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Satchu's Rich Wrap-Up
Wednesday 06th of June 2012

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.

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Maputo Boom Town The Star

A Photo Journey Maputo Mozambique

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@CocaCola #Africa Advert 1b Reasons #Mozambique Twitpic

Sort of sexier in the Portuguese Iteration, I venture.

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Kilimanjaro #Africa Twitpic

Macro Thoughts

I feel the Markets are like Sharks in the Water. They smell Blood.

Policy Makers are flapping around, making a great Commotion.

And crying

'Please Please don't eat me'

Home Thoughts

Maputo was just splendid. They are so polite. The Roads are a Joy.

One Taxi Driver said 'Ah but the Traffic is terrible.'

And We all started laughing because its not and There is no
Overlapping [And I find I dont mind waiting if I know There is an
Order to things - It reduces my stress Levels]

I was at the Airport and this Fellow barges in

I have to admit I started swearing

I said, 'Don't fxxxing barge in Man.'

The Girls asked me But Dad Can't you get done for Abuse.

I said Girls He is the Hooligan not me.

Anyway I digressed,

The Polana was dreamy. @SerenaHotels.very riviera and we all lost
ourselves in a 4 day Mozambique [And Mozambique is just so spicy Its
all got all sorts mixed in its Masala Mix] Reverie. The Hotel was
built in 1922 and its got a splendid Grandeur, which You only find it
about 10 Hotels in the World. The Meurice was like that when we stayed
there some years ago, in Paris.

The People are very civil and courteous in an other worldly way.

The Sea Food is as you would expect splendid.

And the infrastructure is really as You would not want it when You are
playing Catch up and its the Year 2012. Pretty good.

Anyway I am playing Catch up today and will give you some more
Economic Views later in the week but make no mistake its tipping real

   [rev-uh-ree] Show IPA
a state of dreamy meditation or fanciful musing: lost in reverie.
a daydream.
a fantastic, visionary, or impractical idea: reveries that will never
come to fruition.
Music . an instrumental composition of a vague and dreamy character.

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Putin to hold talks with China over Syria crisis NZHERALD
Law & Politics

The leaders of Russia and China are meeting this week to foster an
evolving partnership that has counterbalanced United States influence
and shielded Syria from international moves to halt its crackdown on a
15-month uprising.

Russian President Vladimir Putin arrived in Beijing yesterday on his
first visit to his country's vast neighbour since resuming the Russian
presidency this month. He was to hold talks with Chinese President Hu
Jintao which were expected to touch on the crisis in Syria as well as
on Iran, bilateral trade and energy co-operation, before joining a
regional summit later in the week.

Putin in China [She seems to have caught his Eye]


I imagine Vladimir whispering the following Sweet Nothings in Hu's Ears

Hu...60% of the Navy is going to be in the Asia-Pacific in 6 Years.
You heard Leon, right?

You saw what they did to me.

They are just waiting to expel You from Africa. Gone back to Libya yet?

Russia has been here before My Brother.


Now what's happening in the West?

So what are we going to do about it?

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Syria America versus Israel Giorgio Cafiero Asia Times
Law & Politics

As the violence has escalated and taken more than 9,000 lives, foreign
powers have exploited the carnage to advance their geopolitical
interests. The United States and other powers have used the Syrian
Muslim Brotherhood as a proxy to topple the Syrian Ba'athist regime,
which has governed for almost half a century.

Washington's two primary interests in Syria are to strengthen the Gulf
Cooperation Council (GCC - namely Bahrain, Kuwait, Oman, Qatar, Saudi
Arabia, and the United Arab Emirates) vis-a-vis Iran and to undermine
Russia's power and influence in the Middle East and Mediterranean.
Israel shares the US interest in cutting off Iran and Russia's reach
into the Levant.

Since 1982, the Syrian Muslim Brotherhood has been in exile (primarily
in Spain and Switzerland). However, according to The Washington Post,
"after three decades of persecution that virtually eradicated its
presence, the Syrian Muslim Brotherhood has resurrected itself to
become the dominant group in the fragmented opposition movement
pursuing a 14-month uprising against Assad."

The US alliance with an Islamist organization that espouses
anti-Western views may appear strange. However, this relationship is
far from unprecedented. Syria is only one country where Washington
supported Islamists to undermine nationalist and leftist forces.

This alliance between the United States and Islamist organizations was
widespread throughout the Muslim world during the Cold War, as
Washington deemed such forces - Zia ul-Haq in Pakistan, the Mujahideen
of Afghanistan, Abu Qurah in Jordan, and the Muslim Brotherhood in
Egypt - to be reliable partners in the effort to undermine Communism
and Arab nationalism.

Present US support for Syrian Islamists is part of a larger proxy war.
The United States, Turkey, and the GCC are pushing for Assad's demise,
while Russia, China, Iran, and Hezbollah seek to ensure Assad's
survival. US interest in Assad's downfall relates to its overall
position vis-a-vis Iran and Russia, and by extension China.

The collapse of the Assad regime would almost inevitably decrease
Russian power in the Middle East and the Mediterranean. Syria has
hosted Russia's naval base in Tartus for several decades

The Islamic Republic also took note of the North Atlantic Treaty
Organization campaign against Libya's Muammar Gaddafi. The lesson
learned was that if a state disbands its weapons of mass destruction
program with the intentions of improving ties with the West, it will
be vulnerable to a foreign invasion. In sum, the Libyan case has
arguably pushed the Islamic Republic toward developing a nuclear
weapon - and its further isolation, which would come with Assad's
demise, may accelerate Tehran down that path.


The Best Piece of Scholarship I have read on the Issue.

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Robert Fisk: Revolutions don't always pan out quite as we wanted Independent
Law & Politics

Does a "deep state" exist in Egypt? I've been asking myself that in
the streets of Cairo as more and more people – doormen, shopkeepers,
policemen's families and taxi drivers – express their support for
"Stability Shafik", Hosni Mubarak's last prime minister who watched
his former boss jailed for life on Saturday. Ahmed Shafik says he
stands for stability. A spot of security on the streets – and now the
young people of the 25 January revolution are asking what happened to
them. Some of their cartoons are funny. The one where Mubarak's face
morphs into Shafik's – via the all-powerful Field Marshal Tantawi – is
a cracker. The young sometimes seem to be the only Egyptians leftwith
a sense of humour – until you talk to them. And they speak of

Is Mubarak's ghost going to be reinstalled, substituting a security
state in place of a democracy? That's what many of the protesters are
asking in Tahrir Square ahead of the second round of presidential
elections on 16 and 17 June.

"Do you think we had a democratic election?" a lady from Al-Watan
newspaper asked me in Cairo. "Do you really think so?" She obviously
didn't think I did. Then I'm chatting to a very prominent Egyptian
reporter and the questions come thick and fast. "Isn't there a 'deep
state', can the security apparatus not fix the election by using all
their old agents?" And yes, why can't the guys who handled Mubarak's
witless polls not put the word out that Morsi is too dangerous to have

And then there are the cops who've got away with it; the sniper, for
example, who shot demonstrators in the eye and whose picture was
actually printed in the Cairo press but who has never been arraigned.
Not a single police thug has been charged with attempted murder. I
even heard from a reliable source that a policeman imprisoned under
the Mubarak regime for brutalising a Cairo man served his sentence and
then emerged to be reappointed and promoted. And he's still there. Why
has not a single "baltagi" plainclothes criminal been arrested for
beating and killing demonstrators?

Then there's the obvious question of who Washington would like to see
in power. The brotherhood? Surely not. However democratic he claims to
be, Barack Obama doesn't want Morsi installed in Cairo before his own
presidential election.


I still believe that the Majority across the Maghreb and the Middle
East [and in SSA in fact] are looking for a Stake in the Game and that
Repressive Regimes [and You can define this by just looking at the
Footprint of the Security State and its a Scientific Equation How many
employed + How much spent as a % of GDP] shrink the Economy and end in
an economic Death Spiral over time. Therefore, we either end up in a
very fractured situation, smaller and smaller Statelets and a
dys'topian World or we understand that our Long Security and Economic
Well Being is about bring Meritocracy, Good Governance and that we
need to be on those Young People who flooded Tahrir Square day in and
day out.

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Fed Considers More Action Amid New Recovery Doubts WSJ
World Of Finance

At their policy meeting this month, Fed officials will weigh whether
the U.S. economic outlook is deteriorating enough to justify new
measures to boost growth, according to interviews and Fed speeches.

The Fed's next meeting, June 19 and 20, could be too soon.


The FED will pull the Trigger on QE3 ahead of the Re Election of
President Obama.

The Department of the Treasury #Washington QE and the Money Printing Gig Twitpic

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Currency Markets At A Glance WSJ
World Currencies

Euro 1.2512
Dollar Index 82.47
Japan Yen 78.96
Swiss Franc 0.9602
Pound 1.5429
Aussie 0.9855 djfxtrader: #Australian 1Q GDP +4.3% On Year Vs +3.4%
Consensus First-quarter gross domestic product advanced 1.3 percent
from the previous three months, when it rose a revised 0.6 percen
India Rupee 55.505
South Korea Won  1174.60
Brazil Real  2.0204
Egypt Pound 6.0384
South Africa Rand 8.3561

Australia Dollar 5 Day Chart INO 0.98528 Last

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Australian GDP Expands at More Than Twice Pace Forecast Bloomberg
World Of Finance

“These figures send the loudest possible message to the world that
Australia is the strongest performing developed economy bar none,”
Treasurer Wayne Swan said at a news conference in Canberra after the

The Australian dollar, the world’s fifth-most traded currency, has
gained 40 percent against the U.S. dollar since the start of 2009 and
reached $1.1081 on July 27, the highest level since it was floated in

Stevens yesterday lowered rates by a quarter-point to a 2 1/2-year low
of 3.5 percent, citing global uncertainty and “a degree of
precautionary behavior” by consumers and businesses.


I agree with Wayne Swan.

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Euro versus The Dollar 3 Month Chart INO 1.2503 Last
World Currencies

European representatives “said they will speed up their efforts to
resolve those problems, which was encouraging to us,” Azumi said.
“Japan is ready to provide support if there is anything we can do.”


I think You still Rallies.

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Dollar Index 1 Year Chart INO 82.499 Last
World Currencies

The Dollar Index fell after Federal Reserve Bank of Chicago President
Charles Evans said recent U.S. economic data warrant “extremely strong

“Finding a way to deliver more accommodation -- whether it is monetary
or fiscal -- is particularly important now because delays in reducing
unemployment are costly,” Chicago Fed President Evans said in a speech
yesterday in New York. “Failure to act aggressively now will lower the
capacity of the economy for many years to come.”

Chairman Ben S. Bernanke said in April the Fed may provide more easing
should unemployment fail to make “sufficient progress towards its
longer-run normal level.” The U.S. central bank will release its Beige
Book business survey today, ahead of its next policy meeting on June

The dollar has gained 4.2 percent in the past six months.


Here comes QE3.

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Crude Oil 5 Day Chart INO 84.90 Last

Oil for July delivery climbed as much as 75 cents to $85.04 a barrel
in electronic trading on the New York Mercantile Exchange and was at
$85.01 at 1:46 p.m. Sydney time. The contract yesterday rose 0.4
percent to $84.29, the highest close since May 31. Prices are 14
percent lower this year.


Khamenei was the Buy Signal.

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Gold 1 Year Chart INO 1626.11 Last

Record $1,923.70 set in September. Gold fell 19 percent by May 16 from
its closing high of $1,891.90 in August, within 1 percentage point of
the common definition of a bear market. Prices then touched a
five-month low of $1,523.90 on Dec. 29. After rallying 3.7 percent on
June 1, the metal is now up 4 percent since the start of January to
$1,625.73 today, extending an 11-year bull market.


When QE3 is announced we are going to see Gold rally to a New All Time High.

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UN is asked to push for arrest of Sudan's Bashir Reuters
Law & Politics

Moreno-Ocampo told the U.N. Security Council that it was the primary
responsibility of Sudan to carry out the arrests and that the
peacekeeping mission should not be authorized to carry out or assist
in any arrests.

"Instead, the council can in due course evaluate other possibilities
including asking U.N. member states or regional organizations to
execute arrest operations in furtherance of the arrest warrants issued
by the International Criminal Court," Ocampo told the 15-member
Security Council.

"Such a discussion will be problematic, but the victims will receive a
clear message - they are not ignored. And the perpetrators will
received a clear message - there will be no impunity," he said.

Deputy U.S. Ambassador to the United Nations Jeffrey DeLaurentis told
the Security Council that the lack of arrests in the ICC Darfur case
"merits renewed attention by this Council" and said it should consider
"creative approaches and new tools."

"We can and should review additional steps that can be undertaken to
effectuate the ICC's work in Darfur, execute outstanding arrest
warrants, and ensure compliance by states with relevant international
obligations," DeLaurentis said.


They are looking for a Way around China.

Those 100 JSOC Folks might come in useful soon.

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Kenya holds rate steady, cites FX weakness Reuters
Kenyan Economy

Kenya's central bank left its benchmark interest rate unchanged at 18
percent for a sixth month in a row on Tuesday, saying potential risks
to inflation and the stability of the shilling remained.

A very tight monetary stance adopted in the final quarter of last
year, after inflation surged and the shilling slumped against the
dollar, has helped the year-on-year rate of inflation fall steadily to
12.2 percent in May.

But the effects of global market turmoil last month due to fears over
a possible Greek exit from the euro zone, together with persistently
high liquidity in the market, gradually weakened the shilling to a
5-month low of 87.80 on May 31, forcing the central bank to intervene
by selling dollars.

Eight out of 10 analysts polled by Reuters had expected the bank's
Monetary Policy Committee (MPC) to leave its Central Bank Rate on
hold, while two called for a cut.


I was 1 of those Analysts calling for a Cut. I think holding the CBR
580 Basis Points above Inflation [when the Government of Kenya Yield
Curve has completely inverted] and where the Shilling has outperformed
all its Frontier and Emerging Market Currency Peers versus the Dollar
is now anomalous, out of sync and producing diminishing returns.

I think the Experience last year was a traumatic One. The MPC have [in
my humble opinion] overcompensated and some. To Hold the CBR 580 Basis
Points above the Inflation Rate is more like the Old Buba Bundesbank
on steroids. I think the situation is therefore anomalous. The Money
that is parked in the Money Markets and reaping the Central Bank's
very elevated Reverse Repo rate is essentially Hot Money. The Reason
cited in the Note after the decision is a weak shilling. The Shilling
has been weak only when viewed in isolation. In the context of a
broader Canvas, the Shilling has outperformed all its Peers and even
the likes of the Real, the Rand and the Rupee. Therefore, I think the
CBR should have relaxed the Leash. Their Credentials have been
restablished and furthermore the Oil Price has tanked and its the Oil
Price which has previously spiked the Economy. I think the Shilling
heads to 88.00 which is no bad place to be because Policy Makers need
to be aware of the Euro Shilling Cross and here our Exports are in
serious Jeopardy and an artificially high Cross is going to crater our

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EABL share price data and H1 Earnings here +28.197% Total Return 2012
N.S.E Equities - Industrial & Allied

Par Value:                  2/-
Closing Price:           218.00
Total Shares Issued:          790774976.00
Market Capitalization:        172,388,944,768
EPS:             9.3
PE:                 23.441
H1 2011 versus H1 2010 Results Swot Analysis
Revenue 27.777b versus 20.463b +35.74%
Net Finance Costs [642m] versus 50
Profit Before Income Tax 6.67b versus 6.165b
Profit After Tax 4.877b versus 4.152b +17.461%
Earnings Per Share 5.55 versus 4.03 +37.71%
Total Comprehensive Income 4.561b versus 3.990b
Long Term Borrowings 23.32b versus 3.918b
Available for Sale Investments Tanzania Breweries 2.465b - versus 6.3b
Actual Sale before Deductions - which will feed in at FY and it looks
real Material
Interim Dividend 2.50 a share
Purchase of NCI share of Kenya Breweries 20.876b

Price is +63.909% since Seni took the Helm.


''The Impressive Performance is a direct result of sustained Focus on
our Grwoth Strategy, anchored on our Strong Brands,
innovations.....Tusker growing 21%..solid performance in premium and
mainstream Spirits...'' Seni Adetu.
Uganda showing strong Momentum.


I thought these H1 Results plain muscular. PAT accelerated 17.461% and
EPS +37.71% with a Windfall Gain still to be bagged in the FY Earnings
Release from the TBL Share Sale. Clearly EABL is investing
aggressively in Tanzania at this Point, has gained serious Traction in
Uganda and the Great Lakes Region.

I cannot Fault these Results and I see an Inflection Point in the
Earnings Trajectory here.

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KDN eyes equity investors to cut losses Business Daily
Information & Communication Technology

Altech of South Africa, which owns 60.8 per cent stake, says it needs
new capital to shore up its Kenyan business that is facing stiff
competition from rivals Wananchi Telecoms, AccessKenya and Telkom

“Altech will retain its investments in Kenya, but is looking at equity
partners to inject money into the business in order to take it to the
next level of positive growth,” Altech said in a statement quoting its
CEO Craig Venter.

“Further announcements in this regard will be made when appropriate,”
the South African firm added.

Besides Altech, the other key shareholder in KDN is Sameer ICT, which
is associated with businessman Naushad Merali. Sameer ICT owned 96 per
cent of KDN while its former CEO Kai Wulff held a four per cent stake,
until 2008, when Altech bought a 51 per cent share in the company. The
South African increased its ownership to 60.8 per cent in 2009.

KDN reported a drop in revenue from Sh3.2 billion to Sh2.1 billion for
the six months ended August 31, while operating profit dropped from
Sh657.2 million a year ago to Sh12.6 million.

Their market share has also dropped to 33.4 per cent in December from
36.2 per cent in September based on subscribers, according to data
from the Communication Commission of Kenya (CCK), but its remains the
top internet firm in Kenya ahead of Wananchi Telecoms and Access

Wananchi Telecoms seems to be the biggest beneficiary of the market
share shifts after it increased its market share to 23.5 per cent in
December from 14.25 per cent in September.

Altech, has blamed its poor performance on its East African and West
African units, which pushed it to losses of Sh5 billion. “KDN,
specifically, is trading below expectations and has been heavily
impacted by the cancellation of a major client’s dark fibre business,”
read its 2011 annual report in part.

Our sister publication, the Daily Nation, has traced the poor show of
its Kenyan unit to the loss of a multi-million shilling contract with
Safaricom last year.

The Power Point presentation is here

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Kenyan police officers taken off Alexander Monson case Telegraph
Law & Politics

Alexander Monson died from a massive blood clot on his brain after he
was arrested on Kenya's coast last month.

Investigators are looking into allegations that the former Marlborough
College pupil was hit on the head during the nine hours he was in
custody before he was taken to hospital. He died later the same day.

A corporal and two police constables understood to be at the centre of
the case had been "withdrawn from active duty" and were no longer at
the Diani Police Station, where Mr Monson was taken after his arrest,
The Daily Telegraph was told.

"One of them was responsible for hitting Alexander, and the others we
are told were also involved," said a source with close connections to
individuals involved in the case.

"He was not resisting and he was not violent. The three men are not on
the case anymore and there are plans to move them from the police


I met Lord Monson a week or so ago.

I think he deserves at least a Proper Answer.

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N.S.E Today

The Kenya Shilling firmed to trade at 85.50 last after yesterdays no
change Decision. My Concern is that this Strong Shilling Policy versus
The Dollar is creating a very strong Shilling Euro Cross Rate and that
this will severely crimp Exports into Europe.

The Official closing Data has been delayed as I file this.
The Securities Exchange traded 359.731m.
EABL closed at an all time Closing High of 219.00 and traded 47.521%
of the Total Volume today. EABL is +28.779% in 2012.
LongHorn was high ticked again.

N.S.E Equities - Agricultural

Williamson Tea firmed 2.564% to close at 280.00 and traded 900 shares.
Williamson Tea sits 11.11% beneath its all time High of 315.00 and
targets that Level. Williamson Tea trades on a PE of 2.9143.

N.S.E Equities - Commercial & Services


shares volume 8,461,900
total turnover     28,642,430
avg price     3.38 Closing Price 3.35 Unchanged
high price     3.45
low price     3.30
last price     3.35


Safaricom closed unchanged at 3.35 and traded 4th with 8.461m shares
worth 28.642m traded. Demand outweighed Supply by a Factor of 135
versus 32 at the Closing Bell and the weighted Average was 3.38
signalling the Price Bias is back towards 3.50 the 2012 Closing High.

ScanGroup rallied 5.88% to close at 54.00 and was trading at session
Highs of 55.00 +7.84% at the Closing Bell. ScanGroup traded 72,700
shares. ScanGroup is +30.12% in 2012.

Uchumi eased 2.82% to close at 17.20 and traded 341,600 shares. Uchumi
remains +123.37% in 2012 but has corrected 11.11% off its 2012 Closing
high from last Month.

Longhorn Publishers ticked 0.5479% higher to close at 18.35 and traded
shares at the Daily Up Limit of 20.00 +9.59%. LongHorn has been high
ticked on low Volume since it was introduced via a Listing last Month.
The Process of Price Discovery has not begun yet.

N.S.E Equities - Finance & Investment

Kenya Commercial Bank closed unchanged at 23.00 [Its weighted Average
was 23.17 signalling an imminent move higher] and traded 396,100
shares. KCB had Buy Side Demand for 4.567m shares at the Finish Line
which was 1152% more than the Volume traded during the Entire Session.
KCB has posted +47.477% Total Return in 2012 and a Price to Book of

Equity Bank traded 5th. Equity Bank closed unchanged at 20.25 [the
weighted Average was 20.49 which is rounded down] but was trading
session Highs of 20.75 +2.47% at the Closing Bell. Equity Bank traded
601,100 shares. Equity Bank trades on a 7.2606 Trailing PE and a
2.1869 Price to Book.

NIC Bank traded 3rd at the Exchange. NIC firmed 0.7194% to close at
35.00 and traded 1.189m shares worth 41.629m. NIC Bank is +45.833% in
2012 trades on a PE of 5.2108 [which remains inexpensive] and a Price
to Book of 1.3747.

PanAfric rallied 3.33% to close at 31.00 and traded 44,000 shares.

N.S.E Equities - Industrial & Allied

EABL rallied 0.92% to close at 219.00 and was trading at 221.00 +1.84%
session highs at the Finish Line. EABL has closed at an All Time
Closing high and reached this Level May 23rd 2012. EABL has delivered
an All In Return of 28.779% in 2012 and a Return of 65% [excluding
Dividends] since Seni Adetu took the helm just under 36 months ago,
which represents a Major Out Performance versus the Benchmark NSE
Index. EABL traded 47.521% of the Volume at the Securities Exchange.
EABL has an Extraordinary Gain to book H2, from the Sale of its
shareholding in Tanzania Breweries, which is set to seriously sweeten
the FY Earnings.

BAT traded 2nd at the Exchange. BAT traded 133,800 shares worth
46.161m and all the shares were traded at 345.00. BAT has delivered a
51.21% Total Return in 2012 as Investors recalibrated their Growth
Projections for the Company after it posted a 75.32% Acceleration in
FY PAT to 3.098b. BAT trades on a PE Multiple of 11.1362.

Mumias Sugar firmed 5 cents to close at 5.75 and was trading at 5.85
+2.63% session Highs at the Close. Mumias traded 386,200 shares but
There was Buy Side Demand for 300% of the Amount traded at the Finish
Line, signalling a Move higher.

by Aly Khan Satchu (www.rich.co.ke)
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June 2012

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  aly khan says:
june 7th, 2012 at 09:50 am
#Mindspeak with @BharatThakrar ScanGroup @WPP Africa 2.0 RICH #TV