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Satchu's Rich Wrap-Up
Wednesday 02nd of January 2013

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Normal Board - The Whole shebang
Prompt Board Next day settlement
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The Latest Daily PodCast can be found here on the Front Page of the site

#Mindspeak 2012 RICH TV

Macro Thoughts

Apple is a Buy with a Stop at 475.00 from 18th December

AAPL 1 Month Chart Yahoo Finance 532.173 +4.43%

The Maasai discover an iPad #Apple in the Tsavo #Kenya

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Visiting My Mum

Home Thoughts

We have had a lovely and otherworldly Break. You know the Best Holiday
is when Time slows down and You feel You have stepped off the normal
Run of the World. Since, I was a Young Boy, Dad used to drive us up to
Nairobi in his Alfa Romeo and then in his 504. So The Drive down is
practically ritualistic. Of Course, I enjoy being with my Dad and visiting My Mum

Though This Time The Caretaker of the Cemetary assailed me with the
Fact that There were only 825 Ismailis left in Mombasa and I remember
when the if You were late for Prayers You would have to sit on the
Stairs. Today You can arrive at the End and find a Place. And I was
not very happy because The Caretaker has been turning over the Graves
and I cannot find my Grand Father's Grave anymore and I wanted to tell
him to Stop turning them over. And I wanted to tell him, if he ever
touched My Mum's Grave, I would draw on my Ancient History because
Ismailis were once known as The Assassins but that Story might be part
Mythology. What was sad however was that at least 5 People had passed
away in the last few weeks 3 of whom I knew. I suppose its the
Gujurati in me [There is a Place in Mackinnon Road where we stop as
well] that likes to revere the Dead and prefers a Physical Place to
visit and to tend.

And to boot I chanced across a Book in My Dad's Library called

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The Assassin's Song by MG Vassanji reviewed by Giles Foden

MG Vassanji is one of the unsung greats of African literature. An
Ismaili Muslim of Gujarati heritage, born in Kenya and raised in
Tanzania, he attended the University of Nairobi before winning a
scholarship to MIT to study nuclear physics. In 1978 he moved to
Canada to work at the Ontario nuclear research facility. He began his
literary career two years later. So far, his writing has focused on
the experience of south Asians in east Africa. This mainly merchant
community has been around since the 1850s, but trade has existed
between the two continents since at least the 13th century. It was a
Gujarati sea pilot who led Vasco da Gama from Kenya to India in 1498.

The narrator Karsan's father is the saheb of Pirbaag, lord and keeper
of an ancient Sufi shrine in Gujarat. His village home is overlooked
by the mausoleum of the mystic Pir Bawa, around whose magical
activities the shrine came into being in 1260. Although the teenage
Karsan wishes the distinction would simply go away - he just wants to
play cricket - he must succeed his father.

In due course he must take on the mantle and learn the secret of the
shrine. This is concentrated in the speaking of a "bol", a mantra
passed from father to son. The position does not just involve
guardianship; to be saheb is to be avatar of a cosmic force, in which
Sikhs and Hindus as well as Muslims believe. Pir Bawa himself was a
syncretic figure who mixed occultism with Islam and the classical
Hinduism of his once-welcoming Gujarati hosts.

We never know the exact words of the bol, only that it illuminates a
connection between present-day Ismailis and the medieval Shia sect of
the Assassins, "who disdained the outer forms of worship and the
Muslim laws of Sharia for inner spiritual truths"

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#Mombasa Island from English Point Twitpic

And our Visit to The Jamals Beach House was like that. You started on
top of the Cliff

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Vipingo Beach #Kenya Twitpic

And then You descended via This Ladder onto a deserted Beach. It
really was beautiful and remote.

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Vipingo Beach pristine and not another Soul in sight #Kenya Twitpic

We then drove up to Crystal Bay in Watamu yesterday and though I was
born in Mombasa I had never visited Watamu before, And Christina and
Roberto have been wonderful and gracious Hosts. We swam in the Sea at

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Papa Remo Beach #Watamu Twitpic

And Then at 530 yesterday Evening I said Nishet I want to visit The
Gedi Ruins. And The Family have visited them before and find it a
little too intense and spooky

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Ruins of Gedi

The Ruins of Gedi are the remains of a Swahili town located in Gedi, a
village near the coastal town of Malindi in Kenya. From the 13th or
14th to 17th centuries, Gedi was a thriving community along the jungle
coast of East Africa. Although no written record exists of this town,
excavations between 1948 and 1958 revealed that the Muslim inhabitants
traded with people from all over the world. Some of the findings
included beads from Venice, coins and a Ming vase from China, an iron
lamp from India, and scissors from Spain. The population was estimated
to exceed at least 2500 people.  Gedi had a mosque, a palace, and
large stone houses. These houses were complex for their time, with
bathrooms with drains and overhead basins to flush toilets. The city's
streets were laid out at right angles and had drainage gutters. There
are also wells which supplied water to the community. The material
used to construct the buildings was made from coral reef from the
nearby ocean.

In the early 16th century, the village was abandoned. A possible
explanation was that a punitive expedition came from Mombasa against
Malindi and forced the inhabitants to leave. A temporary reoccupation
likely occurred by the nomadic Oromo tribe from Somalia in the late
16th century, who later abandoned the town. It is unclear whether the
actual name of the town was Gedi, Gede, or Kilimani. The Galla word
"Gede" means "precious", but the town might have been named after the
last Galla leader to camp on the site.[1]

The site is inhabited by guenon monkeys, which frequently interact
with visitors.[citation needed]

According to local tradition, the ruins are protected by the spirits
of its priests. These "Old Ones" supposedly curse anyone who harms the
site or removes anything.

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Ruins of Gedi Just myself and the Monkeys #Kenya

And His Excellency the British High Commissioner tweeted

Christian Turner @HCCTurner @alykhansatchu "nothing
remains...boundless and bare The lone and level sands stretch far

So we have had a lovely Time and the little One Hannah has turned out
to be a Water Baby and a Beach Babe.


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A PICKPOCKET’S TALEThe spectacular thefts of Apollo Robbins.

He is probably best known for an encounter with Jimmy Carter’s Secret
Service detail in 2001. While Carter was at dinner, Robbins struck up
a conversation with several of his Secret Service men. Within a few
minutes, he had emptied the agents’ pockets of pretty much everything
but their guns. Robbins brandished a copy of Carter’s itinerary, and
when an agent snatched it back he said, “You don’t have the
authorization to see that!” When the agent felt for his badge, Robbins
produced it and handed it back. Then he turned to the head of the
detail and handed him his watch, his badge, and the keys to the Carter

Robbins’s hands are slim and smooth, with tapered, manicured fingers,
marred only by a scar on his right ring finger—from when he was
eighteen and tried to juggle a set of hibachi knives at a Japanese
steak house.

From time to time, he let his fingertips graze someone’s pocket, a
technique called “fanning.” “He’s got a cell phone, keys, and maybe
some cash in that right front pocket,” Robbins whispered to me,
indicating one man. “What I’m doing is taking inventory and making
sight maps and getting a feel for who these people are and what I’m
going to do with them. I’m a jazz performer—I have to improvise with
what I’m given.”

“A lot of magic is designed to appeal to people visually, but what I’m
trying to affect is their minds, their moods, their perceptions,” he
told me. “My goal isn’t to hurt them or to bewilder them with a puzzle
but to challenge their maps of reality.”

The book that made the greatest impression on him was a paperback,
published in 1964, called “Whiz Mob: A Correlation of the Technical
Argot of Pickpockets with Their Behavior Patterns,” by David W.
Maurer, a professor of English who devoted his life to the study of
raffish subcultures, before apparently killing himself, in 1981.
Robbins loved the vivid trade lingo in “Whiz Mob,” and he continues to
pepper his conversation with such terms as “pit” (inside jacket
pocket) and “prat” (side pant pocket), “skinning the poke” (removing
the cash from a stolen wallet and wiping it off before tossing it) and
“kissing the dog” (the mistake of letting a victim see your face).

Street pickpockets generally work in teams, known as whiz mobs or wire
mobs. The “steer” chooses the victim, who is referred to generically
as the “mark,” the “vic,” or the “chump,” but can also be categorized
into various subspecies, among them “Mr. Bates” (businessman) and
“pappy” (senior citizen). The “stall,” or “stick,” maneuvers the mark
into position and holds him there, distracting his attention, perhaps
by stumbling in his path, asking him for directions, or spilling
something on him. The “shade” blocks the mark’s view of what’s about
to happen, either with his body or with an object such as a newspaper.
And the “tool” (also known as the “wire,” the “dip,” or the
“mechanic”) lifts his wallet and hands it off to the “duke man,” who
hustles away, leaving the rest of the mob clean. Robbins explained to
me that, in practice, the process is more fluid—team members often
play several positions—and that it unfolds less as a linear sequence
of events than as what he calls a “synchronized convergence,” like a
well-executed offensive play on the gridiron.

If a crew of pickpockets is like a football squad, then its star
quarterback is the “cannon,” an honorific generally reserved for
pickpockets skilled enough to ply their trade without the help of a
team. This is also known as “working single o.” Robbins works single

“When I shake someone’s hand, I apply the lightest pressure on their
wrist with my index and middle fingers and lead them across my body to
my left,” he said, showing me. “The cross-body lead is actually a move
from salsa dancing. I’m finding out what kind of a partner they’re
going to be, and I know that if they follow my lead I can do whatever
I want with them.”
Robbins needs to get close to his victims without setting off alarm
bells. “If I come at you head-on, like this,” he said, stepping
forward, “I’m going to run into that bubble of your personal space
very quickly, and that’s going to make you uncomfortable.” He took a
step back. “So, what I do is I give you a point of focus, say a coin.
Then I break eye contact by looking down, and I pivot around the point
of focus, stepping forward in an arc, or a semicircle, till I’m in
your space.” He demonstrated, winding up shoulder to shoulder with me,
looking up at me sideways, his head cocked, all innocence. “See how I
was able to close the gap?” he said. “I flew in under your radar and I
have access to all your pockets.”

But physical technique, Robbins pointed out, is merely a tool. “It’s
all about the choreography of people’s attention,” he said. “Attention
is like water. It flows. It’s liquid. You create channels to divert
it, and you hope that it flows the right way.”

“I was using an old sales technique called ‘Feel, Felt, Found,’ where
you empathize with the customer,” Robbins told me. “Also, the improv
technique of never using a negative—agree and add on instead.”

Scott said that he’d played cannon in a gang for years. “A cannon is
like a psychiatrist, he’s like an ambassador, he’s like a high-paid
movie star all in one,” he told me. “If I’m working single o, and I
see a guy walking down the street with his wife and I want to beat her
purse, I’ll walk up to him and say, ‘Hey, Coach, how you doing?,’ and
I’ll reach across his wife to shake his hand. She gonna look straight
into his face and be, like, ‘When were you a coach?’ And he gonna be
looking back and forth between her and me, saying, ‘What coach?’
That’s when my hand goes into her purse, and I beat her.”

Robbins grew excited. “That’s what’s called a pattern interrupt,” he
said. “It locks up their brain, puts a question mark in there, and
after that you can just bust them.’’

One of the first things that Robbins ever explained to me was his
observation that the eye will follow an object moving in an arc
without looking back to its point of origin, but that when an object
is moving in a straight line the eye tends to return to the point of
origin, the viewer’s attention snapping back as if it were a rubber

“inattentional blindness,” the phenomenon of focussing so intently on
a single task that one fails to notice things in plain sight.

“It doesn’t matter if people are aware of how I work, or even what I’m
going to do,” he said. “They still won’t catch it. While they’re
trying to watch for it, I’ll be watching them.”

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These Drinks Really Pop WSJ

CHAMPAGNE IS pretty fancy. Champagne cocktails? Even fancier. Those
magnificent little bubbles add a hint of the celebratory to everything
they touch, whether it's an athlete's head after a championship
victory, the bow of a new ship, your lips when the ball drops or a
mixed drink. If your glass doesn't brim with bubbly on Dec. 31, it
isn't really New Year's Eve, is it?

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Rio de Janeiro, Brazil: Young people watch fireworks exploding over Copacabana beach during new year celebrations

We were at Crystal Bay for New Years Eve and the Teenagers were so
keen on the Beach Party and Hannah fell asleep. So I said to Nishet
You take them with Christina and Roberto and I will baby sit Hannah
and Hannah woke up at Midnight and howled at me because I had not
taken her. And told me she hated me and I said I love you more than
the World and did not want to leave You with a Nanny. And in the
morning she forgave me for not taking her and had evidently thought I
could not be that bad for staying with her.

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The Year 2012 In Review MONDAY, DECEMBER 31, 2012 - 00:00 -- BY ALY KHAN SATCHU
Law & Politics

The year feels as if it has flown by and my head is still spinning.
President Bashar Assad was apparently surviving by his fingernails at
the beginning of the year and he ends the year still surviving by his

The war drums were played hard against Iran but Bibi's hand was stayed
by President Obama and the Iranian rial all but collapsed around the
Ayatollah's ears.

Xi Jinping assumed the leadership of the second most powerful nation
in the world in a process that remains 'a riddle, wrapped in a
mystery, inside an enigma' to all but a select few at the very apex of
the Chinese Communist Party.

President Barack Obama batted the Romney [whose party wilfully ignored
the demographics of the new USA] into touch but now is in a deathly
embrace with speaker Boehner, who appears determined to take the US
over the 'fiscal cliff.'

Japan bought some Islands for cash and sparked a low level Island
fracas with China, which everyone hopes does not turn into a war.

The Europeans watched their euro project get a serious infection and
eventually super Mario Draghi came up with a 'parcours'.

The developed world has launched a tsunami of magic money into the
system with Shinzo Abe the comeback kid of Japan now joining the

The last time this experiment was tried was by Zimbabwe's central bank
and they had to give up because the currency went into free fall and
before that the German Weimar Republic discovered that the end game
was one where it took a wheelbarrow of cash to buy a loaf of bread.

And somehow, we are expected to suspend our disbelief as all this
freshly minted money whirls around in the system. Timing is everything
in economics and we are at the pre-wheelbarrow moment and our central
bankers can point and say; Look it has not happened yet, Its different
this time around. Is it really? Or the denouement has just not
happened yet.

And in this uncertain world, Africa popped its head over the global
radar. The Nairobi Securities Exchange’s all-share index has surged 38
per cent this year to be sub-Saharan Africa's top performer in 2012.
We overtook Uganda which is a couple of percentage points behind us.

Nigeria has posted a 32.18% return. South Africa has hit a sequence of
all time highs. If you care to cross the Sahara into Egypt, you will
note that the EGX30 is the 2nd best performing index worldwide having
rallied just over 50%. Venezuela is the world's best and has rallied
just under 300%.

In fact, the likes of Ghana and Nigeria can today borrow dollars more
cheaply than Italy and Spain on the international markets. You might
care to ask what is going on?

The merits of Africa have stood out against this backdrop of global
uncertainty. Global investors have shone a torch on what was once upon
a time the dark continent and everything looks a lot brighter than it
does at home.

And they have all decided to add a little Africa to their portfolios
and thats why the Africa rally has been so broad based.

Bull markets always have to climb a wall of worry and there are things
to fret about. Marikana, the Boko Haram, our elections but when taken
in the global mix, these look pale in comparison to the incredibly
uncertain developed world.

Drilling deeper at home. You will recall that last year, Nairobi and
Mombasa were the best performing real estate markets worldwide ahead
of peers such as Miami and Sao Paolo, which you have to admit is an
extraordinary and noteworthy outcome.

Uchumi has returned 151.94% in 2012 thats 5 times more than the iconic
Apple. EABL has returned +56.686% as its surged to a winning sequence
of fresh all time highs in November and December and thats 1.63x
faster than its majority shareholder Diageo.

Kenya Commercial Bank is +86.053% this year and sniffing close to a
record high. I can guarantee you there are few banks anywhere in the
world who have posted such a return. I think we are at the beginning
of a multi-year rally in Africa. Have you hitched a ride?

Nobody can predict which way the ‘Arab Awakening’ will turn this year.
But Robert Fisk has ventured a very tentative punt or two

Never make predictions in the Middle East. My crystal ball broke long
ago. But predicting the region has an honourable pedigree. “An Arab
movement, newly-risen, is looming in the distance,” a French traveller
to the Gulf and Baghdad wrote in 1883, “and a race hitherto
downtrodden will presently claim its due place in the destinies of
Islam.” A year earlier, a British diplomat in Jeddah confided that “it
is within my knowledge... that the idea of freedom does at present
agitate some minds even in Mecca...”

So let’s say this for 2013: the “Arab Awakening” (the title of George
Antonius’ seminal work of 1938) will continue, the demand for dignity
and freedom – let us not get tramelled up here with “democracy” – will
go on  ravaging the pseudo-stability of the Middle East, causing as
much fear in Washington as it does in the palaces of the Arab Gulf.

On the epic scale of history, that much is certain. At the incendiary
core of this discontent will be the claims of a Palestinian state that
does not exist and may never exist and the actions of an Israeli state
which – through its constant building of colonies for Jews and Jews
only on Arab land – ensures that “Palestine” will remain only an Arab

 Iran? Well, the Iranians understand the West much better than we
understand the Iranians – a lot of them, remember, were educated in
the United States. And they’ve an intriguing way of coming out on top
whatever they do. George Bush (and Lord Blair of Kut al-Amara) invaded
Afghanistan and rid the Shia Iranians of their Sunni enemy, whom they
always called the “Black Taliban”. Then Bush-Blair invaded Iraq and
got rid of the Islamic Republic’s most loathsome enemy, Saddam
Hussein. Thus did Iran win both the Afghan and the Iraqi war – without
firing a shot.

. Yes, Assad will go. One day. He says as much. But don’t expect it to
happen in the immediate future. Or Gaddafi-style. The old mantra still
applies. Egypt was not Tunisia and Yemen was not Egypt and Libya was
not Yemen and Syria is not Libya.

And the Gulf? Arabia, where the first Arab awakening began? Where,
indeed, the first Arab revolution – the advent of Islam – burst forth
upon the world. There are those who say that the Gulf kingdoms will
remain secure for years to come. Don’t count on it. Watch Saudi
Arabia. Remember what that British diplomat wrote 130 years ago. “Even
in Mecca...”


I agree with Fisk on Palestine and on his Point about Iran. Re Iran
Saddam was their Arch Enemy and removed as were the Taliban. Iran
remains encircled however but the Open Question remains whether the US
can carry the Expense around the Encirclement. In fact, it is the
Sanctions War and the Currency Collapse which has been far more
effective I feel at bringing Iran to heel than any military Adventure
might be. Re The Kingdom of Saudi Arabia, I feel there is considerably
more longevity than Fisk is allowing.

DaMina Advisors 2013 AFRICA Periscope

2013 the Chinese year of the black water snake.

Egyptian public and private sector USD-denominated debts stands at
almost $40bn. The biggest risks in Egypt in 2013 will not be
political; they will be financial and economic.

Over $35 billion worth of bad loans have been siphoned from the sector
over the past three years by the government “bad bank,” Asset
Management Corporation of Nigeria, leaving Nigerian bank balance
sheets, governance structures and quality of assets as among the best
in world (OECD inclusive). Unlike in most other emerging and frontier
markets, in Nigerian all pre-2008 bank CEOs have been replaced across
the entire sector; and an open forensic audit has been done on all the
country’s banks- a regulatory feat not even equaled in the UK, Spain,
Russia, China, Brazil or the US.

With a price-to-book ratio of 0.93x; average dividend yield of over
5.8%; and a PE ratio of only 5.92 the sector remains supremely
attractive in a world of global quantitative easing with no end in

The South African Rand and ZAR denominated fixed instruments are
particularly vulnerable in 2013.

Africa’s phenomenal GDP growth and low inflation rates over the past
decade are set for deterioration in 2013. African economies – such as
Zambia, South Africa, DR Congo and Guinea – which are highly dependent
on the mining sector are particularly vulnerable. Oil producers such
as Nigeria, Angola, Algeria, Equatorial Guinea, Gabon, Ghana, Cote
d’Ivoire, Cameroon and Uganda will however benefit from a widening of
the spread between Brent and WTI, as a “hot” war in the Middle East
becomes increasingly likely in 2013. Israel’s prime minister gave a
warning for war in September 2012 at the UN. Civil peace in mining
rich countries, South Africa, Tanzania, DR Congo, Zambia, Ghana,
Madagascar, Zimbabwe and Guinea could be challenged, as laid-off
miners attack facilities and pose a challenge to industrial peace. The
post-conflict natural resources FDI investments flows into South
Sudan, Liberia and Cote d’Ivoire will also likely stall under strain
from negative global economic developments. Guinea, Mozambique,
Zambia, South Africa and DR Congo are particularly vulnerable.

However, a Kerry-led State Department is likely to make a major
attempt to prevent International Criminal Court (ICC) indictees Uhuru
Kenyatta and William Ruto from ultimately running in the March 2013
polls. The US is likely to push the ICC to accelerate its legal
proceedings against the duo in order to send a strong signal to the
Kenyan electorate that the US will not be able to have a normal
relationship with the country if it elects Kenyatta and Ruto. But with
both the presidential and vice-presidential candidates possible war
criminals, Kenya will be thrown into a major political, legal,
diplomatic, constitutional and crisis if Kenyatta and Ruto win, only
to be hounded by the ICC and isolated by the West. Heavy handed
interference by the US may also spur patriotic anti-colonial feelings
in the electorate and possibly tilt the election towards Kenyatta and
Ruto as an assertion of national sovereignty.

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House Passes U.S. Budget Bill, Averts Most Tax Increases Bloomberg
International Trade

djfxtrader: #House Votes 257-167 To Approve Fiscal Cliff Legislation [WSJ]

House of Representatives passed legislation averting income tax
increases for most U.S. workers after Republicans abandoned their
effort to attach spending cuts that would have been rejected by the

The 257-167 bipartisan vote breaks a yearlong impasse over how to head
off $600 billion in tax increases and spending cuts that were set to
begin taking effect today. The Senate passed the bill early this
morning, 89-8, and it goes to President Barack Obama for his

“This law is just one step in the broader effort to strengthen our
economy,” Obama said at the White House. He said he hoped Congress
this year would handle budget issues “with a little bit less drama,
with a little less brinksmanship.”

The White House said Obama was leaving Washington afterward to resume
his vacation in Hawaii.


Its not a Grand Bargain nor a Parcours but a Band Aid.

Currency Markets at a Glance WSJ

Euro 1.3262
Dollar Index 79.49
Japan Yen 87.14  fell past 87 per dollar for the first time in 2 1/2 years
Swiss Franc 0.9114
Pound 1.6318
Aussie 1.0466
India Rupee 54.485
South Korea Won 1064.24
Brazil Real 2.0485
Egypt Pound 6.3599
South Africa Rand 8.4246

Dollar Yen 3 Month Chart 87.176 Last

The yen dropped to as low as 87.30 per dollar, a level unseen since
July 29, 2010

Japan’s Abe said in a New Year statement yesterday that the most
urgent issue for his country is to break out of currency appreciation
and deflation. “Bold” monetary policy is one of the three prongs of
his economic measures, he said.


I expect a 100.00 Print in 2013.

Euro Yen 1 Year Chart 115.62 Last  touched 115.99, the weakest since
July 8, 2011


My 2012/2013 FX Trade.

Euro versus the Dollar 3 Month Chart INO 1.3266 Last

Dollar Index 3 Month Chart INO 79.468 Last

Stocks Beat Bonds, Commodities by Most Since 2009 on Stimulus Bloomberg

The MSCI All-Country World Index of equities increased 16.9 percent in
2012 including dividends after climbing 2.3 percent in December. The
Standard & Poor’s GSCI Total Return Index of 24 commodities rose 0.1
percent last year, while the U.S. Dollar Index (DXY) lost 0.5 percent.
Bonds of all types returned 5.73 percent, on average, according to
Bank of America Merrill Lynch’s Global Broad Market Index. The rally
in global stocks followed a 6.9 percent slump in 2011. The MSCI global
index, which tracks companies in 45 developed and emerging markets,
trades for 15.4 times reported earnings, or about 26 percent below its
historical average of 20.7, according to data compiled by Bloomberg
from 1995.

Within developed markets, 23 out of 24 benchmark indexes advanced.
Stocks in Europe rallied the most as cheap valuations for companies in
Greece, Germany and Denmark lured investors. Equity measures in those
countries climbed at least 27 percent. The price-earnings multiple of
the Stoxx Europe 600 Index has surged more than 86 percent since
hitting an almost three-year low in September 2011. Spain’s IBEX 35
was the only developed market gauge to fall. Japan’s Nikkei 225 Stock
Average surged 23 percent, the biggest rally since 2005, amid calls
from the new government for more monetary easing.

The MSCI Emerging Markets Index of stocks gained 18 percent last year
including dividends, rebounding from an 18 percent loss in 2011.
Venezuela’s benchmark climbed 342 percent including dividends, the
most in the world, as inflation, which rose about 18 percent
year-over-year as of November, prompted investors to buy shares as a
way to preserve the value of their savings. The deteriorating health
of President Hugo Chavez, re-elected in October, fueled speculation
that a regime change may reverse policies that drove away investors.

The world economy is estimated to have expanded 2.2 percent in 2012,
according to the median estimate from economists surveyed by
Bloomberg. Gross domestic product may increase 2.4 percent this year,
the projections show.

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Commodity Markets at a Glance WSJ

Crude Oil 1 Year Chart INO 92.60 Last

Brent crude futures advanced 3.5 percent last year, the smallest
annual gain since prices collapsed in 2008, as threats to Middle
Eastern supplies offset the drag on oil demand from Europe’s sovereign
debt crisis. Prices posted a record annual average of $111.68 a
barrel, buoyed by new international sanctions on Iran and the risk
that conflict in Syria will spread. Brent rose as high as $128.40 on
March 1, and fell to $88.49 on June 22.


Iran has been a 'Cry Wolf' Scenario for a while now. That Angle
remains the Key Geopolitical Premium Element. Continued lashings of QE
with Shinzo Abe now joining the Party lends support to Oil as much as
it does to Gold. I prefer to watch from the sidelines now until I get
a better Feel as to how Netanyahu intends to proceed.

Gold 3 Month Chart INO 1679.63 Last

The metal averaged a record $1,670.71 this year in New York even as it
slid 6 percent since September, the biggest quarterly drop since 2004.
The run of annual gains in the immediate delivery market is the
longest since at least 1920.


We remain in the Warholian Moment.

Emerging Markets

Frontier Markets

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Egypt Pound 1 Year Chart INO 6.3579

The pound weakened almost 1 percent to 6.3649 a dollar at 3:45 p.m. in
Cairo after the central bank sold $74.8 million at a cut-off price of
6.3050 a dollar, according to data compiled by Bloomberg.

Mursi said the pound’s drop relative to the dollar “doesn’t worry or
scare us,” the state-run Middle East News Agency reported. The
situation ‘will even out in a few days,” he said.

The central bank sold $74.9 million to banks yesterday at a cut-off
price of 6.2425 a dollar, a 0.9 percent depreciation from the Dec. 28
closing price, according to data compiled by Bloomberg.

In announcing the auction, the central bank called on Egyptians to
“ration” their foreign-currency use after reserves fell to a
“critical” level.

 It raised 1 billion pounds selling nine-month notes today, missing a
3 billion-pound target, central bank data on Bloomberg show. It had
canceled the sale of 6 billion pounds ($970 million) in six-month and
one-year treasury bills Dec. 27.

“Egypt needs an IMF program,” Agha said


The Egyptian Pound's Slide was predicted and predictable. Its going lower still.

Egypt ^EGX30 Bloomberg 1-Year +50.80%

Dollar versus Rand 3 Month Chart INO 8.4251 Last

Cyril Ramaphosa's appointment has I feel encouraged Rand Bulls.

South Africa All Share Bloomberg 1-Year +22.71%

Nigeria All Share 1-Year +35.45%

Ghana Composite Index 1-Year +23.81%

Malawi’s President Pledges to Keep Floating Currency Bloomberg

“I will not stop the flotation of the kwacha,” Banda said on the
Lilongwe-based Zodiak Broadcasting Station today. “That will be
suicidal. We just have to be patient.”

Malawi devalued the kwacha by a third against the dollar on May 7, a
month after Banda took office, and agreed to let the exchange rate
float to meet conditions set by the International Monetary Fund. Since
then, the currency has dropped 26 percent to 326 per dollar, making it
the worst-performing unit in Africa. Inflation in the southern African
nation surged to 33 percent in November from 30.6 percent in the
previous month.

The Consumers Association of Malawi has organized mass demonstrations
to take place on Jan. 17 to protest against soaring prices. The group
is also calling on Banda to reduce her budget on travel and vehicles
and cut back on government spending.

Banda said food shortages this year have added to consumers’ woes.
About 2 million Malawians are without food, forcing the government to
increase aid to vulnerable families, she said.

read more

Jubilee Predicts Uhuru to Win By 52 Per Cent
Kenyan Economy

Strategists within the Jubilee Coalition are predicting a first-round
win with its flagbearer Deputy Prime Minister Uhuru Kenyatta beating
Cord's Raila Odinga with close to one million votes.

A strategy document, prepared by the Jubilee team using the just
released voter numbers and seen by the Star, predicts that Uhuru will
garner 5 million against Raila's 4.2 million votes, while other
candidates will share close to a million votes, if the election
attracts a 71 per cent voter turnout. The assumption in the statistics
is that out of the 14,337,399 registered voters only 9,695,166 will
turn up to vote on March 4, and the previous voter turnouts in the
various regions will be maintained. The Jubilee strategy document
shows that Uhuru wins by 52 per cent, Raila comes in second with 44
per cent while the other candidates garner 5 per cent of the votes in
the first round.

The statisticians assume that the Jubilee Coalition has a firm grip on
Kiambu, Muranga, Nyandarua, Nyeri, Kirinyaga, Embu, Meru, Tharaka,
Laikipia, Nakuru, Isiolo, Kajiado, Marsabit, Wajir and Mandera under
Uhuru. The Jubilee strongholds perceived to be under the control of
Ruto are Uasin Gishu, Elgeyo Marakwet, Nandi, Baringo, Bomet, Kericho,
Turkana, Samburu, Narok, West Pokot and Garissa.

Mombasa, Kwale, Kilifi, Lamu, Kisii, Nyamira, Tana River, Taita Taveta
have been classified as the swing vote counties with Raila beating
Uhuru in all of them except in Kisii and Nyamira.

The analysis assumes equal popularity by Uhuru and Raila in Nairobi
where they will get 45 per cent each of the votes cast. The assumption
is that 925,030 of the 1,778,903 registered voters in Nairobi will
vote with the two candidates getting 416,263 votes each.

The strategists indicate in their analysis that; "The percentages
allocated to Uhuru were pessimistic while those given to Raila were
optimistic, even in our strongholds. We have given equal popularity to
Uhuru and Raila in Nairobi knowing full well the DPM shall take the


This is an entirely accurate Prediction.

EABL takes crown of most sought-after stock and NSE Cumulative Data for 2012

Turnover in 2012 increased to Sh86 billion from Sh77 billion a year
earlier, an 11.28 per cent increase .
East African Breweries Limited (EABL) recorded the highest turnover at
Sh18.56 billion on 790 million shares traded.

EABL share Price data and Earnings here RECORD HIGH +58.43% 1 Year Return

Par Value:                  2/-
Closing Price:           264.00
Total Shares Issued:          790774976.00
Market Capitalization:        208,764,593,664
EPS:             13.46
PE:                 19.614

House team clears sale plan for Hilton and InterCon hotels Business Daily

The sale of KTDC’s shareholding in Hilton Hotel (40.57 per cent),
InterContinental Hotel (33.83 per cent) and Mountain Lodge Limited
(39.1 per cent) was cleared by the Cabinet in August last year.
Mountain Lodge in Mount Kenya National Park is managed by TPS Serena
and is under lease by the Kenya Wildlife Service.

The Treasury said the sale would be through pre-emptive rights with
existing shareholders getting the first right of refusal.


#Mindspeak is at the @InterConHotels #Nairobi Twitpic

Kenya Shilling versus The Dollar Live ForexPros

Nairobi All Share Bloomberg 1-Year +39.44%

MSCI ranked the Nairobi bourse as the best performing in its Frontier
Markets Africa Index, while its Kenya index was the second best
performing globally after the MSCI Turkey Index.

“The top three single country Frontier Markets index performers for
2012 year-to-date included the MSCI Kenya, Nigeria and Estonia Indices
which posted returns of 54.16 per cent, 52.82 per cent, and 44.98 per
cent, respectively,” said MSCI in a statement capturing the 2012

This means that if an investor had bought the stocks that are tracked
by the MSCI Kenya Index in their exact weights, the value of their
portfolio would have increased by more than half as at December 28.

Nairobi ^NSE20 Bloomberg 1-Year +28.95%

Every Listed Share can be interrogated here

How to issue fake bonds and make millions without breaking a sweat Jaindi Kisero

I had never heard about a case of fake bonds being sold in the market
since the government reintroduced bond auctions in May 2002.

How does someone get to steal government bonds? In the first place,
the process and conditions for opening what is known as a CDS account
at the Central Bank of Kenya, without which you cannot deal in bonds,
is quite onerous.

To do so, you have to physically present yourself at the Central Bank
with all the directors of your company. These people will almost ask
you to physically present your mother and grandfather there.

How did these crooks hope to get away with issuing fake bonds and
selling them in the market knowing that at the end of the day, what is
recorded in the register at the Central Bank must reconcile with
details of actual receipt of cash from bond issues at the Treasury?

Before I continue ranting away, here is the background to this
sensational story.

A few months ago, a very short story in this newspaper reported that a
manager at the Central Bank’s National Debt Department, one Moses
Wambugu Muregi, had been charged in court with stealing Sh105 million
worth of government bonds.

The gravity of the matter did not register in the public domain
because the reports did not give details of how the bonds were stolen.
We have to wait for the full hearing of the case to appreciate what

Personally, this is a case I want to follow closely because I wish to
understand how somebody can actually create fake government bonds and
proceed to sell them in the marketplace.

If someone can create bonds worth Sh105 million and proceed to sell
them, where is the assurance that bigger amounts are not being stolen
from the taxpayer in this manner?

Since most of the Anglo-Leasing scandal was about manipulating the
external debt register, can we deduce from this incident that corrupt
merchants have discovered how to manipulate the internal debt register
to make billions of shillings?

So far, what I have gathered from anecdotal evidence and from insiders
who have spoken to me under conditions of confidentiality, is that
these fake bonds were created and issued through abuse of computer
access rights by Central Bank insiders.

I gather that some unscrupulous staffers at the National Debt
Department stole passwords belonging to their superiors to create fake
government bonds worth millions of shillings.

Apparently, at the time, the Central Bank was in the middle of
migrating to a new computer system.

There had been murmurs from bond traders that the new systems were too
slow in turning around and reconciling transactions.

Once the crooks created the fake bonds, they issued them and deposited
them in CDS accounts belonging to third parties, who then went ahead
and sold them through stockbrokers in the Nairobi Stock Exchange.

A month later, when the Central Bank was calculating and paying
interest on its bond portfolio, the numbers could not reconcile. A
forensic audit revealed that Sh105 million worth of bonds had been
issued and sold in the market.

Fortunately, the systems for issuing and trading bonds are such that
it was not going to be difficult to follow the transactions.

From the anecdotal evidence I have gathered, the Central Bank moved
and froze the accounts of all intermediaries who handled the fake
bonds, including the brokers, agents and commercial banks.

Nearly Sh65.5 million of the money was traced to accounts belonging to
an aspiring politician who is also said to be a relative of a Central
Bank staffer.

Sh40 million was traced to a CDS account of a leading bond trader who
has since been blacklisted by the Capital Markets Authority.

What are the broader policy implications? We must not allow crooks to
mess about with the integrity of the government bond programme.
Indeed, government bonds are what built the Thika superhighway.

read more

N.S.E Today

The Kenya Shilling slipped 0.41% lower versus the Dollar to trade at
86.347 Last and traded a session Low of 86.49. I assume it was a Thin
Market as it was at the Securities Exchange.
The Securities Exchange had its first Trading Session of 2013 today
after a Banner 2012 when the All Share rallied +39.44% and was the
best Performing Index in Sub Saharan Africa. Today was a lackadaisical
post New Years Party Type Session. Clearly the Elections loom in the
First Half and The Index might well become a little more circumspect
ahead of the Elections or at least until we gain more Visibility and
Clarity on the Outcome. it remains a High Beta Event in the First
The Nairobi All Share closed 0.69 points higher at 95.55 which is a
Fresh 22 Month Closing High.
The NSE20 rose 7.41 points to close at 4140.43.
Equity Turnover was thin at 67.092m

N.S.E Equities - Commercial & Services

Safaricom firmed  0.99% to close at 5.10 and traded 3.32m shares.
There was Buy Side Demand for 533% more shares than were traded during
the Session signalling There is strong Support at this level.
Safaricom sits 1.92% below a 28 Month Closing High of 5.20 from the
26th of November 2012.

Kenya Airways eased 0.877% to close at 11.30 and traded 180,500
shares. Kenya Airways shareholders had a Torrid Year in 2012. However,
They successfully completed the Rights Issue which gave them the
Capital to bulk up their Fleet. I think the Bad news is entirely baked
into the Price and the Price will end 2013 considerably higher than
the levels we are seeing now.

Nation Media was high ticked 1.35% to close at 225.00 on light Volume
of 900 shares.

N.S.E Equities - Finance & Investment

Kenya Commercial Bank rallied 1.68% to close at 30.25 and was trading
and Bid at 30.50 +2.52% at the Finish Line. Kenya Commercial Bank
traded 141,300 shares and There was a Material Buy Demand versus Sell
Side Supply Imbalance. Kenya Commercial Bank is within 2.889% of An
All Time Closing High from April 2008. Today marked a Change at the
Helm with Joshua Oigara Esquire officially being handed the Keys to
the CEO Suite by Dr. Oduor-Otieno.

Equity Bank was lightly traded and closed unchanged at 23.75.
Standard Chartered firmed a shilling to close at 236.00 and traded 8,600 shares.
Diamond Trust Bank traded 8,700 shares at 118.00 +2.61% and had Buy
Side Interest for 1,718% more shares than were traded.
COOP Bank firmed 1.19% to close at 12.75 and traded 121,300 shares.

Transcentury traded 350,000 shares all at 23.25 -1.06%. The Business
Daily carried a Report today where it confirmed that Insiders had sold
5m shares since the Firm was introduced via a Listing in July 2011.
Transcentury reported an H1 2012 PAT Acceleration of 508.4%.

Jubilee firmed 1.16% to close at 175.00 and traded 3,000 shares.

N.S.E Equities - Industrial & Allied

EABL firmed 0.75% to close at 267.00 a Fresh All Time Closing High on
light volume of 1,100 shares. EABL set a Sequence of All Time Closing
Highs through 2012 and was in fact the most actively traded share at
the Nairobi Securities Exchange trading 21.581% of the 86b shillings
traded at the Exchange last Year. International Investors have been
stretching for the share all through 2012 and I foresee that Trend
continuing through 2013.

Kenya Power was the most actively traded share at the Securities
Exchange and eased 0.87% to close at 17.00 and traded 977,600 shares
worth 16.622m. Kenya Power has been swimming against the rising Tide
since closing at 18.95 on October 25th and has retreated 10.29% since
that date through today.
KenGen firmed 1.14% to close at 8.90 and traded 98,900 shares.

Bamburi Cement was high ticked 2.7% to close at 190.00 on 100 shares.
That is a 22 Month Closing High.

Sameer rallied 4.82% to close at 4.35 and was trading at session Highs
of 4.50 +8.43% at the Closing Bell. This is a 7 Month Closing High.

by Aly Khan Satchu (www.rich.co.ke)
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January 2013

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