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Satchu's Rich Wrap-Up
Monday 20th of June 2011

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#Africa The State of the Now

Macro Thoughts

Home Thoughts

We were invited to a spectacular Dinner at Mr. and Mrs. Thakrar's
Friday. Bharat and His Wife  [I have been pronouncing the second A
with an elongation whereas I have now learnt it should be clipped] it
turns out are extremely Fine Hosts. The Company and the Hospitality
were first class. The Cuisine which started with Fresh Oysters first
class. Thank You.

read more

Are we all doomed? Martin Rees

“The bells which toll for mankind, are - most of them, anyway - like
the bells on Alpine cattle; they are attached to our own necks and it
must be our fault if they do not make a cheerful and harmonious

Martin Rees is professor of cosmology and astrophysics, Master of
Trinity College, Cambridge, and Astronomer Royal

Just Six Numbers: The Deep Forces That Shape the Universe Martin Rees

So what are the six numbers? One is the number of dimensions we live
in: three. The rest are, at least at first sight, more obscure. For
the record, they are N, the ratio of the strength of gravity to that
of electromagnetism; $epsilon $ (epsilon), the ratio of mass lost to
energy when hydrogen is fused to form helium; $Omega $ (Omega),
describing the amount of dark matter; $lambda $ (lambda), the
cosmological constant; and Q, related to the scale at which the
universe looks smooth. Martin Rees takes 180 pages to explain them - I
can do no better here.

read more

How 'The Family' Controlled Tunisia WSJ
Law & Politics

TUNIS—Zine al-Abidine Ben Ali, Tunisia's deposed president, goes on
trial Monday on charges of abusing state funds and drug trafficking,
providing the first public accounting of the practices of a ruler
whose autocratic style first triggered the Arab Spring revolution that
has swept the Middle East.

Over his 23 years in power, Mr. Ben Ali—who is being tried in
absentia—and his relatives amassed a fortune in banks,
telecommunications firms, real-estate companies and other businesses,
giving them control over as much as one-third of Tunisia's $44 billion
economy, according to anticorruption group Transparency International.
The family displayed its wealth by throwing extravagant parties and
jet-setting among several mansions in Tunisia and overseas.

Mr. Ben Ali's term ended on Jan. 14 when he was hurried into a plane
by his wife, according to a person present, and fled to Saudi Arabia.

Tunisia's Justice Ministry says it has sought Mr. Ben Ali's
extradition but hasn't yet received a response. Officials in Saudi
Arabia didn't respond to requests for comment on extradition

When he took power in 1987 through a bloodless coup, Mr. Ben Ali, a
graduate of the U.S. Army Intelligence School in Fort Holabird, Md.,
inherited a country where the state controlled much of the economy,
from agriculture to tourism and textiles. Privatization of these
formerly state-controlled businesses formed the base of Mr. Ben Ali's
and his relatives' future wealth.

Among the examples: Marouane Mabrouk, one of Mr. Ben Ali's
son-in-laws, won a public auction in 2000 to acquire a controlling
stake in Le Moteur, a state company that distributes Mercedes cars in
Tunisia. He also won a government license to set up Tunisia's first
broadband-cellphone network.

The Ben Ali family expanded when the Tunisian president, who had
divorced from his first wife, in 1992 married his long-time mistress
Leila Trabelsi, the daughter of a shopkeeper and an employee of a
Turkish bath in Tunis's medina. Ms. Trabelsi's 10 siblings are also
considered part of "The Family."

Around the same time, Mr. Bouebdelli, head of a private foundation
that runs several schools in Tunisia, went to the Carthage Palace to
see Mr. Ben Ali and discuss his plans for a new pharmacy university.
"Ok," Mr. Ben Ali said, knocking on the table with the back of his
hand, according to Mr. Bouebdelli. "But it's 50-50." Mr. Bouebdelli
says he shelved the project.


I suppose we should be grateful to Leila Trabelsi that she shoved her
Husband onto a Plane, unlike Bashar in Syria who has chosen the Path
of Inflicting a Medieval Terror on his People. Tunisia and Mohamed
Bouazizi were in fact the Leaders of this Jasmine Revolution which has
tipped and spread even as far as Beijing [refer Ai Weiwei and his last
Tweet]. It seems that the Saudis are hardly like to give him up but
They too seem to me to be swimming against the c21st Tide.

Tunisia's Jasmine Revolution, and how mobile phones helped it happen

In fact, Tunis was the belle of the frontier-market ball.

From January 2006 through September 2010, it had rallied 243.781
percent. Until the Sri Lankans routed the Tamils and the Colombo Stock
Exchange took off into orbit on a Tamil surrender peace dividend,
Tunis was probably the best performing stock index in the world. This
year it has slumped 10 percent through Friday, and the reasons are
best seen in a potted transcript of the week's events.

Mr. Ben Ali in a speech on Monday called the riots “terrorist acts”
that were the work of “masked gangs” operating for foreign parties.

"We are not afraid, we are not afraid, we are afraid only of God," the
crowds chanted on Tuesday in Tunis.

On Thursday, the American secretary of State said the following in Qatar.

“In too many places, in too many ways, the region’s foundations are
sinking into the sand,” said Secretary Hillary Clinton. “Those who
cling to the status quo may be able to hold back the full impact of
their countries’ problems for a little while, but not forever, If
leaders don’t offer a positive vision and give young people meaningful
ways to contribute, others will fill the vacuum.”

Aly-Khan Satchu

read more

TUNIS—Zine al-Abidine Ben Ali, Tunisia's deposed president, goes on trial Monday on charges of abusing state funds and drug trafficking, providing the first public accounting of the practices of a ruler whose autocratic style first triggered the Arab Sp
Law & Politics

Bashar al-Assad, Syria's embattled president, is to deliver his third
major speech since protests demanding greater freedoms and democracy
erupted in Syria in mid-March.

"President Bashar al-Assad will deliver a speech at noon tomorrow
concerning developments in Syria," the official SANA news agency said
in a dispatch on Sunday, without elaborating further.


1. What happens when highly constrained Systems explode?
2. Can it be put back in its Box via Extreme State Sponsored Violence?
3. We are yet to find out.

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Radiation spike halts Fukushima clean-up Aljazeera

The operator of Japan's stricken Fukushima nuclear power plant has
suspended an operation to clean up radioactive water only hours after
it had begun as radiation levels rose faster than expected.The plan
had got under way on Friday after being delayed by a series of

"The level of radiation at a machine to absorb caesium has risen
faster than our initial projections," a spokesman for Tokyo Electric
Power Company (TEPCO), said on Saturday.

"Fukushima is the biggest industrial catastrophe in the history of
mankind," Arnold Gundersen, a former nuclear industry senior
vice-president, told Al Jazeera.

"They are pouring in water and the question is what are they going to
do with the waste that comes out of that system, because it is going
to contain plutonium and uranium," Gundersen said.

"Where do you put the water?"

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UNHCR report says refugee numbers at 15-year high

The number of forcibly displaced people around the world has reached a
15-year high, according to the UN high commission for refugees
(UNHCR), with the vast majority languishing in poor countries
ill-equipped to cater to their needs.

The UNHCR's 2010 trends report estimated that there were 43.7 million
refugees and people displaced within their country by events such as
war and natural disasters at the end of last year. More than half of
the total are children. The figure does not take into account the new
wave of migration set in train by the upheaval of the Arab spring.

read more

Currency Markets at a Glance WSJ
World Currencies

Euro 1.4224 was at 1.4290 in late North American trading Friday
Swiss Franc 0.8492
Yen ¥80.19
Pound 1.6127
Aussie 1.0534
India Rupee 44.98
Rand 6.7919
Dollar Index 75.31

KIEL, Germany—The euro is a stable and credible currency, European
Central Bank President Jean-Claude Trichet said Sunday.

Ministers had been meeting about approving of the release of a $16.8
billion installment of Greece’s $155 billion aid package.Greece will
get the next round of its existing billion bailout package in early
July, if it can pass new spending cuts and economic reforms by the end
of the month, Jean-Claude Juncker, chair of the Eurogroup finance
meetings, reportedly said.“We have to, of course, await this vote” by
the Greek parliament, Juncker said.

a failure of the Greek government to win the confidence vote” would
“not be received well by the markets.”


So Many complexities and potential Curve Balls in trying to predict
where Currencies are going to go.

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Karine Laval, “Yellow Screen” (2010)/Courtesy Bonni Benrubi Gallery, NY.
International Trade

This image comes from Laval’s series “Poolscapes,” for which she
photographed “the Los Angeles urban landscape through window
reflections or in abstract ways approaching a painterly illusion—a
sensation enhanced by unusual angles and the use of a peculiar color
palette,” she told me.

read more

Live Crude Oil chart 91.37 Last

Light, sweet crude oil for July delivery on the New York Mercantile
Exchange settled $1.94, or 2%, lower at $93.01 a barrel, the lowest
finish since Feb. 18. This brings the week's losses to more than 6%.

"It's a worry trade," said Zachary Oxman, managing director at
TrendMax Futures, of the dramatic selloff on the heels of Wednesday's
4.6% decline.

Mr. Oxman added that traders were wary of holding onto bets that
prices would rise over the weekend. "Who knows what could happen?"

ICE August Brent crude settled down 81 cents at $113.21 a barrel. The
spread between the contracts stood at $20.20 a barrel after a record
high $22.29 a barrel on Wednesday.

"We've wiped out half of the spring rally" in U.S. oil prices, Mr.
McGillian said, "and may be ready for a round trip back to $85 a


Sentiment has soured some.

read more

The Lesotho Promise NYT

The Lesotho Promise, shown left, a 603-carat rough diamond, was bought
by Laurence Graff for $12.4 million. It yielded the 26 multi-shaped
polished diamonds, right, all of which were set in a necklace now
valued at more than $60 million.

read more

Syria’s Bourse Expects Six Listings in 2011 Even After Decline Bloomberg
Emerging Markets

Syria’s Damascus Securities Exchange expects six companies to list
shares in 2011 even after the index slumped 34 percent amid regional
turbulence, the bourse’s chief executive officer, Mamoun Hamdan, said.

“The economy was affected by the crisis, which I would say is a
temporary one,” Hamdan said in an interview at his Damascus office
June 15. “The economic sectors in any country would be affected if
this happened” and most companies in Syria’s bourse are banks, he
said. One company should list shares within a week, he said. Syria’s
stock exchange began operations in March 2009 and has 20 listed
companies, 12 of which are banks.

The DWXX Index slumped 11 percent in March as a wave of demonstrations
in the Arab world demanding reform reached Syria. The daily average of
the value of shares traded has ranged between 10 million Syrian pounds
($210,712) and 35 million this year , falling short of a projected 60
million, Hamdan said.

The index surged 21 percent last year. It fell 0.4 percent to 1,133.09
at the 1 p.m. close in Damascus on June 16. The maximum fluctuation
allowed is 3 percent.

“It’s hard to predict how much we can achieve this year,” Hamdan said.
“Our market is very new. We don’t expect more from it now, although we
aim for more.”

The Arab country’s economy may expand as much as 2.5 percent in 2011,
Finance Minister Mohammad Jleilati said June 9. The nation canceled a
sale of 1 billion Syrian pounds of one- year notes on March 16 as
investors sought higher yields. Since then, it has not auctioned any

Foreigners can invest in Syria’s stock exchange, though they must
abide by currency regulations and cannot repatriate full profits until
a year after investment. If they withdraw before that time period, 25
percent to 50 percent of profits must be paid to the government.

DWXX:IND Syria DSE Weighted Index -34.0911% 2011

% Change-0.346

read more

Istanbul Stock Exchange National 100 Index Bloomberg -6.49% 2011
Emerging Markets

% Change0.982

70,072 was the 2011 High on 3rd May and that is my Objective.

read more

Ghana Stock Exchange Composite Index Bloomberg Visual +18.93877551% 2011

% Change0.414


Top Performing Africa Stock Index in 2011

read more

South Africa All Share Bloomberg Visual -4.51148% 2011

% Change-1.069


30193 was the 2011 Closing Low from 15th March.

read more

Egypt ^EGX30 Bloomberg Visual -21.9966% 2011

% Change-0.340

4878 was the 2011 Closing Low from 8th May
The Index has rallied 13.5916% since that 8th May Closing Low.

Morocco Casablanca Stock Exchange CFG 25 Bloomberg Visual -7.87675% 2011


23816 is the 2011 Closing Low from 29th April-

Tunis SE Index Bloomberg Visual -17.5078% 2011

% Change-0.331

4058 was the 2011 Closing Low from 25th February.

Nigeria All Share Bloomberg Visual +2.176% 2011

% Change-0.469

24336 is the 52 week Low from 17th March
27797 is the 52 week Hi from 25th January -

read more

Which Way for the Shilling? The Star
World Currencies

The shilling has weakened 9.8% against the dollar this year, making it
the fourth-worst performer worldwide after Suriname’s dollar,
Maldives’ rufiyaa and the Iranian rial, according to Bloomberg data.
The currency is trading at Levels not seen for more than 17 Years.
Last week, The Shilling touched a Low Quote of 90.85-91.05, before
recovering to a whisker below  90.00. The Last time, we were close to
these Levels was in 1994. In 1994, Goldenberg was hatched and our
Economy cratered. This recent and endemic Shilling weakness has
spilled over into Uganda [which closed at an all time Low Friday] and
the Tanzanian Currency which is a whisker from an all time Low. Bear
in Mind that the Dollar has hardly been strong this Year. Its been
weak and weighed down by more than 14 Trillion Dollars worth of Debt.

There are Two Schools of thought. One School says Lets leave things
be, suck it and see and eventually Things  will be hunky dory. Lets
call this School the 'Benign Neglecters.' The Other School of thought
is the Activist School. This School is saying The Central Bank can do
more and this Shilling weakness is going to import a second Burst of
Inflation and that we are losing more than we are gaining. Our Fuel
bill 12 months through February totalled 251b Shillings and that is
probably the same as our Tea and Horticulture Exports plus our Tourism

Given the Nature of the 'Do Nothing' Strategy there is actually not
very much to discuss except to  try and model where this might take
the Exchange Rate. In My piece, on March 14th, I said it would be wise
to model potential Outcomes where the Shilling touched 90.00 and even
100.00 Well we have taken out 90.00 last week. I think a Do Nothing
Strategy takes us to 100.00. The Market has become disorderly, the
Bid-Offer Spread widened from its normal 10 cents to 50 cents last
week, at one point.  The Momentum alone puts 100.00 into View, surely.

The Activist School would argue that 'Look a Strong Currency is a
Matter of the National Pride and the National Interest. The German
Economy was not built by sinking the currency but by building great
Product . Food and Fuel Prices are at records. A weak currency will
just make both more expensive for 40m Consumers'

The Activist Prescription would be a Shock Therapy Dose of Medicine.
Find the Pain Level of these Shilling Sellers. Lift Short Term Rates.
Find the Pain Level. Stop selling the Shilling [which is what the
Central Bank has been doing since 2009] and do a Robert Rubin.

Start Repeating like a Mantra

'we Believe in a Strong Shilling.'

Beacuse We are currently playing in the same Division as Surinam, the
Maldives and Iran and no disrespect to any of them but its no Premier

read more

Nairobi ^NSE20 Bloomberg Visual -10.1083% 2011
N.S.E General


4621.66 was the 2011 Closing High from 7th January this Year - Index
has retreated 13.784% since then
3870 was the 2011 Closing Low from 29th March. Index is +2.945736%
from that 2011 Closing Low.

read more

Williamson Tea reports FY 2011 EPS 97.45 a share here
N.S.E Equities - Agricultural

Par Value:                  5/-
Closing Price:          210.00
Total Shares Issued:          8,756,320
Market Capitalization:        1,839M
EPS:            97.45
PE:                2.154

Swot Analysis 12 Months ended March 2011
Turnover 3.284909b versus 2.723187b
Profit from Operations before Biological Tax Revaluation 823.363m
versus 759.707m
Biological Revaluation 333.823m versus 382.353m
Profit After Tax 884.385m versus 876.055m
EPS 97.45 versus 96.42
Final Dividend 12.50 + Interim Diividend of 2.50
All In Dividend Yield is 7.142%


They should have paid a Much Higher Dividend Pay Out Ratio. but a PE
of 2.154 looks egregious. Tea Prices are significantly higher than
their Long Term Moving Average and the Currency is also sweetening the
Profits.This remains a very undervalued share but Management
apparently is determined to keep that Discount. A Higher Pay Out Ratio
would have ignited the Price.

Kapchorua Tea Company Ltd FY 2011 Results here

Par Value:                  5/-
Closing Price:          103.00
Total Shares Issued:          3,912,000
Market Capitalization:        403M
EPS:            47.80
PE:                2.154

Turnover 1.246636b versus 1.130108b
Profit before Biological Gains 80.788m versus 190.064m
Biological Gains 176.434m versus 17.42m
Profit After Tax 187.005m versus 139.252m
EPS 47.80 versus 35.60
Final Dividend of 7.50 [Interim Dividend was 1.25]
Dividend Yield 8.495%


Its a cheap share on a PE of 2.154 and a Dividend Yield of 8.495%. I
see Tea Prices remain well above their Historic Moving Average and the
Currency also will remain on the Backfoot.

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Letter from the President on the Foreign Narcotics Kingpin Designation Act
Law & Politics

June 1, 2011

Dear Mr. Chairman:  (Dear Madam Chairman:)
(Dear Representative:) (Dear Senator:)

This report to the Congress, under section 804(a) of the Foreign
Narcotics Kingpin Designation Act, 21 U.S.C. 1901-1908 (the "Kingpin
Act"), transmits my designations of the following seven foreign
individuals as appropriate for sanctions under the Kingpin Act and
reports my direction of sanctions against them under the Act:

Manuel Torres Felix (Mexico)
Gonzalo Inzunza Inzunza (Mexico)
Haji Lal Jan Ishaqzai (Afghanistan)
Kamchybek Asanbekovich Kolbayev (Kyrgyzstan)
John Harun Mwau (Kenya)
Naima Mohamed Nyakiniywa (Kenya)
Javier Antonio Calle Serna (Colombia)



read more

N.S.E Today

The Kenya Shilling was last at 90.195 and 0.8301% off a Record Intra
Day low from yesterday.
The Bourse was thinly traded today and FY Results were issued by
George Williamson Tea and Kapchorua Tea allowing us a Fix on the
The NSE20 firmed 1.26 points to close at 3986.05. The NSE20 Index has
retreated just over 10% in 0211.
The Nairobi All Share closed 0.17 points lower at 91.28.
Market Cap was 1.120574 Trillion versus 1.122596 Trillion last time.
Equity Turnover was slow at 136.958m versus 278.979m last time.

N.S.E Equities - Agricultural

George Williamson Tea reported a FY 2011 EPS of  97.45 versus 96.42
last time and announced a Final Dividend of 12.50 [Williamson paid an
Interim of 2.50 making that 15 shillings a share a Dividend Pay Out
Ratio of 15.392%. If I have an Issue I have it with that Pay Out Ratio
which is mean. Tea Companies are not Hi Tech Growth Companies which
need to hoard their Cash Flow. Nevertheless The PE is now 2.14 and the
Dividend Yield 7.142%. There is plenty of Head Room in this Price.
Williamson Tea rallied 3.809% to close at 218.00 and traded a
215.00-230.00 range and 8,900 shares.
Kapchorua Tea also reported FY Earnings today. EPS was 47.80 versus
35.60 last time and Kapchorua will pay a Final Dividend of 7.50 [1.25
was paid as an Interim] making that a Dividend Yield of 8.495%.
Kapchorua Tea trades on a 2.154 PE but did not trade.
Rea Vipingo firmed 1.359% to close at 14.90 and traded 34,100 shares.
Sasini Tea and Coffee firmed 3.1811% to close at 11.35.

The Agricultural Sector is a Frontier corner of a Frontier Index but
prices are egregious on a PE Basis [2 handles] and on a NAV Basis with
many of these Companies sitting on Land Banks which have not been
revalued since the Date of Purchase. Soft Commodity Prices remain
materially above their 10 Year Moving Averages and the recent shilling
weakness surely sweetens it all.

N.S.E Equities - Commercial & Services


shares volume 6,033,700
total turnover     23,826,276
avg price     3.95
low price     3.90
last price     3.95


Safaricom closed unchanged at 3.95 and traded 2nd overall at the
Bourse with 6.033m shares worth 23.826m changing hands. Safaricom is
sitting just beneath 4.00 Resistance and trades on a 11.861 PE. Recent
News Flow, The Presidential Standstill on the Reduction of the
Interconnect charges and the announcement of a Towers Business with
Telkom Kenya were both constructive for the Price.

I do that Mr. Bharat Thakrar [and his wife] for a wonderful Dinner
Friday. Scangroup rallied 1.1033% to close at 49.75 and traded 10,000
shares. ScanGroup has rallied 63.99% over the last 12 months and
remains a real Outperformer at the Bourse. WPP hold more than 30% of
its shares and Scangroup have already pre announced a more Offensive
Regional Posture.

Uchumi eased 0.3846% to close at 12.95 and traded 1.247m shares.
Uchumi returned at its Suspension price of 14.50 31st May after a 5
Year absence fell as low as 9.80 on a Closing Basis before rebounding
to these Levels.

Kenya Airways rallied 1.91% to close at 40.00 and traded 44,400 shares.

CMC Holdings turned 10 cents higher to close at 10.60 and traded
170,900 shares. CMC closed at 13.05 on 9th June and has retreated
18.77% from that 2011 Closing High.

N.S.E Equities - Finance & Investment

Barclays Bank rallied 2.071% to close at 17.25 and traded 962,300 shares.
KCB closed unchanged at 24.50 on light volume of 176,300 shares.
Equity Bank was the most actively traded counter at the Bourse. Equity
Bank eased 1.00% to close at 24.75 and traded 1.088m shares. Equity
Bank closed at a 52 week high Jan 7th of 30.25 and has retreated
18.181% since closing at that level.
COOP Bank retreated 0.5988% to close at 16.60 and traded 268,600 shares.
StanChart eased 3 shillings to close at 237.00 and traded 5,600 shares.
CFC StanBic closed at 52.50 on light volume of 8,200 shares.

N.S.E Equities - Industrial & Allied

EABL eased 0.515% to close at 193.00 and traded 26,600 shares. EABL is
-3.98% for 2011 and -14.9779% off its Record Closing High of 227.00
from 7th Jan This Year.

Mumias Sugar was unchanged at 7.35.

KPLC closed unchanged at 21.50 and traded 435,900 shares
KenGen eased 0.9933% to close at 14.95 and traded 64,100 shares.

KenolKobil closed unchanged at 10.55.

by Aly Khan Satchu (www.rich.co.ke)
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June 2011

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