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Satchu's Rich Wrap-Up
 
 
Thursday 25th 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.

I thank Chao Tolle of Capital Radio for the Interview This Morning.

I thank Nick Clark of Aljazeera for the Interview today

And Jeff Koinange for The Bench Interview.

Check out Jeff Koinange at #Mindspeak
http://bit.ly/1mPS6v

The CNN Mend Jomo Story is here and starts 1 min 5 secs
http://bit.ly/9xBVqD

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

The Star Standard and Poor's Upgrades Kenya to B+
http://bit.ly/g0LxU3

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

#Mindspeak Saturday 27th November 0930
Silverbird Cinema 1 WestGate Mall
Liza Mucheru-Wisner
http://lizawisner.com/wordpress/

Followed by 4th December where We are hosting Bob Collymore the CEO of Safaricom

Macro Thoughts

Read Pesek down Below - I agree with a great Deal ex His China North
Korea Hypothesis.

Home Thoughts

I watched Wall Street 2 Money Never Sleeps.
http://www.imdb.com/title/tt1027718/

And Enjoyed it. I once was interviewed by Mr. Fuld in New York.

He started by Saying 'How much you worth Aly-Khan?'

He said 'This is the Place we print Money.'

'You have reached that Room, Aly-Khan.'

read more


Black Swans Abound as North Korea Lobs Shells: William Pesek Bloomberg
Law & Politics

Psychological denial is a powerful thing. Politicians fall prey to it
before big elections, investors do at the peak of asset bubbles and
entire populations do when a grave, shadowy danger looms.Jared Diamond
summed it up as well as anyone in his 2005 book “Collapse.” The
Pulitzer Prize-winner wrote of a large dam sitting high above a river
valley and the counterintuitive feelings of local inhabitants. Polls
often show that those residing miles away from the dam fear it
breaking more than those living at its base. Talk about denial.

I often recall his observations while walking the streets of Seoul.
Isn’t it odd that we in Tokyo or folks in Washington tend to fear Kim
Jong Il’s missiles more than those residing 35 kilometers (22 miles)
away from North Korea?That denial was shattered yesterday when North
Korea lobbed artillery shells at South Korea. It showed that the
fallout from North Korea’s crazed action is coming to a market near
you soon.

If there’s anything we know about Kim’s regime it’s how little we know
about what’s going on within it. We don’t even know whether Kim
approved the attack that killed two soldiers and set hundreds of
houses ablaze. Some observers argue it may be the work of rogue
generals with little interest in Kim’s son, Kim Jong Un, replacing his
ailing father. It’s anyone’s guess.

Here are three early implications of yesterday’s skirmish worth
considering. One, this is a blow to South Korea’s otherwise booming
economy, one that might have credit-rating consequences. Two, it puts
China on the hot seat as rarely before to rein in officials in
Pyongyang. Three, it’s a reminder that geopolitical risks abound in
Asia.South Korea’s finance ministry set up a 24-hour emergency
financial market monitoring system. Officials said they are
scrutinizing Korean indexes and any moves by credit-rating companies
and foreign investors. Really, how many nations need to run an
economic war room? That offers some insight into where Lee Myung Bak
finds himself.

The South Korean president was on such a high earlier this month after
the impressive staging of the Group of 20 summit. And now, just days
after U.S. and Chinese presidents Barack Obama and Hu Jintao left
town, Lee is grappling with a crisis that may be more serious than the
March sinking of a South Korean warship that killed 46 sailors. This
latest attack was on a civilian-occupied island near the border with
the North.

For Hu, the timing couldn’t be worse. China is struggling to keep its
overheating economy on track. Officials in Beijing must slow growth,
while making sure those efforts don’t antagonize hundreds of millions
of Chinese seeking higher wages. You would think Hu’s regime has
enough on its hands and it’s high time it put North Korea on a shorter
leash. It has great financial leverage over Pyongyang.You can bet Hu
will get an earful from world leaders, including Obama. At the Seoul
G-20, China was vocal about America’s stimulative monetary policies.
It urged the U.S. to act responsibly for the good of the world
economy. Now Obama can turn the tables and ask Hu to do the same with
Kim.

Our intelligence on North Korea is rather lacking. Media stories focus
on chronic food shortages and how sanctions inflict pain. Then we
learn about Siegfried Hecker’s visit this month to a nuclear plant.
The Stanford University professor speaks of “astonishingly modern”
technological advances at the Yongbyon reactor site. Clearly, efforts
to squeeze Kim are failing.

China owes it to the world to dock Kim’s allowance and restore some
sobriety to the Korean peninsula. Lee has a very short list of options
here. It also seems clear that North Korea had outside help and
equipment to build its new uranium- enrichment facility so quickly.
China really does need to read North Korea the riot act.

The geopolitical-risk angle here is terrible news for investors
everywhere. This isn’t a straight-forward Black Swan moment. Yes, it
will have an impact on markets, yet Asians are rather accustomed to
Kim lobbing volatility bombs their way. Even so, this is a warning
that something big and destabilizing -- beyond anything investors have
contemplated -- could come from Pyongyang at any moment.

A sudden coup, for example, might unnerve investors. Ending the
disastrous Kim dynasty has a certain appeal to many of us. Yet some
rogue, unknown general with lots to prove might not be an improvement.
With Europe’s debt crisis unfolding and the U.S. dollar shaky,
missiles shot in the direction of, say, Tokyo can’t be ruled out.

Along with causing untold pain and suffering for Japan’s populace, an
attack would devastate stocks, send bond yields soaring and cause
havoc in currency markets.

Geopolitics in Asia often trumps economics, and events in Korea are
convulsing markets that are already off balance. North Korea is
Exhibit A of the potential Black Swans out there. Denial is no longer
an option.

Conclusions

I disagree with the China Angle. I think Hu is staking out a more
Forward Position and is seeking to roll Back Obama. Furthermore, that
North Korea is a Near Perfect Instrument for displaying the
consequences for taking the other Side in Asia.

read more


Currency Markets at a Glance WSJ
World Currencies

Dollar Index 79.63
Euro 1.3324 Ahead of U.S. trading yesterday it had slid below $1.33
for the first time in late September
Pound 1.5759
Yen 83.49
South Korean Won 1145.20
Rand 7.0620
Brazil Real 1.7213

The spread on five-year Irish credit default swaps, or CDS, stood at
575.4 basis points in afternoon trade, little changed from Tuesday,
according to data provider CMA, after nearing 600 basis points in
earlier activity. A spread of 575.4 basis points means it would cost
$575,400 annually to insure $10 million of Irish sovereign debt
against default.

The Portuguese spread narrowed to around 481 basis points from 487 on
Tuesday, while the Spanish spread stood at 297.7 after hitting a new
high above 300 in earlier activity.

Conclusions

Europe Fears have trumped everything else of late.

Euro Dollar 1 Month Chart INO 1.3327 Last
http://bit.ly/cpSAgf

South Korean Won 1 Month Chart INO 1150.00 Last
http://bit.ly/gdAwet

All depends on what the Little Guy is thinking in the North.

read more


World Equity Markets At A Glance
World Of Finance

The Dow Industrials rose 150.91 points, or 1.37% to 11187.28. Pre
Thanksgiving Holiday Rally

read more


Aga Khan Award Lauds Chinese Bridge School, Saudi Green Project Bloomberg
Misc.

The Aga Khan Award for Architecture this year was won by five projects
including a school built as a bridge uniting a Chinese village and the
restored center of Tunisia’s capital Tunis.

The revitalization of a Saudi Arabian valley, a Spanish museum and a
Turkish factory also share the biggest prize in architecture,
according to a statement today by the organizers.

“We give the award not to ideas but to completed projects which have
architects, builders and users involved,” Farrokh Derakhshani, the
award’s director, said in Doha. “We also look at issues that the award
has not been able to address in the past. Millions of people work in
industrial buildings every day, so we tell our nominators to look out
for such projects.”

Winners will collect their prizes, totaling up to $500,000, this
evening at Qatar’s Museum of Islamic Art from the Aga Khan, the
spiritual leader of the Shia Ismaili Muslims. He established the award
in 1977 to “recognize architectural excellence” that addresses the
needs of societies in which Muslims have a presence, according to the
website of his philanthropic organization, the Aga Khan Development
Network.

A total of 401 projects applied for this year’s awards and 19 were
shortlisted. The winners were picked by an independent nine-member
jury including French architect Jean Nouvel, Indian- born sculptor
Anish Kapoor and Columbia University philosophy professor Souleymane
Bachir Diagne.

Emre Arolat Architects designed the winning Ipekyol Textile Factory in
Edirne, Turkey, where floor-to-ceiling windows give workers views of
gardens and recreational areas.

Another winner was Li Xiaodong’s Bridge School in China’s Fujian
Province, connecting the village of Xiashi that lies on two sides of a
creek. The school, built on steel trusses with a bridge below, is “the
physical and spiritual centre of what was a declining village,” the
award website said.

Arriyadh Development Authority’s restoration of the Wadi Hanifa
Wetlands, a valley near Saudi Arabia’s capital Riyadh that had been
exploited in an “aggressive and environmentally destructive manner,”
according to the project description, was selected for its creation of
parks, providing water treatment and encouraging tourism.

The Association de Sauvegarde de la Medina de Tunis’s urban
revitalization of the city won for its planning, including the
restoration of theaters and markets.

The Madinat al-Zahra Museum was praised for its role “as a place to
interpret” the 10-century palace city of Madinat al- Zahra in Cordoba,
Spain, one of the most extensive early Islamic archaeological sites in
Western Europe. The museum “blends seamlessly into the site and the
surrounding farmland,” the project description says.

The award is made every three years and is being awarded for the 10th
time this year. It is larger than the $100,000 Pritzker Prize, awarded
annually since 1979 for “significant contributions to humanity and the
built environment through the art of architecture.”

1. The Ipekyol Textile Factory in Edirne, Turkey. The building
designed by Emre Arolat Architects has floor-to-ceiling windows views
of gardens and recreational areas. Source: Aga Khan Foundation via
Bloomberg

2. The Madinat al-Zahra Museum is shown in Cordoba, Spain. The
building is shortlisted for the Aga Khan Architecture Prize

3. Wadi Hanifa Wetlands near Riyadh, Saudi Arabia, shortlisted for the
Aga Khan Architecture Prize. Source: Aga Khan Foundation via Bloomberg

4. Thats Me on the Right with the Aga Khan [I had hair then]

read more




Live Crude Oil chart 83.71 Last
Minerals, Oil & Energy

Light, sweet crude for January delivery settled $2.61, or 3.2%, higher
at $83.86 a barrel on the New York Mercantile Exchange, the largest
one-day percentage gain in four months.

read more


Soft Commodities at a Glance INO
Commodities

Cocoa 2765 -0.36%
Coffee 207.15 -1.55%
Cotton 119.39 +5.21%
Sugar 27.95 +2.6%

Conclusions

I would continue scaling in at these Levels.

read more


Million-Dollar Snuff Bottle Lifts Bonhams Bloomberg
Misc.

The top lot was a famille-rose enameled gold-ground glass snuff bottle
commissioned by the Qianlong emperor (1736-95), which fetched a record
HK$9.1 million, almost four times its estimate. Chinese modern master
Wu Guanzhong’s “Dwelling in the Mountain” sold for HK$3.1 million,
also beating its HK$2 million estimate. Most lots sold to mainland
Chinese buyers, Bonhams said.

Bonhams held the sale at the Island Shangri-La Hotel, including wine,
whisky, watches and pens, to tap what Sheaf described as China’s “new
pool of prosperity.”

A famille-rose enameled gold-ground glass bottle commissioned by the
Qianlong emperor (1736-95).

read more



Obama Administration Seeks More Money to Fight Rebels in Uganda Bloomberg
Law & Politics

The Obama administration is asking for more money to fight Ugandan
rebels in a strategy document sent to Congress yesterday.
Since December 2008, the U.S. has spent $23 million in logistical and
intelligence support for Ugandan army operations against the Lord’s
Resistance Army, along with hundreds of millions of dollars in
humanitarian and development aid for areas where the LRA has operated,
the 33-page document said.

“Without additional funding, eliminating the LRA threat will remain
elusive,” said the strategy document, which was e- mailed to Bloomberg
by Michael Mershon, a spokesman for U.S. Representative Jim McGovern,
a Massachusetts Democrat. McGovern co-sponsored legislation, enacted
earlier this year, that ordered the Uganda strategic review.

The LRA, led by Joseph Kony, began its insurgency in the 1980s after
Ugandan President Yoweri Museveni purged the army of members of the
Acholi community, whose interests the LRA says it is defending. The
Ugandan army’s recent offensive against the group has dispersed the
rebels into remote parts of Sudan, the Central African Republic and
the Democratic Republic of Congo.

U.S. President Barack Obama called for “political, economic, military,
and intelligence support to bear in addressing the threat posed by the
LRA” in a letter to the House Committee on Foreign Affairs, sent along
with yesterday’s strategy document.

The document called for regional and international cooperation in the
“apprehension or removal” of Kony, along with the promotion of
defections from the LRA, increased protection of civilians and
humanitarian relief to affected communities.

The rebels have killed more than 2,000 people and forced more than
400,000 to flee throughout central Africa since December 2008,
according to the United Nations’ Office for the Coordination of
Humanitarian Affairs.

Kony faces International Criminal Court charges of murder, mutilation,
rape and the abduction of thousands of children for use as soldiers.
He is thought to be along the border of the Central African Republic
and Sudan’s south Darfur region, according to the UN.

read more


Kenya 5-yr bond yield at 6.671 pct Reuters
Kenyan Bills & Bonds - Short Term

Kenya sold a five-year Treasury bond at a weighted average yield of
6.671 percent on Wednesday, well above a Reuters poll forecast and
securities with a similar maturity on the secondary market.The
Treasury raised 11.97 billion shillings ($149 million) at the sale,
where bids ranged from 4.75 percent to 10.74 percent. The central bank
fixed the cut-off rate for accepted bids at 7.09 percent and set the
coupon at 6.671 percent.

A Reuters poll of fixed income traders last week had forecast a coupon
rate of 6.1 percent.

The weighted average yield fell from 6.829 percent at the previous
sale of a five-year bond on May 24. The bond issued in May was quoted
with a bid yield of 5.4-5.5 percent on the secondary market on
Wednesday.

The central bank had sought 12 billion shillings worth of bonds and
received bids totalling 18.2 billion.It said it would issue another 12
billion shillings in government bonds in December. The maturity of the
next issue has yet to be determined.

Conclusions

Central Bank versus Treasury Noise has queered the Curve and Investors
are extracting a steep Concession of late.

read more


NIC reports 3rd Quarter 2010 here and share price data www.rich.co.ke
N.S.E Equities - Finance & Investment

Par Value:                  5/-
Closing Price:          48.50
Total Shares Issued:          358,997,792
Market Capitalization:        17,411M
EPS:            3.31
PE:                14.653

EPS up 68 percent to 3.75 shillings
NIC Bank 69% jump in nine-month pretax profit to 2.0 billion shillings
($25 million).
"The financial results were boosted by 27 percent growth in the loan
book and a drop in the cost of funds notwithstanding a higher deposit
base," Group Managing Director James Macharia said in a statement on
Thursday.
NIC Bank, which also has operations in Tanzania, said net loans and
advances to customers grew to 38.1 billion shillings. Net interest
income rose a third to 2.4 billion shillings.
NIC said that it intended to rebrand its Tanzanian subsidiary before
the year's end.
"We planning on re-launching S&F as NIC Bank Tanzania, Macharia said,
adding that the unit was expected to continue making a significant
contribution to the group's profits.
The bank's total assets rose to 59.85 billion shillings from 47.50
billion shillings, while customer deposits increased to 48.29 billion
shillings from 38.86 billion.
Earnings per share leapt 68% to 3.75 shillings.

48.50 / 5.00 [Assuming 3.75 Straight Lined] = Sub 10 Forward PE.

read more


Kenyan banks lose Sh1.7bn to fraudsters in 3 months Business Daily
N.S.E Equities - Finance & Investment

A confidential report by the BFID last month revealed Sh390 million
worth of reported frauds within Kenya’s banks from April to June this
year, up Sh20 million on the previous quarter. But figures for the
third quarter, show fraud during the 12 weeks from July to September
this year, up at Sh1.7 billion.Around half a billion of that amount
was the result of a single attempted fraud through a transfer at
Co-operative Bank of Kenya targeting a National Housing Corporation
account.The anti-fraud police department recovered close to a billion
of the quarter three losses, including the Co-operative Bank transfer,
but that leaves more than Sh700 million still untraced.

read more


AAR sells 20p.c. stake The Nation
Kenyan Economy

AAR, the local private healthcare insurance company, has sold 20 per
cent stake to a strategic partner for Sh750 million.
The Dutch private equity fund, Investment Fund for Health in Africa
(IFHA), said it would increase the stake to 66 per cent in the next
two years.

“We will slowly grow up our shareholding to 50 per cent or 60 per
cent, if we are allowed,” IFHA managing director Max Coppoolse said at
Hotel Intercontinental on Wednesday.

IFHA, also registered in Mauritius, invests in healthcare and medical
services in Africa.

The consortium includes the Dutch pension fund, ABP, African
Development Bank, FMO of Netherlands, International Finance
Corporation, Goldman Sachs, Pfizer and Social Investor Foundation for
Africa, comprising multinationals like Unilever, Shell and Heineken.

AAR Holdings Group chairman Dr Frank Njenga said they brought on board
new partners to expand their business portfolio and list at the
Nairobi Stock Exchange in the next five years.

It is implementing a low-income health insurance project in Kapsabet
in the Rift Valley in partnership with PharmAccess Foundation, an IFHA
partner partially sponsored by the Dutch government.

Conclusions

Private Equity has spiked in a Big way This Year.

read more



 
 
N.S.E Today

The NSE20 fell a further 20.51 points to close at 4528.26 and 3.76%
off its 2010 High.
The NASI fell below 100 to close at 99.6287.
Market Cap was 1.188499 Trillion versus 1.194985 Trillion.
Equity Turnover was 314.591m versus 412.868m.
The Bourse has declined in an orderly Manner from 2010 Highs and
seemingly lacks momentum near term.



N.S.E Equities - Agricultural

Kakuzi rallied 4.67% to close at 89.50. Kakuzi is once again the Top
Performing share at the NSE having posted a 180.897% 1 Year Return.
Kakuzi trades on a 4.931 Trailing PE allowing plenty of Headroom.

Kakuzi share price data www.rich.co.ke
http://bit.ly/5bxXIz

Par Value:                  5/-
Closing Price:          85.50
Total Shares Issued:          19,600,000
Market Capitalization:        1,676M
EPS:            17.34
PE:                4.931

Sasini Tea firmed 10 cents to close at 13.05 and traded 59,500 shares.



N.S.E Equities - Commercial & Services

SAFARICOM

shares volume     16,793,800
total turnover     76,387,360
CLOSING PRICE 4.50
last price     4.50

Conclusions

Safaricom was the most active share and eased back 5 cents to close at
4.50. Safaricom has Size Buyers at 4.50. The PE is about 11.75 and the
share oversold.

TPS Serena was the 2nd most active share at the Bourse. TPS Serena
firmed 0.74% to close at 68.50 which is in fact a 39 Month High. TPS
Serena traded a 62.00-69.00 range and 579,600 shares worth 39.704m.

Kenya Airways firmed a further 0.534% to close at 47.00 and traded a
46.50-47.25 range and 357,100 shares. Kenya Airways posted a +66% PBT
1st Half and Buyers have now twice appeared in very good size at
42.00, which now looks like a classic 'double Bottom' on the charts.

ScanGroup bounced 3.418% to close at 60.50 and traded 20,900 shares.

Nation was unchanged at 160.00 and traded 3,700 shares.
Standard did not trade.

Access Kenya improved 5 cents to close at 15.65 [15.55 was its 12
month low] and traded 74,900 shares.

CMC Holdings was unchanged at 13.15 and traded 142,000 shares.
CarGen did not trade.



N.S.E Equities - Finance & Investment

KCB eased 1.14% to close at 21.75 and traded a 21.25 -22.50 range and
907,300 shares worth 19.856m. KCB's Martin O-O made an eloquent
Presentation at Mindspeak See Here
http://www.rich.co.ke/rctools/richtv.php and the Price is due a Re
Rating ahead or coincident with the Release of the Full Year Results.
KCB trades on a Forward of 8.5.
Barclays Bank fell back 1.5625% to close at 63.00 and traded 134,400 shares.
COOP Bank eased a further 0.50377% to close at 19.75 and traded a
19.00-19.90 range and 639,200 shares.
Equity Bank was unchanged at 25.75 and traded 502,800 shares.
StanChart traded 12,400 shares and was unchanged at 271.00.

NIC reported 3rd Quarter Results with EPS +68% and the Implied Forward
is in Single Digit Territory. NIC traded 57,100 shares and closed
unchanged at 48.50.
HFCK was unchanged at 26.00 on good Volume of 132,400 shares
signalling Buyers are prepared to support the Price at these Levels.
CFC StanBic was unchanged at 83.00 and traded 4,100 shares.
DTB traded 12,400 shares and closed a shilling lighter at 134.00.
NBK closed 1.29% easier at 38.25 and traded 57,400 shares.

Centum rallied a further 3.09% to close at 25.00 and traded 220,100
shares. Centum has rallied 6.18% over the last 2 consecutive sessions.
Centum has now posted a 132.067% 1 Year return.

Centum share price data and 1st Half Results here  www.rich.co.ke
http://bit.ly/3jc0KV

Par Value:                  0.50/-
Closing Price:          25.00
Total Shares Issued:          604,947,072
Market Capitalization:        15,124M
EPS:            1.62
PE:                15.432

Kenya Re traded 208,400 shares and closed at 11.55.
Jubilee closed 2 easier at 189.00 with 1,700 shares traded.
PanAfric firmed 50 cents to close at 70.50 and traded 31,200 shares.

Olympia Capital traded 20,200 shares and closed at 6.35.



N.S.E Equities - Industrial & Allied

KPLC traded 3rd at the Bourse and fell 6.722% to close at 27.75 and
closed out the Session trading at 27.00 -9.24% and the Limit Move for
the Day. KPLC traded a 27.00-29.50 range and 1.334m shares worth
37.223m. KPLC has imposed a Quick Guillotine on its Rights Issue where
the GOK is not taking up its rights and where Equity Bank and Centum
have underwritten half of the Rights Issue. KPLC is restructuring its
Balance Sheet and will be better primed for Scale Up and Growth after
this Exercise. The PE is now very difficult to calculate accurately
but I have it at about 11.00.
KenGen firmed 1.17% to close at 17.25 and traded 408,400 shares worth 7.058m.
Cables closed lower at 17.10 and traded 24,800 shares.

EABL traded 4th at the Bourse and closed 1.375% lower at 216.00 and
traded a 211.00-219.00 range and 102,000 shares worth 22.087m. EABL
closed Monday at 225.00 a Record high and has retreated 4.00% from
there.

Athi River Mining firmed 1.116% to close at 174.00 and traded 98,000
shares. The Action has been some way above its Volume Moving Average
over the last 3 Months.
Bamburi Cement firmed a shilling to close at 196.00 and traded 2,600 shares.
Portland did not trade.

Mumias Sugar rose 1.01% to regain 10.00 where it closed. 425,400
shares were traded.

KenolKobil closed at 10.05 and traded 594,400 shares.
Total traded 2,700 shares at 29.50 unchanged.

BAT came off a further 1.06% to close at 280.00 and traded 6,400 shares.

Sameer closed at 6.80 and traded 11,300 shares.
Eveready fell 3.22% to close at 3.00 and traded 58,500 shares.
Unga closed at 11.70
Carbacid bounced back 4 to close at 150.00 on 1,000 shares.
BOC Gases did not trade.
Crown Berger closed at 32.25 and traded 4,400 shares.



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