well worth the cost of attending the WEF together with the reported wine shortage to hear that particular pearl of wisdom.

EUR/USD 1.0900.

Set-Jetting

No dyslexia here nor a case of Sheridan’s Mrs Malaprop: this is the description of people basing their holiday destination choices on places that have featured in TV Programs and Films. Here are a few examples which are remarkably consistent in numbers across the board in every case with roughly 6% of customers booking Greece purely because for example they have seen Mama Mia. Other places are NYC due to Sex and the City; Majorca-Love Island; Paris-Emily in Paris; Croatia-Game of Thrones, Sicily-White Lotus and NZ-Lord of the Rings. Even Korea gets a look in with fans of Squid Game making tracks to Seoul.

GBP/EUR 1.1650.

If I could turn back time

It was this day in 1985 when critic Mr Blackwell in his annual list, named his worst dressed women of 1984. In gold medal position was Cher with Cyndi Lauper at Number 4 while Prince despite being mostly male could only manage the Number10 slot. Mr Blackwell is over while the well preserved Cher has gone from strength to strength musically if not sartorially -at least according to the long forgotten Mr Blackwell.

If I could turn back time
If I could find a way
I’d take back those words that have hurt you
And you’d stay

I don’t know why I did the things I did
I don’t know why I said the things I said
Pride’s like a knife, it can cut deep inside
Words are like weapons, they wound sometimes

I didn’t really mean to hurt you
I didn’t wanna see you go
I know I made you cry, but baby

If I could turn back time
If I could find a way
I’d take back those words that have hurt you
And you’d stay
If I could reach the stars
I’d give ’em all to you
Then you’d love me, love me
Like you used to do
(If I could turn back time)

My world was shattered, I was torn apart
Like someone took a knife and drove it deep in my heart
When you walked out that door
I swore that I didn’t care
But I lost every thing, darlin’, then and there

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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