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Satchu's Rich Wrap-Up
 
 
Thursday 31st of October 2013
 
Morning
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@toneendungu @ambaksoy @bartouvry @akjdiop#Mindspeak with L.Ploumen @VillaRosaKempin
Africa


Macro Thoughts

Home Thoughts

“In a time of deceit telling the truth is a revolutionary act.”
― George Orwell

“He who controls the past controls the future. He who controls the
present controls the past.”
― George Orwell, 1984

read more


UN seeks surge in anti- al-Shabab campaign in Somalia, says advance has "ground to a halt"
Law & Politics


A top U.N official says the war against al-Shabab militant forces in
Somalia has "ground to a halt" and needs a surge of almost 4,400 more
African Union troops and massive U.N. assistance to break the
stalemate and avoid failure.

Deputy Secretary-General Jan Eliasson told the Security Council on
Wednesday that the U.N.-endorsed African Union force now in Somalia,
and the Somali military, lack "the capacity to push beyond areas
already recovered" from al-Shabab in the last 18 months.

Eliasson recommends that the African Union contingent be boosted by
4,395 troops. The U.N. also wants another 1,000 troops for a U.N.
guard force to prevent suicide attacks as well as 840 police officers.

If authorized by the Security Council that would boost the force to
about 24,000 personnel.

The Rise Of Islamist Militancy In East Africa: Al Qaeda’s Next Target?
– Analysis

http://www.eurasiareview.com/31102013-rise-islamist-militancy-east-africa-al-qaedas-next-target-analysis/

East Africa – incorporating Kenya, Tanzania, and Uganda – is
increasingly vulnerable to Islamist militancy due to severe internal
structural problems that have led to rising inter-communal tensions,
riots, and secessionist tendencies among their coastal populations.

By Ahmed Salah Hashim

THE RECENT terrorist attack on the Westgate Mall in Nairobi by
Al-Shabaab, a Somali-based militant group linked to Al Qaeda, has
highlighted Kenya’s target-rich environment for terrorists. Kenya has
the most stable and democratic government in East Africa but has
experienced the most terrorist attacks because of its relatively
advanced economy and it has many soft targets like Westgate Mall.Al
Shabaab’s attack on the mall was allegedly undertaken with the help of
local disgruntled Somalis and Kenyan Muslims. Kenya’slong-standing
political and security ties with the United Kingdom, United States,
and Israel have earned it the wrath of Islamist militants who are
inspired by Al Qaeda’s determination to wage war against these
‘enemies’ of Islam.

Kenya has weak security forces whose heavy-handedness merely fuels the
rage of locals targeted by security personnel. Then there is a
disaffected minority Muslim population which is made up ethnically of
Arab-Persians (known as Shirazis) Arab-Swahilis (Arab-African mix) and
Somalis in the urban centres but especially along the coast. Muslims
make up 13% of the population of Kenya but are the dominant religious
group along the coast.

Many residents of the ports of Mombasa, Malindi and Lamu have stronger
ties with the Arabian Peninsula and Persian Gulf than with Kenya’s own
interior. Al Qaeda operatives have been able to employ a mixture of
“mosque, madrasah, marriage, money” to establish roots along the coast
of East Africa. While the vast majority of the coastal population are
hostile to Al Qaeda and its agenda, the political and socioeconomic
climate allows radicalism and militancy to thrive.

The problems in Mombasa, Kenya’s main port, are a reflection of the
growing divide. In Mombasa’s poor Kisauni and Majengo neighbourhoods
unemployment is at an all-time high and drug addiction is rampant.
Many of the youths are ideal targets for political militancy. In
August 2012 riots erupted over the murder of a popular local cleric,
Abboud Rogo Mohamed, who was shot in his car by unknown assailants.
Rogo’s supporters fought street battles with the security forces in
the hours after his death, and sporadic violence continued over the
following days with churches becoming targets. An outlawed coastal
group, the Mombasa Republican Council (MRC), wants to secede from
Kenya.

Rising Islamist militancy in Uganda, Tanzania and Zanzibar

Uganda has suffered less from either local or transnational militant
Islamist groups. Al-Shabaab launched an attack in Kampala in 2010 in
retaliation for the country’s decision to send troops to stabilise the
situation in Somalia. More recently, in August 2013 the authorities
arrested 25 suspected militants training at a camp on an island in
Lake Victoria. The militants were preparing to join the Allied
Democratic Forces – a Ugandan militant Islamist movement which is
aligned with Al-Shabaab.

Tanzania has a larger Muslim population than Kenya, again largely
concentrated along the coast while the interior is largely inhabited
by Christians. In post-independence Tanzania, religion was not
politically relevant and relations between the two main religions were
cordial. Things have changed in the past decade. Tanzania’s capital,
Dar es Salaam, was rocked by the worst religious riots in years in
2012 following the defiling of a Quran by two primary school students
which infuriated the Tanzanian Muslim community. Subsequently, four
churches were attacked and burned to the ground. Sheikh Issa Ponda, a
radical cleric, was arrested and accused of inciting violence.

The focus of attention is Zanzibar which became part of Tanzania in
1964, and where rising tensions have marred its reputation as an
island paradise. But tourism – the main source of income – is coming
under threat from a rise in Islamist militancy fueled by political and
socio-economic woes. In January 2002, suspected Islamic militants
petrol-bombed bars and stores selling alcohol in Zanzibar. In 2004 a
spate of weekend bombings on Zanzibar hit the homes of local political
and religious leaders and a restaurant patronised by Western
diplomats.

Many Zanzibari youths feel alienated by mainstream politicians who
have not tackled rampant unemployment, lack of opportunity and poor
infrastructure in the tourist industry.Officially unemployment on the
islands is at 34% leading to joblessness among youths.

Islanders used to support Tanzania’s main opposition party, the Civic
United Front (CUF). But in 2010 it formed a unity government with the
ruling Revolutionary Party (CCM) on the mainland which was perceived
as corrupt and indifferent to local concerns. Zanzibar is home to one
million people (99% Muslim) and more than 2,000 Muslim religious
schools. Most of these draw on the rich Al-Noor charity, which was set
up with private donations from Dubai and Saudi Arabia. As well as
setting up a radio station, it has established mosques, internet rooms
and a nationwide network of madrasahs. It plans to build more, and
every year pays for students and teachers alike to study in Sudan, Abu
Dhabi and Saudi Arabia.

A push for Zanzibar’s Muslims to secede has come from a group called
Jumiki (Jumuiyaya Uamshoname Hadharayaki Islam). The group is better
known as Uamsho or “the awakening” in Swahili. Founded in 2000,
initially, the group preached and provided Quranic instruction.
Eventually, Uamsho took advantage of the discontent of the islanders
and began to advance a political agenda that is unabashedly
secessionist and seeks to re-establish the Sultanate of Zanzibar, but
this time as an explicitly Islamist state for Zanzibaris.

The “Uamsho” agenda includes a new code of conduct for the tourists
who account for 80 per cent of foreign currency earnings. The group
says that in the new state foreign visitors must abide by local social
mores including modest dress codes, limitations on the consumption of
alcohol and private hotel beaches to prevent Western visitors
‘corrupting’ local social mores. As for the mainlanders, they will
have to leave the new state.

East Africa’s coastal problems are structural and cannot be blamed
solely on the export of terrorism from the Horn of Africa in the
north. Nor are these problems created by Al Qaeda. What is clear is
that these problems can be easily exploited to further political
violence in a tenuous region.

read more





Russian President Vladimir Putin (No. 1) takes the top spot on Forbes’ fifth annual ranking of “The World’s Most Powerful People” (p. 136)
Law & Politics


President Barack Obama (No. 2)dropped from the number one spot,
followed by General Secretary, Communist Party of China Xi Jinping
(No. 3), Pope Francis (No.4) and German Chancellor Angela Merkel (No.
5).  Rounding out the Top 10 are Bill & Melinda Gates Foundation
Co-chair Bill Gates (No. 6), U.S. Federal Reserve Chairman Ben S.
Bernanke (No. 7), Saudi Arabia King Abdullah bin Abdul Aziz (No. 8),
European Central Bank President Mario Draghi (No. 9 ), and the highest
ranking active business person on the list – Wal-Mart CEO Michael Duke
(No. 10).  UK Prime Minister David Cameron (No. 11) dropped out of the
Top 10 to take the 11th spot on the list.

Among the 13 newcomers to the list (and new to their positions) are
Pope Francis (No. 4), China Investment Corp. Chairman Ding Xuedong
(No. 36) and Governor of the Bank of Japan Haruhiko Kuroda (No. 39).
They are joined by the richest man in Africa – Nigerian billionaire
Aliko Dangote (No. 64), Samsung Chairman Lee Kun-Hee (No. 41),
Volkswagen CEOMartin Winterkorn (No. 49), IBM CEO Virginia Rometty
(No. 56), and Oracle CEO Larry Ellison (No. 58).  Politicians who are
new to the list include South Korean President Park Geun-hye (No. 52),
Prime Minister of Japan Shinzo Abe (No. 57), and US Federal Reserve
Vice ChairmanJanet Yellen (No. 72).

Amazon CEO Jeff Bezos (No. 15) moved up the list from the 27th spot
last year; his recent purchase of the Washington Post has sparked
debate about the disruption of “old media” and his larger ambitions.
Apple CEO Tim Cook (No. 19) also jumped up the list from No. 35 in
2012.  Forty percent (or 26 people) on the list are billionaires, with
their combined net worth totaling $564.1 billion – more than the GDP
in Sweden, according to The World Bank Group. Four are from China and
4 are from India. Nine out of the 72 are women, more than ever before.
 Facebook CEO Mark Zuckerberg (No. 24)and North Korea Supreme Leader
Kim Jong-un (No. 46) are the youngest on the list, at ages 29 and 30,
respectfully.

Four factors were taken into account to select the 72 people that
matter from the 7.2 billion people on the planet: how many people they
have power over; the financial resources they control; if they have
influence in more than one sphere; and how actively they wield their
power to change the world.  For the full list, complete methodology
and associated features, visit:www.forbes.com/power.

Conclusions

This was a correct Call.

@PutinRF_Eng
http://farm4.static.flickr.com/3176/2668825486_c8ed4fdba9.jpg

R2P As An Instrument of Aggression
http://www.globalresearch.ca/r2p-as-an-instrument-of-aggression/5356195

The new R2P [Right to Protect] rule [which was used in Libya] is a
powerful legal tool 24-OCT-2011 :: Gaddafi's Body in a Freezer -
What's the Message?

http://www.rich.co.ke/media/docs/036NSX2410.pdf

I am left thinking, this dead Gaddafi business is one powerful
message. And today Marshall McLuhan’s prediction in The Gutenberg
Galaxy (1962) that ‘The new electronic interdependence recreates the
world in the image of a global village’ has come to pass. The image of
a bloodied Gaddafi, then of a dead Gaddafi in a meat locker have
flashed around the world via the mobile, YouTube and Twitter.

Who is in charge of the messaging? Through the fog of real time and
raw footage, I note a very pow- erful message. The essence of that
message being;

Muammar Muhammad Abu Minyar al-Gaddafi
http://humanrightsinvestigations.files.wordpress.com/2011/10/muammar_gaddafi.jpg

With the Appointments of Susan Rice and Samantha Power - The R2P
Gig gains real Traction, in my opinion

http://atlanticsentinel.com/wp-content/uploads/2013/06/Samantha-Power-Susan-Rice-Barack-Obama.jpg

read more




The Federal Reserve decided to press on with $85 billion in monthly bond purchases, saying it needs to see more evidence that the economy will continue to improve [Predictably]
International Trade


The Fed repeated that it will “await more evidence that progress will
be sustained before adjusting the pace of its purchases.”

“Wait-and-see seems to be the prescription for the day,” said Scott
Anderson, chief economist at Bank of the West in San Francisco.
“They’re on hold given that the data haven’t moved in their
direction,” said Anderson, who predicts the Fed won’t make its first
cut to bond buying until March.

read more


Currency Markets at a Glance WSJ
World Currencies


Euro 1.3703 The dollar rose for a fourth day against the euro
Dollar Index 79.85
Japan Yen 98.32 reached 98.68, the highest since Oct. 17.
Swiss Franc 0.9008
Pound 1.6015
Aussie 0.9489
India Rupee 61.395 India’s currency rebounded 12.3 percent from a
record low of 68.845 per dollar reached on Aug. 28.
South Korea Won 1061.00
Brazil Real 2.1838
Egypt Pound 6.8897
South Africa Rand 9.9284

The yen has fallen 2.6 percent in the three past months, the worst
performance among 10 developed-nation currencies tracked by Bloomberg
Correlation-Weighted Indexes after the Canadian dollar’s 4.3 percent
drop. The euro has gained 1.2 percent in the same period, while the
New Zealand dollar has risen 1.4 percent.

Dollar Index 3 Month Chart INO 79.85
http://quotes.ino.com/charting/index.html?s=NYBOT_DX&v=d3&t=c&a=50&w=1

Euro versus the Dollar 3 Month Chart 1.3703
http://quotes.ino.com/charting/index.html?s=FOREX_EURUSD&v=d3&t=c&a=50&w=1

Prosperity Lives in the City By Jim O’Neill
http://www.bloomberg.com/news/2013-10-30/prosperity-lives-in-the-city.html

If you study the biggest and most rapidly emerging economies, as I
have for many years, you are bound to be struck by the power of
urbanization and the pivotal role of thriving cities. More often than
not, cities are the engine that powers economic growth. When a
country’s cities succeed -- and I do mean cities, plural -- the
economy is much more likely to prosper.

A useful starting point for this discussion is a recent study by Greg
Clark and Tim Moonen for the Brookings Institution and JPMorgan Chase
and Co.: “The 10 Traits of Globally Fluent Metro Areas.” The paper
rightly emphasizes that in an age of globalization, cities need to
form and exploit connections that run beyond national borders. That’s
the aptitude the authors call “global fluency.”

Here, according to the study, are some of the most helpful elements.
First and most important is “leadership with a world view” -- business
and government leaders at the local level need to be outward-looking
(think of Seattle in the late 1980s). A tradition of global
orientation has often made this easier. True, traditions can be
forgotten (Detroit and Liverpool lost their way), but with a little
ingenuity, they can also be invented (Munich and Toronto are building
on newer legacies of global interaction).

The authors also point to “economic specializations with global reach”
(think Bangalore); economic adaptability (Singapore); emphasis on
skills and knowledge (Tel Aviv); the ability to attract international
and domestic finance (Brisbane); physical and digital connectivity
(Chicago); supportive regional and national governments (Shenzhen);
and a physical and cultural environment that appeals to people and
companies from around the world (Barcelona). The more of these traits
you can combine, of course, the better (New York).

read more



Commodity Markets at a Glance WSJ
Commodities


Gold 1 Year Chart INO 1335.23 [Gold retreated for a third day,
trimming a monthly advance]

http://quotes.ino.com/charting/index.html?s=FOREX_XAUUSDO&t=c&a=50&w=1&v=d12

Crude Oil 6 Month Chart INO 96.69
http://quotes.ino.com/charting/index.html?s=NYMEX_CL.Z13.E&v=d6&t=c&a=50&w=1

WTI for December delivery was at $96.40 a barrel in electronic trading
on the New York Mercantile Exchange, down 37 cents at 2 p.m. Singapore
time. The contract fell 1.5 percent to $96.77 yesterday, the lowest
close since June 28

28-OCT-2013 @BarackObama and @HassanRouhani The Price of Crude Oil
http://www.rich.co.ke/media/docs/038NSX2810.pdf

Since trading just below $110.00 at the end of August, the price of
WTI [West Texas Intermediate] has retreated more than 10% to trade at
97.85, last. That retreat in the price is entirely correlated to a
reduction in the ‘geopolitical’ premium as the two Presidents thawed
previously frozen relations. In fact, if the US and Iran were able to
cut through the noise and to the chase, WTI could trade as low as
$75.00.

"Love Bed" (2012) made of stainless steel razor blades by Tayeba
Begum Lipi. The Bangladeshi artist explores issues of gender,
conjugality and childbirth. Source: Solomon R. Guggenheim Museum via
Bloomberg

http://www.bloomberg.com/news/2013-10-30/guggenheim-takes-bed-of-razors-baseball-bat-monk-to-asia.html

"Enemy's Enemy, Monument to a Monument" (2012) by
Vietnamese-American artist Tuan Andrew Nguyen

http://www.bloomberg.com/news/2013-10-30/guggenheim-takes-bed-of-razors-baseball-bat-monk-to-asia.html

Emerging Markets

Frontier Markets

read more


"(Renamo) President Dhlakama is being hunted down with weapons. The intention is to kill him," Renamo spokesman Fernando Mazanga told Reuters.
Africa


Dhlakama was nevertheless alive and well in a secret location, he said.

Citing attacks by Renamo partisans since April against civilians,
police and army posts, and road and rail traffic, Guebuza's spokesman
said these constituted "armed aggression that threatens national
sovereignty".

Suspected Renamo guerrillas ambushed a truck carrying goods and
passengers on Wednesday at Caramaja in Nampula province, killing two
people, a provincial police spokesman said.

In central Sofala province, armed men also suspected to be from Renamo
attacked military escort vehicles, wounding five people, local media
reported. This followed the ambush of a civilian passenger minibus in
Sofala at the weekend, which killed one person and wounded 10 more.

Dhlakama
http://bit.ly/18FaMg5

Conclusions

Renamo cannot stand Toe to Toe with Frelimo but they pose a potent and
asymmetric challenge.

Mozambique boy's murder by kidnappers causes anger BBC
http://www.bbc.co.uk/news/world-africa-24746833

Mozambicans have been outraged at the government's failure to end
kidnappings for ransom after a child was murdered by his abductors.

A rights group has called for the interior minister to resign after
about 10 abductions in the past eight days.

Kidnappers have demanded ransoms of hundreds of thousands of dollars.

If I were the interior minister, I would resign and get rid of the
whole ministry, starting with the general police command”

Kidnappings have become common in Mozambique over the past two years -
gangs initially targeted wealthy businessmen, but are now also
kidnapping people from middle-class backgrounds, our reporter says.

Most kidnappings have taken place in Maputo, but the port city of
Beira in central Mozambique and Nampula in the north have also been
affected, he says.

The 13-year-old boy, named as Abdul Rashid, was found dead on Monday
in the town of Dondo, about 30km (20 miles) from Beira, our
correspondent says.

The boy's mother, who has not been named by the local media, accused
police of conniving with the kidnappers.

The family reported his abduction to the police and immediately
thereafter received a telephone call from the kidnappers who objected
that "we had put the police in the middle of the deal", the mother
said.

"They ended up assassinating the child," she said.

The kidnappers had originally demanded $1m (£620,000) in ransom, but
lowered it to about $30,000 in negotiations, the mother said.

"We did not have this amount either. We had to pawn some of our
assets, including tricycles and houses to be able to secure over
$30,000 in local currency and they agreed," she is quoted by local
media as saying.

"Our mistake was to contact the [police]."

Conclusions

It was my Mother in Law in Blantyre who is currently informing us of
the Facts on the ground.

read more



Congo rebels abandon last town, withdraw to hills
Africa


"While M23 is not yet fully defeated, there is little doubt that it
has suffered a crushing military loss," Darren Olivier wrote on the
African Defence Review website.

Analysts and diplomats say M23 fighters will have pulled back to the
steep, mountainous hills near the meeting point of Congo, Rwanda and
Uganda's borders, an area they know well.

South Africa All Share Bloomberg +19.66% 2013
http://www.bloomberg.com/quote/JALSH:IND

Dollar versus Rand 6 Month Chart INO 9.9258
http://quotes.ino.com/charting/index.html?s=FOREX_USDZAR&v=d6&t=c&a=50&w=1

Egypt Pound versus The Dollar 3 Month Chart INO 6.8889
http://quotes.ino.com/charting/index.html?s=FOREX_USDEGP&v=d3&t=c&a=50&w=1

Egypt EGX30 Bloomberg +15.71% 2013 [This Index is at a January 2011 High]
http://www.bloomberg.com/quote/CASE:IND

Nigeria All Share Bloomberg +37.31% 2013
http://www.bloomberg.com/quote/NGSEINDX:IND

Ghana Stock Exchange Composite Index Bloomberg +76.30% 2013
http://www.bloomberg.com/quote/GGSECI:IND

 “It’s a tinderbox that can ignite into something very, very big and
very, very bad.” CAR

http://www.washingtonpost.com/world/africa/un-official-describes-atrocities-pitting-christians-vs-muslims-in-central-african-republic/2013/10/29/66d63b04-40cc-11e3-b028-de922d7a3f47_story.html

UNITED NATIONS — Indescribable atrocities are being committed against
innocent civilians in the collapsing Central African Republic where
Muslim and Christian fighters have started attacking each other’s
followers, a top U.N. humanitarian official said Tuesday.

Sunset Bangui CAR
http://farm6.staticflickr.com/5282/5228533887_5ae0a9221d_o.jpg

read more


Trial of Kenyan president likely to be delayed until next year
Kenyan Economy


KenGen of Kenya Plans to Raise $5.5 Billion to Fund Expansion
http://www.bloomberg.com/news/2013-10-30/kengen-of-kenya-plans-to-raise-5-5-billion-to-fund-expansion.html

Kenya Electricity Generating Co., the East African nation’s biggest
power producer, said it will raise $5.5 billion in debt and equity to
more than double generating capacity over the next 40 months.

The company plans to generate 2,500 megawatts of additional capacity
in that period, acting Chief Executive Officer Simon Ngure told
reporters today in the capital, Nairobi. About 70 percent of the funds
will come from development finance institutions, while the remainder
will be sourced from equity including joint ventures, he said.

“The reason why we need this power is to drive economic growth in this
country,” Ngure said.

Kenya, East Africa’s largest economy, has the capacity to generate
1,600 megawatts of electricity, compared with peak demand of 1,500
megawatts. Consumption is growing at an average rate of 8 percent a
year, according to KenGen, as the company is known. It produces 1,232
megawatts, while four private producers generate the remainder.

The company yesterday announced profit in the 12 months through June
surged to 5.25 billion shillings ($5.25 million) from 2.82 billion
shillings a year earlier. The median estimate of three analysts
forecast net income would be 3.36 billion shillings. Revenue grew 4
percent to 16.5 billion shillings, KenGen said.

Shares in KenGen, Kenya’s second-best performing stock in 2013,
rallied 94 percent in the year to date, compared with a 35 percent
gain on the FTSE NSE 25 Share Index

KenGen Full Year Earnings and share price data here
http://www.rich.co.ke/rcdata/company.php?i=Mzc%3D

Par Value:                  2.50/-
Closing Price:           17.35
Total Shares Issued:          2198361344.00
Market Capitalization:        38,141,569,318
EPS:             2.39
PE:                 7.259

FY Earnings through 30th June 2013 versus FY Earnings through June 2012
FY Electricity Revenue 16.451b versus 15.872b +3.6479%
FY Operating Expenses [10.575b] versus [10.266b]
FY Gross Profit 5.876b versus 5.606b
FY Interest Income 676m versus 952m
FY Other Income 595m versus 612m
FY Operating Profit 7.094b versus 7.017b +1.0973%
FY Finance Costs [3.001b] versus [2.972b]
FY Profit Before Tax 4.093b versus 4.045b
FY Tax Income [Expense] 1.157b versus [1.223b]
FY PAT 5.250b versus 2.822b +86.038%
FY Earnings Per Share 2.39 versus 1.28 +86.71%
Final Dividend 60 cents unchanged

Conclusions


Strong Results assisted by a Tax Credit of 1.157b versus a Tax Charge
of [1.223b] in the previous FY.
FY PBT marginally higher but FY PAT +86.038%.

Geothermal OlKaria IV Kenya 464 days ago
http://www.twitpic.com/ab4dxw

“We gazetted the new royalties in August,” he said. “If you think our
royalties are too high find a country that will give you minerals for
free.” CS @Tunajibu

http://www.businessdailyafrica.com/Miners-face-penalty-over-new-royalties/-/539546/2053970/-/u67onv/-/index.html

In a move likely to worsen relations with especially foreign miners,
Mining minister Najib Balala said miners would be forced to pay
penalties and interest on the arrears.

Miners have gone flat out to oppose the 10 per cent royalty gazetted
on August 1 with heavy media lobbying.

Queues form for east African retailers but no one is selling FT [Subscriber]
http://www.ft.com/intl/cms/s/0/504494fc-3fc4-11e3-a890-00144feabdc0.html

Atul Shah, managing director of Nakumatt, east Africa’s biggest
supermarket chain, is rifling through a foot-long stack of business
cards.

“I get one coming to see me once a week,” he says of the stream of
fund managers and private equity investors who are keen to negotiate a
stake in his 40-strong supermarket chain, which turns over $650m a
year.

As African spending power increases, global investors and retail
chains are trying to tap into the continent’s fast-growing economies.
They have entered in South Africa, north Africa and even west Africa,
where formal retail is still a novelty.

But east Africa’s 240m strong market, which includes Kenya, Tanzania,
Uganda and Ethiopia, remains elusive.

Outside investors, including Walmart, the world’s largest retailer by
sales, private equity groups such as Actis Capital and South African
chains, have so far found it impossible to crack the region’s largely
family-run retail sector. In the meantime, valuations are rising as
fast as investors’ interest.

The latest setback for international investors came this month when
negotiations between Naivas, Kenya’s fourth-largest supermarket chain
by revenue, and South Africa-based Massmart, in which Walmart has a
controlling stake, stalled. The Kenyan company said that it wanted to
expand its business rather than sell, although local market executives
attributed the hold-up to wrangling among shareholders over ownership.

Kenya remains the entry route for companies keen to gain a foothold in
east Africa, because its supermarkets – including Nakumatt, Uchumi and
Tuskys – are the most sophisticated, have established large chains and
have spread into the region.

On top of that, it is the most developed market. Citigroup, the bank,
estimates only 5 per cent ofNigeria’s retail sector is formalised
while the rest comprises markets and kiosks, compared with 30 per cent
for Kenya. Kenyan shoppers are also considered to be sophisticated,
familiar with loyalty schemes and 24-hour shopping.

Citigroup said in a report that South Africa’s retailers lacked a big
presence in east Africa, adding: “We believe acquisitions will be
needed to obtain scale in this region.”

But acquisitions look hard. In the best tradition of retailers –
Walmart was built by the Walton family from the 1940s – Kenya’s
leading supermarket chains grew out of the country’s small family
“duka”, or shop, culture. Of Kenya’s top six chains, all but one is
still family-owned, which in the past has hampered a sale.

Today, sibling rivalries over inherited shareholdings have turned ugly
in at least two cases – Naivas and Tuskys – with disputes ending up in
the courts and impeding equity sales.

“There’s enormous interest but shareholders have a lot of internal
housekeeping to do to be ready for a sale,” says a private equity
investor familiar with Kenyan retail. “But it makes sense to get in
ahead now because private equity will have a natural exit selling to a
strategic investor like Walmart later,” the investor adds.

Uchumi is the only Kenyan retailer listed in the local exchange, but
the government retains a 13.4 per cent stake and several individuals
control substantial stakes, making an acquisition difficult. Previous
talks between South Africa’s Shoprite and Uchumi have petered out as
the government appeared reluctant to divest.

Although Kenya’s new government has indicated it would be more
supportive of divestment as a general policy, Uchumi’s directors
appear reluctant to sell to a private equity group. Jonathan Ciano,
Uchumi chief executive, says the company should concentrate on growing
the business. “Why should [the government] sell?,” he asks.

There’s enormous interest [in acquisitions] but shareholders have a
lot of internal housekeeping to do to be ready for a sale

Of all the Kenyan retail chains, Nakumatt looks the most ready for
outside investment, but investors have also expressed concerns over
its shareholdings.

In 2011, US President Barack Obama named John Harun Mwau, thought to
be a Nakumatt shareholder and former Kenyan presidential candidate, as
“a significant foreign narcotics trafficker” under the US Kingpin Act,
which bans US companies from conducting commercial transactions with
any company associated with him.

Mr Shah says that Mr Mwau is now no longer a direct shareholder,
although he did not say since when. He said the family that built the
business retains about 90 per cent and Hotnet, a company in which Mr
Mwau has a stake, has about 10 per cent.

Mr Mwau, who refutes the US allegations, did not respond to requests
for comment.

Observers say that any exit of Mr Mwau, if confirmed, would have
important implications for international investors. “If that’s true,
that unlocks Nakumatt for sale,” said one.

In 2009, a deal with a consortium of investors led by Satya Capital, a
London-based private equity fund owned by the Sudanese billionaire Mo
Ibrahim, for a 25 per cent stake in Nakumatt, fell through.

Now Mr Shah is open minded about the idea of an outside investor. But
since the last attempt, the economics have changed: he estimates
Nakumatt is worth $400m today, up from $160m four years ago.

Nakumatt forced to re-evaluate after Nairobi terror attack

The terrorist attack on the Westgate shopping mall in Nairobi, home to
the flagship Nakumatt store that delivered 11 per cent of the
retailer’s annual revenues, has dealt a blow to east Africa’s
supermarket chain.

Three workers at the 259-worker Kenyan branch were killed in the
attack, in which at least 67 people died. The store “is ash . . .
completely burnt”, says Atul Shah, Nakumatt’s head. He says the attack
has delayed talk of an equity sale.

“We were in discussions . . . we were looking at going in that
direction this year. We would have signed up but Westgate is a big
loss, it has thrown us a little back,” he says, adding that the
company would look again “early next year”.

Shoppers have also stayed away from stores and shopping centres since,
a result of shock and fear as well as more lengthy and intrusive
security searches at mall entries.

“The scare is still there. People are still afraid to go out to
shopping malls,” says Mr Shah, who said takings fell by 30 per cent
across the board for three weeks after the attack.

But he is still chasing 65-70 stores by mid-2015, including the
refurbishment of Westgate – which he describes as “the happening
place” – within the next three years.

He also intends to expand in Uganda and Rwanda, open up in Burundi and
South Sudan and secure entry into Ethiopia, a market of 90m people
largely closed to foreign investment.

Security officers patrol inside the camp after all the @TullowOilPLC
staff packed to leave the site after a series of demonstrations by
residents that paralysed all operations within all the oil sites,
meanwhile Tullow oil has suspended operations for fear of staffs'
security. Photo/PETER WARUTUMO

http://www.businessdailyafrica.com/Tullow-Oil-s-woes-grow-as-MPs-call-for-suspension/-/539546/2054010/-/11gxxoz/-/index.html

Sameer Africa Cautionary Announcement here
http://www.rich.co.ke/media/docs/Sameer%20Africa%20Ltd%20-%20Cautionary%20Announcement.pdf

Sameer Investments Limited intends to acquire 41.485056m shares held
by Bridgestone.

Sameer share price data here
http://www.rich.co.ke/rcdata/company.php?i=NDA%3D

Par Value:                  5/-
Closing Price:           5.45
Total Shares Issued:          278340000.00
Market Capitalization:        1,516,953,000
EPS:             0.68
PE:                 8.015

Diverse group of companies invested in agriculture through to transport.

FY Earnings through December 2012 versus December 2011
FY Sales 3.960967b versus 3.675226b
Gross Profit 953.78m versus 801.446m
Other Operating Income 145.972m versus 109.396m
Other Operating Expenses [219.563m] versus [121.566m]
Finance Costs [34.261m] versus [112.102m]
FY PBT 300.62m versus 148.446m
FY PAT 189.755m versus 96.948m
FY EPS 0.68 versus 0.35

Kenya Shilling versus The Dollar Live ForexPros 85.252
http://j.mp/5jDOot

Nairobi All Share Bloomberg +39.184% [1.175% below an All Time Closing
High from 8th October 2013]

http://www.BLOOMBERG.COM/quote/NSEASI:IND

Nairobi ^NSE20 Bloomberg +20.272% 2013 [1.193% below a more than 5
Year Closing High from 2nd April this Year]

http://j.mp/ajuMHJ

Every Listed Share can be interrogated here
http://www.rich.co.ke/rcdata/nsestocks.php

read more



 
 
N.S.E Today

The Nairobi All Share rallied 0.983% to close at 133.24.
The All Share is +40.45% in 2013 and just 0.269% below a record All
Time Closing High from the 8th of this month.
The Nairobi NSE20 rallied +22 points to close at 4992.88.
The NSE20 will rally through 5,000 [a level it has closed above on 4
occasions this Year] and head towards 5,250 and then 5,450.
I expect a strong Bull Rally into Year End here in Nairobi and across
SSA and Egypt.
The Shilling was last trading at 85.20.
Safaricom set an All Time Closing High ahead of its 1st Half Earnings
Release next week.
The Inflation Rate eased 0.53% in October to end at 7.76% and this
will soothe fears [There were some rather overblown ones around] and I
predict a further Fall next month in particular because of an Oil
Price that was last at a 4 month Low.
Fuel comprises 18.3/100 of the Basket.
The Food and Non Alcoholic Beverages component represents 36.04/100 of
the Basket and There are increasing concerns around the Rains.



N.S.E Equities - Commercial & Services


Safaricom rallied +2.162% to close at a Fresh All Time Closing High of
9.45. Safaricom traded shares at a Session High of 9.70 +4.86% and
that is an All Time High Print. The Move to a Fresh All Time Closing
High was achieved on good volume of 15.883m shares worth 150.717m.
Safaricom is +87.128% in 2013 and releases its keenly awaited H1
Earnings next week. Safaricom has rallied +5% over the last two
sessions.

Safaricom share price data here +87.128% 2013 and a record Closing High
http://www.rich.co.ke/rcdata/company.php?i=NTU%3D

ScanGroup closed unchanged at 58.50 and traded 910,900 shares worth
53.293m. ScanGroup has seen a lot of Volume Action of late and around
this Price Level. WPP via Cavendish Holding is staking out a Majority
position in ScanGroup and I think the Price is oversold and overdue a
Rebound from here.

Uchumi firmed +1.19% to close at 21.25 and was trading at 21.50 at the
Finish Line. Uchumi traded 284,100 shares worth 6.105m. There was Buy
Side Demand for 225% more shares than were traded during the session,
at the closing Bell. Uchumi trades on a Trailing PE of 15.74 [which is
cheap versus its SSA Peers]. @KatrinaManson of the @FT wrote a very
interesting Piece about the Supermarket Space. What I found
interesting is that Nakumatt's Westgate Branch was responsible for 11%
of its Revenues and Mr Shah said takings fell by 30 per cent across
the board for three weeks after the attack. Uchumi is poised to move
to 25.00. Investors particularly Foreign Ones remain red-hot for SSA
Consumer Exposure.



N.S.E Equities - Finance & Investment


Equity Bank was the most actively traded share at the Exchange and
firmed +1.43% to close at 35.50 and traded 5.171m shares worth
184.078m. Equity Bank is +49.47% in 2013 and trades on a Trailing PE
of 10.889 and accelerated H1 2013 PAT +16.746%. Equity Bank is 5.33% a
record closing High set on October 8th.

Equity Bank share price data here +49.47% 2013
http://www.rich.co.ke/rcdata/company.php?i=MTc%3D

Kenya Commercial Bank closed unchanged at 48.50 and traded solid
volume of 3.719m shares worth 181.277m. Kenya Commercial Bank is
+63.02% in 2013, trades on a Trailing PE of 11.8. Kenya Commercial
Bank accelerated H1 2013 PAT +18.176%. Kenya Commercial Bank is 2.512%
below a record closing High set on the 8th of October. After the
Market closed, Kenya Commercial Bank released Q3 2013 Earnings where
Q3 PBT accelerated +17%.

Kenya Commercial Bank share price data and Earnings Releases here +63.02% 2013
http://www.rich.co.ke/rcdata/company.php?i=MjE%3D

Par Value:                  1/-
Closing Price:           48.50
Total Shares Issued:          2950170000.00
Market Capitalization:        143,083,245,000
EPS:             4.11
PE:                 11.800

H1 2013 Earnings through June 2013 versus June 2012
Total Assets 370.911015b versus 349.275693b
H1 Total Operating Income 23.996726b versus 21.900088b
Total and Other Operating Expenses 13.900304b versus 13.396280b
H1 PBT 10.096422b versus 8.503808b +18.728%
H1 PAT 7.192232b versus 6.086014b +18.176%
H1 EPS 2.41 versus 2.05 +17.5609%

CFC StanBic Bank firmed 1.96% to close at 78.00 and traded 52,600 shares.
COOP Bank ticked 1.42% higher to close at 17.85 and traded 966,300 shares.

Jubilee Insurance  firmed +1.8% to close at 284.00 and traded 71,700
shares worth 20.426m. Jubilee trades on an 8.04 Trailing PE and shares
tend to be well held.
Pan Africa Insurance was the biggest Gainer at the Exchange today and
rallied +4.84% to close at 65.00 on 27,100 shares.

Centum which has been on a Roll of late traded +2.5% higher to close
at 30.75 and traded 463,400 shares.



N.S.E Equities - Industrial & Allied


EABL rallied +1.272% to close at 319.00 and traded 209,400 shares
worth 66.997m. EABL is well supported at these Levels. EABL is
+20.377% in 2013.

EABL share price data here +20.377% 2013
http://www.rich.co.ke/rcdata/company.php?i=MzQ%3D

Carbacid firmed +1.923% to close at 212.00 and was trading at 228.00
+9.62% and at its Daily Limit at the Finish Line. Carbacid traded
123,200 shares worth 26.213m. Carbacid recently released FY Earnings
where FY PAT accelerated +22.15% but it was the proposed Bonus and
Split which ignited a +43.24% Rally since the 22nd of this month.

Carbacid FY Earnings and share price data here

http://www.rich.co.ke/rcdata/company.php?i=MzA%3D

The Cement Makers were firm.
Athi Cement firmed 1.25% to close at 81.00 and traded 172,800 shares.
ARM is +81.61% in 2013.
Bamburi Cement traded 1.904% higher to close at 214.00 and traded 83,000 shares.
Portland which reported strong Turnaround FY Earnings ticked 0.709%
higher to close at 71.00.


--



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