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Satchu's Rich Wrap-Up
 
 
Friday 01st of October 2010
 
Morning
Africa

www.rich.co.ke Register and its all Free.

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.

The Latest Daily PodCast can be found here
http://www.rich.co.ke/rctools/richpod.php

My Cousin Reza Satchu [with whom we were with in Lamu] The Professor
of Entrepreneurship
http://bit.ly/dtmiZN

Dawn Lamu Twitpic
http://www.twitpic.com/2jlyky

I am at the StoryMoja Festival Today and tomorrow
http://bit.ly/ak8PYJ

And hence I will be unable to update the NSE Portion of this email today.

The Closing Prices can be found here after 5
http://www.rich.co.ke/rcdata/nsestocks.php

Some Time ago I spoke at a TEDx in Mathare and I took this Photo
http://www.twitpic.com/2le3c7

Macro Thoughts

Gold 1400.00

Home Thoughts

The Little One accompanied this Morning to the Office. She has
discovered that I know some of her Friends Parents and she swaps
notes. Pierre-Emmanuel [Morning] 's daughter Tana has left her School
and gone to Aga Khan and she keeps asking me to find out whether we
are in touch.

'Dad Tana says her Dad has a swimming Pool at his Office.' - P-E works
near the Norfolk. 'We should go You can see her Dad and I can see
Tana.'

Thank Goodness She has stopped telling me of her imminent Marriage
because that used to throw me and I could not handle that too good.

read more


Ecuador's president attacked by police The Guardian
Law & Politics

Rafael Correa is helped as he runs away from tear gas. Photograph:
Dolores Ochoa/APEcuador teetered on the brink of chaos early today as
rebellious police officers protesting against austerity measures
blocked airports and roads, occupied the national assembly and
besieged the president in a hospital after physically assaulting him.

Conclusions

Ecuador has been brittle and fragile for a very long time. It might
seem a curious Observation but Our Help in London was always a signal
to me. We had a very Aristocratic Eritrean Lady and then a Lady from
Ecuador and the way she described it then, it felt like a Powder Keg
so it must have been a slow burning Fuse.

read more


South Sudan referendum complicated by oil revenue Christian Science CS Monitor
Law & Politics

By Aly-Khan Satchu September 30, 2010

I have visited Juba twice this year. The second time President Omar
Bashir – a man on the most wanted list of the International Criminal
Court in The Hague – was in town for the celebration of the
Comprehensive Peace Agreement and I was quick enough on the draw to
take this picture. My Sudanese companion was seriously unhappy with my
photography. The SPLA may have turned into a functioning ruling party
in south Sudan, but it still roams Juba like an army and the reasons
for that are no secret.

President Bashir made a speech in Juba where he said that if the South
elected for independence this January, during the South’s planned
referendum, he would be the first to congratulate President Salva
Kiir. It was hardly reported anywhere but I heard him loud and clear.
I remember turning to my companions, all of whom were in the
government of Southern Sudan. They were unimpressed.

“Aly-Khan, we are Bashir's back garden,” one of my companions said.
“We have most of the wealth.” They certainly have most of the oil, an
estimated 80 percent of proven reserves, and they are taking a haircut
on their share in the current 50-50 split of oil revenues. “Now how
does someone agree to just letting their back garden go?”

If this referendum is held on time, this election will register
something like a 97 percent vote for independence. This will be an
actual example where a 97 percent outcome was not a figment of the
imagination (as so many 90 percent votes are), but the real deal.
There can be no doubt where this vote is going, and how real the
public sentiment is for independence. The folks in Khartoum would have
to be completely deluded to believe there is any chance of any other
outcome.

For the international community, Sudan’s referendum, and its outcome,
are matters of serious concern. China gets 7 percent of its global oil
supplies from Sudan. They have been big investors in the oil business,
and close partners with the unified government in Khartoum. It is
surely not in their national interest for this supply to be disrupted
or discontinued. The United States, which brokered the Comprehensive
Peace Agreement in 2005, is seen as the guarantor of Southern Sudan,
for all practical purposes. But the North and South see different
things in the same document. The South sees liberation in the
referendum. The North was led to expect reconciliation, closer
cooperation, and an eventual renaissance for Bashir, in the way that
Libya’s once-shunned President Qaddafi received in the past decade.
Instead, Bashir got caught up in a new conflict in Darfur, a conflict
that led to his indictment on war crimes by the International Criminal
Court. Rapprochement was over before it had gotten started.

So now we find ourselves fast approaching the vote in January.
President Kiir is reported to see the vote as “sacred.”

“We see this timing as sacred,” he said at the International Peace
Institute in New York. “There is a risk of a return to war in case of
delay or denial of this exercise, and it would be on a very massive
scale.”

It is no great secret that both sides are prepared for war.

Salva then said, “We have fought enough. We have seen war is no good.
We are genuinely willing to negotiate with our brothers in the north.
It is in our interest that the north remains a viable state. But it is
unfair to expect Southern Sudan to make all the compromises, that we
should be expected to buy our freedom.”

And there you have it.

Inflexion points often occur when we least expect them. It seems to me
that both sides need to be persuaded that it would be a win-win
solution if history were to remember Bashir and Kiir for finally
leading their peoples to prosperity and not to war. Make no mistake:
Sudan is a pot of undiscovered gold in this 21st century. The
migration in the South is bigger than that more famous one in the
Serengeti and the Masai Mara.

I flew in a helicopter and the maps my hosts were using were from 70
to 80 years ago. The prize is an enormous one and a great deal of it
is in Khartoum's “back garden.”

Will it be war?

read more


Kan Says Will Sell Yen If Needed, Urges BOJ to Fight Deflation Bloomberg
World Currencies

Japan’s Prime Minister Naoto Kan said he is prepared to resume selling
the country’s currency to prevent it from strengthening and called on
the central bank to do more to bolster an economy threatened by
deflation.

“We will continue to take decisive measures as needed” on the yen, Kan
said today in a policy speech in parliament that also touched on
faltering ties with China. “We expect the Bank of Japan to closely
coordinate with the government and take further policy measures needed
to beat deflation,” he said.

The speech came a day after a report showed Japan last month spent $25
billion intervening in the foreign exchange market to combat the yen’s
climb to a 15-year high against the dollar. Kan said he will reach out
to opposition parties to help pass a new economic spending plan to
address the impact of the yen on an export-led recovery. The stimulus,
which may be as much as 4.6 trillion yen ($55 billion), would be in
addition to a 915 billion yen package he unveiled last month.Passage
of the package is the administration’s “top priority,” he said, adding
that new spending must take into account reining in the world’s
largest public debt. Kan has pledged not to exceed this fiscal year’s
record sales of 44 trillion yen in government bonds.

“China’s rise in recent years is remarkable, but we have concerns
about its military buildup that’s lacking transparency and increasing
ocean activities from the Indian Ocean to the East China Sea,” said
Kan, adding that Japan handled the collision case in accordance with
the law. “We expect China to play an appropriate role as a responsible
member of the international community with its words and actions,” he
said.

Kan reiterated that the islands are Japan’s territory historically and
based on international law. Sovereignty over the area would give the
holder rights to undersea gas and oil reserves.

China yesterday released three of four Japanese employees of a
construction firm, Fujita Corp., after arresting them for allegedly
videotaping military targets. After the collision, China cut off
ministerial talks and disrupted exports of rare earth metals. China
yesterday issued a travel advisory for Japan after Chinese tourists on
a bus were harassed.

Japan sold 2.12 trillion yen from Aug. 28 through Sept. 28 in the
first currency intervention since 2004, the Ministry of Finance said
yesterday. The yen was trading at 83.43 per dollar at 1:55 p.m. in
Tokyo, less than one percent weaker than the 15- year high of 82.88 on
Sept. 15 right before Japan intervened.

Conclusions

NO KAN DO Sell the Yen on Interventions

$ versus Yen INO 1 Year Chart
http://bit.ly/csSeEb

Note the Intervention Blip upto 86.00 area.

read more


Currency Markets at a Glance WSJ
World Currencies

Euro 1.3647
Pound 1.5722
Yen 83.45
Dollar Index 78.69
Aussie 0.9662
Rand 6.9568
Real 1.6871 -> First time through 1.70 for quite some time.

The U.S. dollar had the worst quarterly loss in more than eight years
in the three months that ended Thursday, heading towards a five-month
low against the euro.Dollar Index  fell as low as 78.414 earlier, the
lowest level on closing basis since late January, according to FactSet
Research.For the month, the index lost 5.3%. It’s down 8.4% since
June, the worst quarterly performance since the period ended June
2002.The euro has jumped 7.4%, the best month for the shared currency
since December 2008. It’s up 11.4% this quarter.

Conclusions

The Acceleration Lower in the Dollar happened with FED talking off QE2
and Deflation.

read more



World Equity Markets at a glance
World Of Finance

This quarter, the Dow Industrials surged 1014.03 points, or 10.37% to
10788.05, the Nasdaq Composite rose 259.38 points, or 12.30% to
2368.62 and the S&P 500 gained 110.49 points, or 10.72% to 1141.20.

read more


Pop Goes the Art Market: A $40 Million Lichtenstein? WSJ
Misc.


The 1964 painting, "Ohhh…Alright…," depicts a pixilated redheaded
woman clutching a telephone. The work comes from Lichtenstein's
signature series of comic-strip women who appear caught up
melodramatic moments of distress or disappointment. In the early
1960s, collectors were largely smitten with big, messy abstract
paintings until artists like Lichtenstein began making art that
referenced pop-culture images from advertisements and comics.

read more


Commodity Markets at a Glance WSJ
Commodities


"We had a unique storm," said Mihir Worah.

The Dow Jones-UBS Commodity Index posted its best-performing quarter
since June 2009, up 11.6%.

read more


Gold Live 24 Hour Spot Price KITCO 1309.00
Commodities

Note the dip below 1300 yesterday intra day.

read more



Soft Commodities at a Glance INO
Commodities

Sugar -6.08% - Big Bout of Profit taking
Orange Juice +3.03%
Cotton +0.94%
Cocoa -1.38%
Coffee -1.59%

read more


India Insiders Selling Stocks at Fastest Pace Since Sensex Peak Bloomberg
Emerging Markets


India’s company executives are selling shares at the fastest pace
since prices peaked 2 1/2 years ago, just as foreign investors pour
record amounts of money into the best-performing major emerging
market.Insiders of Bombay Stock Exchange Sensitive Index companies
made at least 110 stock sales last quarter for a combined $21 million,
according to exchange data compiled by Bloomberg. The last time the
number of sales was this high, in the fourth quarter of 2007, the
Sensex sank 23 percent in three months. Housing Development Finance
Corp. Executive Director V. Srinivasa Rangan and Larsen & Toubro Ltd.
board member Krishnamurthi Venkataramanan sold as $11.5 billion of
foreign inflows spurred a 13 percent jump in the Sensex to the highest
level versus profit estimates since January. Indian stocks will return
an average 1 percent in 12 months, compared with 7 percent in China
and at least 20 percent in Brazil and Russia, more than 2,000 analyst
estimates compiled by Bloomberg show.

Company officers and directors boosted their stock sales by 197
percent during the past three months from the same quarter a year ago,
data compiled by Bloomberg show. Sales outnumbered purchases by
14-to-1, compared with an average ratio of 7-to-1 during the past
three years, the data show. A surge in insider sales during the final
three months of 2007 foreshadowed a peak in the 30-stock Sensex index
at 20,873.33 on Jan. 8, 2008. The measure dropped 23 percent the
following three months, twice the 11 percent decline in the MSCI
Emerging Markets Index.

The gauge has gained 15 percent this year as foreign inflows topped
$18 billion on speculation surging consumer demand will boost earnings
even as global growth slows, according to data from the Securities and
Exchange Board of India compiled by Bloomberg.

Russia’s Micex Index climbed 5.1 percent this year and Brazil’s
Bovespa Index increased 0.8 percent. China’s Shanghai Composite Index
retreated 19 percent. The Bovespa is still 6.4 percent below its May
2008 peak after gaining 13 percent last quarter, while the Micex needs
to rise 37 percent to reach its all-time high and the Shanghai
Composite needs to surge 129 percent. The Shanghai gauge climbed 11
percent the past three months, while the Micex increased 10 percent
and the MSCI Emerging Index advanced 17 percent.The Sensex’s 12-month
forward price-earnings ratio of 17 is the highest level since July
versus the Micex, which trades for 6.7 times profits, according to
data compiled by Bloomberg. India’s benchmark index is valued at a 32
percent premium to the Shanghai Composite gauge, near the biggest
difference in 14 months, the data show. The Sensex is the most
expensive equity index among the world’s 20 largest markets, according
to data compiled by Bloomberg.

Sensex ^BSESN 1 Year Chart Yahoo Finance
http://yhoo.it/cS8oUw

BSE SENSEX
(Bombay: ^BSESN)
Index Value:    20,285.32
Change:    Up 216.20 (1.08%)
Day's Range:    20,101.58 - 20,310.65
52wk Range:    15,330.60 - 20,310.65

The Sensex versus The Bovespa and the Dow 1 Year Comparison Yahoo Finance
http://yhoo.it/asc2si

India Rupee INO 1 Year Chart 44.72
http://bit.ly/dv8J2G

Conclusions

A Whisker off 12 month Highs.

read more


Africa Is Looking Like a Dealmaker's Paradise Businessweek
Africa

Some $15 billion in takeovers have been announced in July, with the
latest being Wal-Mart's agreement to buy South African retailer
Massmart

For much of the past decade, Asia has been the go-to continent for
companies interested in tapping into fast-growing economies. Now,
Wal-Mart Stores' (WMT) agreement on Sept. 27 to buy South African
retailer Massmart Holdings for $4.6 billion may signal a shift toward
Africa as another dealmaking destination for multinationals. Besides
the Wal-Mart acquisition (the U.S. retailer's largest in more than a
decade), HSBC Holdings (HBC) is in talks to buy a controlling stake in
Nedbank Group, South Africa's fourth-largest bank, and Japan's Nippon
Telegraph & Telephone (NTT) is buying Africa's biggest technology
company, Dimension Data. In all, more than $15 billion in deals have
been announced across Africa since July.

Big purchases like Wal-Mart's "were a wake up to the rest of the world
that Africa is popping up on the radar screens," said Aly Khan Satchu,
a Nairobi-based independent investment analyst. Adds David Shapiro,
head of Sasfin Holdings' securities unit in Johannesburg: "Any deal is
possible."

A growing number of companies from the U.S., China, Japan, and Britain
are eager to tap the potential growth of a continent with 1 billion
people—especially given the weak outlook in many developed nations.
(On Sept. 21 the International Monetary Fund raised its 2010 growth
forecast for South Africa to 3.2 percent, from 2.6 percent.)
Meanwhile, African governments are luring investments from Chinese
companies seeking to tap the world's biggest deposits of platinum,
chrome, and diamonds.

Conclusions

Big purchases like Wal-Mart's "were a wake up to the rest of the world
that Africa is popping up on the radar screens," said Aly Khan Satchu.

read more


Wal-Mart could lead corporate America into Africa CS Monitor By Aly-Khan Satchu
Retail & Manufacturing

For quite some time, I have felt that corporate America was missing
the Africa story. Like tourists frightened off by rumors of lions
prowling the city streets of Nairobi or Lagos, America’s corporate
sector has been bamboozled and bogged down in an old African landscape
where the only opportunities are to be found in digging up raw
materials, and the greatest challenges are with intractable or corrupt
government bureaucrats. To be sure, that African landscape still
exists, both in mind and in reality.

Sometimes, being the “trusted constable” or the world’s policeman does
not allow you to be an entrepreneur.

Last year, India, Inc. completed its second biggest acquisition
anywhere, via the purchase by Bharti Airtel of Zain’s mobile phone
network. The deal added up to a staggering $10.5 billion. That was
quite a statement. China is simply everywhere on the continent, buying
up oil reserves and copper mines, and building dams, bridges and
roads. But despite all the news of America’s growing military
footprint, through the newly established Africa Command, there was not
a sniff of America, Inc. It was as if America understood the security
and resource games, but that those were the only games in town.

This has changed with Wal-Mart now wanting to put Massmart in its
shopping cart. The African continent remains the last frontier of the
21st century. Africa’s resources are vast and still not properly
quantified, but the far greater value may be in Africa’s human
capital: its consumers.

There are 1 billion souls in Africa, 40 percent of whom live in urban
areas, and according to a McKinsey report on Africa’s booming
opportunities, Africa already has more middle-class households than
India. It’s fitting that a company like Wal-Mart that has always
understood the economies of scale is leading the way for America.
Africa’s consumer market has scale, and plenty of it.

This will prove a valuable acquisition for Wal-Mart. The company is
set to reap an advantage as an early mover. But it won’t be easy.
South Africa is a quirky market; its labor force is unionized and
combative when compared with the rest of the world. However, when
viewed as a “Gateway to Africa,” South Africa is a winner.

With a good deal of its supply coming from China, Wal-Mart will surely
be able to take a knife to Massmart’s costs by bringing its scale to
bear.

I think this acquisition will be viewed as transformative. And, when
the competition sees Wal-Mart’s success, they’ll wish they had been
early movers too.

read more



South Africa All share Bloomberg Visual +6.47% 2010
Africa


Value29,456.04   
Change386.210    
% Change1.329

Conclusions

Less than 1% below April 2010 highs. South African stocks rose 1.3
percent on Thursday to book their best quarter in a year.

read more


Dollar versus Rand Live Forexpros 6.9685
World Currencies

Conclusions

6.85 Objective and then 6.61.

read more


TUNIS SE Index Bloomberg Visual +32.516% 2010 new Record Highs
Africa

Value5,681.39   
Change26.170    
% Change0.463

Conclusions

Its in an apparently relentless Bull Channel.

read more


Kenyan Growth Accelerates to 5.4% in Second Quarter Businessweek
Kenyan Economy

Kenya’s economic growth accelerated in the second quarter after
seasonal rains ended a drought and boosted agricultural
production.Gross domestic product expanded an annual 5.4 percent,
compared with a revised 4.8 percent in the previous three months, the
Nairobi-based Kenya National Bureau of Statistics said in a statement
handed to reporters today.

“Market estimates for growth are about 5 percent for this year as the
economy is starting to rebound and gain traction,” Aly-Khan Satchu, an
independent financial analyst, said by phone before the announcement.

East Africa’s largest economy grew only 2.6 percent last year and 1.7
percent in 2008, partly due to a drought that hit agriculture, which
accounts for a quarter of GDP. The Central Bank of Kenya has lowered
its benchmark interest by 2.5 percentage points to 6 percent in six
reductions since the start of 2009 to revive growth.Kenya’s Finance
Minister Uhuru Kenyatta said last week that he expects expansion to
exceed the government’s target of 4.5 percent this year.

Conclusions

“This is better than the best market estimate,” Aly-Khan Satchu, an
independent financial analyst, said by phone from the capital,
Nairobi, today. “It puts the country in line for GDP growth of between
5 percent and 5.5 percent for the full year.”

Inflation at Cycle Lows and going lower especially if they rebased the
Communications Component of the Basket so I think the CBK might fight
further room to ease over the next 12 months, which will further
cement the recovery.

read more


Kenya's economy powers ahead, inflation subdued XE.COM
Kenyan Economy

'I think that the economy is in a sweet spot and that the tipping
point for turning this acceleration into a 'boomlet' is when retail
borrowing rates drop below 10 percent.'

read more


Economy gains momentum Business Daily
Kenyan Economy


Growth was strongest in the agriculture sector at 5.8 per cent, buoyed
by favourable weather that lifted productivity and global recovery
that raised demand even as low commodity prices helped keep inflation
in check on the home front.

Tax on products, an indication of increased consumption, also grew
robustly at 19 per cent, pointing to a rise in household uptake of
goods and services that only comes with improved confidence in the
direction of the economy.

A survey conducted by TNS Research, a consumer market research firm
and whose results were released early this week, indicates that
retailer confidence index rose to 150.7 in September from 113.7 in
June, in tandem with that of consumers, pointing to the possible
continued rise in demand for goods and services in the remaining part
of the year.

The survey, conducted among 500 retailers showed 86 per cent of
businessmen believe that the next six months will be better compared
to 63 per cent in June.

“Over the past three months, there is an increase of 18 per cent in
optimism levels about future economic circumstances,” said Melissa
Baker, the chief executive officer at TNS.

The Magic Tipping Point The Star 12th April 2010
http://bit.ly/cklDnR

read more


The Nairobi ^NSE20 Bloomberg Visual +42.562% 2010 2 Year Highs
N.S.E General


4,629.80

Conclusions

Headed to New 2010 Highs and thats less than 1% away.
6161 Jan 2007 is the All time High.

read more


Kenya 182-day T-Bill yield dips to 2.093 pct Reuters
Kenyan Bills & Bonds - Short Term


The weighted average yield on the 182-day Treasury bill eased to 2.093
percent at auction on Thursday from 2.113 percent at the last sale two
weeks ago, and also below the 2.11 percent forecast in a Reuters poll.
The Central Bank of Kenya said it had offered bills worth 6.0 billion
Kenya shillings ($74.30 million) and received bids worth 11.59 billion
shillings, a 193 percent subscription rate.It accepted bids worth 7.65
billion shillings.The bank said the cut-off rate was unchanged at
2.199 percent.

Conclusions

The Short End has been assuaged by the Soft Inflation Numbers.

read more


Indian, Chinese markets boost Kenya tea prices Reuters
Commodities

Demand from the Indian and Chinese markets supported Kenya's tea
prices in the first eight months of 2010, powering export earnings 51
percent higher than last year, the tea board said on Thursday.

"It looks like it is going to be an interesting and exciting year for
Kenyan tea. Volumes up, prices are reasonably firm and that is good
for the farmers, good for everyone," the board's Managing Director
Sicily Kariuki told reporters.

The average price for all grades at the weekly tea auction held at the
port city of Mombasa was also up during the eight months at $2.75 per
kg from $2.57 last year, Kariuki said.

"China and India, their markets are coming up with their big
populations and growing economies. So they have come into the basket
and they are helping in sucking in a lot of tea from the other
origins," Kariuki said.

"However two years is a short time, we would want to see these as
fundamental drivers in a period of 3-4 years for us then to confirm
this (trend) will remain," she said.

Output rose to 260 million kg in the eight-month period from 182
million kg in the same period last year and the board maintained its
full year forecast, despite predictions of dry weather towards the end
of the year."We had projected we will be anywhere above 350 million kg
by the end of this year. I can confirm that is going to happen,
whichever way the weather goes," Kariuki said.The board expects full
year earnings to exceed the 70 billion shilling mark, after jumping to
65 billion shillings in January-August 2010 from 43 billion in the
same period last year.

Conclusions

The average price for all grades at the weekly tea auction held at the
port city of Mombasa was also up during the eight months at $2.75 per
kg from $2.57 last year, Kariuki said

read more



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