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Satchu's Rich Wrap-Up
 
 
Thursday 06th of May 2010
 
Morning
Africa

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I do thank The Honorary Attache for Malawi for the Invitation
yesterday to celebrate the Accession of President Bingu wa Mutharika
to the Chairmanship of the African Union. The Honorary Attache had
recalled that the Better Half is a Malawian and that as far as I am
concerned is Fine Diplomacy on its very own. It was an extremely Tip
Top Type Affair and not a small sprinkling of Heavy Hitters. The
Speeches were short sharp and to the point, which is always like icing
on the Cake. The Malawi Minister of Justice described how President
Kamuzu Banda used to have a Fly Whisk and that in fact it was given to
him by Jomo Kenyatta. I remembered Charles Njonjo telling me how when
he was short of a Bob or two in the United Kingdom, he used to make
his was to Dr. Banda's Practice [in Glasgow? I have forgotten] and he
would always come away with Five British Pounds [which was the amount
of Pocket Money I got a week when I was 13 and first went to
Westminster]. I got hold of the Prime Minister and said;

'Do You remember Me?'
PM 'I never forget a Face.'
[We met just before the Election at Karen Country Club.And we had a
long discussion and he delivered a Speech at the NSE that day which
rallied the market over a 100 points, in fact].
I said I am the Man with a Plan.
He says i am the Open Door Policy Guy.

We left it at that.

I did have a very good time. Thank You.

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

The Dubai Dream
Equity Bank Returns To A Supernormal Growth
The Magic Tipping Point
Africa Equities from #Cape to #Cairo
The Farmers Will Drive The Ferraris
Coalition Storm Was Mere Market Swoon
Voodoo Economics

Macro Thoughts

Euro 1.2300 then 1.0950 then Parity ?
The Frontier is the Place to be in 2010.

read more


Nigeria's president Yar'Adua dead AlJazeera
Law & Politics

Umaru Yar'Adua reportedly died around 2100 local time (2000 GMT) on
Wednesday evening at the Aso Rock presidential villa in the Nigerian
capital, Abuja.

"Nigeria has lost the jewel on its crown and even the heavens mourn
with our nation tonight," Jonathan said in a statement.

"As individuals and as a nation we prayed for the recovery of Mr
President. But we take solace in the fact that the Almighty is the
giver and taker of all life."

Under Nigeria's constitution, Jonathan now becomes president until the
next elections scheduled to be held by April 2011. He also will
nominate a vice-president, subject to approval by the senate.

"When a president dies suddenly, the transition period is always dicey.

"On the other hand, his health has been bad for a long time so the
Nigerian power structure has had time to prepare for this.

"I think it will be a fairly smooth transition. I don't expect any
kind of upheaval since Jonathan as acting president is already firmly
in control."

Conclusions

Bullish for the Markets.

From Whence We Came we will return.

read more


Greece on brink of abyss as three bank workers killed in riots Times
World Of Finance

A riot policeman falls after being hit by a molotov cocktail near the
Greek parliament in Athens.

Conclusions

The President of Greece warned last night that his country stood on
the brink of the abyss after three people were killed when an
anti-government mob set fire to the Athens bank where they worked.

“I have difficulty in finding the words to express my distress and
outrage,” President Papoulias said. “The big challenge we face is to
maintain social cohesion and peace. Our country came to the brink of
the abyss. It is our collective responsibility to ensure that we don’t
step over the edge.”

read more


International Markets
World Of Finance


Stock and commodity markets around the world were shaken as concerns
about Greece and the potential downgrade of Portugal fed what one
economist described as "a new global capital markets shock." U.S.
Treasurys and the dollar rallied.

read more


Currency Markets at a Glance WSJ
World Currencies

Euro 1.2830 - Objective 1.23
Pound 1.5106
Dollar Index 84.07
Aussie 0.9044
Rand 7.5997

Conclusions

The Euro is in Free Fall and I see little to stop the Fall for now.The
Euro is at a 15 month low.

read more



US Bond Markets at a Glance WSJ Big Flight to Quality Move
World Of Finance

2-Year Note    0/32    0.873
3-Year Note    -1/32    1.396
5-Year Note    -2/32    2.310
7-Year Note    -2/32    3.014
10-Year Note    -4/32    3.562

read more


Blankfein’s Bonds Are Riskier Bet Than Pandit’s Bloomberg
World Of Finance

Debt from the most profitable Wall Street firm yielded 2.73 percentage
points more than Treasuries on average as of May 4, according to Bank
of America Merrill Lynch indexes. That compares with a spread of 2.29
percentage points for Citigroup, which got a $45 billion bailout in
2008 and repaid $20 billion in December. At the end of March,
Citigroup spreads were 0.45 percentage point wider than Goldman
Sachs’s.

Yields over benchmark rates on junk bonds rose 23 basis points
yesterday, the most since June 2009, to 591, according to Bank of
America Merrill Lynch index data. High-yield, high-risk, or junk bonds
are rated below Baa3 by Moody’s Investors Service and lower than BBB-
by Standard & Poor’s.Developing-nation debt fell as the 110
billion-euro ($141 billion) Greek rescue plan failed to reassure
investors the crisis won’t spread to other European countries and slow
the global recovery. The yield spread over Treasuries widened by 11
basis points to 291 yesterday, according to JPMorgan Chase & Co.’s
EMBI+ Index.Brazil’s benchmark borrowing costs slid below Russia’s for
the first time this year as investors bet the South American country
is less at risk of contagion from the Greek debt crisis than Eastern
European nations.Brazilian dollar bonds yielded 218 basis points more
than Treasuries yesterday, compared with 219 for Russia, according to
the EMBI+ index. Brazilian yields last were below those on Russian
debt, which is rated one level higher by S&P and two by Moody’s, on
Dec. 21.

Conclusions

Those Goldman Bonds are cheap.

read more


Goldman Sachs share price data
World Of Finance

$148.19
52 Week High: $192.28
52 Week Low: $129.26
Shares Issued: 526.25m
Market Cap: $77,985m
RiskGrade: 237
Beta: 1.35

Year Ending      Revenue ($m)      Pre-tax ($m)      EPS            P/E      PEG  EPS Grth.
31-Dec-09      45,173.00      19,829.00      2,188.16¢      7.7      0.0      +369%      

Conclusions

Looks a very cheap share.

Goldman Sachs compared to Citi Wolfram Alpha
http://bit.ly/cHytth

read more



Long-Distance Calls Boost Sotheby's Sale WSJ
Misc.

Matisse's 'Bouquet of Flowers for the 14th of July': $28.6 million.

read more


Bugatti Coupe Sets $30 Million Record as Investors Buy Classics Bloomberg
Tourism, Travel & Transport

A 1930s Bugatti Type 57SC Atlantic. The Bugatti has become the world's
most expensive car after selling in a private transaction close to the
asking price of $30 million. Source: Kidston SA via Bloomberg

The Type 57SC Atlantic was bought in a private transaction for nearly
as much as its asking price, dealers with knowledge of the matter
said. The coupe had been owned by the New Hampshire-based neurologist
Peter D. Williamson, a former president of the American Bugatti Club,
who died in 2008.

“Interest rates are low and some people have made a lot of money over
the last year,” said John Collins, of U.K.-based Ferrari dealers
Talacrest 2000 AD Ltd. “They want to buy real assets that have a
limited supply and that won’t go down in value. Modern art and classic
cars are tracking each other at the moment.”

read more


How to make the perfect cream tea The Times
Food, Climate & Agriculture

Cream first or jam? Plain scone or currants? Raspberry jam or
strawberry? There are hundreds of ways to assemble a cream tea, but no
clear rules on what works best

read more


Commodity Markets at a Glance WSJ
Minerals, Oil & Energy

Crude-oil futures dropped steeply for the second day in a row, sliding
3.4% to settle below $80 a barrel, on concerns about the Greece
bailout and an unexpected rise in inventories.

read more



Live Gold Spot 24 Hour KITCO 1174.50
Commodities

The global political and macroeconomic background "is bullish for
gold, it shows the viability of gold as an alternative currency," he
said.

My Sentiments exactly.

read more


Soft Commodities at a Glance INO
Commodities


Front Cocoa +1.8%
Front Sugar -1.47%

read more




Niigeria All share Index Bloomberg Visual 27121.90 +1.038% +30.22% 2010 Go Limit Long
Africa

Value27,121.90    
Change278.760     
% Change1.038

Conclusions

BUY.

read more


African frontier debt bucks sell-off trend Reuters
Africa


The yield on Ghana's eurobond, a benchmark for African frontier market
risk, fell to a new low on Wednesday even as investors dumped other
emerging market assets on concerns about the fallout from Greek
debt.The yield, which moves inversely to the price, fell as low as
6.365 percent from Tuesday's close of 6.483 -- already a record low
for the $750 million 10-year Eurobond, which was launched in 2007 with
an 8.5 percent coupon.The bond was the first dollar-denominated debt
issued by a sub-Saharan government apart from South Africa, and was
battered in Dec 2008 as panicked foreign investors fled from emerging
markets, pushing the yield up to above 23 percent.

Gabon issued a eurobond with an 8.2 percent coupon shortly after
Ghana, and that plotted a similar course in late 2008 and early 2009,
but has since also seen its yield fall, hitting a record low of 6.1642
on April 15.Gabon's yield on Wednesday fell fractionally on the day to
6.3493 percent.

The two African bonds tell a very different story from more
established emerging markets, where investors pulled out of countries
perceived as having a chance of going the same way as heavily indebted
Greece.CMA Datavision said the cost of insuring five-year sovereign
debt rose in Romania, Hungary and Ukraine.Credit default swaps rose 15
basis points for Hungary, which is seen as vulnerable to contagion due
to state debt on track to hit 80 percent of GDP this year.

The picture is different in many countries in Africa, where government
deficits are generally in check and overall levels of state debt are
low.In Ghana, for instance, the government has managed to bring a
deficit of 24 percent at the end of 2008 to below 10 percent by the
end of last year. The advent of oil revenues in late 2010 should bring
it down to 3-5 percent by 2012.

However, in South Africa, the continent's most developed economy where
the government has a budget deficit of 6.8 percent of GDP and overall
debt of less than 40 percent, the rand fell 1.3 percent and bond
yields rose as investors pulled back.

Conclusions

There is a Structural Short of Paper.

read more


Ghana All Share Bloomberg Visual +20.4055% 2010
Africa

Value6,709.68    
Change141.070
% Change2.148

Conclusions

Buy this as well. 20%+ GDP on the Horizon.

read more


$ versus Rand Live Forexpros 7.6579 Last
World Currencies

8.00-8.10 is the Top of the Range and looks like we are headed right there.

read more


Johannesburg Stock Exchange to Push for Linked Africa Bourses Bloomberg
Africa

Johannesburg’s stock exchange last year started the African Board to
lure companies outside South Africa, setting fees at levels that will
only cover its costs. Talks with exchanges in Botswana, Kenya,
Nigeria, Botswana, Ghana, Namibia, Zambia and Zimbabwe to combine have
failed to result in agreement, with bourses citing concerns that the
JSE would take business away from smaller exchanges, JSE CEO Russell
Loubser  said last year.

“Redesigning Africa’s capital markets is the most important thing,”
Newton-King said on the WEF conference. “It’s about linking exchanges.
We need a harmonization of standards across the market. People aren’t
going to trade in a market unless we’ve sorted this first thing out.”

The market value of companies traded on the Johannesburg exchange is
$408 billion, more than 10 times the $40 billion of sub-Saharan
Africa’s second-biggest market, Nigeria, according to Bloomberg data.
The JSE’s African Board has attracted listings by Namibia’s Trustco
Group Holdings Ltd. and Botswana’s Wilderness Holdings Ltd. with more
expected this year, Newton- King said, without being more specific.

read more


South Africa All Share Index Bloomberg Visual 27616.68 -0.18% 2010
World Of Finance


Value27,616.68    
Change-319.170     
% Change-1.143

Conclusions

Back at Square 1 for 2010.

read more


Sasini Tea reports Half Year Results to March 2009 here www.rich.co.ke
N.S.E Equities - Agricultural

Par Value:                  1/-
Closing Price:          15.20
Total Shares Issued:          228,055,504
Market Capitalization:        3,466M
EPS:            2.30
PE:                6.609

Swot Analysis
Group 6 months to March 2010 versus March 2009
Revenue 1.318672b versus 1.019123b +29.328%
Biological Assets Revaluation 119.396m versus 122.175m
Profit from Operations 494.87m versus 259.58m
PAT 304.155m versus 155.572m
EPS 1.33 versus 0.68 +95.588%
20 cents Interim Dividend per share

Conclusions

15.20 / [1.33 x 2 ] = Implied Forward PE is 5.714

I believe a PE of 10 is an entirely Fair and Justified Objective which
gives a Price of 26.6.

I also believe that The Management need to put up a Road Map for
Shareholder Value Extraction. Hardly Rocket Science.

read more


NIC Bank reports 1st Quarter EPS +42.857% share price date here
N.S.E Equities - Finance & Investment

Par Value:                  5/-
Closing Price:          38.75
Total Shares Issued:          326,361,632
Market Capitalization:        12,647M
EPS:            3.31
PE:                11.707

1.10 versus 0.77 in the 1st Quarter last Year
1.1 x 4 = 4.4
38.75 / 4.4 = 8.80 Implied PE

Conclusions

45.00 is the Price Objective.

read more


NSE20 Bloomberg Visual
N.S.E General

4,243.57
+30.674% 2010

Objectives

4482 and looks now to be under threat.

read more


Death valley The Times
Africa

Spicer thinks Alice, Countess de Janzé, was the killer.

read more


Marula Lane House, Spicer's former home
Africa

The house might well have been in Surrey. The bricks were a bright
baked red, the window frames were painted white and a high chimney on
the left served the large ground-floor sitting room, which overlooked
a tidy lawn. It had all the right playthings: a swimming pool, a
tennis court, verandas and stables. The only clue that the house was
located somewhere quite different was the enormous jacaranda tree to
its left, in full pink-purple bloom.

Marula Lane was 10 miles from the centre of Nairobi, the Kenyan
capital, but shortly after my wife, June, and I moved there in 1970,
we nicknamed it “Murder House”. I was working for Lonrho, which had
bought the property for £12,000. Despite its picturesque location in
Karen — named after Karen Blixen, author of Out of Africa, and the
preferred address for the well-to-do — it was a home haunted by its
past.

read more



 
 
N.S.E Today

I have an appointment at the World Bank and therefore I will update

the Official Closing Data directly onto the site www.rich.co.ke a
little later.

The Bourse saw heavy action with shares worth 588.179m traded and has
surely come close to a new 2010 Closing High.



N.S.E Equities - Agricultural

Sasini Tea reported 6 months results +95.588% ahead of the same time
last year and announced an Interim Dividend of 20 cents. Sasini Tea
closed at 15.15 and traded a 14.85-15.70 range and 634,700 shares
worth 9.639m.
Kakuzi closed at 77.50 and traded 200 shares.
Rea Vipingo closed at 18.85 and traded 14,000 shares.



N.S.E Equities - Commercial & Services

Safaricom

shares volume     42,927,800
total turnover      257,486,368
avg price     6.00 Closing Price 6.00 +0.84%
high price     6.05
low price     5.95
last price     5.95

Conclusions

Safaricom was the most active Counter trading 42.927m shares [which
ranks in the Top 5 heaviest trading days over the last 5 months] worth
257.486m, which was 43.84% of the total volume today at the Bourse in
what was a High Action Day. Safaricom closed at 6.00 +0.84% and 1.63%
below its 12 month high of 6.10. There is clearly a Determined Buyer
at work ahead of the Results due End Month.

Scangroup was unchanged at 30.00 and traded 66,700 shares. I think the
Price is well supported now on the basis that BT has found a key to
unlock SSA and this had previously been a Strategic Challenge.

Kenya Airways rowed against the Tide today and eased 1.76% to close at
55.50 and traded a 55.00-56.50 range and 282,200 shares worth 15.764m.

Access Kenya firmed 1.31% to close at 19.30 and traded a 18.60-20.00
range and 439,700 shares worth 8.501m.

Nation traded 30,000 shares and closed at 145.00 +1.4%.
Standard traded 1,000 shares at 41.00 unchanged.

CMC Holdings bounced 1.125% to close at 13.45 and traded a 13.10-13.90
range and 170,800 shares.
CARGEN did not trade.

TPS Serena was unchanged at 63.00 and traded 17,200 shares.



N.S.E Equities - Finance & Investment

Equity Bank firmed a further 1.6% to close at 19.00 and traded an
18.80-19.30 range and 932,500 shares worth 17.721m. Demand outweighs
Supply by a Factor of 3-1 and points the price at 20.00 as Investors
continue to respond quite forcefully to the Earnings Inflection
evidenced in the 1st Quarter 2010 Earnings report.
Stanchart closed 0.5% better at 200.00 and traded 7,300 shares.
Sellers are scarce.
COOP Bank closed at 11.90 +0.85% and traded 770,100 shares worth 9.186m.
Barclays Bank was unchanged at 57.50 and traded a 57.00-58.00 range
and 263,100 shares worth 15.218m.
KCB was unchanged at 22.50 and traded a 22.25-23.00 range and 607,600
shares worth 13.745m.

NIC reported 1st Quarter 2010 +42.857% and promptly eased 1.29% to
close at 38.25 and traded 55,900 shares. The Results did not justify
this reaction.
CFC StanBic closed 1% easier at 49.25 and traded a 48.00-50.00 range
and traded 109,700 shares.
HFCK edged 1.12% better to close at 22.50 and traded 51,400 shares
with Buyers for 4x that amount.
DTB traded 500 shares at 85.00 and unchanged.
NBK fell 2.29% to close at 42.75 and traded 32,800 shares.

Centum rallied 1.6575% to close at 18.40 and traded 141,000 shares.

Kenya Re closed 5 cents lighter at 13.30 and traded 320,700 shares. It
is difficult to call because I am still unclear as to what drove the
Spike in Claims in the Full Year Results and I would like to know a
whole lot better what type of Risk they are writing.
Jubilee traded 200 shares at an unchanged 175.00.
PanAfric did not trade and is the most expensive of the Insurers on a PE Basis.

Olympia Capital is at 9.90.



N.S.E Equities - Industrial & Allied

KENGEN traded 4th at the Bourse. KENGEN rallied 4.8933% to close at
17.15 and traded a session and 12 month high of 17.50. KENGEN traded
2.771m shares worth 47.65m.

KENGEN share price data from www.rich.co.ke +46.629% 12 months
http://bit.ly/1ADZcx

KPLC closed 0.56% better at 180.00 and traded 31,000 shares.
Cables closed at 21.25 and traded 91,200 shares.

Mumias Sugar was the 2nd most active Counter. The +15% Sugar Crushed
Call at the end of last week has encouraged the Bulls. Mumias Sugar
rallied 3.03% to close at 13.60 and traded a 13.45-13.80 range and
traded a chunky slug of 4.627m shares worth 63.014m.

Mumias Sugar share price data from www.rich.co.ke +249.966% 12 months
http://bit.ly/4WJWWK

KENOLKOBIL surged 8.55% to close at 101.50 and is responding to the
Announcement yesterday that they would split the shares 10 for every 1
Held. 42,400 shares were traded.

KenolKobil share price data from www.rich.co.ke
http://bit.ly/2DMFVE

Par Value:                  0.50/-
Closing Price:          93.50
Total Shares Issued:          147,176,128
Market Capitalization:        13,761M
EPS:            8.77
PE:                10.661

Total eased 0.81% to close at 30.50 and traded 34,900 shares.

BAT was the 3rd most actively traded Counter. BAT improved 0.56% to
close at 196.00 and traded a 196.00-198.00 range and 319,800 shares
worth 62.884m. BAT employs a high Dividend Pay Out with the Running
Yield over 7%, it will remain well supported given the absolute slump
in Inflation and GOK Interest rates.

EABL was unchanged at 169.00 and traded a 169.00-171.00 range and
123,800 shares worth 21.012m.

Bamburi Cement traded 2,200 shares at 190.00 +2.15%. A Great Chunk was
cleared at 185.00 and if that is now complete we can grind towards
200.00.
ARM was unchanged at 115.00 and traded 5,300 shares.
Portland closed a shilling better at 107.00 and traded 2,300 shares.

Carbacid closed at 148.00 +0.68% and traded 1,100 shares.
BOC Kenya did not trade.
Crown Berger slipped 0.69% to close at 35.75 and traded 600 shares.
Eveready was unchanged at 4.65 and traded 30,900 shares.
Sameer rose 0.53% to close at 9.55 and traded 252,300 shares.
Unga traded 6,900 shares at 12.00 +4.35%



by Aly Khan Satchu (www.rich.co.ke)
 
 
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May 2010
 
 
 
 
 
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