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Satchu's Rich Wrap-Up
Wednesday 07th of October 2009
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Macro Thoughts

Its all about Gold. I think this is a Major Break onto higher ground.

Home Thoughts

The Jacaranda are flowering and its a Purple Carpet in many parts of
the City. Its very Pretty. And from my 8th Floor, the view is quite
spectacular as well.


Jacaranda (usually pronounced /ˌdʒækəˈrændə/ in English) is a genus of
49 species of flowering plants in the family Bignoniaceae, native to
tropical and subtropical regions of South and Central America, Mexico,
and the Caribbean. The genus name is also used as the common name.
read more

Behind Afghan War Debate, a Battle of Two Books Rages WSJ
Law & Politics
The struggle to set the future course of the Afghan war is becoming a
battle of two books -- both suddenly popular among White House and
Pentagon brain trusts.The two draw decidedly different lessons from
the Vietnam War. The first book describes a White House in 1965 being
marched into an escalating war by a military viewing the conflict too
narrowly to see the perils ahead. President Barack Obama recently
finished the book, according to administration officials, and Vice
President Joe Biden is reading it now.The second describes a different
administration, in 1972, when a U.S. military that has finally figured
out how to counter the insurgency is rejected by political leaders who
bow to popular opinion and end the fight.

The two books -- "Lessons in Disaster," on Mr. Obama's nightstand, and
"A Better War" on the shelves of military gurus -- have become a
framework for the debate over what will be one of the most important
decisions of Mr. Obama's presidency.

The impact of all the book-reading on the Afghanistan decision isn't
clear. The administration's review of its Afghan strategy is expected
to last until the end of this month, and views are likely to evolve.
"A Better War" shaped the debate over the 2007 troop surge in Iraq:
Military commanders and top Pentagon civilians pushed the book
ardently on surge skeptics, winning important converts.


The most relevant book to read is Baburnama, the Autobiography of
Emperor Babur. The lessons there are the key ones.

Aly-Khan Satchu
Twitter alykhansatchu
read more

Baburnama [The Best translation is Wheeler Thackston Junior] Strand Books
An official chronicle and a highly personal memoir, the Baburnama
presents a vivid and extraordinarily detailed picture of life in
Central Asia and India during the late fifteenth and early sixteenth
centuries. It is also the text most often quoted by historians and
scholars of Mughal India. The prose of Zahiruddin Muhammad Babur, the
first Mughal emperor, is described by its new translator Wheeler
Thackston as frank, intimate, truthful, and unbiased. It is all the
more astonishing, therefore, that the Baburnama is also the first real
autobiography in Islamic literature. Babur had no historical precedent
for his narrative, yet even today it is a remarkably engrossing volume
to read. The interests that Babur expressed so eloquently in the
memoirs - his profound curiosity about the natural world and human
personalities, for example - defined also the directions that artists
were to take. Dr. Thackston's translation provides many new insights
into a particularly stimulating period in the world's history.
read more

Dollar swoon Currency Markets at a Glance WSJ
World Currencies
Dollar Index is at 76.40. Rouble dips below 30.00 to 29.8504
notwithstanding an Aggressive Banki Rossi [trying to stem the
move].Brazilian Real at 1.7548.


Broad Based $ weakness. I remain bearish on Sterling even in this bout
of Dollar weakness.
read more

Sterling versus the Dollar INO
World Currencies
Last trade 1.5874 Change -0.0023 (-0.14%)


Very bearish Price action.
read more

World Equity Markets At A Glance
World Of Finance
Dow closed 1.37% better at 9731.25 +1.37%.
read more

Bond Markets at a Glance WSJ
World Of Finance
The longer end of the US Curve sold off with 30 Years down a Full Point.
read more

Fed's Hoenig suggests tightening 'sooner rather than later' Marketwatch
World Of Finance
Hoenig noted that the current federal funds interest rate, or the
overnight lending rate U.S. banks charge one another, stands near

"I would not support a tight monetary policy in the current
environment," Hoenig said, according to the prepared remarks. "But my
experience tells me that we will need to remove our very accommodative
policy sooner rather than later."

He added, "even if we were to start immediately, much time would pass
before incremental increases could be considered tight or even neutral


I do not see any chance of an imminent tightening in the US.
read more

Gold Hits $1,045, a New Record WSJ
A weak U.S. dollar and chart-based buying enabled December gold
Tuesday to hit a record high for any most-active contract ever traded
on the Comex division of the New York Mercantile Exchange.The contract
peaked at $1,045 an ounce, taking out the previous most-active record
of $1,033.90 in March 2008.Additionally, October gold has been as
muscular as $1,043.80, a record for a nearby contract. Also, cash gold
hit the same record high price, according to one price vendor.


This was a Breakout Move, which to be fair, I have been signalling for
a very long time.
read more

Gold Dec 2011 Options INO
2011-11-22 1000 OG.Z11.1000C 199.7 17.2 14 OG.Z11.1000P 131.8 -5.6
2011-11-22 1050 OG.Z11.1050C 180.1 16.2 1 OG.Z11.1050P 161.2 -6.5
2011-11-22 1100 OG.Z11.1100C 161.7 15.3 9 OG.Z11.1100P 191.7 -7.4
2011-11-22 1150 OG.Z11.1150C 145.5 14.4 30 OG.Z11.1150P 224.3 -8.4
2011-11-22 1200 OG.Z11.1200C 131.1 13.5 14 OG.Z11.1200P 258.8 -9.2


Sell $1,000 Puts for 131.8.
Buy $1,100 Calls for 161.7.
read more

Coffee March 2010 +3.05% INO
Last trade 136.50 Change +4.05 (+3.05%)
Contract High 188.65 Contract High Date 2008-03-03
Contract Low 115 Contract Low Date 2009-03-09


Has room to play catch up.
read more

Rio lights a fire under the Bovespa Yahoo Finance
Emerging Markets
Index Value: 62,670.59
52wk Range: 29,435.00 - 63,291.00


Right on 12 month highs.
read more

Brazilian Real 1 Year Chart INO
World Currencies
Last trade 1.7526 Change -0.0002 (-0.01%)


Very well supported is the Real.
read more

Five Endangered Cultural Monuments That Need Your Help FAST COMPANY
Gingerbread Houses, Port au Prince, Haiti
The city's Bois Verna neighborhood is legendary for these elegant,
turn-of-the-century houses detailed with fretted wood and intricate
read more

Exxon takes $4bn stake in Ghana oil field FT
Minerals, Oil & Energy
ExxonMobil has agreed to acquire large stake in Ghana’s Jubilee oil
field from its private equity owners, paying about $4bn for one of
Africa’s most potentially lucrative oil discoveries in recent years.It
would generate about a four-times return for Blackstone and Warburg
Pincus, which together invested $800m in Kosmos Energy, owner of the
Jubilee stake.It also underscores a growing interest in west Africa by
the oil majors, which have been limited in their ability to expand by
rising resource nationalism in places such as Russia and Venezuela.
Africa has seemed a better bet, where military instability is the big
risk.But offshore positions such as Jubilee are increasingly sought
after, as they are more difficult targets for local insurrections.The
Jubilee field, discovered in 2007 off the coast of Ghana, is divided
into two licence areas. Kosmos has a stake of almost 31 per cent in
one, and 18 per cent in the other.Dallas-based Kosmos was founded by
Jim Musselman and Brian Maxted, two former executives of Triton
Energy, which discovered the Ceiba Field in Equatorial Guinea before
being sold for $3.2bn to Amerada Hess in 2001.

Large western companies including Royal Dutch Shell and BP, and
emerging market companies, such as CNOOC of China, had been listed as
possible bidders.


$800m into $4b.
read more

U.S. Condemns Mass Killings and Rape in Guinea New York Times
Law & Politics
Secretary of State Hillary Rodham Clinton called for “appropriate
actions” against a military government that she said “cannot remain in

“It was criminality of the greatest degree, and those who committed
such acts should not be given any reason to expect that they will
escape justice,” Mrs. Clinton told reporters in Washington. She said
that the nation’s leader, Capt. Moussa Dadis Camara, and his
government “must turn back to the people the right to choose their own

“The message is, what happened on Sept. 28 is totally unacceptable,
from every way you look at it — the killings, the gender violence,”
Mr. Fitzgerald said in an interview at the United States Embassy here
Tuesday. “I said, ‘Mr. President, whether you like it or not, it’s
tied to you. You are responsible for Sept. 28. The buck stops with
you.’ ”

The response from the captain was noncommittal, he said.

France, a traditional partner of Guinea, has suspended military aid,
and on Sunday its foreign minister, Bernard Kouchner, said, “It seems
to me that today, one can no longer work with Dadis Camara, and there
should be an international intervention.”

Captain Camara reacted angrily to these statements, telling reporters
Monday that “Guinea is not a subprefecture, is not a neighborhood in


The Captain is beyond the Pale.
read more

The Rand INO
World Currencies
Last trade 7.4369 Change +0.0124 (+0.17%)


Target remains 7.00.
read more

Uganda military to free Somali state minister Reuters
Law & Politics
Ugandan security forces have questioned Somalia's state minister for
defence and will release him later on Wednesday, Uganda's military
spokesman said.

Sheikh Yusuf Mohammad Siad, a former warlord also known as "Inda'ade"
or "white eyes", was bundled into a car in Kampala by plainclothes
security men on Tuesday, initially triggering fears among relatives
and colleagues that he had been kidnapped.
read more

Kenya Shilling versus Dollar INO
World Currencies

Obviously The Wild Card is the Politics. If Noise levels stay around
here and mute some, I expect a move towards 73.00 and 71.00. Any sharp
discord would amplify the move probably as far as 81.00. 81.00-83.00
has been a very strong support area for the Shilling, for very many
years now.
read more

Kenya's Safaricom fixes bond yield at 12.25 pct Reuters
N.S.E Equities - Commercial & Services
Kenyan mobile phone operator Safaricom's medium-term note will have a
12.25 percent fixed rate and a floating yield of 185 basis points
above the 182-day Treasury-bill return, arrangers said on
Wednesday.The leading telecoms operator wants to raise 12 billion
shillings in a five-year bond. The first tranche of 5 billion
shillings launched on Wednesday.

"It will be going to the market in up to three tranches," said Stanbic
Investment Bank's Anne Aliker, on behalf of other arrangers.

"The timing of the tranches will depend on liquidity, appetite and the
pricing consideration of both investors and Safaricom at that time."

Investors will be required to have a minimum subscription of 1 million

"We are not going to hold back. We need to invest now so that when the
upturn comes, we will be well positioned," said Chris Tiffin,
Safaricom's chief financial officer.


That 12.25% Coupon is attractive. I would look at running a shilling
Carry Trade and Funding it Dollars. Has a very attractive risk
profile. Especially as 81.00 area on the Currency is major resistance.
read more

Kenya tea prices hit another record at auction Reuters
Kenyan tea prices stayed on their upward trend at Tuesday's auction
with best Broken Pekoe Ones (BP1s) hitting a record for a fourth week
running, brokers said.The average price for Best BP1s TEABP1-BEST-KE
hit $4.47 per kg, up from last week's record of $4.31 per kg, and
$4.20 at the weekly auction before that. Best BP1s fetched $4.72-$4.22
per kg, up from $4.38-$4.24 at the last sale, while top PF1s
TEAPF1-BEST-KE changed hands at between $3.70-$3.50 per kg, down from
$3.88-$3.78 last week.


I believe this is a major Trend change and that Prices will remain
higher for longer than Most Commentators seem to allow.
read more

Pakistan Govt plans to launch $500m Eurobond DAWN
World Of Finance
Sources said that Pakistan would prefer to go for Eurobonds rather
than opting for launching Sukuk bonds, which are not beneficial as the
gains are almost neutralised due to the collateral requirement
attached with them.The official said that Eurobonds worth $500 million
were expected to be launched in first quarter of 2010 depending on the
available dates in the issuance calendar.‘While many Asian countries
including Malaysia, Taiwan and Mongolia are also planning to issue
global bonds this year,’ the finance ministry paper said.

With easing of global financial crisis, Pakistan’s international bond
yield has decreased to below 10 per cent compared to more than 26 per
cent in December 2008. ‘We are planning to float $500 million Eurobond
eying a yield of 7 per cent after getting special permission from the
donor agencies,’ the official said, adding that Pakistan’s country
credit rating has also been improved to ‘B-’ recently.
read more

Zain’s Dispute in Nigeria May Complicate Plans to Sell Stake Bloomberg
Information & Communication Technology
Zain, Kuwait’s biggest phone operator, faces an ownership battle in
Nigeria that may complicate plans by some of its investors to sell a
stake in the company.

South Africa’s Econet Wireless Holdings Ltd. disputes the ownership of
Zain’s Celtel Nigeria B.V., and said it sought arbitration measures to
prohibit the unit’s sale or transfer. “Celtel provided certain
undertakings to preserve the status quo,” it said, when asked about
the case. Zain Chief Executive Officer Saad al-Barrak denied on Oct. 5
that the company made such a commitment. “This has no basis
whatsoever,” he said.

The dispute may disrupt plans by Kuwait’s Kharafi Group and its
National Investments Co. to sell a 46 percent stake in Zain valued at
$13.7 billion to a group led by India’s Vavasi Group and Malaysian
billionaire Syed Mokhtar Al-Bukhary.

“As a potential buyer of a stake in the company you certainly want the
dispute about who owns the Nigerian business to be resolved as it
poses a significant commercial risk,” Emeka Obiodu, a London-based
telecommunications analyst at market research company Ovum, said in a
phone interview. “Nigeria is a fast-growing and huge African market
and therefore one of Zain’s most important assets.”

The Nigerian unit is a key asset for Zain. In 2008, Zain generated
about 21 percent of its total earnings before interest, tax,
depreciation and amortization in Nigeria and about 22 percent of its
total sales.

Bryanston, South Africa-based Econet is looking to overturn a 2006
deal in which Celtel bought a 65 percent stake in Nigerian mobile
operator Vmobile, since renamed Zain Nigeria. Econet, which owns 5
percent of Zain Nigeria, says it should have been given the
opportunity to buy the shares first.Zain, then known as Mobile
Telecommunications Co., bought Celtel International for $3.4 billion
in 2005 to expand into 13 African countries, including Kenya and

Econet said it “can confirm that it is currently pursuing arbitration
proceedings against Celtel, now Zain, and others to challenge the
transaction by which Celtel purported to purchase a majority stake in
Vee Networks Ltd., now Zain Nigeria.”

Chris Gabriel, chief executive officer of Zain’s Africa unit, said the
case is “following its due process,” without commenting further when
contacted by Bloomberg News on Sept. 21. Zain spokesman Ibrahim Adel
said the company had no comment. Celtel’s Lagos-based law firm F.O.
Akinrele & Co. didn’t return calls seeking comment.


Nigeria is Africa’s most populous nation with 155 million people and
the number of fixed-line and mobile-phone customers increased to 67.9
million in June from 65.5 million in January, according to the
Abuja-based Nigerian Communications Commission.Mobile-phone
subscribers accounted for 98 percent of the total. Phone connections
in Nigeria soared from 867,000 in 2001 when mobile-phone licenses were
auctioned for $285 million each.Nigeria is the fastest-growing
telecommunications market on the continent. It has overtaken South
Africa as the African country with the most phone users, with many
people carrying multiple handsets because of unreliable services.
read more

KenGen bond oversubscribed by over 68 pct: banker Reuters
N.S.E Equities - Industrial & Allied
Kenyan electricity producer KenGen had received subscriptions worth
25.2 billion shillings for its bond offer by October 5, an investment
banker with the sponsoring brokers said on Wednesday.KenGen, Kenya's
main electricity generating company, had planned to raise at least 15
billion shillings in a 10-year bond and had regulatory approval to
take up an addition 10 billion in the event of an oversubscription.

"As of Monday October 5, 25.2 billion shillings has been subscribed
presenting overall 68 percent oversubscription on the 15 billion we
were looking for. We are extremely please with that outcome," said
Amish Gupta, investment banker at Standard Investment Bank.

Arrangers are still reconciling subscriptions, he said, adding that
KenGen would announce soon whether it would absorb an extra 10 billion
shillings in a so-called greenshoe option.


Thats something.
read more

Kenyan ranch shows how UN scheme could protect forests that absorb CO2 and earn billions of dollars for their owners.
Food, Climate & Agriculture
Rukinga ranch in southern Kenya prides itself on the immense herds of
elephants, giraffe, lions and and wild dogs that have made a home
among its 80,000 acres of acacia trees in the decade since cattle were
banned. But the wildlife sanctuary's guards who risk their lives to
defend the animals from poachers now face an even greater danger.If
the ranch's owners can show that Rukinga's trees and shrubs are under
threat, and independent scientists can calculate the amount of carbon
in its forest, the ranch could qualify as an international Redd
(Reducing emissions from deforestation in developing countries)
project, attracting millions of dollars of carbon credits.

British conservationist Rob Dodwell and California-based dotcom
millionaire Mike Korchinsky, the ranch's two main shareholders, say
they have spent $400,000 (£251,000) over six months measuring
Rukinga's trees and getting their Redd application validated. Despite
the deep concerns of many observers about how open to fraud Redd
projects are, the pair are determined to show it can be done properly.

The carbon stored has been provisionally estimated at around 160
tonnes an acre, which at the present world price of carbon could earn
Rukinga nearly $2m a year — a big return for land bought only 10 years
ago for around $10 an acre. Dodwell and the 50 local community
shareholders of Rukinga will continue to earn money from eco-tourism
and cattle, but hope to earn a lot more from farming carbon.
read more

N.S.E Today
The NSE20 continued its bear run and closed at 2986.83 -33.79 points and through the psychologically important 3,000 level. The NASI slipped 0.57 points to close at 65.84. Market Cap was 762.672b versus 769.27b. Turnover was 90.68m versus 139.046m and confirms that selling pressure is not really material.

N.S.E Equities - Agricultural
Sasini Tea closed at 6.35. and traded 132,900 shares. Rea Vipingo traded a 100 shares higher at 11.20. Kakuzi traded 200 shares at 32.75. The Agri Counters are egregiously priced but Few seem even engaged with how to unlock Value.

N.S.E Equities - Commercial & Services
SAFARICOM shares volume 12,413,700 Total turnover 45,346,488 avg price 3.65 CLOSING PRICE 3.65 -1.35% high price 3.85 low price 3.50 last price 3.70 Conclusions Safaricom traded just under 50% of the Total turnover. How we closed at 3.65 when there was a Bid at 3.70 for more than 5m shares and at the market close makes it a conundrum. Some Cheap shares were self evidently traded on the Prompt [next day settlement] Board. it has been a resilient share price in the recent market pull back and I expect a keen take up of the Bond and a push higher through 4.00. TPSerena was the biggest loser at the Bourse falling 7.5% to close at 37.00 where 6,500 shares were traded. Thats an overeaction but note the low volume. Tourism is past its nadir and anecdotal evidence is that the rebound is material. Access Kenya eased a further 1.25% to close at 19.75 [19.75-20.00] and traded 157,300 shares. The Implied Forward here is 27.03. Kenya Airways was unchanged at 20.75 [20.75-21.50] and transacted 16,500 shares. CMC Holdings closed 1.455% better at 10.45 [10.30-10.50] and traded 25,500 shares with Good Buyside interest clustering at 10.00 and apparently little supply. Nation slipped 0.84% to close at 118.00 on low volume of 2,800 shares. ScanGroup was unchanged at 25.00 and traded a 24.00-25.75 range and 24,100 shares. Standard Group did not trade. CARGEN did not trade.

N.S.E Equities - Finance & Investment
Equity Bank traded 2nd overall. Equity Bank closed lower at 13.65 and traded a 13.50-14.00 range and 523,900 shares worth 7.156m. KCB closed lower at 19.75 [19.00-20.00] and traded 286,600 shares worth 5.672m. KCB is right on the bottom of its long standing range on the charts. Its been a low volume move though. Barclays Bank eased 1.11% to close at 44.50 [43.00-45.75] with 24,100 shares traded. Stanchart eased 1.41% to close at 140.00 [140.00-145.00] and traded 12,700 shares only. COOP Bank closed 1.78% easier at 8.30 [8.00-8.50] and transacted 243,900 shares. The Banks are correlated to GDP and the Economy but prices currently are pricing in an L. CFC StanBic did not trade. DTB did not trade either. HFCK improved 0.7% to close at 14.40 and traded a session high of 14.80 +3.5% with 12,100 shares traded. 15.00 is the key Pivot. NBK improved 1.48% to close at 34.25 and traded a 33.00-34.75 range and 33,500 shares. NIC closed at 31.75 and traded 16,700 shares. Kenya Re closed 3.81% lower at 10.10 [10.00-10.50] and traded 164,600 shares. The PE is about 5.5. Jubilee traded 200 shares at an unchanged 110.00. PanAfric did not trade. Centum bucked the downdraft and improved 0.45% to close at 11.10 [11.10-11.45] with 105,100 shares traded. Olympia Capital was unchanged at 6.60 with 1,100 shares traded.

N.S.E Equities - Industrial & Allied
EABL improved 0.73% to close at 138.00 [135.00-139.00] and traded 33,300 shares worth 4.597m. KENGEN retreated a further 3.004% to close at 11.30 [11.00-11.50] and traded 193,200 shares. KPLC eased 2.34% to close at 125.00 [125.00-129.00] and traded 10,500 shares. Cables was marked down 2.44% to close at 20.00 and traded 12,300 shares. Total slipped 0.85% to close at 29.00 and traded a 29.00-30.00 range and 43,900 shares. KENOLKOBIL was unchanged at 49.00 and traded a 50.00 high and 2,700 shares. Bamburi traded a 100 shares at an unchanged 161.00. ARM eased 2 shillings to close at 93.50 and traded 2,300 shares. PortLand did not trade. Mumias Sugar fell 2.44% to close at 6.55 [6.50-6.75] and traded 419,800 shares. Raw Sugar Prices remain firm and a supportive backdrop, the trailing PE is 6.29, ahead of some new Income Streams, which have yet to fully impact the Bottom line. BAT traded 400 shares at an unchanged 175.00. The Running Yield is 9.71% and an Outlier. Crown Berger did not trade. Eveready improved 1.96% to close at 2.60 on 5,500 shares. Sameer traded 18,500 shares at an unchanged 5.00. Unga bounced 2.64% to close at 7.80 and traded 300 shares with Demand of about 50,000

by Aly Khan Satchu (www.rich.co.ke)
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October 2009

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