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The Latest Daily PodCast can be found here
http://www.rich.co.ke/rctools/richpod.php

Macro Thoughts

Gold looks good value here.
I think you can sell 1700 Puts on the SSE Index. China Fears are
overblown and 1700 is a long way away.
The Rand on balance will trade lower.

Home Thoughts

I very much enjoyed myself in Johannesburg. It did help that we were
holed up in a rather swanky part of Hyde Park. [I remember Dad telling
my Mum when I was about 10 that Aly-Khan will need a well paid Job
because he has expensive Tastes - and Why Not? Who would not prefer to
drink the finest Margaux versus something Rank? Who would not prefer
to be surrounded by something Unique and beautiful rather than
something else? I digress] It was a real pleasure to catch up with so
many Good People, it really was. The Calabash Experience was just
'awesome.' The Ghana Match as cruel as the Beautiful Game can be. The
Prize in your grasp and then taken away. Finance Minister Gordhan
spoke of the World Cup adding 0.4% to GDP but I think it is much more
than that. See My Piece here

South Africa spent a bundle on stadiums, but World Cup will pay off
Africa Monitor Christian Science
http://j.mp/atbEkq

I think in Africa General Optimism and Feel Good has an amplification
Effect and that The World Cup could be worth more than 2% on GDP.
However, I noted a great deal of Informed Chatter about Xenophobia
Risks and Scott Baldauf told me that concerns are swirling about the
12th of July and that Buses North are full. That clearly would be the
least optimal outcome and adds some Volatility to my Optimistic
Forecast. Markets do not rise in a straight line, we might see near
term pressure on the Rand and the JSE has a habit of faithfully
following its Counterpart in the States the ^DJIA, but all things
being equal, I for one noticed a greater sense of Unity and Optimism
and I hope it trickles down and washes across the Continent.

Soccer City Stadium Google Image Search
http://j.mp/aKhYz1

What do you think of these Tweets?

Sadly, we learn so much from fools, economists, & other reverse role
models then pay them back with ingratitude. about 6 hours ago via web
You never win an argument until they attack your person.
@danariely Cher ami, I bought your latest in Heathrow & enjoyed
reading it; the only nonfiction book published past 1872 I've read
this year
People are so prone to overcausation that you can make the reticent
turn loquacious by dropping an occasional "why" in the conversation.
Nation-states like war; city states like commerce; families like
stability; & individuals like entertainment.
Literature comes alive when airbrushing vices, defects, weaknesses, &
confusions; it dies with every trace of preaching.
For soldiers, we use the term "mercenary"; but we absolve employees of
responsibility with "everybody needs to make a living".
Academics are vague where they need to be precise; and precise,
(distracting you with details) where they need to be vague.
@Irisatus Hoc melior. Stultus= هبل = הכל = "fool", "stultus", meus
universus opus
Marriage is the institutional process of feminising men --and feminising women.
@Irisatus, alias, Gare Montparnasse, vanitas vanitatum omnia vanitas
4:41 PM Jul 4th via web
If you are important, they invite you once. If less important, they
invite you twice. 4:12 PM Jul 4th via web
I wonder if anyone measured the time it takes, at a party, before a
mildly successful stranger who went to Harvard makes others aware of
it
By all means, avoid words -threats, complaints, justification,
narratives, reframing, attempts to win arguments, supplications; avoid
words!
Unless we manipulate our surroundings,we have as little control over
what & whom we think about as we do over the muscles of our hearts.
We expect places & products to be less attractive than in mktg
brochures; but we never forgive humans for being worse than first
impression.
Who is more dangerous for world stability, a rogue state w/ weapons or
a Black-Swan-Blind Paul Krugman with error-prone deficit theories...

Guess who it is?

This is Why I love Twitter. You can get into the Minds of People.

Euro 1.2542
Pound 1.5146
Dollar Index 84.50
Higher Beta
Aussie 0.8404
Rand 7.6820
South Korean Won 1226.10 Could not hold sub 1200 levels
Brazil Real 1.7748 Firmer

Conclusions

A Thin Trading Session Yesterday because of the US Holiday.

Gold's bad week shakes conventional analysts, but the radical gold
bugs remain confident if cynical.

Gold broke badly, especially on Monday and Thursday, losing nearly 4%
on the week.

The respected institutionally oriented service Gartman Letter asked
the key question on Friday: "Has the 'game' changed? Are we now going
from a bull market to a bear market, and did it happen in the course
of one trading session? Likely not, but only a fool would say
unequivocally that it has not. ...We've gone from a huge profit to a
swift loss in the course of one session. We are clearly not happy."The
technical damage, of course, has been considerable -- enough for
long-term chartist Martin Pring of Pring.com to put out an unusual
interim report on Thursday evening: "Gold, which was in a narrowing
trading range and looking like it may break to the upside, has instead
broken to the downside.''Friday, however, gave some relief, with
August gold gaining a dollar. JSMineset's Dan Norcini pointed out that
the metal "put in an 'inside day' -- an inside day is one in which the
market high and low of the current session do not exceed the previous
day's high or low -- so that is encouraging to the friends of gold
that sellers could not manage any further additional downside
traction."

As usual in these sudden declines, the most cheerful gold commentary
is to be found among writers at Bill Murphy's LeMetropoleCafe site.
Since this community of what I've called "radical gold bugs" cynically
believes that gold is subject to bouts of official-sector-inspired
selling for policy motives, they do not find abrupt collapses
surprising, although nonetheless irritating -- and hard to plumb.

Conclusions

I remain Bullish and believe this is a Re Entry Opportunity. I think
Gold gets buffeted by Folks bagging their Gains in times of heightened
Market Volatility and that Policy Makers try and give things a Nudge
in such an Environment.

Sugar continues to push on.

China’s property market is beginning a “collapse” that will hit the
nation’s banking system, said Kenneth Rogoff, the Harvard University
professor and former chief economist of the International Monetary
Fund.As China’s economy develops, “especially at the speed it’s
growing, it’s going to have bumps,” said Rogoff, speaking in an
interview with Bloomberg Television in Hong Kong.

The Shanghai Composite Index tumbled 6.7 percent last week, and
dropped 0.8 percent yesterday to close at 2,363.95. In the U.S., the
world’s largest economy, the benchmark Standard & Poor’s 500 index
capped a ninth day of declines in 10 sessions on July 2 after a
government report showed fewer private-sector American jobs were
created in June than forecast.

Chinese authorities intensified a crackdown on property speculation
after announcing the economy expanded at an 11.9 percent annual pace
in the first quarter, the most since 2007. Measures have included
raising minimum mortgage rates and down payment ratios for some home
purchases. Officials may also start a trial property tax, according to
state media.

The efforts have contributed to a slump in real-estate sales, while
prices continue to climb. The value of property sales dropped 25
percent in May from the previous month. The increase in prices, at an
annual 12.4 percent in May according to a government survey of 70
cities, was down from a 12.8 percent advance in April.

Rogoff in February said that real estate values in Beijing and
Shanghai had “taken a departure from reality,” and a real- estate
bubble bursting would be the most likely cause of a slump in Chinese
growth to as low as 2 percent at some point in the coming decade.

Versus

His view clashes with that of Stephen Roach, chairman of Morgan
Stanley Asia Ltd., who said last month the property boom in China
isn’t a bubble. While portions of the market such as high-end
apartments are overheating, residential demand will remain robust as
rural Chinese migrate to bigger cities, according to Roach.

“This is just a sliver of the property boom,” Roach said in a radio
interview from Hong Kong with Tom Keene on Bloomberg Surveillance,
citing that each year since 2000, between 15 and 20 million people
migrate to Beijing, Shanghai, and second- and third-tier cities in
mainland China. “This property has not overheated and the demand for
this property is very, very solid.”

Conclusions

I side with Stephen Roach, in fact. China might slow down but it is
not going to collapse.

Index Value:    2,405.43
Change:    Up 41.48 (1.75%)
Day's Range:    2,356.55 - 2,407.96
52wk Range:    2,319.74 - 3,478.01

Conclusions

I would look at selling Deep Out of the Money Puts at 1700.00.

Agricultural Bank of China's massive initial public offering, to be
priced as early as Tuesday, is testing global investors' faith in
China's fast-growing economy amid global financial turmoil.

If it hits the high end of its expected $23 billion range, AgBank
would raise more money than any other company in history, amid a
string of major stock offerings from developing markets this year.With
nearly 24,000 branches and the largest customer base in the world.

Conclusions

A Barometer.

While most of the world's stock markets are still trading well below
their highs of 2007, a handful has bucked the trend.
Six, to be precise.Tunisia, the tiny African nation south of Italy,
has been the best performing stock market since 2007. The Tunindex, a
12-year-old index of 45 stocks, is trading 81% above its high for that
year, and is up 15% for 2010. Sri Lanka is up 53% since 2007 and 36%
this year.The other four comprise Venezuela, Colombia and Chile— Latin
American countries benefiting from a rush to commodity-rich emerging
markets—and Indonesia.

Conclusions

You will recall my Emphasis on Tunis.

Value4,570.53    
Change12.051     
% Change0.264

Conclusions

The Peace Dividend.

Value4,926.35    
Change-0.130     
% Change-0.003

Conclusions

I remain Bullish and it exhibits very low Beta.

Value26,182.67    
Change-131.890     
% Change-0.501

Conclusions

Looks good Value but at times like these You are also trading the Dow
Jones because of the Higher Correlation in Turbulent times.

Value5,850.38    
Change-45.170
% Change-0.766

Conclusions

Has softened up of late.

Brazil’s President Luiz Inácio Lula da Silva arrived in Nairobi on
Monday evening on the third leg of his tour of Africa aimed at
deepening economic ties with the continent.Economists maintain that
compelling commercial incentives are key drivers of President Lula’s
whirlwind trip.Brazil belongs to a group of countries whose fast
growing economies are forcing them to expand their spheres of
influence in the world. The other countries in this bloc known as Bric
are Russia, India and China.

“Over the next 50 years, the Brics economies could become a much
larger force in the world economy,” said Goldman Sachs in their global
outlook report released in May this year.

Conclusions

His 11th Trip to Africa. Brazil Africa Trade +400% over the last 10
Years. Its not all Chindia in Africa.

Kenya on Monday signed three credit agreements with the World Bank
amounting to Sh36.3 billion for the health and energy sectors.The
first two agreements target the health sector with an allocation of
Sh9.9 billion while a third and the largest by far a Sh26.4 billion
will go towards supporting the energy sector under the Kenya
Electricity Expansion Project.

Conclusions

Speaking at the ceremony, Finance minister Uhuru Kenyatta said the
deals signified the cordial relations between Kenya and the bank.

4,323.85

Conclusions

Has Flat Lined of late very near 2010 Highs.

Uchumi Supermarkets’ 12,0000 owners have agreed to convert the chain’s
debts into equity in a bid to win back firm’s trading rights at the
Nairobi Stock Exchange.Uchumi’s shares were suspended from trading on
the stock exchange in 2006 after it closed its stores following an
aggressive but failed expansion plan that led to a Sh1.2 billion loss
and left the firm reeling in a Sh2 billion debt owed to suppliers,
Kenya Commercial Bank and PTA bank.At the time of delisting from the
bourse, Uchumi shares were trading at Sh14.50. It was the only
supermarket chain listed at the NSE.

On Monday, Uchumi told the Capital Markets Authority (CMA) that
shareholders had instructed directors to convert the debts, including
accrued interest on debts of the retail chain’s creditors such as the
Government and suppliers, into shares.

Conclusions

The Core Business is firing on a few Cylinders now.

Uchumi Results can be found here www.rich.co.ke
http://j.mp/ch9oUs

Par Value:                  5/-
Closing Price:          14.50
Total Shares Issued:          180,000,000
Market Capitalization:        2,610M
EPS:            2.34
PE:                6.197

One of the main Kenyan supermarket chains.

Six Months ended Dec 2009 versus ended Dec 2008
Net Sales 5.2322221b versus 4.432559b
PAT 110.5m versus 68.984m
EPS 0.61 versus 0.38

Goldman Sachs Group Inc and JSE Ltd. both have fans of the Melrose
Arch Precinct. Built to emulate a British High Street, with squares
surrounded by restaurants and exclusive shops, Melrose Arch has
erected two large screens. Colin Coleman, head of Goldman Sachs in
South Africa, favors Tasha’s, with its “great atmosphere.” Tasha’s
outdoor seating and its oyster- and-Champagne bar make for a chilled
place to watch heated games.

Melrose Arch, in the costly suburb of Melrose, Johannesburg, “has an
unbelievable vibe about it, with lots of tourists, lots of accents,”
according to Noah Greenhill, a senior general manager at the country’s
stock exchange.

Conclusions

Thats where we hung out at Tasha's and it was seriously worth it.

Tasha's at Melrose Arch in Johannesburg. Organizers erected two big
screens during the soccer World Cup, so patrons at Tasha's can sit out
in the sun, slurping oysters and sipping champagne while watching the
soccer, which ends on July 11

The meat counter at The Butcher Shop & Grill in Sandton, Johannesburg.
It is a top choice for SABMiller Plc's Norman Adami who likes to drink
beer and watch sports. The soccer World Cup ends on July 11

Kenya's Centum Investment (ICDC.NR: Quote) expects assets under
management to more than triple by 2014 as the country's only listed
investment firm focuses on private equity and real estate in east
Africa.As at the end of March, Centum had 5.5 billion Kenya shillings
($71.15 million) in assets in privately held Kenyan companies, 3.8
billion shillings in blue-chip companies on the Nairobi Stock Exchange
, and 0.1 billion in real estate.

"Our target is to achieve 30 billion shillings in assets under
management by 2014. My view is that we may be there sooner than 2014,"
Chief Executive James Mworia told reporters in the capital, Nairobi,
on Monday.

"Our focus is going to be largely on private equity and real estate
and infrastructure ... our core focus is east Africa."

Mworia said the firm planned to raise real estate assets to 6 billion
in the same period, and have another 5 to 8 billion shillings in
third-party funds -- managing assets owned by other firms in which it
has no stake.

Centum's group pretax profit rose by 149 percent in the year ending
March to 1.18 billion shillings.Centum has stakes in Safaricom
(SCOM.NR: Quote), Kenya Airways (KQNA.NR: Quote), Carbacid (CARB.NR:
Quote), Barclays Bank (BBK.NR: Quote) and East African Breweries
(EABL.NR: Quote) among others.It also has interests in Rift Valley
Bottlers, a Coca Cola franchise, Kenya Wine Agencies, UAP Insurance,
General Motors East Africa, Longhorn Publishers and catering firm NAS.

Mworia said the firm had opted to raise the money through bank debt
and that in the medium term it would consider coming to the market for
an as yet undetermined amount, with some of the proceeds going towards
refinancing the bank debt.

"At least in the short run (the bond) might be off the table, but in
the medium term, it might be a good way of refinancing our existing
bank debt," he told Reuters.

Conclusions

He laid out his Strategy at Mindspeak a Year ago and it was as
compelling then as it is now.

Centum share price data from www.rich.co.ke 22 Month Highs
http://bit.ly/3jc0KV

Par Value:                  0.50/-
Closing Price:          22.25
Total Shares Issued:          549,951,872
Market Capitalization:        12,236M
EPS:            1.62
PE:                13.735

James Mworia's Mindspeak Audio
http://bit.ly/a0RZhr

The NSE20 closed down 14.43 points at 4309.41.
The NASI closed up 0.22 points at 94.94.
Market Cap closed at 1.107867 Trillion versus 1.10418 Trillion.
Equity Turnover was 354.503m.

The Banking Sector saw Good Two way Action as Investors began to
anticipate 1st Half Results.

Sasini Tea closed at 14.10 and traded 52,300 shares.
Rea Vipingo traded 3,000 shares all at 17.70.
Kakuzi closed at 78.00 on 1,100 shares.

SAFARICOM

shares volume    8.741m
avg price    5.76 Closing Price 5.75 Unchanged
high price    5.95
low price    5.70
last price    5.75

Conclusions

We sit below the Mid Range point where the Range is 5.50-6.10. I
believe it is worthy of a price nearer 6.40. It is very well supported
at these Levels. For quite some time, The Incremental Buyers have been
Foreign and I tend to the View that they are being buffeted elsewhere,
for now.

Access Kenya eased 2.3% to close at 21.25 and traded a 21.00-22.50
range. Access Kenya traded 383,600 shares worth 8.222m and has rallied
over 20% from its Year lows.

ScanGroup rallied 2.58% to close at 39.75 and traded 149,400 shares
worth 5.945m. I think the Price is well supported here, that the
Ogilvy Transaction was transformative in opening up the SSA Markets
[subsequently confirmed by the Bharti Airtel win] and that
Institutional Investors will be keen to gain exposure to the stock. I
think it is popping on some Radar Screens.

Kenya Airways was unchanged at 46.50 and traded a 46.00-48.50 range
with 244,600 shares worth 11.46m changing hands. Buyers are prepared
to support these Levels.

Nation was unchanged at 140.00 and traded 11,500 shares.
Standard rose 1.31% to close at 38.75 and traded 21,700 shares.

TPS Serena eased 0.87% to close at 57.00 and traded 12,600 shares.

CMC Holdings firmed 0.39% to close at 12.75 and traded 41,600 shares.
CarGen did not trade.

Signs of renewed Strength ahead of the Half Year Earnings Releases.

KCB eased 0.82% to close at 18.20 and traded an 18.00-18.30 range and
2.617m shares worth 47.636m. KCB Rights were trading 95 cents. At
these prices, KCB is trading on a Trailing PE some way below 10.00.
The Government is diluting their Position allowing room for someone to
get a reasonable slice at what looks to me like a very square Price,
now.

Equity Bank was the most active Counter at the Bourse. Equity Bank
traded a 23.00-23.75 range and closed 1.05% easier at 23.50. Equity
Bank traded 3.184m shares worth 75.037m. Equity Bank sharply inflected
Earnings 1st Quarter and will find renewed Buy Side Interest on
confirmation of the 2010 Trajectory via the Half Year Results.

StanChart rallied 1.305% to close at 227.00. StanChart traded a
224-245 range and 19,300 shares. 227.00 is a 3 Year and 10 month
closing High and Investors are beginning to extrapolate 2009 and 2010
further along the Time axis. Stanchart has returned 73.078% ex
Dividends [which are in fact, very handsome] over the last 12 months.

Barclays Bank firmed 0.8% to close at 63.00 and traded a 63.00-64.00
range and 133,800 shares worth 8.471m. Barclays Bank trades firm and
is at a 23 month Closing high.
COOP Bank firmed 0.33% to close at 15.05 and traded a 15.00-15.20
range and 2.724m shares worth 40.985m.

CFC Stanbic rallied a further 1.33% to close at 76.00 and traded 5,900
shares. End March CFC traded 40.00 and has rallied 90% since then. The
1st Quarter rallied hard and Management continue to show Investors
that they are plain competent at unlocking Value [The Insurance Spin
Off refers].
DTB was unchanged at 88.50 and traded 3,900 shares.
HFCK rose 1.22% to close at 20.75 and traded a session high of 22.50
+9.76% in fact. HFCK traded 46,100 shares.
NBK rose 1.92% to close at 40.00 and traded 49,600 shares.
NIC rallied 1.92% to close at 39.75. NIC traded 99,500 shares.

Centum was unchanged at 22.25 and traded 178,900 shares. The Operation
has been retooled for higher Alpha Growth and I think the Upsizing of
Positions [especially in Real Estate] will reap a handsome Dividend.

Kenya Re eased back 0.84% to close at 11.85. Kenya Re traded an
11.70-12.05 range and 67,700 shares.
Jubilee closed 2 shillings lighter at 163.00 and traded 1,200 shares.
PanAfric closed sharply higher at 64.00 and traded 6,200 shares.

Olympia Capital closed at 7.45.

KPLC traded 250,000 shares worth 50m and closed unchanged at 200.00.
KPLC has witnessed heightened Turnover ahead of an Announcement on
Ratios to be applied in the already telegraphed Balance Sheet
Restructuring Exercise, where GOK Preference shares will be exchanged
into ordinary Shares.
KenGen eased 0.29% to close at 16.95 and traded a 16.50-17.10 range
and 173,100 shares.
Cables was unchanged at 20.25 and traded 187,900 shares.

EABL firmed 0.56% to close at 179.00 and traded 14,100 shares.

Mumias Sugar eased 1.19% to close at 12.55 and traded a 12.20-12.75
range and 513,600 shares. 13.60 equates to a 10.00 Implied Forward PE
and is a fair Price Objective.

Bamburi Cement traded 6,200 shares at 200.00 +1.01%.
ARM eased 0.71% to close at 140.00 and traded 7,100 shares.
Portland traded 700 shares at 116.00 unchanged.

KenolKobil was unchanged at 9.90 and traded 341,600 shares. 10.00 is
the Price Pivot.
Total bounced 1.72% to close at 29.50 and traded 3,600 shares.

BAT rose 0.47% to close at 216.00 and traded 1,400 shares.
BOC Kenya did not trade.
Carbacid traded 6,000 shares at an unchanged 144.00.
Crown Berger traded a 100 shares at 32.75.
Eveready traded 96,800 shares and closed lower and below 4.00 at 3.95.
Sameer traded 21,000 shares at an unchanged 8.60.
Unga closed lower at 11.65.