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Satchu's Rich Wrap-Up
 
 
Wednesday 20th of June 2012
 
Morning
Africa

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Nairobi, Kenya - June 18, 2012 CCTV "I think they finally woke up. I
don't know when the penny dropped'' Aly-Khan Satchu
http://j.mp/MD6oGN

Nairobi, Kenya - June 18, 2012
1. Wide of cityscape
2. Mid of city
3. Mid of building
4. Various of vehicles driving on street
5. SOUNDBITE (English) Aly-Khan Satchu, investment adviser of Rich
Management, Nairobi Stocks Exchange authorized data vendor:
"I think they finally woke up. I don't know when the penny dropped,
but I think dropped in the last 18 months."
6. Wide of vessels on sea
7. Wide of oil refinery plant
8. Mid of oil workers
9. Close of oil refinery equipment
10. SOUNDBITE (English) Aly-Khan Satchu, investment adviser of Rich
Management, Nairobi Stocks Exchange Authorized Data Vendor:
"For a long time, you know, we had too much supply for the global
market but there wasn't much demand, then China came along and
increased the demand and it was that increasing demand that has lifted
our economy in the last 10 years."
11. Various of Chinese workers in Africa
12. Mid of board showing increase of China-Africa trade volume from 1992 to 2011
13. SOUNDBITE (English) Aly-Khan Satchu, investment adviser of Rich
Management, Nairobi Stocks Exchange Authorized Data Vendor:
"And now everybody in Washington is going hang on a second, you know:
How do we reverse this process? How do we repel the Chinese? And
essentially I think this document, which is a very interesting one,
but I think it's a veil for the awareness by the US and its allies."
14. Wide of street
15. Mid of people and vehicles on street
16. Mid of people walking on street
17. Mid of people walking on street
18. SOUNDBITE (English) Aly-Khan Satchu, investment adviser of Rich
Management, Nairobi Stocks Exchange Authorized Data Vendor:
"It's a very complex collision and I think if it's a game of money,
then China wins because China is the banker. But if it's a game of
using hard power, America is going to win it in the short term."
19. Wide of vehicles on street
20. Wide of block

The United States is going to bolster ties with sub-Saharan Africa and
experts say it is a way to compete with China on the continent.
President Obama's plan, released last Thursday, seeks to boost trade,
security and good governance by supporting democratic institutions in
Africa.
Billed as a sweeping new strategy for US involvement in sub-Saharan
Africa, the document talks about the Obama administration's successes
in Africa but also promises to do more to boost economic development.

"As we look toward the future, it is clear that Africa is more
important than ever to the security and prosperity of the
international community, and to the United States in particular,"
Obama said in the statement released by the White House.

With the East seemingly winning favor in Africa, some economic
analysts perceive the gesture as a belated attempt to woo Africa.

"I think they finally woke up. I don't know when the penny dropped,
but I think dropped in the last 18 months," said Aly-Khan Satchu,
investment adviser at Rich Management, a Nairobi Stocks Exchange
authorized data vendor that offers advisory services.

Satchu said it is all related with China's growing presence through
trade and investment in Africa.

"For a long time, you know, we had too much supply for the global
market but there wasn't much demand, then China came along and
increased the demand and it was that increasing demand that has lifted
our economy in the last 10 years," said Satchu.

China-Africa trade has grown by leaps and bounds in the past two
decades, with the trade volume increasing from 10.5 billion US dollars
in 1992 to 160 billion US dollars in 2011.

With most African countries having gone East, China currently enjoys a
dominant position on the continent with bilateral trade between China
and Africa reaching over 120 billion US dollars in 2011, a huge leap
from less-than 20 billion dollars a decade earlier.

"And now everybody in Washington is going hang on a second, you know:
How do we reverse this process? How do we repel the Chinese? And
essentially I think this document, which is a very interesting one,
but I think it's a veil for the awareness by the US and its allies,"
Satchu said.

At the moment Washington, tooling a foreign policy towards trade and
development, also views Africa's intractable conflicts with concern,
including in areas ripe for extremists to exploit, including Somalia
and even Mali.

"It's a very complex collision and I think if it's a game of money,
then China wins because China is the banker," said Satchu. "But if
it's a game of using hard power, America is going to win it in the
short term."

Macro Thoughts

Lets see what the Wizard Ben Bernanke pulls out of His Hat.

Home Thoughts

I met Toby Constantine This Morning more than a Decade later Twitpic
http://www.twitpic.com/9ygfgd

read more


U.S. Plans Major Military Presence in Kuwait TIME
Law & Politics


(WASHINGTON) — The United States is planning a significant military
presence of 13,500 troops in Kuwait to give it the flexibility to
respond to sudden conflicts in the region as Iraq adjusts to the
withdrawal of American combat forces and the world nervously eyes
Iran, according to a congressional report.

"Home to more than half of the world's oil reserves and over a third
of its natural gas, the stability of the Persian Gulf is critical to
the global economy," the report said. "However, the region faces a
myriad of political and security challenges, from the Iranian nuclear
program to the threat of terrorism to the political crisis in
Bahrain."

Conclusions

The Encirclement Of Iran.

Hosni Mubarak in coma as Egypt tension grows
http://j.mp/LAKJxF

The state news agency Mena had initially reported that Mubarak was
clinically dead soon after he was taken to the military hospital.
Later accounts disputed this, saying he had improved slightly but that
he remained in a critical condition.

Muslim Brotherhood warns Egypt's generals Guardian
http://j.mp/MvwtUn

The Muslim Brotherhood has vowed to face down Egypt's ruling generals
in a "life or death" struggle over the country's political future,
after declaring that its candidate had won the presidential election
and would refuse to accept the junta's last-ditch attempts to engineer
a constitutional coup.

"Over the past 18 months we were very keen to avoid any clashes or
confrontations with other components of Egypt's political system
because we felt that it would have negative consequences for the
democratic system and for society as a whole," said Fatema AbouZeid, a
senior policy researcher for the Brotherhood's Freedom and Justice
party and a media co-ordinator for the Morsi campaign. "But now it's
very clear that Scaf and other institutions of the state are
determined to stand in the way of what we're trying to achieve, and we
won't accept this any more. Egypt will not go back to the old regime
through any means, legal or illegal.

"If we find that Scaf stands firm against us as we try to fulfil the
demands of the revolution, we will go back to the streets and escalate
things peacefully to the highest possible stage," she said. "Now we
have a new factor in Egyptian politics, the Egyptian people
themselves, who will not accept a return to the old regime in any
form, not after so much Egyptian blood was shed to remove it.

"The revolution is facing a life or death moment and the Egyptian
people have put their faith in Dr Morsi to represent them at this
time."

Conclusions

The Political Trajectory is in danger of tripping over a Tipping Point.

Egyptian security forces stand behind the gates of Cairo’s parliament
building as they await protesters. EPA
http://j.mp/L3BhAe

CAIRO // The Muslim Brotherhood was escalating a confrontation with
Egypt's military rulers last night by sponsoring a protest with
thousands of demonstrators in Tahrir Square against what many
revolutionary groups have described as a military "coup".

Conclusions

You lose control of the Square and You lose everything.

Russia's prime minister, Dmitry Medvedev, left, is met by the Chechen
regional president, Ramzan Kadyrov, right, at Grozny airport
http://j.mp/Mcq1n4

read more


Fed Seen Extending Operation Twist Bloomberg
International Trade


“Extending Operation Twist is the path of least resistance,” said Josh
Feinman, the New York-based global chief economist for DB Advisors,
the Deutsche Bank AG asset management unit that oversees $232.1
billion. “It would be an extension of something we have in place, so
it would be more seamless, and it doesn’t complicate exit strategies
as much because it’s not expanding the balance sheet,” said Feinman, a
former senior economist for the Fed Board in Washington.

Conclusions

I see a more aggressive Round of Quantative Easing before the Election.

Currency Markets at a Glance WSJ
http://j.mp/97tI8l

Euro 1.2685
Dollar Index 81.41
Japan Yen 78.86
Swiss Franc 0.9475
Pound 1.5726
Aussie 1.0185
India Rupee 56.025
South Korea Won 1151.04
Brazil Real  2.0276
Egypt Pound 6.0508
South Africa Rand 8.2225

Conclusions

Talk of more Twist has repelled the Dollar.

Euro versus The Dollar 3 Month Chart INO 1.2672 Last
http://j.mp/bQ9veD

Dollar Index 1 Year Chart INO 81.418 Last
http://j.mp/eBOSI9

World Equity Markets at a glance
http://markets.on.nytimes.com/research/markets/worldmarkets/worldmarkets.asp

read more


Commodity Markets at a Glance WSJ
Commodities


Crude Oil 1 Year Chart INO 83.85 Last
http://j.mp/KEEcnK

Gold 1 Year Chart INO 1617.33 Last
http://j.mp/zNUcY6

IPad Boom Strains Lithium Supplies After Prices Triple Bloomberg
http://j.mp/LAuOCC

Prices for the conductive metal, the lightest in the periodic table,
have tripled since 2000 in a market now worth $1 billion a year as
uses expand in vehicles, ceramics, electronics and lubricants. Apple
Inc. (AAPL) and Toyota Motor Corp. (7203), maker of the Prius
electric-gasoline car, have few alternatives as they pursue higher
performance and mobility, leading Dahlman Rose & Co. analysts to
forecast lithium demand will double by 2020.

Hirst Cow Watches As Emin Eats At Mark Hix’s Tramshed Bloomberg
http://j.mp/MsCaEI

The Tramshed formula is simple: Chicken or steak is the choice in this
new London restaurant.

In case you forget, the room is dominated by a huge Damien Hirst
vitrine of a cow with a chicken on its back. It’s called “Cock and
Bull” and was created for the space. Don’t ask what it’s worth. If you
need another visual clue, a second Hirst -- “Beef and Chicken” --
hangs on the wall.

read more


India Rupee 1 Year Chart INO 56.043 Last
Emerging Markets

Headed to 60.00 Twist or no Twist.

Frontier Markets

read more


Egypt EGX 30 Index Bloomberg +12.744% 2012
Africa


4,087.45
-180.42
-4.23%

Conclusions

Has now corrected 25.0366% off its 2012 Closing High from March 7th 2012.

Egypt Pound 1 Year Chart INO 6.0442 Last [Hanging on with its FingerNails]
http://bit.ly/fYDTpr

Mozambique coal, gas: boom for all, or just a few? Reuters
http://j.mp/LiAGPB

By Agnieszka Flak and William Mapote

MAPUTO (Reuters) - In Mozambique's port capital Maputo, glitzy
offices, boutique hotels and fancy restaurants are popping up
alongside crumbling colonial buildings, nourished by multi-billion
dollar investment in coal and gas deposits to the north.Luxury cars
jam crowded streets and smart-suited business executives strut the
sidewalks.

But their proximity to children begging for food and clusters of
tin-roofed shacks offers testimony that the benefits of the southern
African nation's incipient economic boom are out of reach for the vast
majority of its 23 million people.

The former Portuguese colony, which emerged from civil war two decades
ago, boasts some of the world's largest untapped coal reserves and is
discovering vast natural gas deposits along its white-sand Indian
Ocean coast.Expectations run high as miners such as Brazil's Vale and
Rio Tinto and oil majors U.S.-listed Anadarko Petroleum and Italy's
Eni compete for a share.Vale has invested $2 billion in its Moatize
coal mine in northwest Tete province, and plans to plough another $6.4
billion into a region wrecked by the 1977-1992 civil war.

After hearing about the investment frenzy, 37-year-old Pedro Maculuve
took a two-day bus journey to Tete, hoping to get a job and leave a
crowded township where he lives in a straw hut.

He came back disappointed. "I used to work on the mines in South
Africa and thought I could be useful in Tete but I was turned away,"
he said in Maputo where he sells wooden masks and trinkets.

Mozambique's gas deposits may be an even bigger game-changer for a
country where more than half of the people live below the national
poverty line of around $0.65 a day and 60 percent have no formal job.

South African petrochemicals group Sasol and its partners have spent
around $1.5 billion to produce gas from their onshore Pande/Temane
fields since 2004.

Large offshore gas finds in the last year have triggered forecasts of
capital inflows of $50 billion over the next decade - five times
Mozambique's gross domestic product - and more is expected to be spent
rebuilding railways, roads and ports.

"I don't expect much from these mining and gas projects," Maculuve
said. "I don't trust the things they say anymore."

On paper, the outlook could not be rosier: Mozambique's economy has
been growing at an average 7 percent a year, inflation is at record
lows and the metical rose most against the dollar last year compared
with other currencies.

Geology has delivered a jackpot in coal reserves estimated at more
than 23 billion tonnes and gas deposits of up to 100 trillion cubic
feet - enough to supply Germany, Britain, France and Italy for a
decade.

Geography has also helped: sitting on Africa's southeast coast,
Mozambique is in prime position to ship energy to growing markets in
Asia.

In the meantime, an influx of migrants - qualified and unqualified -
from other African countries and crisis-hit Europe, especially
Portugal, has made it harder to find jobs.

The government has since raised subsidies for essential items, but the
risk of unrest persists, especially as the ruling Frelimo party moves
towards elections in 2014, analysts said.

"The possibility of social unrest is an underlying latent threat that
could re-erupt at any time," said Anne Fruhauf, an Africa analyst at
Eurasia Group.

"There is much greater pressure on the party to show some gains
because there is an increasing perception that the government doesn't
really care about the people."

To lure investors following the civil war, the government granted huge
tax breaks to outside firms, which means state revenues from the
investment splurge are tiny.In 2009, revenues from the minerals sector
accounted for only around $40 million, or just over 2 percent of total
government receipts, according to the Extractive Industries
Transparency Initiative, an anti-corruption watchdog.

"The fiscal incentives that were given to these companies are very
damaging. These contracts need to be renegotiated," said Dionisio
Nombora, a researcher at the Centre for Public Integrity, a local
think tank.

The government has been under pressure to revisit the deals, but fears
scaring investors, and even if it did, increases in revenue would be
slow to materialise given that mining has yet to start at many coal
projects and gas production from offshore fields is at least six years
away.

They add that the heavy involvement of President Armando Guebuza and
other top officials in private business creates conflicts of interest
that reduces any benefit to the public.

According to two Transparency International reports from 2011,
Mozambique reported the highest incidence of bribery among countries
in southern Africa, with corruption perceived to be on the rise in the
last three years by the majority of the public.

"If we continue like this, these resources will not benefit the
people," Nombora said. "They will benefit, to a large extent, the
multinationals and the political elite involved in this business."

Maputo Boom Town The Star
http://www.rich.co.ke/media/docs/040NSX0406.pdf

GREETINGS from the Serena Polana, Maputo. I can confirm that Maputo is
the land of wonderful and flavoursome tiger prawns. The Architecture
is also deliciously retro. By the way, the Polana was built in 1922
and the flavour is fabulously Riviera and very swanky. It is less than
4hours by plane from Nairobi and surely set to be the most of in
things and places to visit. Of course, Mozambique has popped large
onto the global radar because of gas reserves that have been
discovered offshore and in the deep sea. I have said before, that I
believe the eastern seaboard of Africa is clearly the last great
energy prize in the c21st and  believe this lake of hydrocarbons
stretches from Mozambique up through Tanzania, Kenya and Somalia. We
remain in the early stage of this discovery process but Mozambique is
further along the curve.

Some estimate that Mozambique has gas which is equivalent to 2m
barrels of crude oil per day for 50 Years. 2m barrels of crude is
worth $166m (Sh14billion) [per day]. This excitement around gas in
Mozambique has found expression in a bidding war for Cove Energy. Cove
Energy has an 8.5 per cent stake in Mozambique’s Rovuma offshore gas
basin. John Craven Cove CEO, said: “The project is well under way to
becoming the second largest LNG project in the world.” Now it is
always part of the job description for a CEO of a Wildcatter like Cove
or Tullow Oil to be bullish but this time around, I urge you to
listen. By the way, Tullow Oil’s Mr Heavey said last week that Kenya
had the potential to dwarf its lucrative Lake Albert play in
neighbouring Uganda.

Returning to Mozambique, Its worth noting that it is not only about
gas. Mozambique has also got coal. The Brazilian Company Vale started
producing coal at its Moatize mine last year and has approved a $6
billion expansion of the project to boost output to 22 million tonnes
per year from the 11 million tonnes it expects to mine initially. Then
there is also the Kenmare mineral sands project at the Moma Mine,
located on the
coast of Mozambique. The Moma Mine contains reserves of heavy minerals
which include the economic titanium minerals ilmenite and rutile used
as feedstocks to produce titanium dioxide pigment, as well as the
relatively high-value zirconium silicate mineral, zircon. Rutile,
Ilmenite and Zircon are the exact same minerals that Base Resources
are seeking to mine in Kwale. Mozambique is well worth your attention.
It has
mine.

The Polana at Sun Rise @SerenaHotels #Maputo
http://www.twitpic.com/9swer1

Breakfast at the Polana @Serenahotels #Maputo #Mozambique Video
http://www.twitpic.com/9scfc9

Is it the Alhambra or the Maisha Spa @Serenahotels #Maputo Video
http://www.twitpic.com/9swmus

Samora Machel Praca de Independencia #Maputo
http://www.twitpic.com/9scika

Sunset Maputo Harbour Mozambique #Africa
http://www.twitpic.com/9s2c0i

Etnografia #Maputo #Mozambique An eternal Look at the Camera Twitpic
http://www.twitpic.com/9sck05

Pemba #Mozambique from the Air #Africa
http://www.twitpic.com/9t4u1g

''Madagascar is on trend with East Africa. I'm sitting there waiting
for people to wake up," Madagascar Oil's Laurie Hunter Reuters
http://j.mp/Pm9MGn

Fendi on Sale at African Malls Where Bling Still King Bloomberg
http://j.mp/KSLr8K

After decades of using African ostrich leather, diamonds, gold and
platinum to craft handbags, watches and the like, luxury manufacturers
want to send some of those goods back -- and the locals are eager to
buy.

With oil exports from Angola and Nigeria minting new millionaires, and
the middle class growing in South Africa and Morocco, Burberry Group
Plc (BRBY), Prada SpA (1913), and other luxury companies are opening
stores in African cities to cater to demand for displaying newfound
wealth.

“The mix of customers is changing,” Michele Norsa, chief executive
officer of Italian shoemaker Salvatore Ferragamo SpA (SFER), said in a
Bloomberg Television interview. “You see nationalities of people you
had never figured buying -- from Angola, Nigeria or Latin American
countries.”

Burberry opened its first boutique in Johannesburg at the end of last
year, adding to the store it has had in Cape Town since 2008. Louis
Vuitton (MC), Fendi, Gucci, Prada, Miu Miu and others have outlets in
Casablanca’s first luxury mall, which opened in December. Swiss
watchmaker Breitling distributes its timepieces via wholesalers in
Ghana, Algeria and 10 other African countries.

“There is a new focus on Africa,” Italian suitmaker Ermenegildo Zegna
Group said in April, announcing plans to open its first stores in
Morocco and Nigeria.

Sixty percent of Africa’s U.S. dollar millionaires, or 71,000 people,
are in South Africa, the region’s largest economy, according to
consultant Bain & Co. That’s more millionaires than in Saudi Arabia or
the United Arab Emirates, the consultant estimates.

Sales of luxury goods in Africa, the Middle East and Australia may
rise as much as 8 percent a year between 2011 and 2014, according to
Bain, faster than any other region other than Asia.

“The real opportunity is more the emergence of the new middle class,”
said Claudia D’Arpizio, a partner at Bain who leads the consultant’s
luxury-goods practice.

By 2020, 420,000 South African households will have disposable income
that tops $100,000, Bain estimates. The retail value of luxury goods
sold in the country, where the World Bank says almost a quarter of
people live below the poverty line, is set to swell by 20 percent to
$816 million annually by 2015, Euromonitor International estimates.
For at least five years, companies are likely to limit expansion to a
few stores to test the market and gauge local tastes, D’Arpizio said.

Fueled by oil exports to China, Angola is “the crucible” of
conspicuous consumption in Africa, according to Ford. Yet, the wealth
is in the hands of a few, and a quarter of the country’s gross revenue
is unaccounted for, Ford estimates.

Angola, he said, “is like a laboratory” for acute income disparity.
“So far, it hasn’t led to any social unrest or certainly any targeting
of stores but it’s definitely” a possibility.

Africans protest in China as man dies in police custody Reuters
http://j.mp/MnpNM2

BEIJING (Reuters) - More than 100 Africans protested on Tuesday
outside a police station in China's southern Guangdong province after
an African man died in police custody, state news agency Xinhua said,
citing local authorities.

The protest in Guangdong's capital Guangzhou, which brought traffic to
a halt, lasted for two hours on Tuesday, Xinhua said, citing an
official from the Guangzhou Municipal Public Security Bureau.

Xinhua said the dead African man, whose identity has not been
confirmed, "suddenly fell unconscious" at a police station on Monday
afternoon "and died after medical efforts failed", Xinhua said, citing
police.

The African man was taken into the police station for questioning on
Monday after he had a "physical altercation" with another person, the
owner of an electric bicycle who had given the African man a ride as a
passenger on Monday afternoon, Xinhua said. Both of them disagreed
over payment.

The protest comes ahead of a summit between China and Africa that
China is expected to host in July, and amid a crackdown by Beijing and
Shanghai on "illegal foreigners". In late May, Beijing launched a
100-day campaign to "clean out" foreigners living or working illegally
in the city and has stepped up police checks on expatriates.

The Xinhua report said police have launched an investigation into the
death and that "police in Guangzhou have called for foreigners to
abide by Chinese law and refrain from disturbing public order"

Conclusions

These Scenarios need to be handled with a Great Deal of Tact and Finesse.

Billionaire Dangote to head Nigeria bourse board Reuters
http://j.mp/MKLtyb

LAGOS (Reuters) - Nigerian billionaire Aliko Dangote will assume
leadership of the governing board of Nigeria's stock exchange on
Tuesday, after an appeal court overturned the annulment of his 2009
election.

"We are a law abiding organisation and since the court has reinstated
him (Dangote), we will surely abide by that," Nigerian Stock Exchange
(NSE) spokesman Dante Martins said by telephone.

Martins said there would be a meeting of the board on Tuesday and
Dangote will be there as its president.

Dangote, Africa's richest man currently with an $11 billion fortune
and a cement empire stretching from Senegal to Ethiopia, was elected
to head the bourse's board in August 2009.

But just before his tenure was to begin in March 2010, shareholders of
a fuel importer Forte Oil Plc obtained a High court ruling preventing
him from taking it up.

They had accused the billionaire of manipulating Forte Oil's share
price on a day in which it fell the maximum 5 percent allowed. The
stock exchange regulator had previously cleared Dangote of any
involvement in manipulation, but the court upheld the case against his
election nonetheless.

Dangote owns three companies listed on the bourse -- Dangote Cement,
which makes up a quarter of the exchange's market capitalisation,
Dangote Flour and Dangote Sugar.

He was previously vice-president of its board.

Dinner with Aliko #Dangote #Nairobi #Africa Twitpic
http://www.twitpic.com/4hp5fn

With Thanks to Shaila Koinange for effecting the Introduction.

Dollar versus Rand 5 Day Chart INO 8.2265 Last Rand at a 1 Month High
http://j.mp/dbyzlo

read more


KenolKobil Profits Warning Announcement here
Kenyan Economy


Kenyan fuel marketer KenolKobil issues profit warning Reuters
http://j.mp/LxCEwX

NAIROBI, June 19 (Reuters) - Kenyan fuel marketer KenolKobil issued on
Tuesday a profit warning for the six months ending June, saying its
performance will be hurt by foreign exchange losses, falling
international oil prices and high financing costs.

The company, which is a takeover target of Swiss-based Puma Energy, a
subsidiary of Trafigura Beheer, also said it expected its full year
2012 earnings to be lower than the previous year.

It said foreign exchange hedging positions it took in 2011 to cushion
foreign exchange volatility had translated into losses and high
financing costs in Kenya and other markets it operates in the region,
and in the euro zone were hurting its net profit margins.

"Management expects that the company's results for the six months
ending 30th June 2012 will reflect all the above mentioned negative
factors," the company said in a statement.

"Should international oil prices, currency trends and financing costs
among other factors improve, it would reverse some of these negative
effects and reflect more positive results for the full year 2012."

KenolKobil, which also operates in eight other African countries
including Uganda, Burundi, Tanzania, Rwanda and Zambia, posted a 74
percent rise in pretax profit last year to 4.9 billion shillings
($58.19 million).

Its pretax profit for the first half of 2011 jumped 86 percent to 3.22
billion shillings.

KenolKobil said last month it expected the sale of a majority stake to
Puma Energy by key shareholders to be completed within a few months.

Its shares were suspended indefinitely from trading on the Nairobi
Securities Exchange after the announcement that it was in talks with
Puma Energy. ($1 = 84.2000 Kenyan shillings)

Conclusions

The Trading Suspension was lifted today.

KenolKobil share Price data Full Year Results here
http://www.rich.co.ke/rcdata/company.php?i=MzU%3D

Par Value:                  0.50/-
Closing Price:           12.50
Total Shares Issued:          1471600000.00
Market Capitalization:        18,395,000,000
EPS:             2.21
PE:                 5.656

FY Results 2011 versus 2011

Net Sales 222.440715b versus 101.649560b +118.83%
Cost of Sales 201.107493b versus 94.052548b
Gross Profit 12.333222b versus 7.597012b
Administrative Expenses 3.949176b versus 2.647044b +49.19%
Interest Expense 1.155478b versus 0.544195b +112.32%
Net Foreign exchange Losses 1.155478b versus 0.573059b
PBT 4.933782b versus 2.836228b +73.955%
PAT 3.273831b versus 1.915045b +70.95%
EPS 2.21 versus 1.21 +82.64%
Proposed Final Dividend 0.43
Interim Dividend 0.57

14-MAY-2012  'The Week That Was From Sarkozy to Puma Energy' The Star
http://www.rich.co.ke/media/docs/036NSX1405.pdf

Back home, the big news was that the majority shareholders [Mr.
Nicholas Biwott Inc.] of KenolKobil were negotiating to sell to Puma
En- ergy, a subsidiary of Trafigura.
The negotiations must have been interrupted and the existence of them
leaked because the share was suspended from trading. Other- wise, you
would have announced the price and just gotten on with it. KenolKobil
has a market cap of Sh18.395b which is about $217m. That is calculated
at a price of 12.50. The Price Earnings Ratio is 5.656. The PE Ratio
for EABL is 23.226. The PE Ratio for Safaricom is 10.625. I am
calculating that a fair PE for the takeover is 8.00 and that equates
to a price of 17.68 which is a take over premium of 41.44%. The East
African oil and gas sector is simply red hot. And I like the way Puma
Energy is seeking to enter the landscape.

Kenya Shilling versus The Dollar Live ForexPros 83.876 Last
http://j.mp/5jDOot

The shilling, which is up 0.8 percent against the dollar so far this
year, has rallied a total of 1.5 percent in the last five sessions,
thanks to aggressive tightening of liquidity by the central bank and a
build-up of foreign exchange reserves.

Nairobi ^NSE20 Bloomberg Year To Date
http://j.mp/ajuMHJ

read more



 
 
N.S.E Today


The NSE20 rallied 31.44 Points to close at 3694.55. The Index is
+15.257% in 2012.
The Nairobi All Share rallied 0.76 points to close at 80.94.
Market Cap was 1.037359 Trillion versus 1.027686 Trillion.
Equity Turnover was 373.029m and EABL which set a Fresh All Time High
for the 2nd consecutive Session was responsible for 59% of that
Volume.
The Bull Run is very much intact and once again gaining renewed Vigour
and Traction.
EABL is at a Fresh All Time high as is BAT and Athi River Mining just
below one. KenolKobil closed at a 6 year High. Safaricom is at a 10
and a Half Month High.
The Pattern is constructive.
The Shilling climbed for the 6th Straight Session and was last at
83.65  a level it last touched in mid May.



N.S.E Equities - Agricultural


Limuru Tea eased 2.173% to close at 450.00 and 7,200 shares were
traded. Limuru Tea is +34.328% in 2012 but has retreated 10% off its
All Time Closing High of 500.00 set June 15 through June 18



N.S.E Equities - Commercial & Services


SAFARICOM
shares volume 6,221,700
total turnover  21,827,804
avg price       3.51 Closing Price 3.50 +1.45%
high price      3.55
low price       3.45
last price      3.50

Conclusions

Safaricom traded 4th and rallied 1.45% to close at 3.50, which is 10
and a Half Month Closing High. Safaricom closed at this Level May 7th
and May 17 through May 22 this Year. Safaricom traded 6.221m shares
and had 112 versus 34 Demand versus Supply Imbalance at the Closing
Bell, which is constructive. Safaricom trades on a Trailing PE of
10.9375 and I believe A Price Target of 4.00 looks entirely
reasonable. Safaricom is +18.644% in 2012.

Safaricom share Price Data FY Results here
http://www.rich.co.ke/rcdata/company.php?i=NTU%3D

Safaricom FY2011/2012 Annual Results Interview with Aly Khan Satchu YouTube
http://www.youtube.com/watch?v=wxqCVII5N8k

Nation Media firmed 1.117% to close at 172.00 and traded 20,800
shares. Nation Media is +22.8571% in 2012 and trades on a PE of
13.4648.

ScanGroup closed unchanged at 54.50 and traded 30,500 shares.
ScanGroup is +31.325% in 2012 and 50c below an 11 Month High.

Uchumi rebounded 3.174% to close at 16.25 and traded 133,400 shares.



N.S.E Equities - Finance & Investment


Centum firmed 0.375% [It fell yesterday 9.83% after the Release of its
FY Earnings and the Failure to Issue a FY Profits Warning was front
and centre of Market Chatter] to close at 13.35 and was trading at
13.50 +1.5% at the Closing Bell. Centum reported yesterday that FY
Profit After Tax slid 48.123% to 1.189b. The Portfolio has been re
engineered a Great Deal.

Centum FY Earnings Official Announcements and share Price Data here
http://www.rich.co.ke/rcdata/company.php?i=MTk%3D

Kenya Commercial Bank closed unchanged at 23.50 and traded 109,100
shares. KCB had Buy Side Demand at the Finish line for 3100% of the
Volume traded during the Session. KCB has posted a 50.445% Total
Return in 2012 and is headed higher again.
Standard Chartered rallied 3.141% to close at 197.00 and traded 7,800 shares.
Equity Bank traded 2nd. Equity Bank firmed 1.11% to close at 22.75 and
traded a 22.75-23.00 range and 1.139m shares worth 26.054m.
Barclays Bank traded 3rd. Barclays Bank improved 0.38% to close at
13.10 and traded 1.945m shares worth 25.484m.



N.S.E Equities - Industrial & Allied


KenolKobil issued a Profits Warning after the Market closed yesterday.
The Company said Volumes will be higher but are citing Foreign
Exchange Losses on Forward Contracts and the Recent Trend Lower in
International Prices as having crimped Profits. They must have had to
mark down the Value of their Inventory. Subsequent to that Profit
Warning and Pre Market Opening the Nairobi Securities Exchange
announced that they had been instructed by the CMA to lift the Trading
Suspension. The Price has yet to be set. KenolKobil rallied 4.4% to
close at 13.05 and traded shares as high as 15.00 +20.00% Intra Day.
KenolKobil traded 160,400 shares worth 2.099m. Now, of course,
KenolKobil is subject to a Takeover from Puma Energy [a subsidiary of
Trafigura] and My Estimation is that KenolKobil's Fair Value Take Out
Price is no less than 17.68, thats based on a PE of 8 versus 2011
Earnings. I think this is a Strategic Trade for Trafigura to  insert
themselves into a Red Hot East African Oil and Gas Space. Therefore, I
think, its not a clever Trade to offload shares at this Price Point.
KenolKobil has rallied 31.15% in 2012 and has paid a Full Year
Dividend of 43 cents making that a 35.477% Total Return in 2012.
KenolKobil has closed at a more than 6 Year High.

EABL rallied 0.9% to close at 225.00 which is its second consecutive
Session Close at a Record All Time High. EABL traded a 222.00-230.00
range and 981,100 shares worth 220.746m, which represented 59.539% of
the Total Volume traded during todays Session. EABL has delivered a
32.267% Total Return in 2012 and Investors are chasing the share ahead
of its FY Earnings Release. EABL accelerated Profit After Tax +17.461%
to 4.877b  and Earnings Per Share +37.71% to 5.55 at the 1st Half
Earnings Release and that was without Booking its Extraordinary Gain
from the Sale of its Shareholding in Tanzania Breweries.

EABL share Price Data and H1 Earnings here
http://www.rich.co.ke/rcdata/company.php?i=MzQ%3D

Bamburi Cement rallied 4.48% to close at 163.00 and traded 45,200 shares.
ARM firmed a shilling to close at 203.00 and traded 10,900 shares.

Mumias Sugar bucked the Trend today to ease 1.526% to close at 6.45
and was trading 6.20 -5.34% and just off session Lows at the Closing
Bell. Mumias Sugar traded 1.988m shares worth 12.824m and the Market
was top heavy, with Supply exceeding Demand By a Factor of 24 versus
10.



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