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Satchu's Rich Wrap-Up
 
 
Wednesday 19th of May 2010
 
Morning
Africa

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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

The Star The Sick Man of Europe
http://bit.ly/az7VFf

A Selection of 2010 Opinion Pieces The Star
http://bit.ly/9vrHxU

The Dubai Dream
Equity Bank Returns To A Supernormal Growth Curve
The Magic Tipping Point
Africa Equities from #Cape to #Cairo
The Farmers Will Drive The Ferraris
Voodoo Economics

I do thank Gichiri Ndua and his Team at the Kenya Ports Authority for
the time yesterday. Under a Different Guise [Nation's Money Matters] I
had been down there a couple of years ago. There were a few familiar
Faces. Thanks.

Macro Thoughts

Well Well.

Home Thoughts

Re Reading Reminscences of a Stock Market Operator
http://bit.ly/bUiPer

P. 45

Well, I went Home. But the Moment I was back I knew that I had but one
Mission in Life and that was to get a stake and go back to Wall
Street. That was the only place in the Country where I could trade
heavily. Someday, when My Game was all right, I'd need such a
place.When a Man is righthe wants to get all that is coming to him for
being right.

Conclusions

I bought that Book when I was 26 and it has sat on my Desk since then.

read more


Thai Army storms the barricades in all-out assault on Red Shirt protest The Times
Law & Politics

Mr Abhisit said that there would be no talks until the protesters
abandoned the Ratchaprasong district, where they have been for six
weeks. Satit Wongnongtoey, one of his ministers, said: “The situation
could be resolved and lead to negotiations when demonstrators
disperse.” He quoted the Prime Minister as saying that “the situation
will end only when the protest stops”, a condition that will certainly
be rejected by the protest leaders.

Conclusions

Abhisit has to assert ownership over the Street and land a decisive Blow.

read more


UN sanctions suggest Iran may have overplayed its hand Guardian
Law & Politics

The agreement by the UN security council's dominant five powers to
pursue sanctions against Iran yesterday came as a surprisingly fast
riposte to Iran's last-ditch diplomatic efforts to fend off punitive
measures, and suggests Tehran may have overplayed its hand.

A day earlier, Iranian, Turkish and Brazilian leaders met in Tehran to
declare that sanctions had been made irrelevant by their joint
diplomatic breakthrough. Iran would embrace a deal agreed in principle
with major powers last October, but subsequentlywhich it had walked
away from, involving the transfer of some of its enriched uranium
stockpile abroad in return for fuel rods for the Tehran research
reactor.Yesterday's decision by Russia and China to press on with
sanctions with the US, Britain, France and Germany was a clear signal
that they were not impressed. The reason seems to be that Iran was
over-confident, offering too little and asking for too much.

Conclusions

Yesterday's decision will infuriate Turkey and Brazil, who will see it
as the established powers quashing a genuine attempt at mediation by
two new voices on the world stage.

The big five will be able to push this through the security council
over Turkish, Brazilian and other objections, but it will leave behind
a bitter taste of unfairness at the UN.

read more


Euro, Stocks, Copper Tumble as Germany Bans Naked Short Sales Bloomberg
World Of Finance

The euro slid to a four-year low against the dollar, and stocks and
copper tumbled after Germany banned certain bearish investments,
fueling speculation that European debt crisis will worsen.

The euro fell below $1.22 for the first time since April 17, 2006,
trading at $1.2159 at 10:05 a.m. in Tokyo.

The euro and stocks extended losses as Germany’s BaFin
financial-services regulator temporarily banned naked short selling
and naked credit-default swaps of euro-area government bonds starting
today. The ban also applies to naked short selling in shares of 10
banks and insurers that will last until March 31, 2011, BaFin said
yesterday in an e-mailed statement.

BaFin said it was taking the step because of “exceptional volatility”
in euro-area bonds. “Massive” short-selling was leading to excessive
price movements which “could endanger the stability of the entire
financial system.”

“It makes it look as if the Germans are worried about something behind
the scenes that the market’s not aware of,” said Michael O’Rourke.

Such a sudden, preemptive measure to prevent volatile market moves
indicates conditions in European financial markets may be worse than
expected, hurting sentiment further

“In some ways, it’s a battle of the politicians against the markets”
and “I’m determined to win,” Merkel said May 6. “The speculators are
our adversaries.”

Conclusions

“It almost looked panicked, which further undermines confidence in the
markets. They’ve done as poor a job as one can do in delivering a
message.”

Germany's move Tuesday "appears to be half-baked and not really
thought out, and plays into market doubts about European policy-making
credibility,"

read more


World Currency Markets At A Glance WSJ
World Currencies

Euro 1.2192 Near Term 1.1760 Objective
Sterling 1.4280 Objective 1.35
Dollar Index 87.24
Aussie 0.8552
Real 1.8201
Rand 7.66 7.92 and 8 is my Objective

The euro fell to $1.2204, down from $1.2384 in North American trading
late Monday. It fell as low as $1.2159 intraday, its lowest level
since 2006.

Conclusions

1.1760 is the next Point.

read more





A Hong Kong Trophy Goes for Record Price WSJ
RealEstate, Housing & Construction

HONG KONG—A plot of luxury Hong Kong land went for a record price at
auction Tuesday, defying an effort by the government to temper the top
end of the real-estate market.

Lee Shau-kee, the 82-year-old tycoon who controls blue-chip property
player Henderson Land Development Co., paid 1.82 billion Hong Kong
dollars (US$233 million), or about HK$68,000 per square foot, for the
site. The price was above market expectations and a record high for a
Hong Kong auction of luxury residential land, according to auctioneers
Jones Lang LaSalle.

read more


Marchesi, on Food and Life WSJ
Food, Climate & Agriculture

'Dripping di pesce', fish garnished using the Jackson Pollock-inspired
dripping technique at L'Albereta restaurant.

Mr. Marchesi has nothing left to prove. Beyond the taste, the texture,
the aroma, the presentation and the creativity of his cooking, there's
something else. Something intangible. The sense that what you are
eating is a little piece of European culinary history. Perhaps even,
if Mr. Marchesi is to be indulged, a little piece of artistic history,
too.

read more


Commodity Markets at a Glance WSJ
Commodities

Crude oil for June delivery lost 67 cents, or 1%, to $69.41 a barrel
on the New York Mercantile Exchange, ending in the red for the sixth
consecutive session.

That was the lowest settlement for a most-active contract since Sept.
29, when oil ended at $66.71 a barrel, according to FactSet Research.

You might recall my Long Gold Short Crude Trade.

read more




Gold Live 24 Hour Spot Price KITCO 1209.30
Commodities

Conclusions

Extreme Volatility as we are currently witnessing will lead to Stop
Loss type Trading but Gold is set to cross 1400.

read more


Soft Commodities at a Glance INO
Commodities

Cocoa +0.85%
Sugar +5.38%

Conclusions

I think Sugar has bottomed out or very near to doing so.

read more


Celebrating Shanghai WSJ
China

Liu Jianhua's 'Shadow in the Water'

read more


Life Healthcare Seeks $1 Billion, Biggest Africa IPO Bloomberg
World Of Finance

Life Healthcare Group Holdings Ltd., the South African hospital owner,
began the continent’s biggest initial public offering as it approached
investors to buy as much as 8.04 billion rand ($1.06 billion) of
shares.Life Healthcare started selling as many as 473 million shares
and plans to list its stock on the main board of South Africa’s JSE
Ltd. on June 8, three days before the start of the soccer World Cup,
the company said in a statement to Johannesburg’s Stock Exchange News
Service.

Life Healthcare’s planned IPO will surpass the $903 million raised by
Maroc Telecom in 2004 and $841 million by Starcomm Plc, a Nigerian
telephone services company, in 2008, Bloomberg data show.

Shares in Life Healthcare, which has about 27 percent market share of
the private hospital beds in South Africa, will be offered at a price
of 14.50 to 17 rand with the final price to be announced on June 3.
That would value the company at between 12 and 14 times earnings,
Flemming said. By comparison, Netcare Ltd., the largest owner of
private hospitals in South Africa and the U.K., trades at 13.14 times
estimated earnings and Medi-Clinic Corp. Ltd., the second-biggest
publicly traded hospital owner, trades at 19.4 times, according to
Bloomberg data.

Conclusions

A multiple of 13 times earnings “is not cheap” and the start of
trading would “almost certainly be dull,”

read more


South Africa All share Index Bloomberg Visual 2010 -93 Points
World Of Finance

Value27,573.83   
Change267.090    
% Change0.978

read more



Nigeria All share Bloomberg Visual +31.804% 2010
Africa

Value27,451.77   
Change34.470    
% Change0.126

Conclusions

Remains attractive and I feel headed to 30,000

read more



Nairobi NSE20 Share Index Bloomberg Visual +32.399% 2010
N.S.E General

4,299.50

Conclusions

4312 is the high for the Year.

4482 is the Top side of this Range and I expect the Bourse to trend that way.

read more


Kenya eyes mobile phone banking to boost savings Reuters
Information & Communication Technology

The east African nation has 8.5 million bank accounts -- equivalent to
23 percent of its population -- and a savings to gross domestic
product ratio of about 15 percent.

"In order for us to achieve our development targets, we need to change
this state of affairs," President Mwai Kibaki said at the launch of a
new banking service between Equity Bank and mobile operator
Safaricom.The tie-up between Equity and Safaricom brings together two
companies who have pioneered taking financial services closer to the
poor in a country where a third of the population has no access to any
form of financial services.

While Equity moved from rural building society to the sixth largest
bank by assets through a focus on serving the poor, Safaricom
pioneered mobile phone-based money transfer services.

Known as M-Pesa, Safaricom's service, which was launched in 2007, now
has close to 10 million users.

"Kenyans no longer just send money, they M-Pesa it," said Michael
Joseph, Safaricom's chief executive. "Dowry is paid through M-Pesa and
sometimes even ransom for kidnappings."

A new service known as M-Kesho is available to M-Pesa users and Equity
Bank's 4.5 million account holders, allowing users to gain access to
credit, earn interest on deposits and buy insurance.

Users will open and run their M-Kesho accounts from their mobile
handsets linked to Equity's banking infrastructure.

Officials say it is vital to raise Kenya's savings rate as a
proportion of GDP to between 25 and 30 percent to enable investments
needed to reach the goal of a sustained 10 percent economic growth
rate in the medium term.

Conclusions

A Win Win.

read more


Equity Bank share price data from www.rich.co.ke
N.S.E Equities - Finance & Investment

Par Value:                  0.50/-
Closing Price:          19.45
Total Shares Issued:          3,702,777,088
Market Capitalization:        72,019M
EPS:            1.14
PE:                17.061

Conclusions

Headed back to 25.00.

Earnings have already inflected as per the 1st Quarter 2010 Earnings Release.

read more


Safaricom share price data from www.rich.co.ke
N.S.E Equities - Commercial & Services

Par Value:                  0.05/-
Closing Price:          5.55
Total Shares Issued:          40,000,000,000
Market Capitalization:        222,000M
EPS:            0.27
PE:                20.556

read more


Sh30 billion lies idle The Nation
Kenyan Economy

A whopping Sh30 billion earmarked for development in the current
financial year and released to ministries remains idle in bank
accounts, hampering delivery of critical services to wananchi.The
riddle of unspent billions, coming hardly a month before the next
budget, has provided the latest indications of how ministries have
been unable to roll out projects which were listed in this year’s
budget.This was revealed by Treasury permanent secretary Joseph Kinyua
addressing members of the Public Accounts Committee.

Conclusions

The Stimulus that never was ?

read more



NBK reports 1st Quarter 2010 Pretax +11% share price data here www.rich.co.ke
N.S.E Equities - Finance & Investment

Par Value:                  5/-
Closing Price:          42.25
Total Shares Issued:          280,000,000
Market Capitalization:        11,830M
EPS:            5.61
PE:                7.531

read more


Rea Vipingo Fy Net Profit May Be More Than 25% Lower on Drought Businessweek
N.S.E Equities - Agricultural

Rea Vipingo Plantations Ltd., a Kenyan sisal production and spinning
company, said its full- year profit may fall more 25 percent due to
drought.

“The drought that was experienced through east Africa in 2009 resulted
in lower than expected volumes of sisal fiber being produced,” it said
in a statement in the Nairobi-based Daily Nation today.

Recent rains have boosted production to “normal levels” and production
for the remainder of the financial year is expected to be good, the
statement said.The company reported fiscal 2009 profit fell 11 percent
to 149 million shillings ($1.9 million), according to an e- mailed
statement from the Nairobi Stock Exchange on Jan 20.

read more


Rea Vipingo share price data from www.rich.co.ke
N.S.E Equities - Agricultural

Par Value:                  5/-
Closing Price:          19.00
Total Shares Issued:          60,000,000
Market Capitalization:        1,140M
EPS:            2.48
PE:                7.661

read more


Abu Dhabi's mile-long hotel Telegraph
Tourism, Travel & Transport

I am not sure what the collective noun for sheikhs is (a cumulus?),
but after an ethereal, two-hour drive across the wind-coiffed deserts
of Abu Dhabi, it's an exciting surprise to find that a score of the
United Arab Emirates' most powerful leaders have swooped down on my
wilderness hotel for a top-level confab. Arriving in a flurry of
state-of-the-art helicopters and blacked-out Land Cruisers with
lean-faced paramedics on standby, the Oil-Mighty immediately hide away
in a castellated enclave of Royal Villas wrapped in the uncaring sands
– leaving us mere guests to gather up crumbs of gossip like
grandmothers eavesdropping on a wedding night.

read more



Zambia GDP to grow 8 pct in 2010: trade minister Reuters
Africa

Zambia's economy will likely grow by 8 percent in 2010 driven by
investment inflows as the global recovery gathers pace, Commerce,
Trade and Industry Minister Felix Mutati said on Wednesday.

"Zambia will achieve GDP growth of 8 percent this year because of the
huge investment inflows, especially from China," Mutati told
journalists after meeting officials from the global accounting firm
Grant Thornton.

Data from the Central Statistical Office show the economy grew by 5.9
percent last year. A previous forecast from the central bank showed
the economy was expected to grow by 7.0 percent.

read more


Kenyans, Tanzanians Less Likely to See Gain From EAC Gallup
East Africa

The East African Community (EAC) is poised to open a common market in
July to widen and deepen cooperation among the five member countries.
Gallup surveys last year show Rwandans (95%), Burundians (93%), and
Ugandans (88%) who have heard of the EAC were more likely to see their
countries as gaining from the EAC than either Kenyans (65%) or
Tanzanians (58%).

Conclusions

Those look like good numbers to work with.

read more


Kenya signs Nile Basin deal rejected by Egypt Reuters
Africa

Kenya signed a new agreement to alter historic water sharing
arrangements for the River Nile on Wednesday and said Egypt, which
opposes the deal, had little choice but to join the other states.

After more than a decade of talks driven by anger over the perceived
injustice of the previous Nile water treaty signed in 1929, Ethiopia,
Uganda, Tanzania and Rwanda signed the deal last week, a move promptly
challenged by Cairo.

"That treaty (1929) is obsolete. Nothing stops us to use the the water
as we wish. It is now up to Egypt to come on board," Charity Ngilu,
Kenya's minister of water, told a news conference.

read more


Kenya draws millions of rural migrants to its urban slums - Feature Earthtimes
Kenyan Economy

Julius Isaji work an 87-hour week.

Six overnight shifts guarding a Nairobi guesthouse from the Kenyan
capital's rampant criminal gangs are supplemented by three mornings
tending the gardens of well-to-do Kenyans and foreigners.When he is
not working, Julius returns to his two-room home, where he has just
enough energy for a quick dinner before settling down for five hours
of sleep - if his four children will stay quiet long enough to let him
rest.All this labour earns Julius 12,000 Kenyan shillings (155
dollars) each month.It may not sound like a lot, and by the standards
of Kenya's increasingly wealthy middle class, it is no more than a few
fancy dinners. But compared to the hundreds of thousands of Kenyans
who migrate to the city in search of a better life, Julius is a
wealthy man.

"I am a success," says Julius, a soft-spoken 40-year-old who somehow
looks 10 years younger, despite his gruelling work schedule. "Because
if you see other people, they are so down."

An estimated 3.2 million people live in Nairobi, more than half of
them in the teeming slums that have sprouted between leafy
neighbourhoods housing wealthy Kenyans, foreign aid workers,
businessmen and diplomats.

The city's population has more than doubled since 1990, much of it due
to the process of urbanization. It is almost impossible to find a
Kenyan who was actually born in Nairobi.

Julius is fiercely proud of the fact that he now lives in a stone
house with electricity, its own small kitchen and toilet. The sitting
room doubles as a bedroom for the four children. Despite the cramped
conditions, Julius says he and his family are content.

"The children are so happy here," he says. "There were so many things
they didn't know upcountry. Now they learn so much more."

Conclusions

Actually, the latest Research shows that there is a Network Effect in
these Big Agglomerations.

The Shilling is weaker at 79.30

read more



 
 
N.S.E Today

The NSE20 closed 6.34 points higher at 4305.85.
The NASI rallied 1.03 points to close at 92.09 and a new closing high for 2010.
Market Cap was 1.073652 Trillion versus 1.061604 Trillion.
Equity Turnover was 473.378m versus 196.656m.

The Bourse has closed at a new 2010 Closing High and remains in a Bull
Channel. Equity Bank has taken up the Baton and the Big Cap Banking
stocks have Buyers in hot Pursuit.



N.S.E Equities - Agricultural

Rea Vipingo issued a Profits warning saying that the Full Year might
be as much as 25% lower compared to the Previous Year, citing the
Drought as having crimped Production. Rea Vipingo reacted 8.15% lower
to the news to close at 17.45 and traded 14,100 shares. The Trailing
PE is 7.03 and inexpensive notwithstanding the Warning.
Sasini Tea closed at 14.80 and traded 10,500 shares.



N.S.E Equities - Commercial & Services

SAFARICOM

shares volume     27.303m
total turnover      151,130,192
avg price     5.60 Closing Price 5.60 +0.9%
high price     5.60
low price     5.55
last price     5.55

Conclusions

Safaricom was the most active Counter again. Full Year results are set
for release in less than two weeks and will govern whether the 6.10 12
month High comes under attack. The Recent Announcement that Safaricom
and Equity Bank have partnered to bring Banking Services to MPESA
Customers confirm there is plenty of Growth ahead for the Company.
Safaricom looks oversold at 5.60 and is overdue a rebound.

Kenya Airways rallied 3.776% to close at 55.00 and was trading at
56.00 +5.66% session highs into the Finish Line. Kenya Airways traded
131,900 shares and Demand versus Supply has now inverted.

Nation rallied 1.4454% to close at 139.00 and traded a 137.00-140.00
range and 52,900 shares worth 7.403m.
Standard did not trade.

Access Kenya fell 4.49% to close at 17.00. Access Kenya traded a
16.75-17.80 range and 275,000 shares. Access Kenya is down 23.259%
over a 12 month Period. Access Kenya trades on a Trailing PE of
20.533.

Scangroup was unchanged at 31.25 and traded 61,700 shares.

TPS Serena was unchanged at 63.50 and traded 12,300 shares.

CMC Holdings retreated 2.14% to close at 13.75 and traded 21,100 shares.
Cargen did not trade.



N.S.E Equities - Finance & Investment

was flicking through My book Anyone can Be Rich written 4 years ago

and I was going through my Interview with Dr. James Mwangi of Equity
Bank P.93

..When I interviewed the softly spoken [Iron Fist in a Velvet Glove?]
Mr.[then] Mwangi had started by quoting Donald Trump who said;' The
Face of Opportunity has a common Face.'

This M-KESHO Transaction confirms that statement and the Bourse is
seriously responding.

Equity Bank rallied 7.96% to close at 21.00 and spent most of the
session trading at Intra Day highs of 21.25 +9.25%. Equity Bank has
closed today at a 26 month high. Equity Bank traded 4.196m shares
worth 88.199m and had a Severe Demand versus Supply Disequilibrium
with Buyers for 4m shares showing at 21.00+ into the Finale. 25.00 is
the near term Objective on an absolute Step Change in 2010, the first
evidence of which was the 1st Quarter Earnings release where Equity
accelerated 3500 Basis Points. The China Development SME Transaction
and now the M Kesho Product will surely feed the Acceleration. Buyers
are chasing things now. Equity Bank was the 2nd most active Counter.

Stanchart rallied 1.9% to close at 214.00 and traded a session high of
220.00 +4.76%. Stanchart targets 234.00 [which was my Objective from a
while back] which equates to a Trailing PE of 14.00. Stanchart traded
7,500 shares with Sellers somewhere in the Hills.
KCB was unchanged at 21.50 and traded a 21.00-21.75 range and 744,600 shares.
Barclays Bank was unchanged at 60.00 and traded a 59.00-61.00 range
and 139,200 shares worth 8.41m.
COOP Bank was unchanged at 12.10 and traded a 11.95-12.40 range and
1.101m shares worth 13.327m.

NIC shaved off 0.65% to close at 38.25 and traded 292,800 shares worth 11.266m.
HFCK firmed 1.235% to close at 22.25 and traded a 21.25-23.00 range
and 276,500 shares.
CFC Stanbic drifted 1.66% to close at 59.00 and traded 37,800 shares.
DTB was unchanged at 84.00 and traded 8,200 shares.
NBK was unchanged at 42.25 and traded 57,800 shares.

Kenya Re dipped 1.1625% to close at 12.75 and traded 175,700 shares.
There is a singular lack of Clarity re the Underwriting Capacity and
Investors are shying away notwithstanding the PE at less than 6.00.
Jubilee traded 1,900 shares at an unchanged 175.00.
PanAfric traded 30,300 shares all at 60.00. PanAfric trades on a PE
more than 2x Jubilee and more than 3x Kenya Re and that is after a
high beta Turnaround. Looks anomalous.

Centum closed at 18.80 -0.27% and traded 110,500 shares.

Olympia Capital is at 9.10.



N.S.E Equities - Industrial & Allied

EABL was the 3rd most actively traded Counter at the Bourse. EABL

rallied 2.352% to close at 174.00 and was trading session highs of
175.00 +2.94% into the close. EABL traded 470,300 shares worth
81.852m. EABL is at a 12 month closing High.

Mumias Sugar traded 4th and eased 0.74% to close at 13.25. Mumias
Sugar traded a 13.00-13.45 range and 1.198m shares worth 15.94m.

BAT traded 64,000 shares worth 12.608m and all at +0.51%. It is the
highest Yielding Dividend Stock at the Bourse.

KENGEN dipped 1.16% to close at 17.15 and traded a 16.75-17.50 range
and 454,600 shares. Demand outweighs Supply by a Factor of 2-1 and
points the price higher.
KPLC edged up a shilling to close at 201.00 and traded a 205.00
session high and 22,900 shares. 260.00 is the chart Objective.
Cables rowed back 3.45% to close at 21.00 and traded 42,700 shares.

ARM rose 1.61% to close at 126.00 and traded a 127.00 high and 14,000
shares. This is an all time closing High and the price is uniformly
bullish.
Bamburi rose 0.51% to close at 198.00 and traded 1,500 shares.
Portland traded 500 shares at an unchanged 125.00.

Kenolkobil drifted 1.89% easier to close at 104.00 and traded 44,400 shares.
Total rose 0.81% to close at 31.00 and traded 13,100 shares.

BOC Kenya did not trade.
Carbacid eased 0.66% to close at 150.00 and traded 1,400 shares.
Crown Berger rose 1.4454% to close at 34.75 and traded 6,600 shares.
Eveready firmed 1.1% to close at 4.60 and traded 11,800 shares.
Sameer eased 0.56% to close at 8.90 and traded 32,000 shares.
Unga closed higher at 12.40 and traded 32,200 shares.



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