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Satchu's Rich Wrap-Up
 
 
Wednesday 10th of November 2010
 
Afternoon
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.

Please accept this earlier Missive as I will be attending the
Safaricom results Release at Safaricom House. If you want to follow
the Results in real time Follow me on www.twitter.com @alykhansatchu

When I met @bobcollymore recently He told. I want to tweet more but
How can I when I am receiving an Award from The President? I, of course,
explain if I am on the Phone I am tweeting and its not me being rude.

I had an excellent Coffee and Discussion this morning with my Friend
John Ngumi of Standard Bank. John was quite the Excellent Speaker at
#Mindspeak last year. John was the prime Mover behind the PTA Bank
Debut $300m 6.875% Eurobond due 2016. And I was explaining Africa in
Dubai and I wish this had happened before I got up there because this
Eurobond is a preeminent Example of the Breakthrough Moment we find
ourselves in.

I said this about the Wal-Mart MassMart Transaction
http://bit.ly/bwyJhd

Big purchases like Walmart'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.

And I said to John I thought this Eurobond a Radar Screen Trade.

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

The Star E-Float QE2 The Titanic
http://www.rich.co.ke/media/docs/016NSX0811.pdf

What is #Mindspeak ?
http://bit.ly/9mhe39

Martin O-O's Visual Presentation KCB at  #Mindspeak is here
http://bit.ly/b8oKik

Have you seen Jeff Koinange's #Mindspeak Session
http://bit.ly/1mPS6v

Its outrageously Good.

Part 1 Jeff and Oprah
http://bit.ly/ccmBmx

Part 2 Mend A Man called Jomo
http://bit.ly/9xBVqD

Macro Thoughts

Gold is a Buy below 1400.00
You recall what I said about BreakFast Commodities?

Home Thoughts

I turned 45 yesterday. And I had a Lovely Day. The Tsunami Wave of
good Wishes was like a Rising Tide and put me on a natural High which
is best described by this Marvin Gaye Song

Rare marvin gaye - flying high in the friendly sky YouTube
http://bit.ly/bx0PNy

I did feel sort of 21 again. The Girls made me a Lovely Dinner and I
opened one of my Chateau Musar Bottles of Red. Years ago, There was a
Wine Club in The Spectator Magazine and 25 Years ago that Fellow was
just such a champion of the Musar Vineyard in Lebanon. And My Brother
Samir had with some flourish produced a Bottle.

And I had said;

'Where did you get that from?'

'Dubai Duty Free.' he said.

Chateau Musar Google Image Search
http://bit.ly/cA2bMY

read more


Cameron Risks China Spat Bloomberg
Law & Politics

U.K. Prime Minister David Cameron resisted a request from Chinese
officials yesterday to remove the poppy symbol that Britons wear every
November in memory of their war dead during his visit to Beijing.The
flower has a different resonance in China, which fought and lost two
Opium Wars with Britain in the 19th century. Those resulted in the
U.K. forcing the Chinese to open their borders to trade, including in
the narcotic derived from the poppy. Britain also gained the territory
of Hong Kong, which was not handed back to China until 1997.

Two British officials familiar with the matter said the Chinese had
requested the prime minister and his delegation remove the poppies
from their lapels before they arrived yesterday at the Great Hall of
the People in Beijing, where Cameron was greeted by Premier Wen Jiabao
and inspected an honor guard of the People’s Liberation Army. The U.K.
government refused, on the grounds that the symbol was important to
Britain.

This year is the 150th anniversary of the Second Opium War, which
ended when the British and French armies arrived in Peking, as Beijing
was then known, and destroyed the emperor’s Summer Palace to remind
the Chinese of their defeat.

Cameron’s two-day visit has focused on boosting trade ties, yesterday
signing an accord improving access for U.K. companies to China’s
securities markets. Rolls-Royce Group Plc signed a $1.2 billion order
to provide 16 jet engines to China Eastern Airlines Corp., and Royal
Bank of Scotland Group Plc reached a deal with Guolian Securities Co.
to underwrite bonds and shares.

Cameron’s relationship with China got off to a rocky start even before
he became prime minister, when he said during a television debate
before the May 6 general election that uncertainty over China was one
reason for the U.K. to keep its nuclear weapons.

British officials refused to confirm or deny yesterday that Cameron
would raise the issue of jailed Chinese dissident Liu Xiaobo, the
winner of this year’s Nobel Peace Prize, with the Chinese leadership.
China’s flagship Communist Party newspaper, the People’s Daily,
attacked the peace prize last week as a “political tool” that is “in
tune with U.S. global strategy,” maintaining Chinese criticism of last
month’s award.

Conclusions

You know one of my closest Friends is Alex Michaelis [Who is one of
the most famous Contemporary Architects today] arranged for me to have
lunch with the 'Future' [at that time] Prime Minister and I really
liked him, I have to admit. He told me how he had spent his Gap Year
at Soysambu.

Alex Michaelis Google Image Search
http://bit.ly/9EjwaR

Good Morning Alex.

Alex and I and Lin Menuhin [Hi Lin] drove in Alex's Alfa Sud from
London to the South of France when we were 17. I can tell you that was
a Halycon moment. Was it not Gentlemen?

Michaelis Boyd Associates
http://www.michaelisboyd.kk5.org/

read more


Currency Markets at a Glance WSJ
World Currencies

Euro 1.3378
Pound 1.6001
Yen 81.80 1 Big Figure Move
Aussie 1.0042
Brazil Real 1.7002
India Rupee 44.38
Rand 6.8655

"This is part of a broad dollar rally, with equities selling off, some
nervousness in Treasurys going on, and an overall unsettled feeling
ahead of [meetings of the Group of 20 leading nations]," said Andrew
Busch, global foreign-exchange strategist at BMO Capital Markets in
Chicago.

The euro, sterling and yen all hit session lows against the dollar in
afternoon trading in New York.

Conclusions

This remains a Counter Trend Dollar Rally. I prefer scaling into Long
Aussie and Rand Positions as the most way optimal way to play this
Pullback.

Euro Dollar 1 Year Chart INO 1.3777
http://bit.ly/9pP06c

Periphery Centre Stage again

read more



Pop Goes the Art Market: Sotheby's Sells Warhol Soda Bottle for $35.3 Million WSJ
Misc.


Never underestimate the power of suggestion: On Tuesday, Sotheby's
hired waiters with silver trays to offer up tiny glass bottles of soda
pop to collectors arriving for its major evening sale of contemporary
art. Half an hour later, eight bidders fought over the sale's priciest
offering -- Andy Warhol's 1962 soda bottle, "Coca-Cola [4] [Large
Coca-Cola]." A telephone bidder won it for $35.3 million, over its $25
million high estimate.

read more


"Coca-Cola [4] Large Coca-Cola," a 1961-62 painting by Andy Warhol. Photographer: Tom Starkweather/Bloomberg
Misc.

"Untitled," a 1955 painting by Mark Rothko. Photographer: Tom
Starkweather/Bloomberg

Conclusions

If I had had the Budget I would have bought Warhol's Dollars and
frankly any Rothko.

read more



Precious Metals Watch: Can You Say ‘Margin Calls’? WSJ
Commodities


The silver juggernaut has finally met some resistance.On Tuesday,
silver prices soared $1.474 to $28.90 per ounce. After the market
settled, CME Group, where the metal is traded, decided to raise the
margin requirements for holding a silver futures contract from $5,000
to $6,500 per contract.Exchanges typically raise margin requirements
when prices are too volatile to be covered by the collateral traders
have pledged. For example, Tuesday’s silver move can be translated
into a $7,370 per contract move, as each silver contract has 5,000
ounces, well exceeding the original margin.

Higher margin requirements mean that investors need to put up more
money to trade and hold a contract. For silver, it’s a combination of
higher prices and more volatility that has led to the exchange’s
action, said Richard Digenan, assistant margin manager at R.J.
O’Brien. This has been the first margin increase since April. This
year, silver is up 71%.The margin action has probably triggered a
selloff in precious metals in late Tuesday. Silver, measured by the
most active contract, settled up 5.4%, but fell 7.3% to $26.805 per
ounce after hours. Gold was up 0.5% at settlement, but fell 1.5% to
$1,388.8 per ounce after the CME announcement.

As the new margins won’t become effective tonight, Mr. Digenan said he
might start making some “margin calls” to clients tomorrow morning.

Conclusions

Softened up Gold and Silver near term. Its effect will not be that
long Lived, I venture.
This was how Bunker Hunt was stopped.

Spot Silver Chart INO 27.3913
http://bit.ly/dgePlU

Gold live 24 Hour Spot Price KITCO 1398.10
http://bit.ly/aGn67A

A Trading Buy again. Unsettled by the 'Margin Call' recalibration.

read more



Soft Commodities at a Glance INO
Commodities

Cocoa +2.54% - has been a Laggard in its Complex
Coffee +4.34% - These are Multi Year Highs
Cotton +1.69%
Sugar +3.72%

Coffee Dec 2010 217.05 +9.45 (+4.34%)
http://bit.ly/b6N9d3

Last Price    217.05
Open Int.    58058
Contract High    217.85
Contract Low    123.95
First Delivery    2010-12-30
Contract High Date    2010-11-09
Contract Low Date    2009-03-10
Expiration    2010-12-17

Conclusions

Do You remember what I said ad nauseam about the Breakfast Commodities?

Sugar March 2011 INO 33.11 +1.23 (+3.72%) INO
http://bit.ly/arDA0l

Last Price    33.11
Open Int.    250586
Contract High    33.32
Contract Low    11.9
First Delivery    2011-05-15
Contract High Date    2010-11-09
Contract Low Date    2008-10-24
Expiration    2011-02-28
Close Time    12:30

read more


Bharti Second-Quarter Profit Falls After Price Cuts Bloomberg
Information & Communication Technology

Bharti Airtel Ltd., India’s largest mobile-phone operator, reported
profit fell 27 percent after the company cut calling rates to compete
in the world’s second- largest wireless market.Second-quarter net
income dropped to 16.6 billion rupees ($374 million) in the three
months ended Sept. 30, compared with 22.6 billion rupees a year
earlier, New Delhi-based Bharti said today. That lagged behind the
17.8 billion rupee average of 27 analyst estimates compiled by
Bloomberg.

Bharti, controlled by billionaire Chairman Sunil Mittal, fell in
Mumbai trading as intensifying competition with Vodafone Group Plc and
Reliance Communications Ltd. drove down monthly phone bills in India
by 20 percent. Bharti is expanding into countries including Kenya with
the $9 billion purchase of the African assets of Kuwait’s Mobile
Telecommunications Co. to offset slowing growth at home.

“In Africa, the turnaround is going to take a while,” said Naveen
Kulkarni, an analyst with MF Global Ltd. in Mumbai. “It will take at
least two to three quarters for them to get a foothold there, and to
maintain margins.”

Bharti fell 0.9 percent to 331.55 rupees as of 10:55 a.m. in Mumbai
trading. The benchmark Sensitive Index, or Sensex, was unchanged. The
stock has advanced less than 1 percent this year compared with the
Sensex’s 20 percent climb.

Manoj Kohli, chief executive officer of Bharti’s Africa business,
plans to invest in expanding new businesses in Nigeria, Gabon, Zambia,
Malawi, Niger and Uganda after the company completed its purchase of
the African assets of Zain.The company plans to invest $1.2 billion in
the six countries over the next three years, Kohli said in
July.Japan’s NTT DoCoMo Inc. and Norway’s Telenor ASA triggered a
price war last year when they entered India with cut-rate plans to win
a larger share of a market that is forecast by researcher Gartner Inc.
to exceed 993 million users by the end of 2014. India had 671 million
mobile-phone accounts in August, according to the phone regulator,
lagging behind only China.

Bharti said it had 195 million subscribers across 19 countries as of
Sept. 30, according to today’s statement.

Sales rose 47 percent to 152.2 billion rupees. That compared with the
150 billion rupee average of 37 analyst estimates. Earnings before
interest, tax, depreciation and amortization, or Ebitda, rose 19
percent to 51.2 billion rupees.

“The margins in Africa are still low,” Kohli said. “By the time we
reach the next fiscal year we will see improvements.”

Bharti’s average revenue per user, a key measure of performance in the
telecommunications industry, plunged 20 percent in India to 202 rupees
a month. That’s cheaper than Bharti’s average phone bill from its
Africa operations.

Bharti is rolling out a third-generation wireless network in India
this year that will allow it to begin providing faster data services
on smartphones this year. The company paid the government 123 billion
rupees for permits in 13 of India’s 22 telecommunication zones, and 33
billion rupees in June for licenses to offer wireless broadband
service in four regions.The company also paid $300 million in January
for a 70 percent stake in Abu Dhabi-based Warid Telecom Group’s
Bangladesh operations and plans to invest $200 million in the next
five years in its mobile operations in Sri Lanka.

Conclusions

They have 4 Quarters to get Africa right before the Pressure starts to
build on their Spreads.

“The margins in Africa are still low,” Kohli said - Higher than in
India apparently Manoj.

Minutes of usage were at 454 minutes per user, up 1 percent from a
year earlier - The Minute Factory - Airtel http://bit.ly/cdmIDc

Bharti Airtel share price data Bloomberg
http://bit.ly/auaC8j

Price331.250   
Change-3.300    
% Change-0.986    
52-Wk High (09/28/10)376.950   
52-Wk Low (11/27/09)229.500   
1-Yr Return13.224
FUNDAMENTALS
Shares (Millions)3,797.530   
Market Cap (Millions)1,257,932.000   
Earnings24.133   
Price/Earnings13.726   
Dividend Yield (ttm)0.301   
Rel. Dividend Yield0.254   
90-Day Volatility33.083   
Beta vs. SENSEX0.806

Conclusions

They are straining the Balance Sheet at the moment and the Question is
the Inflexion Point.

Of Course, Safaricom and Zain is like a Proxy War between 2 Great
Powers Vodafone and Bharti Airtel.

The Market Tolerance Level for Bharti's Strategy comes into Focus

Bharti's home woes ease; Africa margins are a worry Reuters
http://reut.rs/b873oO

The News Flow and Market tolerance Levels hove into View.

read more


PTA Bank Sells $300 Million of Eurobonds for Loans (Update2) Bloomberg
World Of Finance

The Eastern and Southern Trade Development Bank, the Burundi-based
lender known as PTA Bank, said it sold $300 million of five-year
Eurobonds to fund loans small- and medium-sized businesses in the
region.

The securities are part of a $1 billion program to “diversify the
bank’s resource base and to raise funding,” PTA Bank President Michael
Gondwe said in a statement handed to reporters today in Nairobi, the
Kenyan capital, where the lender has an office.

The debt, which matures on Jan. 9 2016, was sold at 6.875 percent, CFC
Stanbic Bank Ltd., the Kenyan bank that arranged the transaction, said
in an e-mailed statement. The first coupon will be paid on July 9,
2011, it said.

Ghana’s 8.5 percent fixed-rate Eurobond, due October 2017, climbed for
a third day, rising 26 cents to $115.48, reducing the yield by 4 basis
points, or 0.04 percentage point, to 5.75 percent by the close of
trade yesterday.

PTA Bank has been assigned a BB rating by Fitch Ratings, two steps
below investment grade, and Ba1, or the highest non- investment grade,
by Moody’s Investors Service.

In July 2005, the lender sold seven-year bonds worth 800 million
Kenyan shillings ($9.9 million) and in October 2007, it sold
seven-year bonds worth 1 billion shillings. Both of those issues,
which are traded on the Nairobi Stock Exchange, have a coupon rate of
1 percent above the 91-day Treasury bill rate, according to data from
the Kenyan bourse.

Standard Bank Group Ltd., which is based in Johannesburg, and
London-based HSBC Holdings Plc acted as book runners for the Eurobond
sale, CFC Stanbic said.

“This is an affirmation that political risk is taking a back seat and
sets the stage for new sovereign issues in East and Central Africa,”
CFC Stanbic said.

Conclusions

Thats a Tipping Point and I had Coffee with the Tipping Agent this AM.

77% sold into Europe which I found interesting. 15% US Offshore. Asia 8%.

read more


Senegal eyes first sukuk as Africa looks to Islamic finance Reuters
World Of Finance

Senegal is the latest African nation looking to tap the growing
Islamic finance market by issuing its first sovereign Islamic bond in
2011, three sources familiar with the matter, including an official at
Senegal's Ministry of Finance, told Reuters.

read more


Essar Group Unit Is Preferred Bidder for Zimbabwe Iron & Steel Bloomberg
Commodities

India’s Essar Group said it is the preferred bidder for the Zimbabwe
government’s 60 percent stake in Zimbabwe Iron and Steel Co.,
according to an e-mailed statement today.

read more


Kenyans living abroad to send home Sh136 billion this year Business Daily
Kenyan Economy

Kenya is expected to earn an estimated Sh136 billion ($1.7 billion) in
remittances from abroad by the end of this year, according to a World
Bank report.The amount, according to the bank’s Migration and
Remittances Factbook 2011, is five per cent of Kenya’s gross domestic
product

Conclusions

A 10 Year Phenomenon.

A View I gave the BBC in 2008
http://bbc.in/aET49P

Mr Satchu says remittances have been a powerful anchor for the Kenyan economy.

read more


Safaricom reports 1st Half Results today share data previous Full Year Results here
N.S.E Equities - Commercial & Services

Par Value:                  0.05/-
Closing Price:          4.75
Total Shares Issued:          40,000,000,000
Market Capitalization:        19,000M
EPS:            0.38
PE:                12.500

Conclusions

Look at the Volume traded Yesterday It was the highest Action day for the Year.

read more


KenolKobil to Operate in Zimbabwe, Mozambique in 2011 Bloomberg
N.S.E Equities - Industrial & Allied


KenolKobil Ltd., a Kenyan fuel retailer, said it plans to open an
office in Zimbabwe in January as part of its plan to expand in
southern Africa.The company expects to start “business activities” in
Zimbabwe and Mozambique in 2011, according to an e-mailed statement
from the Nairobi-based company today.The plan is to acquire and build
retail fuel stations for KenolKobil to operate in the two countries,
Charles Njogu, the company’s spokesman, said today by phone from
Nairobi.

“We have somebody looking into the opportunities and scouting
investments,” Njogu said. “Mozambique can also be used as an import
opportunity.”

KenolKobil share price data here +132.618% 1 Year
http://bit.ly/2DMFVE

Par Value:                  0.50/-
Closing Price:          10.80
Total Shares Issued:          1,471,761,152
Market Capitalization:        15,895M
EPS:            0.88
PE:                12.273

read more



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