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0930-1500 KENYA TIME
Normal Board - The Whole shebang
Prompt Board Next day settlement
Expert Board All you need re an Individual stock.

MindSpeak The Business Club This Saturday Feb 20th
SilverBird Westgate Cinema 0930 for 1000 am start
Guest Speaker Mike Lin

Mike Lin is the founder and CEO of Fenix International Inc., a
silicon-valley renewable energy start-up serving emerging markets with
micro-power generation and smart storage. He previously founded Vestal
Design Atelier LLC, an award winning product design firm that
specializes in socially and environmentally sustainable design as well
as B.MINIMA LLC, an eco-solutions company. Mike is also a Lecturer at
Stanford University where he teaches a course entitled Sustainable
Development Studio (currently on leave) and was previously a member of
the teaching team at the Product Realization Lab. He has also lectured
in design, robotics as well as social entrepreneurship at Yale
University and served on the board of advisors to several
eco-startups.

I hope to see you there. Mike is a c21st Inventor.

Macro Thoughts

The Signal for the Short Covering Rally in the Euro which then spilled
over was the Very Short Position in the Euro.

Home Thoughts

There I am at 9 pm with Groups of Other Dutiful Parents outside the
School Hall [which was in fact built after my time]. The Hall was just
rocking, Hannah turns to me and says thats Rihanna [having watched
This is It and asked I thought Michael Jackson was dead?]. You see the
School had a Valentine's Disco. Given that I attended Kenton, My
Thoughts always start to Stream like a James Joyce Novel. I sort of
hear Voices from a Long time ago, I remember swimming in the Pool at 6
in the Morning and it used to be very cold then. The Girls told me
they had a Good time. I asked Layla,

'Layla, Who did you dance with?'

Still slightly Flushed 'Just Everyone Dad, I danced and I danced.'

And Thinking to Myself, I should say something stern for Form's sake
and I did not because I quite savioured the Fact.

A Relaxation Machine
http://bit.ly/cKFazC

President Obama's failure to meet the Dalai Lama last year set back
the Tibetan cause, but a new meeting at the White House this week is a
chance for the president to repair the damage, according to a top aide
to the exiled leader.

The Dalai Lama is to meet with Obama on Thursday. China has criticized
the meeting and warned of unspecified consequences. Obama postponed
that initial meeting last year because of his concerns about China's
reaction.

Conservative leader David Cameron should consider a “profoundly
unpopular” move such as calling for aid from the International
Monetary Fund if his party wins this year’s U.K. election, economist
Irwin Stelzer said.

“What would I do if I were David Cameron? I would look at the books”
and “I would say: ‘Shock, horror, I’ve found it’s much worse than I
thought and so Gordon Brown has forced me to call in the IMF,’”
Stelzer said, speaking at an event in London late yesterday.

Such a move would be reminiscent of 1976 when then- Chancellor of the
Exchequer Denis Healey sought an emergency loan from the IMF. Under
Prime Minister Gordon Brown, the U.K. is now running a record
peacetime budget deficit, prompting Standard & Poor’s to lower its
outlook on Britain’s AAA rating to negative from stable in May.

“You need to do something profoundly unpopular,” said Stelzer, who is
director of the economic policy studies group at the Washington-based
Hudson Institute and an adviser to Rupert Murdoch. “If it takes
undemocratic means, I would say you have no choice but to call in the
IMF.”

The British economy is in a “terrible shape” and has “a serious
structural deficit,” Stelzer said. Neither Brown nor Cameron has set
out a credible plan to reduce the budget shortfall, he said.

Conclusions

“When the rating agencies say they’re looking at your AAA rating, the
markets are warning you that now is the time to have a credible plan
to reduce the deficit,” Stelzer said, speaking at an event hosted by
Politeia, a London-based research group. “The markets are saying:
‘This is it, fellas.’”

Euro 1.3776
Dollar Index 79.64
Sterling 1.5775
Rand 7.6541

Conclusions

That Data showing yesterday that there was a Record Short Position in
the Euro was a Signal for the short Covering rally that we witnessed
especially in the Euro.

Net buying of long-term equities, notes and bonds totaled $63.3
billion for the month, compared with net purchases of $126.4 billion
in November, the Treasury said in Washington.China was a net seller of
U.S. Treasuries for a second straight month, after sales of $34.2
billion, the report showed. Japan replaced China as the top foreign
holder of U.S. government debt, after net purchases of $11.5 billion
raised its total to $768.8 billion.

The Standard & Poor’s 500 Index rose 1.8 percent in December and the
Dollar Index, a gauge of its strength against six other major
currencies, jumped 4 percent. U.S. Treasuries lost 2.64 percent in the
final month of 2009, according to an index compiled by Bank of America
Corp.’s Merrill Lynch unit.

Net foreign purchases of equities were $20.1 billion in December after
net purchases of $9.7 billion in November. Investors sold a net $7.9
billion in U.S. corporate debt in December, the seventh straight month
of net sales.

Goldman Sachs Group Inc. managed $15 billion of bond sales for Greece
after arranging a currency swap that allowed the government to hide
the extent of its deficit.No mention was made of the swap in sales
documents for the securities in at least six of the 10 sales the bank
arranged for Greece since the transaction, according to a review of
the prospectuses by Bloomberg. The New York-based firm helped Greece
raise $1 billion of off-balance-sheet funding in 2002 through the
swap, which European Union regulators said they knew nothing about
until recent days.Failing to disclose the swap may have allowed
Goldman, a co-lead manager on many of the sales, other underwriters
and Greece to get a better price for the securities, said Bill Blain,
co-head of fixed income at Matrix Corporate Capital LLP, a
London-based broker and fund manager.

“The price of bonds should reflect the reality of Greece’s finances,”
Blain said. “If a bank was selling them to investors on the basis of
publicly available information, and they were aware that information
was incorrect, then investors have been fooled.”

ZAKARIA: Let me ask you a final question.

What is the crisis you’re worried about now?

VOLCKER: I hate to give you this answer…

VOLCKER: I hate to give you this answer, but the crisis I most worry
about is the crisis in governance.

There are many problems with governance right now. However the
inability to enact financial reform is not caused by the differences
between the two parties, but rather their similarities. That’s a much,
much bigger problem.

Dow Rallies 169.67 as View Brightens. The Dow Jones Industrial Average
rose 169.67 points, or 1.7%, to 10268.81, its best day since Nov. 9.
Of the 11 trading days so far in February, seven have seen moves of
100 points or more.

Bill Clinton is not a man known for introspection, but looking back at
the scandal that nearly destroyed his presidency he does have regrets.
It is not his personal conduct that seems to trouble him most, or his
misleading statements under oath, or his failure to settle the Paula
Jones sexual-harassment lawsuit until it was too late. It is his
decision to renew the independent-counsel statute—the law that led to
the appointment of Whitewater prosecutor Kenneth Starr. Mr. Clinton
calls it "one of the greatest miscalculations" of his presidency. He
tells Ken Gormley: "I was as guilty as anybody, I signed [the
law]."Mr. Gormley's "The Death of American Virtue," despite its
overwrought title, is a scrupulously even-handed and exhaustively
reported book.

Mr. Gormley interviewed the former president three times in 2004-05
and found a man still seething at the vast right-wing conspiracy that
he blames for bringing the stain of impeachment to his presidency.
"They're on a crusade," Mr. Clinton says. "God has ordained them to
crush the infidels. . . . Ken Starr was their errand boy, and he
danced to their tune, just as hard as he could dance."

About the House Republicans who led the drive to impeach him Mr.
Clinton is even harsher. "They ran a partisan hit job run by a bitter
right-winger, Henry Hyde," Mr. Clinton says. "Yeah, I will always have
an asterisk after my name, but I hope I'll have two asterisks: one is
'they impeached him,' and the other is 'He stood up to them and beat
them. And he beat them like a yard dog.' "

The Ken Starr portrayed by Mr. Gormley is a reluctant prosecutor,
insisting that his lawyers refer to Mr. Clinton "as 'the president' or
'President Clinton,' " never as merely "Clinton." he was a diabolical
Clinton hater but because he was slow. Even when he gave full
attention to his duties, Mr. Starr's operating style slowed things
down. He ran the office by consensus, deciding all major decisions by
a vote of his deputies. He had no prosecutorial experience, and it
showed.Mr. Starr also had a conflict of interest. Billing records show
that before his appointment he had spent 4½ hours consulting attorneys
suing Mr. Clinton in the Paula Jones case and had even offered to
write an amicus brief for Ms. Jones making the case that a sitting
president is not immune from civil lawsuits.

After Mr. Starr stepped down as independent counsel, his successor was
ready to "pull the trigger" on an indictment of Mr. Clinton when, a
few hours before the end of his presidency, Mr. Clinton struck a deal,
agreeing to pay a $25,000 fine and admit to giving "false testimony
under oath." The saga would end with the president's approval ratings
high and his prosecutors vilified. To Mr. Clinton the story was a lot
like a classic Warner Bros. cartoon. "I felt they were Wile E. Coyote
in the pack and I was the Road Runner."

Conclusions

I have to say and maybe its a Personal Thing but Give me Bill Clinton
any day over Kenneth Starr. And I remember watching that Starr
Interview [Clinton had a Pepsi as a sort of Prop] and really his
Performance then [Clinton's] was nailbiting, breathtaking and
Political Genius.

I think the Book really gets the Language and Linguistics right. You
can just imagine him saying

"I felt they were Wile E. Coyote in the pack and I was the Road Runner."

Word's just leaked, before a formal announcement, of a new
super-light, text-only version of Facebook designed for simple cell
phone interactions. It looks like it's designed to further Facebook's
penetration into daily life. And it might be free. But only for little
taste.

The idea is that Facebook's drummed up some pretty neat deals with a
large number of cell phone providers across the globe and has written
some code that presents a user's Facebook news stream as a text-only
entity that can be accessed via a phone's browser at
zero.facebook.com. The trick is that it's free of charge. And that
will be an extremely interesting idea to many millions of Facebook
addicts who've yet to make the leap to full-on smartphone tech, or who
have limited data packages as part of their mobile broadband contract
with their cell phone network.

Conclusions

Thats a Sure Fire Way of Monetising Facebook in a micro payment Below
the Radar way and it gets the Location Coordinates down to a Tee.
Latest Data from the Frontier and I cite Kenya is of an extraordinary
Parabolic Growth Curve and by creating a Cell Phone Interface for
Free, Facebook are just having their first Tilt at the Demographic
Bulge. Most Studies also confirm, that Folks are more sensitised to
paying via their Phones.

Aly-Khan Satchu
www.rich.co.ke

Crude-oil futures rallied nearly 4% to finish above $77 on Tuesday,
lifted by a slide in the dollar against the euro as concerns about
Greece's debt ebbed after a long holiday weekend in the U.S.Crude oil
for March delivery finished up $2.88, or 3.9%, at $77.01 a barrel at
the New York Mercantile Exchange.Crude has also benefited from rising
tensions between Iran and Western countries seeking to impose
sanctions on OPEC's second-largest oil producer over its nuclear
program.

State oil company Saudi Arabian Oil Co., known as Saudi Aramco, still
has 4 million barrels a day of spare crude oil capacity, in addition
to its daily production of 12 million barrels, a senior executive from
the company told reporters Tuesday.

"We still have 4 million spare capacity--although in the current
climate this is very expensive to maintain--but it's a reflection of
global responsibility to maintain [a] reliably supplied market at all
times," said Dawood Al-Dawood, Aramco vice-president for marketing,
supply and joint-venture coordinator, on the sidelines of the
International Petroleum Week conference lunch in London.

Conclusions

This Message to China re Iran probably sharpened the Bulls Appetite.

Conclusions

1400.00 Objective.

Last trade    3.231    Change    +0.118 (+3.82%)
Contract High    3.36    Contract High Date    2009-12-31
Contract Low    2.4    Contract Low Date    2009-07-15

Conclusions

Not Far off 12 month Highs.

Cocoa and Sugar bounce.

Last trade    3156    Change    +53 (+1.68%)
Contract High    3514    Contract High Date    2009-12-16
Contract Low    2066    Contract Low Date    2008-11-25

Conclusions

Politics in the Ivory Coast putting in a firmer Floor under the Price.
I expect levels of 4,000+ in 2010.

Billionaire Sunil Bharti Mittal’s $9 billion bid to buy mobile-phone
assets in Africa may signal the return of India’s appetite for
overseas assets.

Reliance Industries Ltd., software exporter Wipro Ltd. and Jindal
Steel & Power Ltd. are among Indian companies saying this year they’re
scouting for acquisitions abroad after the financial crisis created
buying opportunities. Bharti Airtel Ltd.’s offer for Zain’s African
assets alone would be more than double the amount Indian companies
paid for overseas assets during 2009, according to data compiled by
Bloomberg.

Compared with Indian companies, the rest of the world may be
relatively cheap. The benchmark Bombay Stock Exchange’s Sensitive
Index, Sensex, is valued at 15.5 times analysts’ profit estimates for
the next year, compared with a multiple of 11.5 for the Standard &
Poor’s 500 stock index, and 9.7 for the FTSE 100 Index, according to
Bloomberg data.

“There is capacity which is available cheap so one can play an
arbitrage game as there are high domestic valuations and low
international valuations,” said J. Ramachandran, a professor of
corporate strategy at the Indian Institute of Management Bangalore.
“Most of the acquisitions are by leaders in the domestic market, who
to meet their growth aspirations are exploring a window of opportunity
to become global players.”

An increase in takeover activity would reverse last year’s drought.
The $3.6 billion Indian companies spent last year was 75 percent less
than the $14.3 billion invested in 2008, according to data compiled by
Bloomberg.From 2005 to 2009, Indian companies spent a record $61.3
billion buying 631 assets overseas, according to data compiled by
Bloomberg, to gain access to technology, brands and markets.

Conclusions

The Zain Africa Deal is more than all the Deals done in 2009 and Thats
serious Confirmation of India Appetite for Africa [Mobile].

India's largest mobile services operator Bharti Airtel hopes to
conclude the deal to buy Zain's African assets by March 25 and does
not see funding as an issue, its chief said in a newspaper interview
on Wednesday.Mittal also said funding for the deal is not expected to
put a strain on Bharti's balance sheet. "The financial plans will be
laid out in totality over the coming days," he said.

"All I can say is that funding has never been an issue and will never
be an issue for Bharti. We have obviously gone into the deal with our
eyes open....," he said.

Bharti is likely to finance nearly all the deal's purchase with
foreign currency loans, three people familiar with the matter told
Reuters on Tuesday.

Mittal also said the criticism by analysts of the high price being
paid was a "fairy tale." "We don't look at analysts' views of cost per
customer but the growth potential that Africa offers," he was quoted
as saying.

Morocco’s Madex Index has climbed 5.9 percent this year, beating
benchmark measures in Brazil, Russia, India and China as rains lift
farm production. The gauge trades at a 19 percent discount to stocks
in the BRIC nations, according to price-to- earnings data compiled by
Bloomberg, and may outperform this year as stronger wheat harvests
boost Morocco’s economy, London- based Silk Invest said. The outlook
for farming, which employs almost half the nation’s workforce, is
improving as concern that China will tighten lending and European
nations will struggle to pay their debts drags down BRIC stocks.
Morocco’s rainfall exceeded evaporation and absorption by the most in
30 years in the month through mid-October, according to the nation’s
meteorology agency.

Investors are returning to Morocco after the Madex fell 6.6 percent
last year, missing the rally that bolstered the BRICs. Brazil’s
Bovespa index soared 83 percent, Russia’s Micex more than doubled,
India’s Sensex jumped 81 percent and China’s Shanghai Composite Index
surged 80 percent in 2009 as the world economy rebounded from its
first recession since World War II.

The Madex’s decline last year dragged its price-to-earnings ratio
based on reported profit to 17.4 in December, the lowest since at
least October 2006, according to Bloomberg data. The measure trades
for 19.4 times earnings, less than the 24 average for the BRICs, 20.9
times for the MSCI Emerging Markets Index of 22 developing nations,
including Morocco, and 19.9 times for MSCI’s gauge of smaller,
frontier markets.

The nation’s soft-wheat harvest more than doubled in the first seven
months of the current crop year, climbing to 2.4 million metric tons
from June 1 to Dec. 31, the crops office said in a report posted on
its Web site last month. That’s 71 percent above the five-year
average, according to the report.

Morocco’s economy probably grew 5 percent last year after expanding
5.6 percent in 2008, according to the Rabat, Morocco- based Statistics
Bureau. While that would exceed the 2.1 percent expansion last year in
developing countries, growth may slow to 4.1 percent in 2010, the
statistics bureau said, less than the 6 percent estimated for
developing nations, according to the International Monetary Fund in
Washington.

For some investors, Morocco isn’t cheap enough. When the Madex is
valued on analysts’ 2010 earnings estimates, it trades at 16.5 times
projected profit, more than the average 14.5 times for the BRICs,
according to data compiled by Bloomberg.

Conclusions

The Maghreb North African Markets trade on a Much Higher PE Versus the
SSA Markets but note the divergence in Performance between BRIC and
the Frontier and hence I remain of the View that we are seeing a
Period of Frontier and SSA Outperformance now and its a Move thats is
pretty much Immune to what happens elsewhere.

Morocco MADEX Free Float Index Bloomberg Visual
http://bit.ly/brzTfX

Value8,964.33   
Change3.740    
% Change0.042

Conclusions

12,000+ All Time Highs.

Value26,939.80   
Change238.440    
% Change0.893

Conclusions

On its way to 30,000. The News is in the Price. Note well Absa Price
Reaction to Results. The Price rallied.

Value23,064.29   
Change2.880    
% Change0.012

The Central Bank of Libya Tuesday invited foreign banks to submit
applications to set up subsidiaries in the country as the former
pariah state continues to open up its economy to the outside world.

"An important part of Libya's financial-sector reform strategy is to
allow foreign banks to operate in the country," the bank said in an
emailed statement. The central bank would issue two licenses to
foreign banks

New Generation Telecommunications Ltd. bid $2.5 billion for a controlling stake in Nigeria's former telecoms monopoly Nitel on Tuesday and was made the preferred bidder, the privatisation body said.Precise ownership of the U.S.-registered group was not immediately known, but officials said it included Chinese and Gulf interests seeking a place in one of the world's fastest growing telecoms markets. "From the outcome of today's bids, New Generation has emerged the preferred bidder with $2.5 billion and Omen International Ltd (BVI) is the reserve bidder with $956 million," the National Council on Privatisation said. Nigeria invited expressions of interest in July for a minimum of a 75 percent stake in the Nitel conglomerate or a stake in one or several of its components, including mobile arm MTEL, the South Atlantic Terminal underwater cable (SAT-3) and its domestic fixed line network.After the bid is approved by the privatisation council, the group will have 10 days to pay 30 percent of the purchase price and a further 50 days to pay the rest. "We will pay within the stipulated time. We did not make a hypothetical offer," said Abubakar Usman from New Generation. South Africa's MTN was among the bidders, but only for a stake in the SAT-3 underwater cable. But the government has struggled to sell the firm mainly because of the shambolic state of its fixed line infrastructure. Its fixed lines have fallen to less than 100,000 from five times that number in 2001 and MTEL subscribers have dropped to a few thousand from over 1 million.

Mr Odinga suspended two cabinet heavyweights on Sunday over corruption
investigations but was almost immediately over-ruled by the president,
who accused him of over-stepping his authority. The prime minister has
responded by calling for the return of peace envoy Kofi Annan and
threatening to boycott cabinet meetings.

Mr Annan has instead handed the Waki Report to the International
Criminal Court in The Hague which is now deciding whether to proceed
to indictments. At least two current cabinet ministers are believed to
be among the "architects of the post-election violence" being sought
by the ICC's chief prosecutor, Luis Moreno-Ocampo, who has vowed to
make an example of Kenya.

While corruption is arguably the issue in Kenya it's not the reason
that the unity government marriage is on the rocks. Behind the scenes
it has become increasingly clear that an informal deal between the two
protagonists – that Mr Kibaki would endorse Mr Odinga for the
presidency at the next elections, expected in 2012, in return for his
support now – has been reneged upon.

Afro-pessimists dismiss Kenya's politics as tribal and national polls
have functioned as periodic ethnic censuses, but the reality is more
complicated than that. Each election in Kenya is different and the
alliances that win or lose them are shifting. Mr Odinga drew support
last time by rallying Kenya's smaller tribes into an anti-Kikuyu bloc
that sought to end the dominance of Kenya's largest tribe, of which Mr
Kibaki is a member. The prime minister, who like Barack Obama's father
hails from the Luo tribe, is fashioning a new alliance to break up the
status quo and reshape it in his own favour. His main opponents look
like being Mr Ruto, whose numerous Kalenjin tribe were previously
allies, and Uhuru Kenyatta, the finance minister, Kikuyu millionaire
and scion of the family that led Kenya at independence.

Now, some analysts believe Mr Odinga is trying to shape the terms of
the next vote and trying out issues like the environment, corruption
and probably constitutional reform next to see what works. When that
becomes clear he will likely resign from the government and campaign
as the leader of the opposition.

Because of the importance of its markets, ports and roads, when Kenya
sneezes the entire region catches cold. Anything that hurts recovery
in Nairobi will be felt from Rwanda to South Sudan.

Many believe that the international community's investment in Nairobi,
which is the regional hub for aid agencies, the UN and Western
diplomatic missions, makes the state too big to fail.

But those institutions were, almost without exception, blind-sided by
the post-election killing spree and powerless to do much about it.
Kenya could be coming apart at the seams or simply getting ready for
the next election campaign – or both simultaneously.

Conclusions

An extremely well written Piece I must say and you have unpicked many
a Nuance that others have missed. I commend you for it.

Your Point about Kenya sneezing and the Region catching a Cold was a
particularly fine one. The Forces for Integration were starting to
gain serious Traction and the recent Oil Discovery in the Lake Albert
Basin in Uganda a serious Game Changer all confirming Kenya's Value
via its position in the East African Geo Political and Strategic
Tapestry. In terms of the Economic Game Plan, Instability at Home at
this Time is a little self indulgent and small Picture.

I think we are also witnessing very Laboratory Experiment Speed Macro
Trends. 10 Years ago, there were about 15,000 Phones. Today, there are
more than 17.4m. The Skew is all towards the last 5 Years. I believe
that the Phone and with it the arrival of the Information Century is a
tremendous Tool for Citizen Empowerment. Just Plot SMSs across Africa
for the Evidence that confirms the arrival of the c21st. This Trend I
think for the First Time is creating a very dynamic Constituency of
Voters. To expect the Arrival of the Information Century [and recall
Kenya has double downed on this Bet and that was commendable] not to
create a Strong Dynamic is I think Naive. Also Consider the
Demographic Skew. 60% of the Population is Under 24. The 2012 Election
surely will be won by capturing the Youth Vote.

With regard to this Crisis which does have the Flavour of being a
little contrived but thats not really the Main Point. As per the Old
Game of Tribal Mathematics, the Prime Minster is now encircled. The
Kalenjin Block has been completely peeled off jeopardising the
Majority in Parliament. Whether, the New Friends can translate a
Political Alliance onto Votes at Ground Level is another question. I
had a Fellow speak at my Business Club Mindspeak and he was of the
View that Differences at Ground Level are a Chasm and not a short Hop
apart. Nevertheless, The Prime Minster has lost his Majority of that
there is no question.

Against this Background, The Prime Minister has actually tacked his
Political appeal onto National Issues. The Nuances of Respect aside
[Talk is that He is a bit of a Lone Ranger, making announcements
without clearance], he has been politically preemptive and is basing
his Appeal on the new Dynamics. The Mau Forest was a slam Dunk
Nationally. We have emerged from a Brutal Drought that effected
everyone whether in the Country or the City. By stepping ahead of the
Curve, he reached Countrywide. He has played an Ahead of the Curve
Game. He has gone National where Many have stayed Parochial.

It is no Secret that President Obama has a keen interest [and in
Politics a Connection such as his is no small thing] and apparently
had a Message Delivered and read to both Principals. And one senses
that the Prime Minister is feeding into that Loop by picking this
Issue on which to make a Stand.

The President is clearly a shrewd Political Operator. He was hemmed in
for a very long time under President Moi. Patience is one of his
Strong Political Skills. His Protagonist a little impatient.

Aly-Khan Satchu
www.rich.co.ke

Par Value:                  2/-
Closing Price:          152.00
Total Shares Issued:          790,774,336
Market Capitalization:        120,198M
EPS:            9.09
PE:                16.722

Interim Dividend 2.50
Six Months to Dec 2009 versus to Dec 2008
Revenue 18.617b versus 18.096b +3.00%
Other Operating Expenses -408m versus -53m +667%
Selling and Distribution Costs 1.353b versus 1.162b +16%
Net Profit 3.691b versus 4.053b -9.00%
EPS 4.67 versus 5.13 -9.00%
Total Equity 37.807b versus 35.348b
Net Cash and Cash Equivalents 1.632b versus 170m

Conclusions

I am unclear as to what the Other Operating Expenses were. I had
expected stronger Results especially after Harp Nigeria and Tusker
Kenya were cited as OutPerformers by Diageo when they announced their
results. The CEO as per Reuters cited drought, the global downturn,
weak local currencies and higher taxes on spirits in Kenya as crimping
Profits. The Reuters Report is here http://bit.ly/9IO11q . Volume of
beer and spirits sold would 10 percent in the period to the end of
December from a year earlier while turnover rose 3 percent. The cash
and Equivalents number signals a Lot of Cash Muscle on the Balance
sheet.

At 4.67 x 2 = 9.34 Implied Full Year versus Price of 152.00/9.34 =
16.27 Forward Implied

EABL’s sales volumes fell 10 per cent across the Kenya, Uganda, the Great Lakes and Tanzanian markets, but its impact on sales was softened by price increments on premium and mainstream brands Tusker and Guinness — that managed to post positive growth. EABL announced price increase of between Sh5 to Sh10 per bottle in October on selected brands including Tusker, White Cap and Guinness citing rising production costs that had slowed down profit growth, especially in the key Kenyan market. Some analysts saw the price adjustments as an admission by EABL that price and not volumes will be the key driver of growth this year. This paid off in the quarter to December when its flagship brands Tusker and Guinness posted 18 per cent and 22 per cent growth respectively despite the increment. This helped to soften the impact of lower sales from the spirits business, which accounts for about 11 per cent of its revenues, and brands such as Senator, Citizen Special and Allsops. “It was a half of two quarters. The first quarter volumes were down 18 per cent while in the second quarter it was down 2 per cent despite the price increases in October,” said Mr Adetu.

South Africa's rand firmed sharply and government bonds rallied on
Tuesday after the national budget showed higher growth forecasts and a
lower-than-expected budget deficit for 2009/10.

The rand firmed to 7.60 against the dollar at 1220 GMT from 7.68
before Finance Minister Pravin Gordhan started his speech at 1201 GMT.

The yield on the 2015 bond was down at 8.215 percent versus 8.28
percent before, 11.5 basis points lower for the session.

The budget deficit for 2009/10 is estimated at 7.3 percent of gross
domestic product, lower than the Reuters median consensus of 7.8
percent.

The shortfall is seen narrowing to 6.2 percent in 2010/11 and 4.1
percent by 2012/13.

Par Value:                  5/-
Closing Price:          48.00
Total Shares Issued:          461,615,488
Market Capitalization:        22,158M
EPS:            -8.84
PE:                -5.430

We continued to experience some Spill Over and Buffeting from the
Political Brouhaha which had amplified in a steady Crescendo but has
now probably peaked. Buyers stepped into the Market in the 2nd half of
the Session and picked up Shares in Kenya Airways, and Safaricom in
particular right back to the Unchanged Mark. The Near term direction
is dependant on the Politics. If we have peaked Near term on the
Political Noise we can bounce back to 12 month highs but any
ratcheting Up will prick the Incipient Optimism that was only just
starting to infect.

The NSE20 fell a round 50.00 points to close at 3520.92.
The NASI was down 1.04 points at 77.34.
Market Cap was 900.638b versus 912.68b.
Equity Turnover was 258.885m versus 167.943m as Buyers picked their
Spots in Kenya Airways, KQ and a number of other Counters.

Rea Vipingo was unchanged at 12.70.
Sasini Tea closed lower at 7.60 on 15,000 shares. Tea Prices were
softer this week and African Tea Brokers are citing a Warehouse
Related Strike as Reducing Supply at Auction.

Kenya Airways was the most Active Counter at the Bourse. Kenya Airways
closed unchanged at 48.00 and traded a 48.25 high and 1.345m shares
[0.2195% of the Issued Share Capital] worth 64.599m. The Size of the
Transaction confirms Interested Buyers at work at these levels. The
Main Drag was Expensive Fuel and these Options have rolled off in most
Part and Investors expect a high Beta Turnaround at the Half Year
Mark.

Kenya Airways share price data from www.rich.co.ke
http://bit.ly/1AaBD1

Par Value:                  5/-
Closing Price:          48.00
Total Shares Issued:          461,615,488
Market Capitalization:        22,158M
EPS:            -8.84
PE:                -5.430

Safaricom

shares volume     7,966,200
total turnover      41,629,916
avg price     5.23 CLOSING PRICE 5.20  -1.886%
high price     5.30
low price     5.15
last price     5.30

Conclusions

Safaricom traded 2nd Overall and closed lower at 5.20 but turned
around Mid Session and was trading at the Unchanged Mark at the
Finale. Demand outweighs Supply by a Factor of 11-7 as Buyers try and
snaffle up some cheap Stock.

TPSerena was marked down a sharp 5.82% to close 44.50 but only on 3,100 shares.

Access Kenya was unchanged at 20.00 and traded 56,600 shares.

ScanGroup traded 18,700 shares and firmed 0.9615% to close at 26.25.

CMC Holdings closed a marginal 5 cents better at 11.30 and traded just
10,900 shares.

Nation was unchanged at 120.00 and traded 2,800 shares.
Standard Group was marked up 2 shillings to close at 38.00 on 100 shares.

CARGEN did not trade.

Kenya Re was the 3rd most Active Counter today. Kenya Re closed at
12.95 +0.388% and traded a 12.50-13.00 range and 3.142m shares
[0.52366% of the Issued Share Capital] worth 40.836m. Kenya Re trades
on a Trailing PE of 6.548 which makes it quite inexpensive on a PE
Basis.

Kenya Re share price data and Graphs from www.rich.co.ke
http://bit.ly/as8dhu

Par Value:                  2.50/-
Closing Price:          12.90
Total Shares Issued:          600,000,000
Market Capitalization:        7,740M
EPS:            1.97
PE:                6.548

Jubilee traded 6,400 shares at 135.00 -1.46%.
PanAfric did not trade.

Barclays Bank traded 4th. Barclays Bank dipped 0.51% to close at 48.75
and traded a 47.50-49.75 range with 295,500 shares worth 14.438m
changing hands. Results are imminent and keenly awaited. They have
previously made a great deal of money in the Fixed Income market in
the 1990s and some might be expecting a similar outcome in the 4th
Quarter.

COOP Bank was unchanged at 9.70 and traded 1.088m shares worth 10.561m.
KCB eased 2.38% to close at 20.50 and traded a 20.25-21.25 range and
124,200 shares only. Buyers were paying 21.25 +1.19% into the close
and Demand outweighed Supply.
Equity Bank dipped 3.14% to close at 15.40 [15.10-15.80] and traded
231,800 shares.
StanChart shaved off 0.58% to close at 172.00 and traded 2,700 shares.

NIC Bank was heavily traded again. NIC traded a 34.00-35.00 range and
closed unchanged at 34.75. NIC traded 473,700 shares [0.1451% of the
share Capital] worth 16.574m. At a Trailing PE which is just inside
Double Digits, Investors have swept up stock from 28.00 levels and
today confirms a Good Appetite for the Equity, again.

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

Par Value:                  5/-
Closing Price:          34.75
Total Shares Issued:          326,361,632
Market Capitalization:        11,341M
EPS:            3.49
PE:                9.957

CFC Stanbic retreated 3.42% to close at 42.50 on 13,000 shares.
DTB dipped 2.78% to close at 70.00 and traded 24,600 shares.
HFCK was unchanged at 17.15 and traded 45,700 shares.
NBK closed 25 cents better at 38.75 and traded 23,300 shares.

Centum rallied 1.2% to close at 12.65 and traded 57,800 shares.

Olympia Capital was at 7.00.

EABL shaved off 0.66% to close at 151.00  and traded a 150.00-153.00
range and 73,700 shares worth 11.129m. Demand and Supply inflected
with more Sellers post the Half Time Report which saw a head line fall
of 9% in Earnings per share compared to the same Period in the Year
before. EABL trades on a Price Earnings of just over 16.00 versus an
EM Average PE OF 20.9, which affords Buyers a small Discount. After
the Diageo Trading announcement where they singled out Tusker as a
shining Star in their Stable, some Investors had expected a more
muscular number. It looks as if they have trimmed the Operation and
sized it right to capture the Rebound.

Mumias Sugar fell a sharp 6.0654% to close at 9.30 and traded a
9.00-10.25 range and 1.272m shares worth 11.877m. The Market was
higher than the Official Close at 9.50 into the Finale. The Sugar Back
Drop is very supportive and this Draw Down looks very overdone.

Bamburi was well traded all unchanged at 167.00 and 83,300 shares
worth 13.911m changed hands at that level. They have an extraordinary
Gain of about 2 shillings a share to take from the sale of their
Shareholding in ARM.
ARM traded 1,900 shares and closed lower at 103.00. 100.00 is key
support on the charts.
Portland traded 8,100 shares and all at 80.00 unchanged.

BAT closed 1.6% lower at 185.00 and traded 41,300 shares. BAT is well
supported by its running Yield of over 9.00%.

KENGEN traded 1.08% lower to close at 13.70 and traded 280,100 shares.
KPLC shaved one Shilling off to close at 149.00 and traded 7,100 shares.
Cables was 2.12% lower at 23.00 and traded 33,700 shares.

KENOLKOBIL traded 1,500 shares and closed lower at 61.00. It looks
steeply undervalued especially post the Announcement of stronger
Metrics pretty much across the Board by Management.
Total traded 34,600 shares and closed 25 cents better at 30.50.

BOC Gases did not trade.
CARBACID traded 1,100 shares at an unchanged 100.00.
Eveready traded 34,500 shares and closed softer at 3.55.
Sameer traded 15,400 shares and shaved off 5 cents to close at 6.00.
Unga traded 1,600 shares at 9.20 unchanged.