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Satchu's Rich Wrap-Up
 
 
Wednesday 11th of May 2016
 
Morning
Africa

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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 on the Front Page of the site
http://www.rich.co.ke

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"The Black Swan," Nassim Taleb, framed it in his 2007 book:
Africa


"There are two varieties of rare events: a) the narrated Black Swans,
those that are present in the current discourse and that you are
likely to hear about on television, and b) those nobody talks about,
since they escape  models -- those that you would feel ashamed
discussing in public because they do not seem plausible. I can safely
say that it is entirely compatible with human nature that the
incidences of Black Swans would be overestimated in the first case,
but severely underestimated in the second one."

Home Thoughts

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Fly away epicness by @jaydabliu. Awesome sunrise shot of Nairobi. #BornToFly
Africa


“You want me to be a tragic backdrop so that you can appear to be
illuminated, so that people can say ‘Wow, isn’t he so terribly brave
to love a girl who is so obviously sad?’ You think I’ll be the dark
sky so you can be the star? I’ll swallow you whole.” ― Warsan Shire

“At the end of the day, it isn’t where I came from. Maybe home is
somewhere I’m going and never have been before.” ― Warsan Shire

“You tried to change didn’t you?
closed your mouth more
tried to be softer
prettier
less volatile, less awake
but even when sleeping you could feel
him travelling away from you in his dreams
so what did you want to do love
split his head open?
you can’t make homes out of human beings
someone should have already told you that
and if he wants to leave
then let him leave
you are terrifying
and strange and beautiful
something not everyone knows how to love.”
― Warsaw Shire

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Currency Markets at a Glance WSJ
World Currencies


Euro 1.1391
Dollar Index 94.10
Japan Yen 108.53
Swiss Franc 0.9732
Pound 1.4424
Aussie 0.7351
India Rupee 66.725
South Korea Won 1169.31
Brazil Real 3.4742
Egypt Pound 8.8787
South Africa Rand 15.2554

Goldman Sachs says the dollar slump is over

https://twitter.com/paul_dobson/status/730279448411549696?s=03

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Commodity Markets at a Glance WSJ
Commodities


Gold 6 month INO 1273.40

http://quotes.ino.com/charting/index.html?s=FOREX_XAUUSDO&t=c&a=50&w=1&v=d6

Nearing that golden moment for black gold. "Golden Cross" upon us
for the first time since 2014 price crash @DavidInglesTV

https://twitter.com/DavidInglesTV/status/730270168497172480

Crude Oil 3 Month Chart INO 44.04

http://quotes.ino.com/charting/index.html?s=NYMEX_CL.M16.E&v=d3&t=l&a=50&w=1

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Election Delays Raise Tensions in Resource-Rich Congo @WSJ
Africa


Delays and standoffs with the political opposition in a planned
presidential election are raising the threat of widespread violence in
the Democratic Republic of Congo, the war-ravaged but resource-rich
nation that is seen as key to continental stability.

Tensions escalated last week when Congolese security forces surrounded
the home of Moise Katumbi to arrest the popular former state governor
and soccer-club owner the day after he said he would run for president
in elections scheduled for November. The government of President
Joseph Kabila, who has been in power since 2001, has accused him of
hiring mercenaries.

Mr. Katumbi denies the charges, but remains free only after the
intervention of United Nations peacekeepers. Mr. Katumbi appeared
before a prosecutor late Monday to answer to the charges, and the
police appear to have stopped pursuing his immediate arrest.

Term limits bar 44-year-old Mr. Kabila—who took over after his father
was assassinated in 2001—from running again in November, and his
government has repeatedly pushed back the vote and instituted
logistical hurdles that will likely delay it well into 2017.

The government had originally called for a national census before the
vote, then more recently said it needed to clean up the voter
registry, a process that could take as long as two years.

“The election is not going to happen this year,” said Thierry
Vircoulon, a longtime Congo researcher currently with the Paris-based
French Institute for International Relations think tank. “He has
already found the way to remain in charge. He has not organized the
election.”

“This is definitely going to escalate if there’s no political
dialogue,” said Jason Stearns, head of the Congo Research Group at New
York University. “This is probably the most important conflict to
prevent in Africa over the next couple of years.” He said if Congo’s
vote is put off further, opposition groups could radicalize and
Western powers would have to decide whether to institute sanctions or
take further measures.

When Mr. Katumbi’s announced his candidacy last Wednesday, the
government filed suit alleging he had recruited mercenaries, including
former U.S. soldiers. Mr. Katumbi’s spokesmen have said he had only
hired a handful of unarmed security advisers—some of whom had U.S.
military backgrounds—for his family’s protection.

The next day, Congolese police surrounded Mr. Katumbi’s residence and
tried to arrest him.

A spokesman for the U.N. military mission in Congo said its
peacekeepers stopped the police from taking Mr. Katumbi into custody.

“Our peacekeeping troops in Lubumbashi contained the situation at
Katumbi’s residence. They were also able to stop his attempted arrest.
The situation is now calm,” Lt. Col. Felix Bassesaid.

Congo’s information minister, Lambert Mende, warned the U.N. against
“blatant meddling” into domestic affairs. The actions by the U.N.
force “are beyond their mandate and they certainly know their limits,”
Mr. Mende said. “We shall not be tolerant for long.” Congo will have a
say in the next renewal of the U.N. mandate, due to expire in March
2017, according to the Security Council.

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Seeing President Mugambe's Frailty, Zimbabwe Braces for Turmoil New York Times
Africa


HARARE, Zimbabwe — The independence festivities took place just as
they have for decades: led by President Robert Mugabe, the only leader
Zimbabwe has ever had.

But as Mr. Mugabe, 92, inspected a military parade during the
celebrations last month, he did something unusual. When his vehicle
stopped in front of a framed picture of the president, Mr. Mugabe
bowed before his own portrait. Zimbabweans were stunned. Had their
president grown so feeble, they wondered, that he could no longer
recognize the person in front of him?

Mr. Mugabe, the world’s oldest head of state, said this year that he
would preside over Zimbabwe “until God says, ‘Come.’ ” His
increasingly powerful wife, Grace, vowed that her husband would rule
from a special wheelchair until he was 100.

But the end of an era looms over this capital. As Mr. Mugabe has grown
visibly weaker in the past year, talk of his death dominates the
private conversations of the governing class, leading to some
cutthroat maneuvering for the endgame.

As in the final days in Mobutu Sese Seko’s Zaire or Felix
Houphouet-Boigny’s Ivory Coast, two other African nations forged over
decades by a single leader, tensions and anxieties hang heavy in the
air. Conversations delicately include phrases like “when the old man
goes” or “when nature takes its course.”

For the first time, Mr. Mugabe has been forced to talk about his
mortality. In a recent meeting with the nation’s war veterans, he
complained that talk of his eventual death was fueling a fight over
succession inside his party.

“I am not dying,” he said. “Shame on you.”

“The present is now a story reminiscent of Mao and Jiang Qing,” said
Mr. Mutsvangwa, who served as Zimbabwe’s ambassador to China,
referring to Mao Zedong’s fourth wife, who, in the leader’s final
years, assumed great power as part of the Gang of Four.

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Uganda's Top Export: Mercenaries
Africa


The African nation makes more money from military contractors than coffee

Armed guards are Uganda’s top export. Mercenary remittances surpassed
coffee exports in 2009, according to the Ministry of Gender, Labour,
and Social Development. Interpol’s Kampala bureau conducts roughly
1,000 background checks on Ugandans heading abroad for security jobs
every month, “just to make sure we are not sending foreign fighters,”
says Asan Kasingye, Interpol’s local chief. (By “foreign fighters,” he
means international Islamic State recruits.) That figure doesn’t count
the guards working in countries that don’t require checks nor guards
who secure bogus credentials, fail to renew their Interpol-issued
permits, or are illegally trafficked. A conservative estimate is
20,000 Ugandan mercenaries working abroad right now, according to
Interpol figures and industry insiders.

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South Africa All Share Bloomberg +2.65% 2016
Africa


Dollar versus Rand 6 Month Chart INO 15.2554

http://quotes.ino.com/charting/index.html?s=FOREX_USDZAR&v=d6&t=c&a=50&w=1

Egypt EGX30 Bloomberg +8.63% 2016

http://www.bloomberg.com/quote/CASE:IND

Nigeria All Share Bloomberg -10.46% 2016

http://www.bloomberg.com/quote/NGSEINDX:IND

Ghana Stock Exchange Composite Index Bloomberg -9.38% 2016

http://www.bloomberg.com/quote/GGSECI:IND

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@Safaricomltd reports FY16 PBT +20.83% share price data here #SafaricomFYResults
Africa


Par Value:                  0.05/-
Closing Price:           16.95
Total Shares Issued:          40065428000.00
Market Capitalization:        679,109,004,600
EPS:             0.95
PE:              17.84

Safaricom reports Full Year Earnings through 31st March 2016 versus
through 31st March 2015

FY Service revenue 177.784089b vs. 156.246631b +13.784%
FY Handsets and other revenue 8.621317b vs. 7.117490b +21.129%
FY Total revenue 195.685224b vs. 163.364121b +16.681%
FY Voice Revenue 90.8b versus 87.37b +3.93%
FY M-Pesa Revenue 41.5b versus 32.63b +27.18%
FY SMS Revenue 41.50b versus 32.63b +10.59%
FY Mobile Data Revenue 21.15b versus 14.82b +42.71%
FY Direct costs [62.310003b] vs. [56.708576b] +9.878%
FY Other expenses [41.260953b] vs. [36.039990b] +14.487%
FY EBITDA 83.066273b vs. 71.191159b +16.681%
FY Depreciation, impairment and amortisation [27.942546b] vs.
[25.570159b] +9.278%
FY Profit before taxation 55.762505b vs. 46.149545b +20.830%
FY Total Comprehensive income for the period 38.104290b vs. 31.871303b +19.557%
Basic & diluted EPS 0.95 vs. 0.80 +18.750%
Dividend per share 0.76 vs. 0.64 +18.750%
Shareholders’ funds 116.738947b vs. 104.276531b +11.951%
Cash & cash equivalents at the end of the period 6.109493b vs.
11.916371b -48.730%

Accompanying Commentary

+7.8% increase in total Customer Base to 25.2m
19.8% increase in 30 day active M-Pesa Customers to 16.6m
Safaricom has a 64.7% subscriber market share
Service Revenue +13.8% grew +15.2% in 2nd Half
Voice Revenue = 51.1% of Service Revenue
Non-Voice Revenue +26.3% now represents 48.9% of service revenue from
44.1% last year
Mobile Data Customers 14.1m +21.5%
7.9m Customers on 3G and 4G [0.7m on 4G Handsets]
Zero Gearing
FY 17 Guidance we expect EBITDA for FY17 to be in the range of 89b-92b.

Some of My Tweets from the Presentation

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Voice Revenue +3.9% minutes of use +11% @SafaricomLtd #safaricomfyresults
Kenyan Economy


Conclusions

a seriously strong set of Results what with FY EPS +18.75% and FY
Dividend +18.75%.
Voice at +3.93% is a seriously good outcome.
SMS Revenue was a Bullish Outlier with a +10.59% gain [Sportspesa refers].
Data continues to expand exponentially +42.71% with a Triple digit %
gain in Data Usage.
There are not many Companies in the World able to deliver these kinds
of numbers and raise the dividend by such an amount.
Interesting FY EBITDA Guidance range has been tilted lower
 FY 17 Guidance we expect EBITDA for FY17 to be in the range of 89b-92b.

read more




Vodafone Mobile-Money Volumes Boosted by Sports Betting in Kenya @business
Kenyan Economy


Kenyans using mobile-money platform M-Pesa to bet on the outcome of
sporting events helped Vodafone Plc’s unit in the East African country
boost transaction volumes by 48 percent in the past year.

The service, offered by Safaricom Ltd. in East Africa’s biggest
economy, is now transacting about 5 billion shillings ($50 million)
day, Chief Executive Officer Bob Collymore, 57, said in an interview
May 7 in the capital, Nairobi. M-Pesa, which means mobile money in the
Swahili language, can now handle 900 transactions per second, compared
with 320 previously, after Safaricom moved its servers to Kenya from
Germany to improve efficiency, he said

“We’re seeing tremendous growth,” Collymore said. “Sports betting is
one which is using M-Pesa a lot and had we not done this we would have
really struggled to meet capacity there. That sector has now
absolutely overtaken everyone else.”

M-Pesa earned Safaricom, which is 40 percent owned by Vodafone Plc,
about 32.6 billion shillings in the 12 months through March 2015, a
fifth of total revenue. The company reports its latest full-year
earnings on Wednesday. The platform has grown from 2 million users in
the first year it was introduced in 2007, to more than 21 million,
Collymore said. The number of transactions it handles equates to about
a third of Kenya’s $61 billion gross domestic product, according to
World Bank data.

Safaricom has used M-Pesa to roll out new services, including
partnerships with more than 10 banks that enables businesses to
transfer money from their mobile phones to their bank accounts. It’s
also offered users the ability to reverse transactions within 20
seconds if they’ve sent funds to the wrong number.

Over the next 12 months, the company plans to begin introducing home
broadband services to 12,000 homes in Nairobi by using Kenya Power
Ltd. infrastructure to connect its fiber-optic cables to households,
Collymore said. The use of the electricity utility’s pylons to connect
consumers will help reduce data prices, he said.

Putting the fiber on Kenya Power’s poles is “a lot cheaper and a lot
quicker,” Collymore said. “Because they are going to new cement poles,
it makes it more robust because fiber gets dug up quite a bit. In a
low-cost, low-revenue environment like this, it actually makes more
sense.”

Kenya’s biggest company by market value currently has 3,200 kilometers
(1,988 miles) of fiber reaching 7,000 homes in Nairobi and the port
city of Mombasa. The company rolled out mobile 4G services in late
2014 through partnerships with Huawei Technologies Co. and Nokia OYJ
and is still testing the service that offers speeds of up to 100
megabytes per second, Collymore said.
Safaricom’s shares have climbed 3.7 percent so far this year to 16.90
shillings, giving the company a market capitalization of 677 billion
shillings.

read more




Equity Bank on Tuesday reported a more than doubling of loans disbursed through its mobile money platform, Equitel, to Sh14.1 billion and a 20 per cent increase in its first quarter profits to Sh5.1 billion.
Kenyan Economy


The bank said 81 per cent of its loans are now being disbursed through
the mobile platform, allowing it to cut stationary and staff costs.

“We have issued two million Equitel sim cards of which 90 per cent are
activated,” the bank’s chief executive, James Mwangi, said.

The steep increase in the volume of loans disbursed through the phone
also benefited from the fact that the average size of loan disbursed
through Equitel grew to Sh42,000 from Sh7,000 in December.

Equity’s loan book grew to Sh275 billion in the first quarter compared
to Sh224 billion in March last year while customer savings rose to
Sh299 billion from Sh276 billion a year earlier.

Mr Mwangi, however, disclosed that Equity cut back on take up of fixed
deposits after it tapped into cheap funding from the international
market during the Global Entrepreneurship Summit last year.

The bank received Sh20 billion at an average four per cent per annum
compared to average fixed deposit rate of 7.5 per cent.

read more





 
 
N.S.E Today

I came through the Early morning Rain in order to attend the Safaricom
Full Year Earnings Release this morning, ahead of the Market Opening.
This is a Flag-Ship Earnings Release because Safaricom constitutes
about 33% of the capitalisation of the Securities Exchange. Therefore,
whither Safaricom goes, so does the Nairobi All Share. Bob Collymore
Esquire has presided over a ''golden period'' of value creation for
Shareholders, with Shareholders having received returns since 2011
totalling 104% in Dividends and 680% in capital gains, through this
morning.  There are Few CEOs anywhere who can claim to have delivered
this kind of value to their Shareholders.



N.S.E Equities - Commercial & Services


Safaricom reported a +16.681% acceleration in Full Year Revenue which
clocked 195.685b. Full Year Voice Revenue [which has been pronounced
''Dead'' for a number of Years] posted a +3.93% increase and now
represents 51.1% of Service Revenue. SMS Revenue level-pegged M-Pesa
Revenue to clock 41.5b +10.59%. SMS is another Revenue Stream that was
pronounced ''dead'' not too longer. Mr. Collymore alluded to the
Arrival of Sportpesa as having been a Key SMS Accelerant. M-Pesa
Revenue clocked 41.5b +27.18% and that confirms M-Pesa's ubiquity in
the Financial Eco-System. M-Pesa Revenues clocked 11.78B in 2011 and
are up nearly 400% through 2016.

Mr. Collymore also said  "We are issuing 1 Loan every second via
M~Shwari and @KCBGroup M~Pesa"  This is the New Algorithmic Banking
model that Joshua Oigara spoke about, in action.

Mobile Data Revenues continue to be a ''sweet spot'' and Revenues
surged +42.71% to post 21.15b in FY16. Safaricom reported 14.1m mobile
data Users  and that Mobile Usage surged +112%. This remains a very
sexy curve. Safaricom reported 7.9m Customers on 3G and 0.7m on 4G
Handsets. The Arrival of the Information and Mobile Internet Century
is witnessed in these numbers. Expect further acceleration.

Safaricom reported a Headline +20.83% Gain in FY Profit before Tax at
55.76b, FY Earnings Per Share rallied +18.75% at 95 cents a share and
the Full Year Dividend was ratcheted +18.75% higher to 76 cents a
share. There are not many companies in Nairobi or anywhere [in many
parts of the World we are deep in negative interest rate Territory]
who are raising their Dividend Pay Outs by this kind of Quantum.
Safaricom is a Cash-Machine'' and reported Zero Gearing at the End of
this reporting Period.

The Share Price rallied +0.88% to close at 17.10 and traded 4.498m
shares. Sellers were thin on the ground. Safaricom is +4.58% in 2016
and I expect a Push up to All Time [Intra-day] Highs of 17.85 which is
just 4.20% away from todays closing Price. My Price Target remains
22.50 in 2016.

Safaricom closed the Earnings report by providing FY17 EBITDA Guidance
at 89b-92b versus 83.066273b FY16 which is a range increase of between
7.151%-10.76%. Essentially Safaricom have tilted EBITDA lower because
the FY16 Acceleration was +16.681%.

My Conclusion is that Safaricom is going to spend more in FY17,
especially in the area of ''big Data''

These were bulked up muscular Earnings, plain and simple.



by Aly Khan Satchu (www.rich.co.ke)
 
 
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