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Satchu's Rich Wrap-Up
 
 
Friday 20th of June 2008
 
Afternoon
Africa
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If you are tracking the NSE Do it via RICHLIVE and use Mozilla Firefox as your Browser.
0930-1500 KENYA TIME
Normal Board - The Whole shebang
Prompt Board Next day settlement
Expert Board All you need re an Individual stock.

I welcome feedback.

I thank Ashok Shah for the time today. Thank you.

Tomorrow 9.30 onwards Nu Metro Westgate Safaricom CEO Mr. Michael Joseph is the Guest Speaker.
You are all welcome. Do come and support us.
I gave Lynette [She looks after Hannah] her Safaricom profits yesterday and she was pleased. We went through the whole process of a loan et al because lot of folk just would be too scared to go through the process. Now she has a bank account and we can work on getting her the piece of land she covets in Kakamega. I live in a house entirely of women. Nishet, Aysha, Layla and Hannah. And of course, Sahara the retriever.

I am going to take them to the Rugby Sevens over the weekend.
http://www.nationmedia.com/dailynation/nmgcontententry.asp?category_id=5&newsid=125690
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Safaricom Data
Africa
total deals 5216
total turnover 480,502,240
avg price 7.84 closing price 7.80
high price 7.90
low price 7.70
last price 7.85
shares volume 61,271,800

Commentary

Still beneath 8.00, the key pivot. On classic chart theory, the recent price is creating a triangle pattern, which normally indicates an upcoming break [either side actually]. Its well supported at 7.80, volumes are slowing so I expect a break to the upside.
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Macro Thoughts-Buy China
China
Buy one and two year soft commodity calls.
Buy one year $ calls against the Euro
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International Markets
RealEstate, Housing & Construction
UK property; IG Index, the online spread-betting provider, offers a Dec 08 future on the UK/London avg. house price. Daily price today is about 280, Dec future is currently at 169.
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Short-Selling Nasty, Brutish And Short
World Of Finance
It is difficult being a short-seller. Most shareholders and managers agree that you are an important part of an efficient stockmarket—until you dump shares in their company. Then things can turn nasty. "We appreciate that, asshole," barked Enron's chief executive, on a public conference call, to a suspected short-seller who had complained about the lack of a published balance sheet. Sometimes bears need even thicker skins. In 1995 Malaysia's finance ministry reportedly proposed caning as a punishment for abusive shorting.

A reaction against short-selling often follows big stockmarket declines.
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Bollywood And Hollywood
Misc.
Bollywood's songs are hummed in Morocco, its films are rented in California and its stars are cast in wax at Madame Tussauds in London.
But India's new money has an appeal even its melodrama cannot match.
On June 17th the Wall Street Journal reported that one of India's biggest conglomerates, Anil Ambani's Reliance group, was in talks to form a film-making partnership with Steven Spielberg's DreamWorks studio, owned by Viacom, a media giant. Mr Spielberg and David Geffen, the studio's co-founders, want to regain their independence when their contract with Viacom ends, and are looking for funding.
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Commodities-US Says Israel Exercise Seemed Directed At Iran: Report
Commodities
US officials say a major military exercise carried out by Israel earlier this month seemed to be a practice for any potential strike against Iran's nuclear facilities, US media reported Friday.

More than 100 Israeli F-16 and F-15 fighter jets took part in maneuvers over the eastern Mediterranean and Greece in the first week of June to gear the military for long-range strikes and demonstrate Israel's serious concern over Iran's nuclear ambitions, the New York Times cited US officials as saying.

A Pentagon official briefed on the exercise said a goal of the practice flights was to send a message that the Jewish state was prepared to act militarily if diplomatic efforts failed to halt Tehran's production of bomb-grade uranium.

"They wanted us to know, they wanted the Europeans to know, and they wanted the Iranians to know," the Pentagon official was quoted as saying.

"There's a lot of signaling going on at different levels."

Conclusions

This is lifting crude prices higher. It is curious that it was nearly 30 years ago that the Ayatollah was swept into power. I remember watching the revolution unfold on the TV. I had gone to study at Westminster School that very same year. The catalyst for the revolution was best captured by
http://www.randomhouse.com/acmart/catalog/display.pperl?isbn=9780679738015
The Ayatollah was in France and as the Shah become more repressive, every Friday he would send a tape which would be played in the Mosques. The Shah began to feel very threatened especially when Worshippers left the mosque of a Friday and one Friday, he sent the hated Savak into the Mosques. The next Friday he was gone. The tape said, 'He is an Infidel, he does not respect the holiest of places.'
The Peacock throne fell and on such seemingly trifling mistakes, Regimes fall.

The Iranian version of Shia Islam is deeply rooted in the idea of Martyrdom and sacrifice. Millions of Iranians went to their deaths against Saddam. The West still sees Iran through the Pahlavi prism, because so many of them are in LA.

My point is this. It might make great TV lobbing a few well directed missiles at the Iranians and my concern is that a President who sees so much in a stark black and white, good and evil prism, nearing the end of his tenure, it might seem a great exit option. It really might.
This would not be taken lying down by the Iranians and I think they could really hold our feet to the fire in Iraq.
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How Iran Would Retaliate If It Comes To War
Misc.
"If you attack Iran you are unleashing a firestorm of reaction internally that will only strengthen revolutionary forces, and externally in the region," says Ranstorp. "It's a nightmare scenario for any contingency planner, and I think you really enter the twilight zone if you strike Iran."

So what does such a scenario do to the Crude market? It creates a potential super spike. How to exploit this? ONE TOUCH.
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Crude Fell $4 A Barrel Yesterday
Commodities
Yesterday, the contract dropped $4.75, or 3.5 percent, the biggest decline since March 31. China raised fuel prices for the first time in
7 1/2 months.Futures climbed to a record $139.89 on June 16. Prices are 91 percent higher than a year earlier.

and Note this
Americans reduce driving 1.4 billion miles http://www.startribune.com/business/20586524.html?location_refer=Business

With gas prices at record levels above $4 a gallon, Americans are driving less and abandoning gas-guzzling vehicles, according to government data. Americans drove 1.4 billion fewer highway miles in April compared with the same month last year, and 400 million fewer miles than they did in March, according to the Transportation Department.
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Slav Farm Reserves Could Avert Global Famine
Food, Climate & Agriculture
Troika Dialog has written a detailed report - "The New Frontier" - to guide western investors through the Slav land boom and on how to play the opportunities on both the Moscow bourse (for the brave) and European stock exchanges (for the timid).

If you want to gain a stake in the land, Mr Bond recommends the Baltic company Trigon Agri. It trades on the Stockholm exchange (TAGR.ST) and values holdings in Russia and the Ukraine at roughly $1,400 a hectare.
Troika Dialog likes the sunflower processor Kernel and the sugar group Astarta, both Ukrainian companies that trade on the Warsaw exchange if you want the security of EU investor protection. Or try the grain group Razgulay (GRAZ.MM in Moscow), meat producer Cherikozovo Group, and the fertilizer companies Uralkali and Silvinit, all Russian. They trade at a price-earnings ratio of 9 to 12, a 25pc discount to global peers.
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Emerging Markets-Sub-Saharan Africa-Zimbabwe's Tsvangirai May Pull Out Of Run-Off - MDC
Africa
Zimbabwe's opposition leader Morgan Tsvangirai is considering pulling out of the June 27 presidential run-off election, a spokesman for his Movement for Democratic Change said on Friday.

"There is a huge avalanche of calls and pressure from supporters across the country, especially in the rural areas, not to accept to be participants in this charade," MDC spokesman Nelson Chamisa told Reuters.
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Africa Needs A Farming Revolution, Experts Say
Food, Climate & Agriculture
Africa's farms today are only one-fourth as productive as the world average. Populations are growing fast, while food productivity per capita has declined from 30 years ago. During that time, Africa has gone from a continent of food exporters to one that imports some 20 million tons of it every year.

"These are farmers who are basically always living on the edge," said Josh Ruxin, a development expert at Columbia University. "They produce just enough food to eat, and during natural disasters or economic downturns they use up their crops and are thrust to the brink of hunger."

Conclusions

Its extremely simple. You subsidise the inputs up front. When you are in a hand to mouth situation, it is obvious that you are not going to be able to afford the escalating prices of the inputs. Its the chicken and egg. Malawi worked it out and have achieved tremendous success.
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Uganda's Strategic Vulnerability
Africa
"As a landlocked country, Uganda relies heavily on the transport networks of its neighbours," stated the report. "And the inadequacy of Kenyan ports and rail services considerably hampers Uganda's trade activity."
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Kenya- Safaricom Refund Blues
Africa
The Central Bank of Kenya and the Capital Markets Authority, meanwhile stepped in with a directive that the process be speeded up. They also ordered banks to pay refunds of Sh10,000 or less in cash to reduce the queues.
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Bank Verus Saccos
Africa
According to Central Bank statistics, commercial banks at the beginning of 2008 were holding Sh682 billion for depositors and had lent out Sh400 billion. Around two million Kenyans, out of a total workforce of 15 million in the formal, informal and farming sectors hold bank accounts today. Over half of these customers are with Equity Bank and Co-op Bank.

Saccos on the other hand served seven million members with Sh210 billion in deposits and advanced loans worth Sh150 billion as last year, according to the latest data from the ministry of Cooperative development and marketing.

As matters stand, Saccos serve 17 per cent of Kenyans and have grown at an average of 20 per cent per year over the last five years.
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Jubilee Expansion Plans
Africa
In the year ending December 31, 2007, Jubilee Holdings Limited posted a pre- tax profit of Sh809.5 million, a 26 per cent increase over the previous year's earnings of Sh642.8 million

The company said the rise was boosted by the medical business which grew by 34 per cent in 2007 to stand at Sh1.24 billion

Fundamentals of the company's business are in good shape because of "selective underwriting, pricing discipline and improved operational efficiency."

The company says its plans for 2008 includes a strategic drive in the life insurance segment, including innovation in distribution and customer orientation, the roll-out of new products targeting customer segments and lifestyle needs such as an education policy cover.
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Political Reflections- Public Reacts To MPs' Anti Tax Stance
Africa
Separate statements by the Head of the Public Service Francis Muthaura and Government Spokesman Alfred Mutua left no doubts a major battle was looming between the Government and the MPs opposed to taxation of their allowances.

"There is a strong feeling in Government legislators should participate in taxation," said Muthaura.

Conclusions

It seems politically a very silly posture to argue against being taxed.

The Shilling is at 64.45.
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N.S.E Today
Market is a little like a rabbit caught in the headlights, the next surge higher will coincide with Safaricom crossing and closing above 8.00. Market capitalisation closed at 1255.04b versus 1259.86b last time. Turnover was 790.746m versus 787.384m last time. The NASI is down 0.44 points at 114.321. The NSE 20 eased 12.18 points to close at 5271.90.


N.S.E Equities - Agricultural
Unilever Tea is lower at 47.00 [1,400 shares]. Kakuzi is higher at 39.25 [5,900 shares]. Rea Vipingo closed at 19.65 [14,300 shares]. Sasini closed at 14.75 on 11,800 shares.


N.S.E Equities - Commercial & Services
Access Kenya traded 3rd at the Bourse with 1.716m shares worth 60.162m changing hands. The days range was 34.75-35.50 and Access is unchanged at 35.00. Nation was 4th overall today which is quite a turn up because volumes had really declined. Nation traded 77,600 shares worth 27.059m shillings. The days range was 348-350 and NMG eased marginally to close at 348.00. CMC transacted 625,572 shares worth 13.547m. The days range was 21-22 and CMC closed unchanged at 21.50. 20 is key support. Kenya Airways closed at 51.00. Kenya Airways traded a tight 50.50-51.50 range, some 230,000 shares worth 11.73m. Key Support is 48.50. Scangroup is unchanged at 32.75 [33.25 intra day high] on just 61,300 shares. TPSerena closed at 72.00 on just 4,600 shares. Standard Group is down 2.56% to close at 57.00 on 1,579 shares. Car and General did not trade.


N.S.E Equities - Finance & Investment
Equity Bank was 2nd today. Equity [clever advert given the refund shenanigans elsewhere] traded 212,600 shares worth 63.827m. The range was 297-310 and Equity closed bang on 300.00. Its looking very constructive again. KCB was 6th overall, trading 600,770 shares worth 19.027m. The range was 31-32 and KCB closed at 31.50. This is a compelling entry point for anyone prepared to look a little forward. Barclays is unchanged at 72.50 [72-73 range]. Barclays traded 181,478 shares. Stanchart closed at 217 [215-218] on relatively light trading of 31,900 shares. NBK was well traded, the rest barely featured in this segment. NBK transacted 189,925 shares worth 11.734m. The days range was 61.50-63 and NBK closed a little lower at 61.50. NBK is being well sought and is in a 58-65 range for now. NIC closed at 60.50 [61.50 intra day high] on 40,600 shares. HFCK closed at 34.25 [34.50 high] on 89,100 shares. DTB is unchanged at 95.50, traded a 99 intra day high and 34,109 shares. CFC is at 116.00 on 3,200 shares. Kenya Re traded a healthy 365,066 shares worth 6.349m shillings. The days range was 17.35-17.6 and Kenya Re closed at 17.50. Jubilee is being jerked around of late. Jubilee closed 2.63% higher at 195.00 on just 2,000 shares. PanAfric did not trade. Centum closed at 27 [27-28 range] on 111,000 shares.


N.S.E Equities - Industrial & Allied
EABL closed 0.5% lower at 198. EABL traded 5th overall [activity has sparked around this 195-205 level] with 131,102 shares worth 26.058m changing hands. Mumias [Look at Brazil and see the potential] Sugar traded 956,899 shares [Supply continues to come easy confirming an outsize position being trimmed, still] worth 12.314m. The range was 12.60-13 and Mumias closed at 12.85. The Cements were lightly traded. ARM eased 1.75% to close at 112 [110-114] on light volume, 15,500 shares. Bamburi did not trade. Neither did Portland. Kengen traded 401,603 shares, a 24.75-25.50 range and has closed at 25 and unchanged. KPLC transacted 2,493 shares and has closed lower at 218.00 [208-220]. Cables edged lower to 41.50 on 40,100 shares. Kenol traded a 90-91.50 range and edged higher to close at 90.50 on 51,300 shares. Total is unchanged at 30 [31 intra day high] on 59,300 shares. BAT is at 163.00 [3,600 shares]. Berger is at 42.50 [1,300 shares]. Eveready is unchanged at 5.95 [47,900 shares]. Sameer closed at 9.70 [17,400 shares]. Olympia is at 15.65 [16,800 shares]. Unga is at 13.50 [22,900 shares]. If you have got down all the way here you deserve a beer!


by Aly Khan Satchu (www.rich.co.ke)
 
 
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June 2008
 
 
 
 
 
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