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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.

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

I have been Kindly invited by the Liaison Group to speak tomorrow
Morning at Sun N Sand in Mombasa. I am looking forward to that and a
Swim in the Indian Ocean.

By The Way The Tweets from yesterday were @nntaleb I picked up
Gladwell's latest at The Oliver Tambo Airport on way out
http://www.gladwell.com/archive.html

And in it He talked of Taleb. Now Taleb's basic Thesis is that Black
Swan Events happen far more frequently than the Market allows.
Therefore, Taleb might take incremental losses for 360 days of the
Year for what he considers will be a Slam Dunk Pay Out, once a Year,
for example. As a Trader, thats hardly a Comfort Zone, to stare at a
losing number day in day out.

Nasim Taleb's Home Page
http://www.fooledbyrandomness.com/

Macro Thoughts

Watching The Euro and Gold.

I think we are in a Trading Period where the Market is set to react to
Data Releases with higher Volatility and Beta and that the Market is
primarily concerned with slowing US Growth for now.

Home Thoughts

The Little One Hannah took off to School Yesterday with all the
Paraphernalia of her Trip to the World Cup. Her Vuvuzela [which is
almost as big as her Little Person], Her Kanye West Spectacles but
forgot her Rabbit Ears, which I just love to see her in.

resident Barack Obama said direct Israel-Palestinian talks may get
started within less than three months, praising Israeli Prime Minister
Benjamin Netanyahu as a leader prepared to take “risks for peace.”

Conclusions

Very Interesting Body Language with competing priorities, I venture.

Chris Kiagiri of Google made the following Point to me when I said

'Chris But South Africa is not really the same as the rest of Africa.'

He said 'But Aly-Khan For all these People who came it is Africa.'

Which was the Point I was trying to make here The Star

Is The World Cup Africa's Tipping Point
http://bit.ly/94jnfx

2010 Weekly Pieces for The Star can be found here
http://bit.ly/9vrHxU

Euro 1.2588 - Trades like the last throes of a Vicious Squeeze
Pound 1.5138
Dollar Index 84.24
Higher Beta
Aussie 0.8476
Rand 7.655
South Korean Won 1220

The dollar index fell to 84.113, down 0.6% from light trading on
Monday to the lowest level since early May. It fell as low as 83.825,
versus 84.410 in late North American trading on Friday. The euro  rose
to $1.2618 from $1.2525 in late trade Monday. It touched $1.2662
intraday near its highest levels since early May.

"The market is paying increased attention to economic releases at this
point in the crisis, and we also appear to have moved into a market
psychology where poor U.S. data trigger U.S. dollar weakness," wrote
strategists at Brown Brothers Harriman.

Conclusions

Which was the Point I was making about the FX Markets trading on Data
Releases now.

Euro versus Dollar 3 month Chart INO
http://bit.ly/bxIoJI

Conclusions

I see it breaking down again but for now weak US Data has undercut the Dollar.

Stocks had rallied early in the day, lost most of their earlier gains,
but hung on for a 57.14-point gain. The Dow broke its seven-session
losing streak.

The San Francisco Museum of Modern Art, currently celebrating its 75th
year, has been on a roll for the past two decades. SFMOMA's latest—and
largest—leap forward came with the decision by Donald and Doris Fisher
to entrust the museum (by means of a renewable 100-year loan) with
their prize collection of 1,092 artworks, 429 of them prints. Museum
director Neal Benezra identifies a "core collection" of 400 especially
important works, about 90% of them created since 1960. Mr. Fisher, who
opened the first Gap store here in 1969, died two days after the
agreement was announced last September.

Busy Professionals Relax in Yards Designed to Be Appreciated in the Dark.

In thinking of gardens only for daytime pleasure, "you're missing the
half of it," says Peter Loewer, author of "The Evening Garden: Flowers
and Fragrance from Dusk till Dawn."

Multicolored flower gardens look muddy in moonlight, but moon gardens
glow because of their predominately white flowers and silvery foliage.
Some blossoms unfurl only at day's end—especially moonflowers (Ipomoea
alba), a type of morning glory; angel's trumpets (Brugmansia arborea),
so named because the flowers open downward, as if from heaven; and
devil's trumpets (Datura meteloides), so named because they open from
the opposite direction. Both are poisonous and emit a perfume that
grows more pronounced in heavy evening air.

Conclusions

Actually there is an Evening Perfume that suffuses my Patio. Its
practically an Intoxicant.

Central banks are pawning their gold to the Bank for International
Settlements at a record rate, taking advantage of the precious metal's
historically high value to raise cash.A little-noticed data point at
the back of a 216-page report released last week by the BIS shows the
international agency has taken 349 metric tons of gold since
December—allowing central banks to raise a record $14 billion.The
number surprised the market, which had assumed most central banks had
retained their holdings of gold. Instead, the BIS data show that they
have been entering these gold swaps.

Conclusions

Defensive, for now.

Crude for August delivery lost 16 cents, or 0.2%, to $71.98 a barrel,
oil's lowest price and its first drop below $72 in a month.

Last Price    155.50
Open    160.45
Contract High    180
Contract Low    120.1

Khan Shatyr after its opening in Astana. Photograph: Reuters
The world's largest tent opened in Kazakhstan this week, soaring up
150m to crown the skyline of Central Asia's newest capital.The Khan
Shatyr, a 100,000 sq metre complex designed by Lord Foster, holds a
city within a city, with shops and restaurants, cinemas, water park,
botanical garden, mini-golf course, and a monorail.The aim of the tent
is to provide escape to a people subjected to some of the harshest
climes of Central Asia's vast steppe. Temperatures in Astana, in
northern Kazakhstan, regularly dip well below -30C in winter.

British architects Foster & Partners sheathed the modern tent in ETFE,
a lightweight plastic designed to control temperatures inside the
structure, so its beaches and tree-lined walkways can stay open
year-round.

The Khan Shatyr is the latest vanity project initiated by Nursultan
Nazarbayev, Kazakhstan's increasingly autocratic president. Its
opening ceremony, launched with a performance by Italian tenor Andrea
Bocelli and closed with a burst of fireworks, was timed to coincide
with Astana day, a new holiday to celebrate the country's capital. It
was attended by Nazarbayev, Russian president Dmitry Medvedev, Turkish
president Abdullah Gul and Ukrainian president Viktor Yanukovych,
among others.

Africa withstood the financial crisis better than many predicted, and
the region's economic growth is forecast at 4.75 percent in 2010. Next
year, half of the world's 10 fastest growing economies are expected to
be in Africa, and it is now attracting more than just the most
intrepid investors.

"The latent interest in Africa is enormous," said Stephen Jennings,
chief executive of Russian investment bank Renaissance Capital,
speaking to the Reuters meeting by video link from Moscow.

"Before the crisis there were probably 40 people or groups
establishing Africa funds. In 3-4 years you'll have 100 Africa funds
and the biggest one won't be $2 billion, it'll be $20 billion."

Fund tracker EPFR reports 43 consecutive weeks of net inflows to
Africa equities funds, reaching $484 million in the first half of 2010
-- nearly double those to India over the same period.

SCI's index of Africa countries outside South Africa, though well off
its year highs, is still up nearly 8 percent in 2010. The S&P 500 is
more than 8 percent down.


A shift of global economic power to emerging giants such as Brazil,
Russia, India and China -- known collectively as the BRICs -- benefits
Africa as surging economies seek its resources and push up commodity
prices and investment.

Brazil, Russia and India still trail China, which last year became
Africa's biggest trade partner, but they have been rapidly expanding
trade and putting more money into Africa.

"What's absolutely striking is how much change there's been between
the BRIC countries and Africa," said Jacko Maree, chief executive of
South Africa's Standard Bank, which is Africa's biggest. "We like to
think that the whole story has only just begun."

Brazilian firms with a large African presence may soon issue bonds in
South African rand to seize on growing interest, said Standard Bank's
chief executive in the Americas, Eduardo Centola.

"Africa has no experience of huge capital inflows," said Renaissance's
Jennings. "Under the scenario I'm painting, the capital inflows will
be way above and beyond the ability of those countries to absorb
them."

Conclusions

There is a Tipping Point and it is not that far away.

Africa's main development bank says the continent is making a
"spectacular" recovery from the global recession.

African Development Bank chief economist Mthuli Ncube said Tuesday the
bank's annual economic forecast predicts growth for the continent of
4.5 percent this year and over 5 percent next year. It is then
expected to return to the average of about 6 percent it enjoyed
between 2006 and 2008. Growth was just 2.5 percent last year.

Ncube links Africa's resiliency to trade with China and to decades of
market reform. But he says recovery could be threatened if Europe --
to which many African economies are closely connected -- fails to
bounce back. Other threats include the possibility of political or
social tension and problems associated with poor infrastructure.

Vodafone is targeting sub-Saharan Africa as one of three “priority
areas” for expansion, and Vivendi SA has built up its Maroc Telecom
unit with deals in Mali and Burkina Faso.

“Five years ago, it took half a year to recover investments in
infrastructure for new clients,” said Marc Rennard, the head of France
Telecom’s African and Middle Eastern operations. “Now it’s more than
two years, but that’s still pretty good.”

Services revenue in Africa, which grew 3.4 percent to $48.7 billion
last year, will rise 2.9 percent this year and 7.9 percent next year,
according to market researcher Gartner Inc. The region is still one of
the largest untapped mobile-phone markets with about 300 million
unsigned subscribers as of last year. Still, operators expanding with
those growth rates in sight may be less willing to pay rich premiums
for assets.Bharti paid $9 billion, or about 10 times annual earnings
before interest, taxes, depreciation and amortization, for Zain’s
African assets. The assets had also had been considered by Vivendi
before it balked at the price.

“Mobile data is the next area, and that’s yet to be tested,” Nick
Jotischky, an analyst at Informa Telecoms & Media, said by phone.
While the most promising value-added service is mobile banking like
that offered by Safaricom Ltd in Kenya, “no one’s been able to
replicate it entirely,” he said.

Value-added services will be marginal for the foreseeable future as
underserved rural areas are connected, said Rosalind Craven, an
analyst at Business Monitor International in London.

“All growth is at the bottom of the market,” making cost control
critical for operators, she said. “Previously, this was ignored in a
mad scramble to expand.”

“Except in a truly special case, we wouldn’t be prepared to pay 10
times Ebitda for a target,” France Telecom CEO Richard said on July 5.

Vodacom had also been in talks with Zain “long before Bharti,” said
Pieter Uys, Vodacom’s CEO. It walked away from the price “knowing the
businesses, knowing the countries, knowing the opportunities,” he
said. Vodacom would pay as much as six or seven times earnings for the
right assets, Chief Financial Officer Rob Shuter said.

Conclusions

The Very low Hanging Fruit has been plucked. However, There is plenty
of Hyper Growth coming especially for those well positioned in the
Data Space.

26,723.87

Conclusions

Bounced Yesterday.

This Envisat Advanced Synthetic Aperture Radar interferogram over the
Kenyan section of the Great Rift Valley shows small surface
displacements that are not visible to the naked eye of the Longonot
(front right). In the background is Suswa volcano, which was not
deforming at this time. A group of scientists employed the technique
known as SAR Interferometry (InSAR) - a sophisticated version of 'spot
the difference' - on more than a decade worth of radar images from
ESA’s Envisat and ERS satellites to study volcanic activity in the
Great Rift Valley, which extends through Africa from Mozambique to
Djibouti.

From 1997 - 2000 they discovered that the volcanoes at Suswa and
Menengai (not visible) subsided 2 - 5 cm, and between 2004 and 2006
the Longonot Volcano experienced uplift of around 9 cm (pictured). The
proximity of these volcanoes to a major metropolitan area poses a
challenge in terms of a large eruption; several are located close to
the capital cities Nairobi and Addis Ababa.

The study also provides insight as to the geothermal potential of the
region. Both countries are actively building geothermal plants to
generate a renewable, environmentally-friendly form of energy. InSAR
involves combining two or more radar images of the same ground
location in such a way that very precise measurements - down to a
scale of a few millimetres - can be made of any ground motion taking
place between image acquisitions.
Interferogram images appear as rainbow-coloured interference patterns.
A complete set of coloured bands, called 'fringes', represents ground
movement relative to the spacecraft of half a wavelength, which is 2.8
cm in the case of Envisat's ASAR.

Foreign companies are raising their shareholding in telecoms firm
Safaricom Ltd at the Nairobi Stock Exchange as locals and corporates
gradually exit.Over the last one year, foreign firms have increased
their stake by 63.34 per cent while the stake of Kenyans has been on
the decline.As at May this year, foreign investors held 2.15 billion
shares from 1.32 billion held the same period last year.Over the same
period, local investors reduced their stake from 4.09 billion to 3.3
billion, while local institutional investors cut theirs from 4.47
billion to 4.37 billion.Foreign individuals have 91.9 million shares
which is a reduction from 112.9 million as at May last year.

Safaricom chief investor relations officer Les Baillie at a media
briefing in Nairobi yesterday said since May last year, foreign firms
have increased their stake by 8.35 per cent to 21.54 per cent as at
the same month this year.

Local institutional investors including pension schemes, insurance
providers and collective investment vehicles, and individuals have
sold off 0.99 per cent and 7.15 per cent of their shareholding
respectively within the same period to 77.54 per cent collectively
compared to 85.68 per cent a year ago.

The number of shareholders has also gradually gone down since last
year by 5.92 per cent to 775,147 shareholders in May 2010.

“While the number of foreign corporates increased by 15.31 per cent,
all the other classes of shareholders recorded a decline with local
firms having the largest drop of 11.17 per cent,” reads in part a
document prepared by Safaricom’s investor relations department.

Analysts attribute the exit of small shareholders from the firm to the
overall market trend where retail investors have reduced their
participation in the market and lack of opportunity to make quick
gains for speculative investors, who form a huge chunk of the retail
investors.

Increased interest from abroad in Safaricom follows a series of
meetings the Nairobi-based company held with institutional investors
outside the country to provide information about performance and
outlook.

“The company’s management reinforced its strategy to promote
investment prospects in Safaricom by undertaking an international
investor roadshow in May-June that targeted 60 companies,” said Mr
Baillie.Between May and June this year, the firm has held road shows
in South Africa, twice in New York, Boston, Rwanda, Uganda, Frankfurt
and London.

NSSF Uganda and NSSF Rwanda are today the 4th and 8th largest
shareholders in Safaricom, respectively.

The mobile phone firm listed 10 billion shares on the Nairobi Stock
Exchange in East Africa’s largest initial public offering in 2008.

In 2009 financial year, the firm reported Sh20.9 billion in pre-tax
profit, 37 per cent increase, from Sh15.3 billion last year, driven
largely by data business, especially its revolutionary M-Pesa money
transfer service.

Conclusions

It is Foreign Investors who are the Incremental New Buyers. The
Brouhaha with the CCK and a sense that they were seeking to TILT the
Pitch has tapered the Bull Move and held the Price in check.

10th May 2010 The Star Safaricom CCK
http://bit.ly/9zaDNS

Par Value:                  0.05/-
Closing Price:          5.75
Total Shares Issued:          40b
EPS:            0.38
PE:                15.132

China National offshore Oil Corporation (CNOOC), China's largest
offshore oil and gas producer, is to start test drill of a well in
northern Kenya this week to determine the quantity and quality of
natural gas, the Dow Jones Newswires reported on Tuesday.CNOOC is to
bring equipment to the Boghal well in the country, in which natural
gas flows were found earlier this year.According to the report, CNOOC
firstly wanted to explore crude oil in the region, but it then changed
its mind to focus on natural gas reserves instead.The report quoted
Patrick Nyoike, the permanent secretary at Kenya's ministry of energy,
as saying that the outcome of the tests will be known in about a
month.

Conclusions

Some Informed Folk reckon this is a Shoe IN.

Old Mutual Kenya’s decade-long push to acquire a seat at the Nairobi
Stock Exchange (NSE) has finally come to an end with the buyout of
brokerage firm Reliable Securities Ltd.
While specific details on the purchase remained sketchy, Old Mutual on
Tuesday announced it had acquired 70 per cent of the Kenyan stock
brokerage firm, giving it the opportunity to trade securities at the
NSE.

With an estimated Sh80 billion in assets under management, Old
Mutual’s acquisition of Reliable Securities is a boon for the
investment firm which has long held ambitions of acquiring a seat at
the bourse to better manage its trading costs and directly participate
in the stock market.

“This is an excellent strategic fit and we expect the acquisition to
give us immediate presence in the stock broking market and ability to
generate substantial cost and revenue synergies,” said Tavaziva
Madzinga, Old Mutual Kenya’s chief executive officer, adding that the
buyout introduces a well capitalised stockbroking firm with the
necessary risk management systems and processes in the local market.

Conclusions

A Big Loss for some Stock Brokers.

Please excuse a more potted version of my Daily Commentary as I am en
route to Mombasa this afternoon.
I have commented on the most active Counters only.
As at 1459 The Market had traded 238.658m worth of Business.

SAFARICOM

total deals    354
total turnover    22,625,750
avg price    5.75 Closing Price 5.75 Unchanged
high price    5.80
low price    5.60
last price    5.75
shares volume    3,931,700

Access Kenya was unchanged at 21.25 and traded 382,700 shares. There
has been a mopping up of loose stock Exercise from the Lows around
17.00 and not too long ago.

Conclusions

We Supported here just under the Half way Point of its trading Range
which is 5.50-6.10. Reading the Les Baillie Transcript from yesterday
and looking at the Shareholder breakdown and trends, I arrive at the
Conclusion that the Incremental Buyers are Foreign Investors and their
Enthusiasm was stymied by the CCK.
On balance, I stick by a 6.40 price Target based on Growing
Understanding around the Data Hyper Growth Curve and the Quality
around Execution.

And I see Bharti exercising Discipline around where they spend their
Capital across the Network, which makes Kenya, therefore, not really
the most optimal destination, for now.

Equity Bank was the most actively traded counter. Equity Bank eased

2.12% to close at 23.00 and traded a 22.00-23.75 range and 2.289m
shares worth 53.013m. Quite a bit of Supply has seeped out at these
levels. The Key Driver will now be the First Half results as it will
be for the Sector as a whole.
KCB was the 2nd most actively traded counter and closed 0.27% easier
at 18.15 and traded an 18.10-18.25 range and 2.473m shares worth
44.985m. KCB has retreated ahead of the Rights Issue but is now
apparently finding its Feet. The Rights Issue Supply pressure has
taken the PE to 8.878 pre Dilution, which looks very square versus its
Peers.
Barclays Bank rallied 1.586% to close at 64.00 and traded shares as
high as 66.00. Barclays Bank traded 95,000 shares and has a 6-1 Demand
versus Supply Disequilibrium.
Stanchart firmed 0.44% to close at 228.00 and traded 8,000 shares. It
is about 10% off its 5 Year High.
COOP Bank dipped 0.33% to close at 15.00 and traded 662,900 shares.
COOP Bank is less than 5% of its all time Highs.

KenolKobil rallied 1.01% to regain 10.00. KenolKobil traded a
9.80-10.15 range and 1.11m shares worth 11.148m. It has an expanding
regional Foot Print.
Total eased 1.69% to close at 29.00 and traded 22,200 shares.

Mumias Sugar bounced 1.175% to close at 12.70 and was trading out the
session at 12.85 +2.39% into the close. Mumias Sugar traded 695,500
shares.

BAT was unchanged at 216.00 and traded a 215.00-220.00 range and
46,200 shares. BAT has the highest running Yield of just around 7%, at
the Bourse.