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Macro Thoughts

Looking at Gold because I think this anti Euro Dollar Pro Dollar Trade
is a Kneejerk one and that Gold is the Currency Hedge. These levels
look attractive.

Home Thoughts

We were watching It's Complicated with Meryl Streep and Alec Baldwin
[who has this wonderful cheeky Chappy type Look about him] this
weekend. It got a little racy and I am sort of squirming and the Wife
and Daughters turn to me and say DAD Oh Come on and the thing is I end
up wandering off because I find I am too embarrassed. I am sure this
is the wrong way around.

But any faint whiff of diplomatic encouragement that had been in the
air evaporated with yesterday's theatrical flourish from President
Ahmadinejad. Presiding at a televised meeting attended by the head of
Iran's atomic energy agency, Ali Akbar Salehi, the President turned to
him and ordered: "Mr Salehi, begin production of 20 per cent."

"We will hand over an official letter to the International Atomic
Energy Agency tomorrow, informing the agency that we will start making
20 per cent enriched fuel from Tuesday," Mr Salehi later told Iran's
Arabic-language state television station, al-Alam. The drama in Tehran
coincided with a warning from Germany to Iran that "patience is at an
end".

Conclusions

Launching Those Worms into Space was proof that the Man has a sense of
Humour, he was effectively taking the 'Worm' out of the International
Community. The Point is I think the Iranian Nuclear Capacity has
inflected and now he is calling Everyone's Bluff.

YANG YAO is Deputy Dean of the National School of Development and the
Director of the China Center for Economic Research at Peking
University.

Since China began undertaking economic reforms in 1978, its economy
has grown at a rate of nearly ten percent a year, and its per-capita
GDP is now twelve times greater than it was three decades ago. Many
analysts attribute the country's economic success to its
unconventional approach to economic policy -- a combination of mixed
ownership, basic property rights, and heavy government intervention.
Time magazine's former foreign editor, Joshua Cooper Ramo, has even
given it a name: the Beijing consensus.

Since the Chinese Communist Party (CCP) lacks legitimacy in the
classic democratic sense, it has been forced to seek performance-based
legitimacy instead, by continuously improving the living standards of
Chinese citizens. So far, this strategy has succeeded, but there are
signs that it will not last because of the growing income inequality
and the internal and external imbalances it has created.

The overall Gini coefficient -- a measure of economic inequality in
which zero equals perfect equality and one absolute inequality --
reached 0.47 in 2008, the same level as in the United States. More
disturbing, Chinese city dwellers are now earning three and a half
times as much as their fellow citizens in the countryside, the highest
urban-rural income gap in the world.

Between 2002 and 2007, Chinese exports grew by an annual rate of 29
percent, double the average rate during the 1990s.

The economy currently depends heavily on external demand, creating
friction among major trading partners. Savings account for 52 percent
of GDP, and consumption has dropped to a historic low. Whereas
governments in most advanced democracies spend less than eight percent
of government revenue on capital investment, this figure is close to
50 percent in China.

The Chinese government generally tries to manage such popular
discontent by providing various "pain relievers," including programs
that quickly address early signs of unrest in the population, such as
reemployment centers for unemployed workers, migration programs aimed
at lowering regional disparities, and the recent "new countryside
movement" to improve infrastructure, health care, and education in
rural areas.

Conclusions

Rumours of the Demise of the Beijing Consensus are just that Rumours.

Group of Seven financial leaders sought to downplay the threat
Greece's debt woes pose to the financial system amid growing concern
of contagion across the 16-member euro zone.

No one is really concerned about Greece—but people are concerned about
the potential contagion.

As of last week, there were about $77 billion of CDS contracts sold to
protect Greece's debt, according to the Depository Trust & Clearing
Corp., almost twice the $40 billion of a year ago. Greece has about
$408 billion in debt outstanding, according to its finance ministry.

As the debt of various nations has fallen in price, the value of these
CDS contracts, which serve as insurance on all kinds of debt, has
soared, enabling these investors to score hefty gains.

Some bearish investors argue that France, Belgium and other wealthier
European nations likely will have to step in and lead some kind of
bailout of their weaker brethren, putting pressure on their own fiscal
health. The cost of insuring five-year debt of those two nations has
jumped nearly 20% in the past five days, though it still would cost
well under $10,000 annually to insure $1 million of debt of both
nations.

Conclusions

At this Moment in time, the Market is trapped in the headlights when
it comes to Europe and hence the Flight from the Euro into the Dollar
and the Yen but at some moment and it might well not be that far away,
the Market will comprehenend that this is a Beauty Contest between
Ugly Sisters and then we will probably see a sharp run up in Gold. The
Underlying Metrics of Greece, the US, The United Kingdom look little
different, I am Afraid.

Aly-Khan Satchu
www.rich.co.ke

Euro 1.3639 - On the charts 1.3380 and then 1.2980 are the objectives
Dollar Index 80.21
UK Pound 1.56
Higher Beta Currencies
Rand 7.7490 - Targets 8.00
Real 1.8810
Aussie 0.8658

Conclusions

The Euro is Centre Stage with concerns about the PIIGS [The Term has
been outlawed by Barclays] Portugal, Ireland, Italy, Greece and Spain
front and centre. Investors are exiting the Euro for the Perceived
safety of the Dollar and the Yen, neither of which have much to
reccommend them other than the Fact that they are not the Euro.

2-Year Note*    2/32    0.771
3-Year Note*    5/32    1.261
5-Year Note*    10/32    2.240
7-Year Note*    12/32    3.010
10-Year Note*    10/32    3.571

Conclusions

Curve Flattens on a Flight to 'Safety'.

Tiger Woods has always been The Invisible Man. To him, the world was a
perfect place when he could walk down the 18th fairway on a Sunday
afternoon drinking in the cheers of his adoring fans, collect a large
trophy and a massive cheque, say a few words on the engrossing subject
of birdies and bogeys in the media tent and then – poof! – become
invisible until it was time to tee it up again. Sure, there were
occasional Tiger-spottings: Tiger front row at a basketball game;
Tiger laughing it up some place with another sports celebrity such as
Roger Federer, Michael Jordan or Indianapolis Colts quarterback Peyton
Manning. Even those rare appearances felt staged, as if they were part
of the non-stop image-crafting being done by Tiger and his managers at
IMG. In fact, the celebrity connections Tiger made were usually
business-related: he, Federer and Jordan were all Nike endorsers, and
he and Manning were both represented by IMG. Coincidence? Hardly.

Think about it: at least one of Woods's affairs had been going on for
31 months before it became public. The most famous athlete on the
planet, arguably one of the most famous people on earth, was carrying
on with a woman in Las Vegas for 31 months and the story never
leaked.If nothing else, Tiger Woods built a wall around himself that
was almost impenetrable. Even now, with the wall broken, his number
one goal seems to be not so much to repair his marriage as to repair
his wall.

Here's what we do know about Earl: he taught his son very early that
you give away nothing and you control everything.

There again, though, is a glimpse into Tiger's view of the world. When
he was 21 and getting ready to play in his first Masters as a pro
(which he went on to win by 12 shots), Tiger had lunch with Arnold
Palmer in the champions' locker room at Augusta. Tiger spent a lot of
time grousing about how tough his life was. "I can't be a normal
21-year-old," he said. "I have to talk to the media all the time, sign
autographs, do photo-shoots for sponsors…"

When Woods finally stopped, Palmer looked at him and said: "You're
right, Tiger, you're not a normal 21-year-old. Normal 21-year-olds
don't have $50m in the bank. If you want to be a normal 21-year-old,
that's fine – give the money back."

All of which leads to the most oft-asked question in this entire
tangled web: how could one of the great control freaks of history
allow himself to completely lose control of his life this way? Anyone
who claims it was an unhappy marriage or an over-developed sex drive
entirely misses the point. Tiger Woods went on these binges for one
simple reason: hubris.

Through it all, Tiger tried to be Tiger, issuing escalating statements
through his website: there was an accident, he was fine; OK, there may
have been some "transgressions"; and then came the release of the
21st-century equivalent of Monica Lewinsky's stained dress: the
near-hysterical voice mail sent a few hours before the car accident to
the girlfriend in Las Vegas, begging her to take his name off her
mobile phone.

There was a weak attempt by apologists to deny that it was Tiger. But
it was. If there were any doubt about his voice (and to those who know
him there was none), his use of the word "huge" twice in a few seconds
was a dead giveaway. Go back to any Woods interview and listen:
everything is huge: making a putt is huge; winning a tournament is
huge; being able to help 10 million people is huge.

Perhaps he can come back and dominate golf the way he did for 13
years. It's a certainty he will never again be the almost universally
beloved figure that he was. But one other thing is just as certain:
Tiger the man will remain as invisible as ever, appearing inside the
ropes to wield his magic, talking in his famous non-speak way about
birdies and bogeys and then disappearing into the mist again.

Gold futures climbed as much as $20 an ounce on Globex by Monday
morning in Asia, finding support after tallying a loss of more than
$65 during a losing streak that spanned three sessions in a row.

"Investors will eventually be realizing that shifting money from
Greek, Portuguese and Spanish bonds to the supposed safe haven of U.S.
Treasurys or German bunds isn't going to be the solution, since even
the 'stronger' countries themselves are facing uncontrollable budget
deficit crises of their own," said Martin Hennecke, an associate
director at Tyche Group Ltd. in Hong Kong.

"With the safety of U.S. and German debt soon starting to become
questioned as well, the default-and-inflation proof asset class of
precious metals will most certainly become an increasingly popular
investment alternative again," he said in emailed comments.

Conclusions

Thats the Point

Conclusions

1400+ Target 2010.

Sell 1000.00 Puts x 2

2011-01-26    1000    OG.G11.1000P    83.0    3.5    

Buy 1100 Calls  x 1

2011-01-26    1100    OG.G11.1100C    96.5    -4.8    

Crude-oil futures fell 2.7% in a volatile session that saw a barrel
briefly dip below $70 Friday, extending a 5% slide in the previous
session.

Cocoa -3.3% and Sugar -4.65%.

Conclusions

Kneejerk Sell Off Scouting for a Long Re Entry Point for Both.

Egypt's net foreign reserves rose to $34.21 billion in January from
$34.16 billion a month earlier, Egypt's central bank said on its
website on Sunday.
It was the ninth straight month-on-month rise, pushing the figure for
reserves to its highest level since November 2008.Beltone economist
Reham ElDesoki forecast a further rise citing factors such as
recovering capital inflows and stronger earnings from tourism
receipts, Suez Canal revenues and worker remittances.

Value6,827.49    
Change-151.710     
% Change-2.174

Value23,226.28    
Change-619.750     
% Change-2.599

Conclusions

Investors take some Chips off the Table [Mostly Banks].

Guinness Nigeria Plc said first-half profit fell 11 percent to 7.18
billion naira, according to a statement published on the Nigerian
Stock Exchange’s Web site.

Revenue for the six months through December climbed 24 percent to 53.8
billion naira, the company said.

Guinness has “invested significantly behind the brand portfolio to
drive growth,” it said. In addition, there has been “continued
investment in capacity expansion. These investments combined with cost
pressure have resulted in a year- on-year profit-after tax decline in
the half year.”

Conclusions

My Target is 8.00 now.

Zain, Kuwait’s biggest phone company, is discussing the sale of units
in Africa with interested parties, Al-Rai reported, without saying
where it got the information.

Saad al-Barrak, Zain’s former chief executive officer, said last
October that the company had halted talks to sell its African
operations at the request of an Indian-led group planning to buy a 46
percent controlling stake in Zain.

Conclusions

GroundHog Day.

Illovo Sugar Ltd. plans to spend about 6 billion rand ($774 million)
over the next five years expanding in Africa, Business Day reported,
citing Managing Director Graham Clark.The company plans to boost
production of the sweetener to as much as 2.7 million metric tons,
from 1.7 million tons, the Johannesburg-based newspaper said.

Illovo Sugar share price data Bloomberg
http://bit.ly/cOTRyA

Price3,250.000    
Change-70.000     
% Change-2.108
2-Wk High (10/21/09)3,700.000    
52-Wk Low (02/20/09)2,352.653
1-Yr Return39.001

A multi-storey cruise ship dwarfs the harbour of Port Victoria,
engulfing two fishing trawlers in its considerable shadow. Together,
the trio of vessels offer a snapshot of the economy of this Indian
Ocean archipelago. While the floating holiday camp disgorges hundreds
of sunburnt Europeans into the Seychelles' eternal summer, the
trawlers unload skipjack and yellow fin tuna by the thousands, bound
eventually for Europe.

Mention of the Seychelles is typically the cue for flowery sentences
in which "palm-fringed", "azure" and "turquoise" are rearranged in
brochure variations but another kind of ship has been arriving here
almost daily that darkens the postcard picture. Out in the spectacular
bay of Mahe Island, visiting Russian frigates and Royal Navy
destroyers are evidence of a gathering storm in the Somali basin that
threatens to sink the economy of this tropical paradise.

The anti-piracy armada assembled off the Horn of Africa to protect
international shipping from Somali pirates has had the unintended
consequence of pushing the problem south and east and into the
Seychelles.

Britain's High Commissioner, Matthew Forbes, describes what has
happened as the "balloon effect" with the Gulf of Aden patrols
squeezing out the pirates who instead have "popped up here".

Victoria was often thought of as a cushy posting with an ambassadorial
Jaguar to keep up appearances. That changed irrevocably in October
when a retired couple from Tunbridge Wells steered their yacht, the
Lynn Rival, out of Victoria heading north-west of Mahe. The emerging
crisis has transformed Mahe, in Forbes's words, "into the frontline of
the fight against piracy". Half a dozen EU spotter planes leave on
daily sorties; three US drones launch from its granite hills to
photograph thousands of square miles of open sea; and warships detour
south.

Conclusions

Piracy is a near perfect Example of the Asymettry of the c21st.

Export earnings by Kenyan flower producers fell to 32 billion
shillings in 2009 from 40 billion in 2008, hit by drought at home and
the global economic slowdown, the country's flower council said on
Sunday.Flower exports are among the leading foreign exchange earners
for the east African economy. The European Union is the main
market.Export volumes dropped to 87,000 tonnes from 93,000 tonnes in
2008, Jane Ngige, chief executive of the private Kenya Flower Council,
said.

"We had a difficult year due to the financial crisis and climate
change ... we cut production because of limited water available, but
also in the market place when the winters are too cold consumers don't
go shopping so there was less demand," she told Reuters on the
sidelines of a flower arranging exhibition.

"This year we are hoping to do better than 2009. We would like to beat
the target set in 2008 of 93,000 tonnes."

Conclusions

430107 per tonne 2008 versus 367816 per Tonne 2009

Value3,599.40

Conclusions

Back Testing Year Highs but the move to 4,000 will now be governed by
the Full Year results Season.

Conclusions

Key support is 81.00-83.00.

I like the idea of being Long the Shilling versus Sterling.

“We submitted the proposals to Treasury in December and are now
awaiting the go ahead to move to the next stage of the privatisation,”
Mr Kitungu told the Nation in a telephone interview at the
weekend.Among the corporations targeted in the submitted proposals
include National Bank of Kenya and Kenya Wines Agency Limited. Others
are five State-backed sugar factories and 11 hotels spread across the
country.Already, the Ministry of Agriculture has given an indication
that it will be looking for strategic investors to take up 51 per cent
of the sugar millers in the sale. This should be completed by May,
minister William Ruto, said recently.

“We are going to seek Cabinet approval to go ahead with the tendering
process for the investors that will best run the factories,” Mr Ruto
told journalists in an earlier meeting.

Conclusions

This Process need to be accelerated.

Nigeria's windfall oil savings in its excess crude account have fallen
to around $6.2 billion as the government spent to counter the impact
of a global downturn, junior finance minister Remi Babalola said on
Monday.

Finance Minister Mansur Muhtar said in October the oil savings, which
are supposed to cushion the OPEC member from the impact of any decline
in world oil prices, stood at around $7 billion.

The NSE20 closed 4.63 points lower at 3594.77.
The NASI dipped 0.67 points to close at 79.37.
Market Cap was 924.315b versus 931.34b.
Equity Turnover was 155.895m versus 283.55m and the Volumes confirm
the sell side pressure is in fact light.

Full Year Results will now govern the direction with a Bias towards
4000 on the NSE20.

Sasini Tea improved 10 cents to close at 7.65 and traded 31,500 shares.
Rea Vipingo firmed 10 cents to close at 12.70 and traded 2,000 shares.
Kakuzi traded 500 shares and was unchanged at 35.00.

SAFARICOM
shares volume     7,270,900
total turnover      40,064,804
avg price     5.51 closing PRICE 5.50  -2.65%
high price     5.60
low price     5.30
last price     5.50

Conclusions

Was the most active Counter. 6.10 remains the near term objective
which was also the High on the recent Rally which actually started at
2.55.

Access Kenya closed 25 cents higher at 22.25 and traded a 21.50-22.50
range and 89,000 shares.

Kenya Airways was unchanged at 52.00 and traded a 51.00-53.00 range
and 40,900. Demand was for 400% the amount traded.

Nation traded 0.8% easier to close at 124.00 and traded a
123.00-126.00 range and 24,800 shares.
Standard closed lower at 37.00 on 1,600 shares.

TPSerena firmed 1.05% to close at 48.00 and traded 16,700 shares.

CMC Holdings traded 0.44% firmer to close at 11.30 and traded an
11.20-11.50 range and 265,700 shares.

Scangroup was unchanged at 26.50 and traded 8,700 shares.

CARGEN traded a 1000 shares unchanged at 33.50.

Marshalls traded a 100 shares at 21.00 -3.45%.

Barclays Bank traded 2nd at the Bourse. Barclays firmed 1.02% to close
at 49.25 and traded a 48.75-49.50 range and 684,700 shares worth
33.863m. Barclays Bank trades on a Trailing PE of 11.89 and Full Year
results will be keenly awaited. Barclays Bank was running at single
digits positive EPS expansion at the 3rd Quarter 2009 mark.

Barclays Bank share Price data and Graphs from www.rich.co.ke
http://bit.ly/3FrB3X

Par Value:                  2/-
Closing Price:          48.75
Total Shares Issued:          1,357,884,032
Market Capitalization:        66,197M
EPS:            4.10
PE:                11.890

NIC traded 3rd at the Bourse. NIC eased 1.41% to close at 35.00 and
traded 742,900 shares [0.2276% of the issued shares] worth 26.003m.
NIC Bank trades on a Trailing PE of 10.172 and James Macharia in an
Interview with Reuters at the back end of 2009 signalled Optimism
about the 2010 Outlook. The Share Price looks very square.

NIC Bank share price data and Graphs from www.rich.co.ke
http://bit.ly/20bSMS

Par Value:                  5/-
Closing Price:          35.50
Total Shares Issued:          326,361,632
Market Capitalization:        11,586M
EPS:            3.49
PE:                10.172

Equity Bank eased 2.43% to close at 16.10 and traded a 15.95-16.50
range  with 350,800 shares traded.
Stanchart shaved off a shilling to close at 169.00 and traded a
168.00-171.00 range and 13,100 shares. Stanchart will be the Outlier
at the round of Full Year 2009 Reports.
KCB was unchanged at 22.00 and traded a 22.00-22.50 range and 230,200 shares.
COOP Bank dipped 1.04% to close at 9.55 and traded 543,200 shares.

CFC Stanbic eased 0.56% to close at 44.75 and traded 6,800 shares.
DTB dipped 0.705% to close at 70.50 and traded a 70.00-71.00 range and
23,200 shares.
HFCK was unchanged at 17.80 and traded a 17.50-18.15 range and 49,700
shares. Of the Mid Caps, HFCK is expected to report the Fastest EPS
increase admittedly from a Low Base.
NBK bounced 3.3125% to close at  39.00 and traded 4,600 shares.

Jubilee rose 3.76% to close at 138.00 and traded 300 shares.
Kenya Re rose 2.3% to close at 13.30 and traded a 13.05-13.50 range
and 187,700 shares.
PanAfric did not trade.

Centum dipped 1.86% to close at 13.20 and traded 49,100 shares.

Olympia Capital was unchanged at 7.40.

Mumias Sugar traded 4th and was unchanged at 10.55. Mumias Sugar
traded a 10.50-10.70 range and 1.181m shares worth 12.515m. The 1st
Half Results piqued Buy Side Demand and the share price remains cheap
versus the Consolidation Opportunity and the Sugar Price Curve. Higher
Sugar Prices have extinguished the Comesa Sugar dumping Risk which had
been a perennial problem for Mumias.

EABL was unchanged at 150.00 and traded 11,300 shares and Demand
outweighed Supply by a Factor of 4-1 indicating an Imminent Push
Higher. Supply has been extinguished at these price points.

KENGEN firmed 0.36% to close at 14.05 and traded a 14.00-14.55 range
and 85,200 shares. KENGEN points at 15.00 which is the key resistance
Level.
KPLC rose 0.67% to close at 150.00 and traded 600 shares.
Cables dipped 1.06% to close at 23.25 and traded 30,900 shares.

KENOLKOBIL rose 2.31% to close at 66.50 and was trading at 68.0 +4.62%
into the close. KENOLKOBIL traded 12,200 shares.
Total rose 0.83% to close at 30.25 and traded 24,100 shares and traded
a session high of  32.00 +6.67%.

Bamburi traded 1,000 shares at 161.00 unchanged.
ARM dipped 1.87% to close at 105.00 and traded 1,900 shares.
Portland dipped 1.18% to close at 84.00 and traded 1,399 shares.

BAT rose a shilling to close at 183.00 and traded 3,700 shares.

BOC Gases was unchanged at 149.00 and traded 1,000 shares.
CARBACID shaved a shilling to close at 99.00 and traded 1,700 shares.

Eveready rose 2.78% to close at 3.70.
Sameer shaved off 0.75% to close at 6.60 and traded 23,300 shares.
Unga closed at 9.10.
Crown Berger did not trade.