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Satchu's Rich Wrap-Up
Thursday 21st of February 2013

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With Thanks to @JohnGithongo #Mindspeak Twitpic

EABL H1 Earnings Release and an Interview with the CEO and MD Devlin
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Devlin Hainsworth EABL @Diageo_News Twitpic

Macro Thoughts

The Fed is once again emitting smoke Signals which are buffeting the Markets

Home Thoughts

I watched Flight.

Flight: Denzel Washington in the trailer for Robert Zemeckis's new film - video

Flight Poster

read more

Life Takes Nose Dive, and Settles Into an Abyss Flight New York Times

There is a single image in “Flight” of a miniature bottle of vodka
that’s more nerve-racking than almost anything in the thrillers
released this year. Shot in close-up with a room blurred in the
background, the bottle looks so very big for something so small, like
a totem of some mystical deity. It represents a million earlier drinks
downed in a forlorn, existential frenzy, but it also resonates with a
foreboding that the director Robert Zemeckis sustains for several
unsettling seconds. What gives the image such tension, an almost
unbearable throb of suspense, is that you know that right outside the
frame is a man who is just dying for that drink. And you’re dying a
little along with him.

The man going down, down, down is Whip Whitaker. Played by a titanic
Denzel Washington, he’s a veteran commercial pilot whose greatest
vocation should be his flying but, for this and that reason, has
become his drinking. Whip doesn’t drink to excess and quietly fade, he
stumbles, shouts, flails, blacks out. Mr. Zemeckis, directing his best
movie since “Cast Away” (2000), about a different kind of disaster,
makes you see that Whip is a beautiful indulger, as does the
erotically hyped-up Mr. Washington, with his switchblade strut and
aviator shades. As crucially, they also show you the ugly, mean,
angrily unrepentant drunk, the one whose sunglasses hide bloodshot
eyes and who, when he passes out on the floor, needs someone to tilt
his head so he doesn’t choke on his own vomit.

Mr. Zemeckis sets this scene efficiently, using his restless cameras,
the pinpoint editing and seemingly nonchalant performances to home in
on details that will register more meaningfully later, like the hunger
with which Whip looks at Katerina and the anger edging his voice as he
talks to his ex-wife on the phone. Nothing in the scene registers as
especially significant until, amid the chatter and subtly
choreographed bodies and cameras, you learn that Whip is a pilot
scheduled to fly that same morning. This bombshell doesn’t fully
explode, though, until he leans over a line of coke and, with his head
swooping straight at us — and the camera racing away from him just as
fast — snorts it, punctuating the hit with an ecstatic shake of his
head, the whites of his eyes shining.

He’s high as a kite, and you may be too, lifted by the contact high
that great filmmaking gives you.


This is an incredibly good Movie. And The Trading Floor was inhabited
by Personalities such as Whip Whitaker and once upon a time I used to
find these sort of Impossible to Believe Personalities mesmerising as
they pirouetted on the Edge of the Canyon.

Now I find even the up close Contact just alarming.

Brilliant Movie.

Of Course Denzel is brilliant and I have not seen Don Cheadle since
his chocolate Love Episode in Boogie Nights.

read more

This pool party sequence from Paul Thomas Anderson's "Boogie Nights" (1997) YouTube

"This place is a dream. Only a sleeper considers it real. Then death
comes like dawn, and you wake up laughing at what you thought was your
grief."  -- Rumi

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Japan’s Prime Minister Shinzo Abe: Chinese need for conflict is ‘deeply ingrained’ WAPO
Law & Politics

TOKYO — China has a “deeply ingrained” need to spar with Japan and
other Asian neighbors over territory, because the ruling Communist
Party uses the disputes to maintain strong domestic support, Japanese
Prime Minister Shinzo Abe said in an interview.

Clashes with neighbors, notably Japan, play to popular opinion, Abe
said, given a Chinese education system that emphasizes patriotism and
“anti-Japanese sentiment.”

Abe’s theory on the entrenched motivation behind China’s recent naval
aggression helps explain why he has spent more effort trying to
counter the Chinese than make peace with them: He thinks the fierce
dispute with China over an island chain in the East China Sea isn’t
going away anytime soon.

Abe spoke about China in what aides described as unusually detailed
terms, laying out challenges that Chinese leaders might face if other
Asian countries, unnerved by Beijing’s maritime expansionism, decide
to reduce trade and other economic ties. China’s government would be
hurt by such moves, Abe said, because without economic growth, it
“will not be able to control the 1.3 billion people . . . under the
one-party rule.”

Abe, who is to meet Friday with President Obama in Washington, said
the U.S. presence in Asia is “critical” to deter China from taking
territory controlled by other countries.

“What is important first and foremost,” Abe said, “is to make [China]
realize that they would not be able to change the rules or take away
somebody’s territorial water or territory by coercion or

Abe’s assessment of China sounds like a version of the one that
experts in Beijing give of Japan, which they say has shifted to the
right on foreign policy and security issues in a bid to recover clout
and pride lost during two decades of economic stagnation. Abe’s
criticism of Chinese education is also notable because, during his
first stint as prime minister six years ago, he revised a law to
encourage a more patriotic curriculum in Japan’s classrooms.

His latest popularity rating is 71 percent, according to the Yomiuri
newspaper, a stunning mark in a nation that has cycled through six
consecutive one-year leaders.

“I have succeeded already in changing the general mood and atmosphere
that was prevalent in Japan,” Abe said.


@AbeShinzo is the Forward Position of @BarackObama 's Pivot to Asia.

Africa: U.S. Intervention Sets to Deepen Global Research

Speaking in Bamako on Tuesday, U.S. Senator Christopher Coons,
chairman of the Senate Foreign Relations Committee, stated that direct
U.S. military support of the Malian government is likely to resume
after the country’s July elections.

Coons went on to deem al-Qaeda in Islamic Maghreb (AQIM) a “‘very real
threat’ to Africa, the United States and the wider world.”

According to U.S. intelligence officials, however, AQIM “remains
mainly a regional menace,” with “no capacity” to launch attacks within
the U.S.  Even so, the Pentagon continues to move closer to directly
targeting AQIM targets.

As was first reported by the New York Times, the U.S. is currently in
the midst of establishing a drone base in Niger.  The base will
reportedly host up to “300 United States military and contractor

“U.S. officials say they envision flying only unarmed surveillance
drones from the base,” the Times reported, “though they have not ruled
out conducting missile strikes at some point if the threat worsens.”

But according to the Wall Street Journal, “at some point” is a moment
which fast approaches, as senior U.S. officials are pressing to expand
the U.S. “kill list” to include targets from northern Mali.

Meanwhile, in a prepared statement given to the U.S. Senate Armed
Services Committee last week, U.S. Army Gen. David Rodriquez, who is
poised to become the next commander of the U.S. military’s Africa
Command (AFRICOM), argued that greater U.S. intervention into
northwestern Africa is necessary for “stability.”

“With the increasing threat of al-Qaeda in the Islamic Maghreb,” Gen.
Rodriquez wrote, “I see a greater risk of regional instability if we
do not engage aggressively. Our long-term fight against al-Qaeda
necessitates persistent engagement with our critical partners.”

As part of his prepared remarks given to the Armed Services Committee,
Gen. Rodriquez called for a 15-fold increase in U.S.
intelligence-gathering missions in Africa.  This comes despite the
fact that the U.S. has already established “about a dozen airbases”
across Africa dedicated to “intelligence-gathering” just since 2007.

Even more foreboding, though, Gen. Rodriquez went on to call for the
U.S. to enhance its Special Operations presence in a total of ten
African states (Libya, Niger, Tunisia, Algeria, Mauritania, Nigeria,
Mali, Cameroon, South Sudan, and Kenya).

The targeting of Islamic extremists and al-Qaeda, though, is but a
pretext for the U.S. to contain Chinese interests in Africa.  As
Secretary of State John Kerry warned in his confirmation hearing,
“China is all over Africa — I mean, all over Africa…And we got to get

Indeed, for when asked whether the U.S. “pivot” to Asia would hamper
AFRICOM’s mission, Gen. Rodriquez noted that, “The impact on the
operations and activities of AFRICOM will be minimal. In fact, based
on the interconnectivity between Africa and the Asia-Pacific region,
AFRICOM’s activities may become more important.”


The Pivot to Asia detours through Africa.

Iran economy far from collapse as sanctions tighten Reuters

(Reuters) - Hossein Ahmad, an Iranian who runs a jewelry shop in
wealthy Dubai, marvels at the spending power he sees on show during
his monthly trips to Tehran, a year after U.S. sanctions largely froze
Iran out of the global banking system.

Shops in the Iranian capital are crowded. Finding a seat at good
restaurants can be difficult. And the ski resorts in the mountains
north of Tehran continue to attract Tehran's glamorous and

"The economy has problems with the sanctions, yes. But it's still
working," he says. "It isn't as bad as people outside the country

"The government had a long time to prepare for economic war," said
Mohammad Ali Shabani, an Iranian political analyst based in London.
"If you're talking about collapse, that is not happening."

Iran's oil and gas exports, which previously accounted for
three-quarters of total exports, plunged last year because of
international sanctions, and they may fall further as Washington makes
it even harder for Tehran to obtain payment for them.

The International Energy Agency estimated last week that Iran's oil
exports may have dropped below 1 million barrels per day in January
from 2.2 million bpd in late 2011, costing the country over $40
billion in lost revenues last year.

That loss is manageable, however, for a nearly $500 billion economy,
and Iran has taken steps in the past year to put the economy on an
emergency footing.

Most importantly, the government presided late last year over a slide
in the Iranian rial, which lost about two-thirds of its value against
the U.S. dollar in the free market before stabilizing in its current
range around 36,500.

It is not clear whether authorities deliberately engineered the slide,
which caused panic among businessmen and brief street protests in
Tehran, but the end result suits a government that is hunkering down
to resist more years of sanctions.

Since the state controls the oil sector, it can divert most of Iran's
remaining hard currency supplies where it wishes. It is using special
exchange centers to sell dollars at cheap rates to importers of basic
foods, medicines and other essentials.

Meanwhile, the mass of Iranians who want dollars for other purposes -
to import luxuries, travel overseas or move their savings abroad -
must buy them at the expensive market rate. This cuts demand to send
money out of the country.

The outcome, analysts say, is that Iran may avoid an external payments
crisis even if oil exports fall further. Its foreign reserves are
estimated by private economists to have dropped to around $70-80
billion from just above $100 billion at the end of 2011; the fall may
slow and eventually halt as the currency depreciation and other
emergency policies take hold.

"We are not even in the neighborhood of a critical situation for the
balance of payments," he said

The International Monetary Fund estimated in October that Iran would
post a general state budget deficit of 3.9 percent of gross domestic
product this year - easily bearable for a government with gross debt
of only about 9 percent of GDP.

The sanctions are, however, sapping Iranians' living standards as the
weak rial pushes up inflation through higher import costs. Chicken
prices, for example, nearly tripled in a year as the cost of buying
feed from abroad jumped.

The official inflation rate hit 27.4 percent at the end of 2012.
Including imported goods, actual inflation is believed to be roughly
twice as high. A small jar of Nescafe now costs about 230,000 rials
($6.30 at the free market rate) in a Tehran store, up from 120,000
rials a few months ago.

Iranians seeking to escape inflation and unable to move their money
out of the country are building new homes, boosting the construction
and carpentry industries.

These mini-booms are reflected in flashy new cars cruising Tehran's
streets and luxury apartments going up in its affluent neighborhoods.
The stock market hit a record high this week.

The rial's depreciation has halved the savings of the middle class and
destroyed some of their businesses, but "those at the top and bottom
of the pyramid haven't seen a dramatic amount of change", said Emad
Mostaque, a strategist who follows Iran at London-based NOAH Capital

This uneven distribution of the pain of sanctions is why, for
Washington, they could prove counter-productive: they are doing most
damage to a group that might be expected to push for political change
in Iran.

"The middle class, people with fixed incomes, pensioners are under a
lot of pressure. They are too exhausted to rise up," Shabani said.

10-JAN-2012 :: Why #Iran Matters A Geopolitical Black Swan The #Star

There is clearly a covert war being waged against iran. their top
scientists are being assassinated. in fact, the iAeA pretty much
leaked the names.

With President @BarackObama seeking re election this year, it is clear
he is not prepared to upset the israeli lobby [AiPAC] and has been
largely triangulated, in this matter.

The Us has now tightened the sanctions noose around the iranian neck.
the europeans are considering whether or not to buy oil from iran
anymore. the iranian rial has been hitting record lows and is the
worst performing currency in the World. the iranians effectively
closed off the strait of Hormuz for about 5 hours last week. 1/6th of
the World’s oil passes through that strait. iran is the second-largest
OPeC producer, exporting up to 2.5 million barrels of oil a day.

I venture that iran is in fact a geopolitical black swan. it is not
iraq circa saddam Hussein. it is not Libya circa Muammar Gaddafi. they
have a considerable reach. The Maliki Government in iraq might well be
an iranian asset. the majority of saudi Arabia’s oil comes from the
eastern Province, where the shia are probably a majority. Bahrain is
another potential powder keg. Hezbollah in Lebanon probably have a
dual reporting line to tehran and nas- rallah. Bashar Assad’s syria
[under considerable Pressure, admit- tedly] also lends strategic
depth. it is impossible to model the outcomes of what will happen.

Ben Bernanke described the reason for holding gold as follows “i think
the reason people hold gold is as protection against what we call
‘tail risk’ — really, really bad outcomes.”

every risk manager needs to be managing their oil tail risk and
modelling different prices because we look as if we are on a
trajectory that brings us ever closer to Gladwell’s tipping point as
“the moment of critical mass, the threshold, the boiling point.”

The Black Swan Nanyuki 490 Days Ago Twitpic

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Fed minutes send warning on durability of bond buying Reuters
International Trade

A number of Federal Reserve officials think the central bank might
have to slow or stop buying bonds before seeing the pickup in hiring
the program is designed to deliver, according to minutes of the
central bank's policy meeting last month.

The Fed opted in January to keep buying bonds at an $85 billion
monthly pace until the labor market outlook improved substantially,
but the minutes on Wednesday showed anxiety over the strategy's risks
- news that sent stocks sharply lower.

"A number of participants stated that an ongoing evaluation of the
efficacy, costs, and risks of asset purchases might well lead the
(policy-setting) committee to taper or end its purchases before it
judged that a substantial improvement in the outlook for the labor
market had occurred," the minutes said.

The dollar rose after the minutes were released, gold prices hit their
lowest level since July and Treasury debt prices advanced, helped by
the weaker tone in Wall Street stocks.

"The minutes ... portray a Fed whose thinking on the conduct of
monetary policy is constantly evolving and shows a committee that is
far less unified than at any other time in the past few years," Millan
Mulraine at TD Securities wrote in a client note.

The Fed has more than tripled the size of its balance sheet since 2008
to around $3 trillion through purchases of bonds designed to hold down
the cost of long-term borrowing and spur a stronger recovery.

The Fed has said it will reduce the size of its balance sheet when the
time comes to tighten monetary policy. The central bank will use its
March meeting to review the language it has used in its post-meeting
statements pertaining to the possible costs of unconventional policy,
the minutes said.


The Fed steps up its Rhetoric around the The End of the Warholian Moment.

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Currency Markets at a Glance WSJ
World Currencies

Euro 1.3266
Dollar Index 81.13 rose to a three- month high
Japan Yen 93.48
Swiss Franc 0.9293
Pound 1.5209
Aussie 1.0242
India Rupee 54.405
South Korea Won 1084.14
Brazil Real 1.9616
Egypt Pound 6.7319
South Africa Rand 8.9133

The dollar has gained 0.1 percent in the past three months, while the
euro has risen 3.8 percent, according to Bloomberg
Correlation-Weighted Indexes that tracks 10 developed-market
currencies. The yen was the worst performer during the period with a
13 percent slump.


Big Sell off in Risk Currencies and The Pound in particular looks very

Dollar Index 3 Month Chart INO 81.153 Last the highest since Nov. 21.

djfxtrader: *DJ FOMC Minutes: Several Officials Say Fed Should Be
Ready to Vary Pace of Asset Purchases
djfxtrader: *DJ FOMC Minutes: A Number Say Fed Might Taper, End
Purchases Before Job Market Substantially Improved

Sterling 1 Year Chart INO 1.5207 Last

The pound has fallen 5.4 percent this year, the second- worst
performer among 10 developed-market currencies tracked by Bloomberg
Correlation-Weighted Indexes.


Lower still.

Pound Slumps on BOE Minutes Bloomberg

Sterling dropped to the lowest level since June versus the dollar
after minutes of the central bank’s Feb. 7 meeting showed policy
makers also considered an interest-rate cut. Governor Mervyn King and
Paul Fisher joined David Miles in voting to increase the target for
bond purchases by 25 billion pounds ($38.3 billion) to 400 billion
pounds, though they were outvoted by the remaining six members of the
Monetary Policy Committee.

“The market clearly has sterling in the cross hairs,” said Gavin
Friend, a foreign-exchange strategist at National Australia Bank Ltd.
in London. “King and Fisher have joined Miles in voting for more
quantitative easing and the market has thumped sterling on the back of

The minutes showed policy makers also considered lowering the
benchmark interest rate from its record-low 0.5 percent, purchasing
assets other than gilts and changing the remuneration on bank

“This continues the snowball of gloominess which has been gathering
pace against sterling with the downside risk now getting more worrying
for the friendless pound.”

Dollar Yen 3 Month Chart INO 93.46 Last

Euro versus the Dollar 3 Month Chart 1.3259 Last

Caught up in the Cross Hairs of the Sell Off Yesterday.

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Commodity Markets at a Glance WSJ

Crude Oil 5 Day Chart INO 94.44 Last

West Texas Intermediate oil dropped for a second day, extending the
biggest decline in three months.WTI for April delivery slid as much as
92 cents to $94.30 a barrel in electronic trading on the New York
Mercantile Exchange and was at $94.35 at 12:55 p.m. Singapore time.
The March contract fell to $94.46 yesterday, the lowest since Jan. 16.
The volume of all futures traded is 69 percent above the 100-day

Gold 3 Month Chart INO 1560.73 Last [Getting caned]

Gold dropped for a seventh day, slumping to the lowest level since
July. Gold for immediate delivery fell as much as 0.6 percent to
$1,555.55 an ounce, the lowest since July 12, and was at $1,560.15 by
10:47 a.m. in Singapore. A seventh day of losses would be the worst
run since March 2009.

Emerging Markets

Frontier Markets

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Eni Led Europe in Oil, Gas Discoveries in 2012 WSJ

Italy's Eni SpA led Europe's oil and gas sector in new discoveries in
2012, after figures on Friday showed it replaced more of its proved
reserves than any other major oil company in the region as it found
large gas resources offshore Mozambique.

Eni said 2012 proved reserves were at an eight-year high and it
discovered a record 3.64 billion barrels of oil equivalent. Its
organic reserve replacement ratio—the proportion of oil and gas
produced in the year that was replaced by new resources—was 147%. It
compares with 110% at Norway's Statoil ASA STO -0.36% and the U.K's
Royal Dutch Shell RDSB.LN +0.84% PLC's 85% while Spain's Repsol SA
REP.MC -1.11% is yet to report figures.

Eni's decided last year to increase its exposure to oil and gas
production by selling its stake in Italy's gas grid operator and part
of its holding in Portugal's biggest oil company. Eni backed its
stronger oil and gas output outlook for 2013 by raising the dividend
on last year's earnings by 4%, despite fourth-quarter net profit
falling by a similar amount.

"2012 was a record year for exploration at Eni with discovered
resources about six times yearly production thanks to our outstanding
achievements in Mozambique," said Eni Chief Executive Paolo Scaroni in
a statement Friday. "The company will achieve industry-leading
upstream growth rates" in the coming years.

Mozambique—a recent debutante into the energy sector—has given a
significant boost to Eni's resources. The company's 2012 exploration
campaign in Area 4 of the offshore Rovuma basin has led to a
"world-class discovery" called Mamba, the company said.

Eni estimates the full discovery potential of Area 4 is 75 trillion
cubic feet of natural gas, equivalent to 30 years of Italy's gas

"Eni is an upstream story for the next four to five years," said Jason
Kenney, who heads Banco Santander's SAN.MC -1.88% pan-European
large-capitalization oil and gas equity research. "Thanks to
Mozambique there is good confidence it can deliver on this."

To deliver on its growth plans, Eni expects on invest €59.6 billion
($79.6 billion) from 2012 to 2015, an increase of 12% from the
previous four-year investment plan. Three-quarters of that is set
aside for oil and gas production.

However, in the past Eni hasn't always met its targets for big oil and
gas projects. The Kashagan project in Kazakhstan, which is about eight
years late and billions of dollars over budget, and the Goliat field
in Norway, of which the startup has been postponed due to delays in
delivery of the production platform, demonstrate the challenges the
company faces, said Investec Securities analyst Stuart Joyner.

Eni said Friday its fourth-quarter net profit, adjusted for changes in
the value of oil inventories and one-off gains and losses from asset
sales, fell 3.6% to €1.52 billion from €1.58 billion a year earlier,
mainly because of higher taxes and weaker gas sales.

Eni's oil and gas output for the period averaged 1.747 million barrels
of oil equivalent a day, up from 1.678 million barrels of oil
equivalent a day in the fourth quarter of 2011. Eni's oil and gas
production was crimped last year by the conflict in Libya that toppled
Col. Moammar Gadhafi's regime.

read more

#BestofItalyinKenya RICH TV

HE Paola Imperiale asked to make Presentation to PM #BestofItalyinKenya Twitpic

Sun Rise #Maputo Polana @SerenaHotels #Mozambique Twitpic

Maputo from the Sea #Africa Twitpic

The local Cinema Xenon #Maputo Twitpic

Nigerian Stock Exchange All Share Index Year To Date +20.05% 51 Month Highs


@Nestle Nigeria share price data here 1-Yr Rtn: +128.77% Bloomberg Record Highs

981.00 NGN +7.80%

@Nestle Coffee Cup Nairobi

Dollar versus Rand 8.9089 Last

South African Inflation Slows to Five-Month Low of 5.4% Bloomberg

South African inflation slowed to a five-month low in January after
the statistics office adjusted the consumer price basket and food and
fuel prices eased.

The inflation rate fell to 5.4 percent from 5.7 percent in December,
Pretoria-based Statistics South Africa said on its website today. The
median estimate in a Bloomberg survey of 19 economists was 5.7
percent. Prices rose 0.3 percent in the month.

The government cut the price of gasoline by 1.2 percent in January as
a stronger rand in the previous month helped to curb import costs.
Since then, the currency has plunged 4.8 percent against the dollar
and fuel prices climbed, adding to pressure on inflation.

“All indications are that this is not going to last and the overall
trajectory is still upward,” George Glynos, an economist at
Econometrix Treasury Management, said in a phone interview from

The Reserve Bank has held its benchmark repurchase rate at 5 percent
since a surprise cut in July. The bank’s mandate is to keep inflation
within a range of 3 percent to 6 percent.

“This should have no implication for the repo rate, given this is
expected to be a temporary slowdown,” Carmen Nel, an economist at Rand
Merchant Bank, said in a phone interview from Cape Town.

Annual food inflation slowed to 6.2 percent in January from 6.9
percent the month before, while transport costs eased to 5.1 percent
from 5.5 percent, the statistics agency said.

The statistics agency adjusted the consumer price basket with effect
from January to give more weighting to electricity and gasoline prices

South Africa All Share Bloomberg Year To Date +3.00%

Egypt Pound versus The Dollar 3 Month Chart INO 6.7359 Last Record Low

Egypt ^EGX30 Bloomberg Year To Date +2.69%

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Chief Justice Mutunga 334 Days ago Loreto Convent Msongari Twitpic
Kenyan Economy

"A too-close-to-call result, and one that the loser disputes, will add
complexity and uncertainty," says Aly-Khan Satchu Guardian 18th

"A too-close-to-call result, and one that the loser disputes, will add
complexity and uncertainty," says Aly-Khan Satchu, chief executive of
the east African financial portal Rich Management. However, he says
markets remain positive, with foreign investors driving the stock
market to new highs.

"Equity markets have been in a bull market since May last year, and
remain so," he adds. "Bond markets have been very well behaved. The
central bank stabilised the macro economy and inflation is at a record
low … It is either the calm before the storm or markets are signalling
a positive outcome around the elections."

Some analysts say the worst-case scenario would be Kenyatta winning
and refusing to go to the ICC.

"Then it is predicted and predictable that Kenya will meet sanctions
and, given our interconnectedness with the global economy, this would
have a severe impact on the economy," says Satchu.

read more

10-DEC-2012 :: A Deep dive into Kenya The Star
Kenyan Economy

THE World Bank issued its seventh edition of the Kenya economic update
last week. The headline of this edition was ‘Kenya at Work energising
the economy and creating jobs.’ I would argue that should be the
Mantra that every voter should be repeating when they come to cast
their vote or when they interrogate any and every presidential
candidate. Frankly, that is the signal in the noise and so far I have
to admit I have listened hard for the signal but all I have heard is
the noise of tribal arithmetic.

‘Since the 2007 elections, the only year when Kenya grew above 5 per
cent was 2010’ The World Bank is now predicting a 4.3 per cent GDP
expansion in 2012, We grew at 4.4 per cent in 2011. Everyone was
beating the 5 per cent drum but now we are in December and its plain
as day that 5 per cent is a figment of the imagination. Curiously, the
report says that Kenya is well positioned to achieve 5 per cent in
2013 and then in the very same breath issues this alert;

‘Historically, Kenya has also been vulnerable to election-related
shocks.’ You can say that again. 1992, 1997, 2007/8 that is a 25 per
cent pass rate.

The report then says ‘’The conduct of the national elections in 2013
will determine international perceptions of Kenya for the years to
come, and greatly influence Kenya’s medium- term economic prospects.’’

Its therefore a really high beta moment. We get it wrong this time and
the price of Kenya Inc is going to ‘crash and burn’. We get it right
and things will rally big. That’s beta, when something could go either
way and wildly. Security is already flashing amber and we do not have
such a totemic no nonsense figure as the late Minister John Michuki to
bring it under control. One third of Nairobi’s economy is driven by
the UN and it’s affiliates and if they turn tail in the event we give
the two finger salute to the international community, where will we

Oh I forgot the Chinese will bail us out. This China thing has gained
mythical status.

 Go ask the Iranians what kind of price gouging they are enduring right now.

Let’s be clear China Inc is a business and not Bob Geldof circa live aid.

We have this powerful tailwind, the Lake of Hydrocarbons which
stretches from Mozambique through Somalia, We have a nascent mining
industry [which admittedly the minister has done his very best to stop
dead in its tracks]. There is a firesale of heavy mining machinery as
we speak because they are all lying idle because all the exploration
companies have run away. We have the extraordinary phenomenon of
mobile money which Safaricom has parlayed into M-Shwari which I think
is the next big thing for Safaricom. We have this wonderful geothermal
green energy gig all along the Rift Valley. We have the opportunity to
be the hub, The geopolitical pivot of this entire region. We have a
deep pool of human capital and a 21st century entrepreneuralism
in our DNA which has excited enough people so that frequently I note
headlines like ‘Silicon Savannah’. These are all magic ingredients
with which we can bake a wonderful and very big cake.

Returning to the World Bank’s report, They say ‘Kenya has been
following, not leading Africa’s growth momentum.’ Since 2008, Kenya’s
average growth rate has been only 4 per cent lower than Sub Saharan
Africa [excluding South Africa] which grew close to 5 per cent and
substantially lower than our neighbours Uganda, Tanzania and Rwanda
which together grew at an average of 6.8 per cent.

Is it not time we took a leadership position? Got ahead of the curve?

read more

Landlocked neighbors worried by possible Kenya poll violence Reuters
Kenyan Economy

Kenya's landlocked neighbors are stocking up on fuel and food to
prevent the kind of disruption they suffered after being cut off from
the port of Mombasa by angry rioters following a disputed election
five years ago.About 200 million people in Uganda, Rwanda, Burundi,
South Sudan and eastern Congo could be affected if Kenya goes through
a fresh bout of fighting when it holds presidential and parliamentary
elections on March 4.

The port of Mombasa serves its wide hinterland with imports that
include oil, clinker which is used to make cement, steel, bitumen for
road construction and second-hand cars, while the main exports include
tea, coffee, and horticultural products.Some 95 percent of all the
cargo coming in through the port is trucked by road. Truck drivers at
a weigh bridge in the small town of Athi River on the fringes of the
capital Nairobi said there were already fears of violence.

"Everybody is scared about the elections, especially the foreign truck
drivers. Last time some of us were attacked and goods were lost," said
Charles Mburu, 36, who has driven trucks for the last eight years.

"Our employers are not just insuring the goods and trucks, but also
the drivers. You have to be certain that they will compensate you in
case of an attack."

After the December 2007 election, machete-wielding youths blocked
roads and looted trucks they had hijacked. They burnt tires to cut the
road from the port and uprooted railway lines, strangling trade to
Uganda, Rwanda and Burundi for weeks.

Kenya, Uganda and Tanzania all suffered inflationary pressures in 2008
due to the impact of the post-election crisis that damaged regional

This pushed Uganda's headline inflation rate to over 10 percent in
January 2008, while the country's revenue body reported daily revenue
losses of up to $600,000.

Burundi's top hard currency earners coffee and tea were also hit hard
- the tiny landlocked country transports over 80 percent of its
produce through Kenya.

"Our tea stocks in Bujumbura expired for consumption because we could
not export or send it to Mombasa," said Jacques Bigirimana, commercial
director at state-run tea board.


Banks and importers have been taking defensive positions by buying
dollars in Kenya and Uganda, traders said.

The Uganda shilling hit a 14-month low against the dollar on January 4
due to aid cuts by at least five western countries, including Uganda's
biggest bilateral donor Britain, after officials in the prime
minister's office were accused of embezzlement, and jitters over
election violence in Kenya.The Kenyan shilling has also taken a knock
from the cautious importers stockpiling dollars, and is down 1.7
percent so far this year, despite the central bank selling dollars to
shore up the local currency.

"If chaos breaks out in Kenya again, both the currencies will come
under serious pressure due to investor flight," said Ignatius Chicha,
head of markets at Citibank in Nairobi.

To mitigate against disruption of the supply of goods, the company
operating Kenya's railway system has bolted down the railway track to
prevent any chance that it may be damaged.Opposition supporters in
Nairobi's Kibera slums, one of Africa's largest urban settlements,
manually uprooted miles of railway tracks in protest at what they said
was a stolen vote, preventing the cargo from reaching Uganda.

"There is a learning curve from what happen in 2008," said Karim
Sadek, the managing director of Egypt's Citadel Capital, owner of a
Kenyan company that manages its railway line.

"God forbid, if anything happens, we will of course have
contingencies. I won't be sitting here, saying it won't affect the
business, it will affect the business, seriously," he said.

"In the flash areas where violence happened last time, we've welded
the rail. So 10 km of rail is a heavy proposition to lift," he said.

Companies with a regional presence also said they would take steps to
prevent being caught unawares again.

The Ugandan unit of Shell is building large reservoirs of fuel as a
back up at Jinja, east on the capital Kampala on the shore of Lake

"... We're building up some reserves on our own and some other oil
companies are doing the same, and that collective effort gives a good
back up," Ivan Kyayonka, Shell Uganda's country manager said.

Abid Alam, managing director of one of Uganda's biggest constructions
firms, the Alam Group, said his firm had bought huge stocks of raw
materials to prepare for any disruptions.

Alam said last time around his company suffered badly, with fuel and
other supplies disrupted.

"This time there's a lot of uncertainty surrounding the forthcoming
elections and it is scary to use the Mombasa-Uganda-Rwanda transport
corridor," Alam said. "Mombasa must not be looked at as a Kenyan port
but a regional port that must be secured from any internal political

Kenya's Bidco Oil Refineries, one of the largest consumer goods maker
with exports across the region, said it has already moved stocks to
neighboring countries to avoid disruption.

"We've taken measures to ensure that all our clients are well stocked
both in Kenya and outside," said Vimal Shah, its chief executive


Worsening security in Kenya would also mean aid groups could be unable
to reach millions of people displaced in fighting in eastern Congo who
may be going hungry, a spokeswoman for the World Food Programme (WFP)

The United Nations agency, which distributes more than 400,000 metric
tons (440,925) of food to nearly seven million people in east, central
and southern Africa annually, has also made plans for supplies to be
moved through Kenya to Uganda.

The agency also plans to have its ships dock in the port of Dar es
Salaam in Kenya's neighbor Tanzania, and Djibouti.

"We have moved most of the food stocks we will need downstream to
Eldoret and Tororo," Challiss McDonough, WFP's spokeswoman in the
region, said, referring to the north-western town of Eldoret near the
border with Uganda, and Tororo, just inside the landlocked country.
The stocks could last for two months, she added.

The Mombasa port handled 22 million metric tons of cargo last year, up
from 20 million metric tons in 2011, with about two-thirds of the
total traffic of cargo destined to its neighbors, meaning they almost
totally depend on its smooth operation.

On The Road 7th January 2013 The Star

My Christmas holiday ritual is to jump into a car and take the family
down to the Coast. The Nairobi-Mombasa road arrows ‘into immensities
and is ‘impossible-to- believe.’ It retains a near mystical hold on my
imagination and connects me to my childhood and beyond.

Dad used to once own an Alfa Romeo [of which there were only three
then in the country] and my pilgrimage along that road started then,
when we used to come from Mombasa. Now, of course, we set off from
Nairobi but the road still has its hold. The landmarks still reach out
to me.

This time we were swarmed by doves near Emali which was breathtaking.
There is still the eerie and deserted very Oscar Niemeyer building
which might have been a petrol station with a restaurant. We stopped
at Makindu which is like being teleported to Amritsar and on New Years
day was packed to the rafters. We always stop at Mackinnon road where
there is a shrine which houses the tomb of Seyyid Baghali, a Pun- jabi
foreman at the time of the building of the railway who was renowned
for his strength. And this time we took ourselves to Vipingo and
Watamu. In Vipingo,I was introduced to a pristine beach which is
accessed via a ladder as if you were descending from the real world
into another.

Jim Rogers who is a trader of some repute and co-founded the Quantum
Fund with George Soros at one point took a sabbatical and took off on
a motor bike round the world and wrote a book called Investment Biker.

Now I am not proposing that you bike the Nairobi- Mombasa road, not at all.


The Mombasa Nairobi Road is the Jugular Vein of the EAC FLICKR

Mombasa Island seen From English Point Twitpic

The somewhat eerie and deserted Petrol Station Mombasa Nairobi road

Vipingo Beach

#Mindspeak with Karim Sadek MD Citadel Capital RICH TV

Do not get to close to Politics in order to survive Regime Change
Karim Sadek #Mindspeak Citadel Twitpic

Mombasa Nairobi Railway Twitpic

Kenya Elections - A Family Affair Part 1 YouTube

Karen Allen reports on the legacy of past electoral unrest in Kenya.

Kenya Elections - A Family Affair Part 2 YouTube

NIC Bank reports FY PAT +12.177% 2012 Earnings here share Price +18.954% in 2013

Par Value:                  5/-
Closing Price:           45.50
Total Shares Issued:          542980000.00
Market Capitalization:        24,705,590,000
EPS:             6.03
PE:               7.545

FY 2012 Earnings versus FY 2011 Earnings
Kenya Government Securities 9.194971b versus 3.077723b
Government and Other Securities held for Dealing Purposes 7.165969b
versus 4.406496b
Loans and Advances Net to Customers 71.540092b versus 56.624621b
Total Assets 108.348593b versus 78.984005b +37.177%
Customer Deposits 83.739576b versus 66.293053b +26.317%
Total Liabilities 92.866971b versus 68.461052b
Total Interest Income 11.467574b versus 6.831581b +67.8612%
Total Interest Expense 5.983706b versus 2.552093b +134.46%
Net Interest Income 5.483868b versus 4.279488b
Total Non-Interest Income 2.896530b versus 2.381644b +21.6181%
Total Operating Income 8.380398b versus 6.661132b +25.81%
Loan Loss Provision 297.485m versus 258.151m
Staff Costs 1.814769b versus 1.480668b +22.564%
Other Operating Expenses 1.099046b versus 0.863465b
Total Operating Expenses 3.862431b versus 3.056184b
FY Profit Before Tax PBT 4.517967b versus 3.604948b +25.326%
FY PAT 3.036794b versus 2.707136b +12.177%
FY Earnings Per Share 6.03 versus 5.54 +8.844%
Final Dividend 1.00 versus 0.25 +400%

NIC, which also operates in Tanzania and Uganda


This is a Well Managed Bank.
On a Trailing PE of 7.545 its fairly valued with Head Room.

Pan Africa Insurance Company reports FY PAT 2012 +57.479% Earnings
here share price +11.081% 2013

Par Value:                  5/-
Closing Price:           45.00
Total Shares Issued:          96000000.00
Market Capitalization:        4,320,000,000
EPS:             7.27
PE:                6.189

FY Results 2012 versus FY 2011
Gross Written Premium 5.440654b versus 3.648492b
Net Written Premium 5.125634b versus 3.300055b
Investment Income 1.244574b versus 0.697015b
Fair Value Gains 0.879863b versus -0.895668b
Other Operating Income 0.594904b versus 1.055534b
Other Revenue 2.795207b versus 0.941470b
Total Income 7.920841b versus 4.241525b
Net Change in Contract Liabilities [4.020967b] versus [0.622202b]
Total Benefits Claims and other Expenses [7.087865b] versus [3.690608b]
FY PBT 834.646m versus 552.435m +51.084%
FY PAT 698.271m versus 443.405m +57.479%
FY EPS 7.27 versus 4.62 +57.359%
Dividend 3 shillings a share versus 2.00 +50%

Company Commentary

• Profit before tax at Kshs. 834.6m is up 51% from Kshs. 552m
• Total assets up by 43% to Kshs. 16.5b
• Pan Africa Life Embedded Value (EV) increased by 22% to Kshs. 2.2b
while Group EV increased by 8% to Kshs. 4.4b
• Group Capital Adequacy Requirement (Solvency) covered 4.3 times
• Value of New Business up by 33% to Kshs. 222m.

Our focus this year will be to implement our alternative business
distribution strategy initiated last year through partnerships with
various stakeholders in the micro-finance sector and mobile telephony.
We will also be completing the implementation of our new
Administration system by the 3rd Quarter of the year. The Runda Phase
3 project is in progress with the infrastructural development having
started in February 2013.


Strong Results.
On a PE of 6.189 its inexpensive.
Dividend Yield of 6.666% will be supportive of the Price.

Kenya Shilling versus The Dollar Live ForexPros

The shilling has fallen 0.4 percent against the greenback since Feb.
15 and is down 1.7 percent in the year-to-date.

Nairobi All Share Bloomberg Year To Date +10.826% in 2013

The All Share closed at 109.50 a Multi Year High on the 13th February
has corrected 3.9908% since the 13th of February.

Nairobi ^NSE20 Bloomberg +8.928% in 2013

The NSE20 closed at a 27 Month High of 4648.09 on the 13th of February.
The NSE20 Index has corrected .1411% since closing at a 27 month high
on February 13th

Every Listed Share can be interrogated here

read more

N.S.E Today

The Nairobi Securities turned higher after a 5 Session losing Streak.
The Nairobi All Share turned 0.26 points higher to close at 105.39.
The Nairobi NSE20 edged up 2.83 points to close at 4505.59.
Buyers stepped up and Bought up EABL.
Athi River Mining Set a Fresh All Time High.
The Bourse is now in a potentially High beta Period but todays
Performance will give Comfort to the Bulls, like myself.


N.S.E Equities - Commercial & Services

Safaricom closed unchanged at 5.70 and traded 14.617m shares worth
83.962m. Safaricom had Buy Side Demand for 224% more shares than were
traded during the Session, at the Finish Line. Safaricom is +12.871%
and targets its August 2010 Closing High of 5.80 reached on January

N.S.E Equities - Finance & Investment

Kenya Commercial Bank eased 0.684% to close at 36.25 and traded 2.605m
shares worth 94.526m. Kenya Commercial Bank is +21.848% in 2013 and
has corrected 5.844% off an All Time Closing High of 38.50 reached on
the 13th of February. Kenya Commercial Bank releases FY Earnings at
the end of next week.

Equity Bank eased 0.92% to close at 27.00 and traded 1.828m shares
worth 49.476m.

NIC Bank shaved off 0.55% to close at 45.25 and traded 725,300 shares
the day after releasing FY Earnings where FY Profit Before Tax PBT
increased +25.326% to 4.517967b, FY PAT increased +12.177% to
3.036794b, FY Earnings Per Share expanded +8.844% to 6.03.

Pan Africa Insurance released FY Earnings Pre Market Opening. Pan
Africa reported FY PBT expanded +51.084% to 834.646m,  FY PAT expanded
+57.479% to 698.271m, FY EPS expanded +57.359% to 7.27 and the Final
Dividend was raised 50% to 3 shillings a share. Pan Africa rallied
4.44% to close at 47.00. Pan Africa is +16.77% in 2013 and has further

N.S.E Equities - Industrial & Allied

EABL was the most actively traded share at the Securities Exchange
today. EABL rebounded 1.465% to close at 277.00 on Heavy Volume of
1.454m shares worth 402.906m which represented 45.9755% of the Total
Volume traded today. EABL had corrected 13.333% off an All Time
Closing High of 315.00 achieved on the 13th February through this
Morning. The Reaction Lower was overcooked and had become
overextended. EABL is +4.528% in 2013 and the Down Draft is complete.

Bamburi Cement rebounded 4.90% to close at 214.00 and traded 172,200
shares worth 36.943m.
Portland Cement rallied 3.23% to close at 48.00 and traded 12,000 shares.
Athi River Mining rallied 1.64% to close at 62.00 and set a Fresh All
Time Closing High.

BAT eased 0.93% to close at 530.00 and traded 103,700 shares. BAT is
+7.942% in 2013 and sits 1.851% below a Record Closing High of 540.00
reached on the 13th of February.

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

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