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Satchu's Rich Wrap-Up
 
 
Tuesday 26th of November 2013
 
Morning
Africa

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Normal Board - The Whole shebang
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The Latest Daily PodCast can be found here on the Front Page of the site
http://www.rich.co.ke

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Mindspeak is held at The @InterConNairobi
Africa


Saturday 30th We take a Look at the Evolution of Professional Services
with @DeloitteEA with @SammyOnyango @amuraya @OduorMartinO
@Nikhil_Hira @HarveenGadhoke

read more



#Mindspeak 2013 RICH TV
Africa


@LPloumen H.E Lilianne Ploumen, Minister for Foreign, Trade and
Development Cooperation. Government of The Netherlands
Mining, Oil & Gas- Voluntary Principles
@IMFNews Domenico Fanizza, Assistant Director IMF and Ragnar
Gudmundsson, Resident Representative, Kenya
@DReynders: Belgium Deputy Prime Minister and Minister for Foreign Affairs
@HabilOlaka C.E.O Kenya Bankers Association
@PatriciaIthau1- Managing Director L'Oreal East Africa
@JohnGithongo- C.E.O Inuka
@MaggieIreri - Managing Director Ipsos Synovate

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#MindSpeak Session: Mining, Oil & Gas - Voluntary Principles
Africa


Macro Thoughts

Home Thoughts

As Gramsci once said, with the old world dying, and new yet to be
born, a variety of morbid symptoms appear in the interregnum.

New York as a character in a mystery would not be the detective, would
not be the murderer. It would be the enigmatic suspect who knows the
real story but isn’t going to tell it. — Bleeding Edge Thomas Pynchon

read more


Who will tell? Indeed, who is capable of telling? Bleeding Edge might as close to that telling as we're going to get.
Africa


“No matter how the official narrative of this turns out," it seemed to
Heidi, "these are the places we should be looking, not in newspapers
or television but at the margins, graffiti, uncontrolled utterances,
bad dreamers who sleep in public and scream in their sleep.”

Pâtisserie du Jour and tartelettes au citron
http://www.newyorker.com/online/blogs/photobooth/#slide_ss_0=14

This Morning, the Little One decided that her Mother had made the
decision about the colour of her Room and she wanted a Pink Bedroom
and immediately.

And she was so very cross
http://www.twitpic.com/9t4xu0

And I said, 'Darling, I understand the situation totally and
completely and I wish to fix it with an Urgency that even you will
have to appreciate.'

read more


US-Iran: The ever-spinning deal By Pepe Escobar
Law & Politics


The 34-year Wall of Mistrust between the US and Iran started tumbling
down on Sunday at 3 am local time in Geneva. Or has it?

It is, after all, only a mutually acknowledged "first step" - a deal
to start negotiating a real deal (see the full text here ) And the
terms, for Iran, are harsh.

Iran will be allowed to trade again in gold, petrochemicals, car and
plane parts, and will have some US$4.2 billion in oil sales unfrozen.
Yet a fortune remains in permafrost - including $10 billion in
European banks. And there is still $50 billion with Iran's Asian
energy clients - China, India, Japan, South Korea, Turkey - that still
cannot be repatriated.

If Tehran follows every single concession - as it will - and by May
2014 there are no actual major dividends, there won't be much
incentive to discuss a definite deal.

Bibi Netanyahu. Imagine his reaction when he read those finally
unfrozen reports about months of secret US-Iranian negotiations in
Oman. [1] The bottom line: Bibi was totally frozen out of the New
Great Game in Eurasia by the Obama administration.

Now for the grown-ups. In terms of Russian foreign policy, it's now a
string of victories. Syria. Ukraine. And now Iran. Foreign Minister
Sergey Lavrov is a man who can do no wrong, especially in the
developing world

Russia and also China (in the usual, silent but imposing background)
consider a strong Iranian economy - as well as a stable Syria -
matters of supreme self-interest. Both abhor the possibility of Bandar
Bush's goons spreading out from Syria towards the Caucasus and even
Xinjiang. Both want an Iran normalized with the West as a crucial
stabilizing factor in Southwest Asia. The question is whether the
Western, financial Masters of the Universe will allow a sovereign,
independent Iran in the same league of Russia and China. That would
only solidify yet a new Asian integration victory in the New Great
Game in Eurasia.

The real test starts now. It should always be stressed that a
practically full Western blockade of Iran - financial and in oil sales
- is still in effect. Tehran is still confined to export only 1
million barrels of oil a day. Yet the temptation may be great to
sideline cynicism and bet on the Obama administration.

Conclusions

read more


President @BarackObama and His Secretary of State John Kerry
Law & Politics


have been the First Team since George Bush the Elder and James Baker 111
http://www.tomflocco.com/fsimage/NervesOfSteal/BakerandBush41.jpg

to stare down recalcitrant Allies.

"It's the top item on his foreign agenda for the rest of his term," a
source close to the White House's thinking said of the Iran issue. "He
doesn't want to leave anything to chance."

http://www.reuters.com/article/2013/11/25/us-iran-nuclear-usa-obama-analysis-idUSBRE9AO12J20131125

When push came to shove in the closing hours of marathon negotiations
in Geneva on Iran's nuclear program, it was President Barack Obama,
back at the White House, who approved the final language on the U.S.
side before the historic deal was clinched.

It was perhaps only fitting that Obama had the last say. His push for
a thaw with Tehran, a longtime U.S. foe, dates back to before his
presidency, and no other foreign policy issue bears his personal stamp
more since he took office in early 2009.

On Saturday, Kerry spoke by phone to Obama from Geneva to discuss the
outstanding issues in the final tense stages of negotiations, a senior
State Department official said. "This went all the way up to (Obama)
personally approving the final language," the official said.

"I have a profound responsibility to try to resolve our differences
peacefully, rather than rush toward conflict," Obama said.

In return, Iran gets what President Obama called “modest relief” from
sanctions.

http://www.newyorker.com/online/blogs/closeread/2013/11/on-iran-john-kerry-closes-a-deal.html

Mostly, this means letting Iran have access to some of what is
actually its own money, frozen in foreign bank accounts.

Delegates at the Iran nuclear talks at the Palais des Nations in
Geneva, Switzerland. Photograph: /Xinhua/Landov/Barcroft Media

http://www.theguardian.com/world/2013/nov/24/secret-usa-iran-talks-nuclear-deal

@AbeShinzo China new air defence zone move 'dangerous' @BBC
http://www.bbc.co.uk/news/world-asia-25050493

Japan's Prime Minister Shinzo Abe has described China's move to create
a new "air defence identification zone" over disputed waters as
"dangerous".

China's action had "no validity whatsoever on Japan", Mr Abe added.

The zone covers disputed islands that are claimed and controlled by
Japan. China says aircraft entering the zone must obey its rules.

Mr Abe told parliament on Monday that the zone "can invite an
unexpected occurrence and it is a very dangerous thing as well".

"We demand China revoke any measures that could infringe upon the
freedom of flight in international airspace,'' he added.

"This announcement by the People's Republic of China will not in any
way change how the United States conducts military operations in the
region," he added.

Japan described China's move as an "escalation" on Saturday, after
China announced the new zone.

Hagel reminded Beijing that the remote Senkaku islands, known as
Diaoyu in China, are covered by the 1952 US-Japan security treaty,
under which the US is committed to fighting alongside Japan to repel
any "common danger".

http://www.theguardian.com/world/2013/nov/24/us-warns-beijiing-island-dispute-senkanus

Conclusions

read more



The U.S. won’t change its flight operations to comply with China’s newly claimed air defense zone in the East China Sea, a Pentagon spokesman said today.
Law & Politics


The U.S. won’t change its flight operations to comply with China’s
newly claimed air defense zone in the East China Sea, a Pentagon
spokesman said today.

“We will not in any way change how we conduct our operations,” Army
Colonel Steve Warren told reporters at the Pentagon. U.S. pilots won’t
register their flight plans or identify their transponder or
frequency, Warren said.

China announced an air defense identification zone in the East China
Sea effective Nov. 23 and said its military will take “defensive
emergency measures” if aircraft enter the area without reporting
flight plans or identifying themselves.

“We see it as destabilizing,” Warren said of China’s decision. He said
U.S. pilots always maintain the ability to defend themselves.

Conclusions

China has been supremely and finely calibrated in its Response and
this Time is betting that the US is not going to elect to back its
Pivot at this Point and over this Issue.

ANA began informing China on Nov. 24 of flights to Hong Kong and
Taiwan that pass through the area while JAL started giving details a
day before, spokesmen at the two airlines said by phone today.

http://www.bloomberg.com/news/2013-11-26/ana-jal-reporting-flight-plans-over-china-s-new-zone.html

A Japan Airlines Co. (JAL) aircraft takes off from Haneda Airport
while the Tokyo Sky Tree, right, stands in Tokyo. Photographer:
Kiyoshi Ota/Bloomberg

http://www.bloomberg.com/news/2013-11-26/ana-jal-reporting-flight-plans-over-china-s-new-zone.html

read more




Currency Markets at a Glance WSJ
World Currencies


Euro 1.3530 The euro added 0.1 percent to $1.3532 after falling 0.3
percent to $1.3517 yesterday.
Dollar Index 80.86  I do not expect a Taper through Q1 2014.
Japan Yen 101.56 Japan’s currency gained 0.2 percent to 101.44 per
dollar as of 2:04 p.m. in Tokyo after reaching 101.92 yesterday, the
weakest since May 29
Swiss Franc 0.9110
Pound 1.6151 The pound fell 0.5 percent to $1.6143 at 4:24 p.m. London
time after climbing to $1.6240, the highest since Oct. 25.
Aussie 0.9181 “We don’t rule intervention in or out, that’s been a
long-standing practice,” the RBA’s Lowe said
India Rupee 62.423
South Korea Won 1059.34
Brazil Real 2.2838
Egypt Pound 6.8869
South Africa Rand 10.0995

Dollar Index 3 Month Chart INO 80.86
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 1.3530
http://quotes.ino.com/charting/index.html?s=FOREX_EURUSD&v=d3&t=c&a=50&w=1

Inflation in Europe probably stayed close to the lowest level in
almost four years in November with a reading of 0.8 percent, according
to the median prediction of economists polled by Bloomberg News before
a Nov. 29 report.

Conclusions

The News is in the Price and I expect the Euro to trade towards 1.38
[with a STOP below 1.3380]

Dollar Yen 3 Month Chart INO 101.56
http://quotes.ino.com/charting/index.html?s=FOREX_USDJPY&v=d3&t=c&a=50&w=1

The BOJ said in April it wanted to achieve 2 percent inflation
(ECCPEST) in about two years. Consumer prices excluding fresh food
climbed 0.7 percent in September.

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Commodity Markets at a Glance WSJ
Commodities


Gold 1 Year Chart INO 1252.62
http://quotes.ino.com/charting/index.html?s=FOREX_XAUUSDO&t=c&a=50&w=1&v=d12

Crude Oil 6 Month Chart INO 94.50
http://quotes.ino.com/charting/index.html?s=NYMEX_CL.F14.E&v=d6&t=c&a=50&w=1

WTI for January delivery gained as much as 51 cents to $94.60 a barrel
in electronic trading on the New York Mercantile Exchange. It was at
$94.52 at 2:30 p.m. Singapore time. The contract decreased 75 cents to
$94.09 yesterday, the lowest close since Nov. 20. The volume of all
futures traded was about 49 percent below the 100-day average. Prices
are up 2.9 percent this year.

Conclusions

Heads lower and towards $90.00.

Citigroup said the Geneva deal should cut global oil prices by $13
over time, enough to depress Brent crude below $100 and US crude below
$85.

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/10471548/Iran-sanctions-deal-to-unleash-oil-supply-but-Saudi-wild-card-looms.html

if the US and Iran were able to cut through the noise and to the
chase, WTI could trade as low as $75.00.28-OCT-2013 :: The 2 Husseins
@BarackObama and @HassanRouhani

http://www.rich.co.ke/media/docs/038NSX2810.pdf

Emerging Markets

Frontier Markets

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Africa: Kuwait Declaration a Win-Win for Africa, Arab Cooperation
Africa


I thank His Excellency Y. Alsanad, the Kuwait Ambassador to Kenya for
the Invitation to the Arab/Africa Economic Forum, which was one of the
Events which preceeded the Arab Africa Summit, which the President
along with 34 Heads of State attended. The 3rd Arab Africa Summit in
Kuwait follows The 1st Arab-African Summit which was held in 1977 in
Egypt and the second in 2010 in Sirte, Libya.

My Flight Path to Kuwait was quite circuitious and I had been reading
Don Delillo

“Air travel reminds us who we are. It’s the means by which we
recognize ourselves as modern. The process removes us from the world
and sets us apart from each other. We wander in the ambient noise,
checking one more time for the flight coupon, the boarding pass, the
visa. The process convinces us that at any moment we may have to
submit to the force that is implied in all this, the unknown authority
behind it, behind the categories, the languages we don’t understand.
This vast terminal has been erected to examine souls.”

I have digressed but  In fact, I still find Flying around the World in
Upper Class [as it once used to read on the Mombasa, Nairobi Railway]
and at 35,000 Feet as enjoyable a Pleasure as I found it when I made
my First Trip to New York, many years ago.

The Kuwaitis are simply spectacular Hosts. The Conference ran with a
Swiss Precision and was about "activating the Arab-African
cooperation."

The Linkages between the Arab and the African Worlds have been
entrenched for centuries and the Indian Ocean and its marvellous
reversible escalator Monsoon Wind was surely responsible for the
earliest Interactions.

International Funds have been upsizing their Exposure [from an
egregious near zero allocation] to Sub Saharan Equities and have
floated Equity Indices from Egypt [January 2011 Highs] to Ghana [all
time Highs] to Nairobi where the All Share set a record every session
last week, higher in an SSA Wide Bull Market Phenomenon.

What If serious Lashings of Arab Liquidity starting washing up on
Africa's shores?

The 3rd Arab Africa Summit in Kuwait brought that moment closer.

Greetings from somewhere on the Indian Ocean 699 Days Ago
http://www.twitpic.com/7zo8nl

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If You ever fancy a Trip into another Century go to Wasini Island with the captain
Africa


My Ancestors put their Faith in a Captain in the 1880s when they set
off from India.

Bottlenose Dolphins #Shimoni #Kenya
http://www.twitpic.com/7zms0a

Deep roots foster new Mideast-Africa trade ties @FT
http://www.ft.com/intl/cms/s/0/9afe7326-37d8-11e3-8668-00144feab7de.html#axzz2lehNxL1O

The historical relationship remains strong. Go to Jeddah, Saudi
Arabia’s port on the Red Sea and before long you will encounter
traders from the Horn of Africa. Go shopping in Dubai and you will
inevitably find yourself alongside Nigerian entrepreneurs. Venture
into Africa’s hinterlands and there are strong odds you will run into
a Lebanese trader whose family has done business for generations.

Yet, as Africa’s economy surges, the nature of commerce between the
two is changing. If Africa is at a crossroads, then so, too, is its
relationship with its oldest trading partner.

The traders of the Middle East have history – and capital – on their
side. But in recent decades they have been supplanted: China, Europe
and the US now dominate the trade in goods with Africa. And new
entrants such as Turkey are making bold forays into the continent:
last year, Turkish Airlines launched a twice-weekly service from
Istanbul to Mogadishu, the first for more than 20 years.

But although agricultural commodities and raw materials still dominate
Africa’s exports to the Middle East and oil the return journey, the
traders from the Gulf, north Africa and the Levant who have for
centuries built links with their African partners, are focusing on new
investments and opportunities.

Gulf private equity groups are buying up African companies with an eye
on the future. Banks are seeing opportunities in the rising economies
of Africa. Dubai’s DP World has been investing in African ports while
Middle Eastern airlines are staking claims on the continent: Emirates,
Etihad, and Qatar Airways have all increased the frequency of their
flights to Africa in recent years.
They are also positioning Gulf hubs, including Dubai and Doha, as the
natural linking points on the flights from Asia to Africa. And
Flydubai, a low-cost start-up, is offering direct services to
secondary destinations such as Djibouti and South Sudan.

At the heart of the new relationship are the changing fortunes of
Africa. The IMF now predicts the region will be the fastest growing in
the world in 2014, behind only Asia. Some of its more dynamic
economies – such as Ghana and Nigeria – are growing at rates
comparable to the big emerging economies of the world.

When Jim O’Neill, the former Goldman Sachs economist who coined the
acronym Brics to characterise the economies of Brazil, Russia, India
and China, addresses audiences these days he often uses another
acronym: the Mint economies – those of Mexico, Indonesia, Nigeria and
Turkey.

To leave Africa out of the mix now would be unthinkable.

One of the key features of the changing relationship between the
Middle East and Africa is the way African business people are using
bases in the Gulf such as Dubai, or Middle Eastern banks, to finance
their operations, especially as those banks increase their presence in
Africa to serve a growing list of clients from China, Europe and
beyond.

However, anyone arriving at an airport in Africa will be painfully
aware that the continent still faces challenges and has a long way to
go before it catches up with the rising economies of Asia. The ride in
from the airport in Lagos is still a more tortured affair than the one
investors experience in Jakarta, let alone in Beijing.

But the attraction is strong. Africa is now home to a rising middle
class that is beginning to consume with gusto.

When the Dubai-based Abraaj Group in June paid a reported $350m for
Fan Milk, which operates in seven west African countries, Arif Naqvi,
Abraaj’s founder and group chief executive, was clear on the lure.
Africa is “witnessing the rise of a burgeoning middle and consumer
class”, Mr Naqvi said, making it “an extremely exciting and compelling
investment opportunity”.
Leading the Gulf private equity push into the region, Abraaj has
already sunk more than $2.2bn into 70 companies across Africa. And it
sees further opportunities, says partner Jacob Kholi, a Ghanaian who
is a former KPMG accountant based in Accra. “The African market is
still underpenetrated and valuations are good,” says Mr Kholi, who
sees the food sector as particularly attractive, but also “fantastic
potential” across various other sectors and countries.

For other Middle Eastern investors the appeal goes beyond the
increasingly empowered consumer: they are looking to Africa’s
infrastructure.

DP World, one of the world’s leading groups, now operates eight marine
terminals in five countries, including Djibouti, Senegal and
Mozambique. Such port facilities are transit points for the growing
volume of agricultural goods exported from Africa to the Middle East,
reflecting the growth in Arab investment in African land.

Somalia and its breakaway territory of Somaliland exceeded records
last year when they jointly exported about 3m sheep to the Middle
East. With goats, cattle and camels added to that, total livestock
exports from those territories, which have been recovering from a
shattering civil war, rose to 4.8m in 2012.

Africa remains a challenging environment and the barriers to trade are
often daunting, even though the mood is one of optimism. Paul Brenton,
trade practice leader for the World Bank in Africa and co-editor of
the recent book De-fragmenting Africa, says: “People are perceiving a
much wider range of opportunities in Africa. A much more diverse set
of interests is now thinking of trading with Africa.”

Efforts are being made to address the problems that for so long have
made trading with Africa difficult. Governments are reducing waiting
times at borders and cracking down on corruption. Yet those efforts
are often faltering at best and one of the biggest challenges is to
break down barriers within the continent that limit intra-regional
trade.

For Africa, even as new partners join long-time players, the real
promise lies in trading within the continent, Mr Brenton points out.
“Increasing regional trade is still the best way into diversification
and away from a dependence on resources,” he says.

More than two millennia after the Middle East and Africa began to
trade, the signs are that there is scope for deepening those
historical links to make the most of the new conditions.

South Africa All Share Bloomberg +17.04% 2013

http://www.bloomberg.com/quote/JALSH:IND

Dollar versus Rand 6 Month Chart INO 10.0999
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 6.8872

http://quotes.ino.com/charting/index.html?s=FOREX_USDEGP&v=d3&t=c&a=50&w=1

Egypt EGX30 Bloomberg +19.42% 2013

http://www.bloomberg.com/quote/CASE:IND

Nigeria All Share Bloomberg +44.13% 2013

http://www.bloomberg.com/quote/NGSEINDX:IND

Ghana Stock Exchange Composite Index Bloomberg +78.99% 2013

http://www.bloomberg.com/quote/GGSECI:IND

Switzerland's Trafigura sells stake in Africa unit for $500 million Reuters
http://www.reuters.com/article/2013/11/24/trafigura-sale-idUSL4N0J90GZ20131124

Global trading firm Trafigura said it sold a $500 million stake in its
African unit Puma to Angolan companies rather than to opt for an
earlier plan raise cash through a share sale.

In a company prospectus, Trafigura said it now owned 49 percent in
Puma, having sold stakes to Angolan state energy firm Sonangol and
private Angolan firm Cochan.

"With Trafigura ownership in Puma below 50 percent, Trafigura
envisages that Puma will eventually be deconsolidated from the Group's
balance sheet", Swiss-based Trafigura said.

Conclusions

It was Trafigura via Puma Energy who ran the slide rule over @KenolKobil.

Angolan Minister of Culture, Rosa Cruz e Silva was quoted by news
agencies and Angola newspapers as saying, "The process of legalisation
of Islam has not been approved by the Ministry of Justice and Human
rights, their mosques would be closed until further notice."

http://indiatoday.intoday.in/story/angola-first-country-to-ban-islam-muslims-mosques-demolished/1/326414.html

Speaking about it, Angolan President Jose Eduardo dos Santos said,
"This is the final end of Islamic influence in our country."

Eliasson said virtually the entire population — 4.6 million people —
is “enduring suffering beyond imagination” UN: Central African
Republic needs UN force

http://www.washingtonpost.com/world/africa/un-central-african-republic-needs-un-force/2013/11/25/47044ea8-5641-11e3-bdbf-097ab2a3dc2b_story.html

"We spoke about the security question. France has 410 soldiers now in
Bangui and that will be strengthened by 800, to take the number to
1,200 - more if needed," Tiangaye told Reuters after meeting Fabius in
Paris.

http://www.reuters.com/article/2013/11/26/us-france-centralafrican-troops-idUSBRE9AO0V820131126

Bangui CAR

http://bangui-hotels.com/wp-content/uploads/as-the-sun-was-going.jpg

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At the Full Year Earnings Release, EABL Reserve Spirits accelerated +276% Premium Spirits +22% Mainstream Spirits -6.00% Emerging Spirits +32%.
Kenyan Economy


EABL Group Corporate Affairs Director Brenda Mbathi and Rich.co.ke
Founder Aly Khan Satchu follow the proceeding on the best way you to
enjoy whisky.
http://www.capitalfm.co.ke/lifestyle/2013/11/25/johnnie-walker-blue-labels-opulent-dinner-for-ceos/

Its a party Johnnie Walker #Nairobi @Diageo_News @NorfolkFairmont cc
@Ckirubi Charles Ireland

http://www.twitpic.com/dm2mm1

Kenya Shilling versus The Dollar Live ForexPros 86.75 Last

http://j.mp/5jDOot

Nairobi All Share Bloomberg +4.63% in November and +47.67% in 2013.

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

Nairobi ^NSE20 Bloomberg +22.622% 2013 64 Month Highs

http://j.mp/ajuMHJ

Every Listed Share can be interrogated here

http://www.rich.co.ke/rcdata/nsestocks.php

Foreign ownership of shares at NSE rises to seven-year high Business Daily

http://www.businessdailyafrica.com/Foreign-ownership-of-shares-at-NSE-rises-to-seven-year-high/-/539552/2088172/-/l6s67v/-/index.html

New stock market data shows foreign investors were holding 22.4 per
cent shares as at the end of September, a level close to the 2006 peak
of 25.6 per cent.

Foreign investors’ stock ownership at the Nairobi Securities Exchange
dropped sharply to a low of 7.9 per cent in 2008 following the
post-election violence but has since steadily climbed to the present
levels.

The most dramatic increase in the seven-year period was in 2011,
shortly after Kenya registered a 5.8 per cent economic growth rate. In
2010, international investors controlled 12.6 per cent of the bourse,
climbing to 19.44 per cent in 2011 — a jump of nearly seven percentage
points.

The NSE-listed companies whose foreign shareholding is highest include
Total Kenya with 94.18 per cent, British American Tobacco with 77.21
per cent, CfC Stanbic with 75.07 per cent, Standard Chartered Bank
with 74.97 per cent and BOC Kenya with 73.99 per cent. These represent
the oil, banking and manufacturing sectors in Kenya.

The amount of cash that has been flowing to NSE this year has been
growing almost by the month. The latest NSE data shows that a net of
Sh2.8 billion flowed into the stock market in October, an increase
from Sh2.1 billion in September.

The amount of new cash entering the market to trade in October is due
to a higher level of purchases compared to sales.

In October, foreigners bought shares worth Sh10.2 billion while they
sold holdings of Sh7.4 billion.

In September, overseas buyers bought shares valued at Sh6.6 billion,
but sold Sh4.6 billion worth, resulting in a net cash flow into the
economy of just over Sh2 billion.

Conclusions

read more


Investors scramble for Kenya’s blue-chip stocks @FT @JavierBlas2
Kenyan Economy


Share prices in Kenya have been among the biggest beneficiaries as
investors attracted by strong economic growth pour billions of dollars
into the frontier markets of Africa. The Nairobi Securities Exchange’s
All Share index is up 50 per cent over the past year, well above the
33 per cent of the S&P Africa Frontier index, which tracks stocks in
Botswana, Ivory Coast, Ghana, Kenya,

“The rally is driven by institutional investors increasingly raising
their allocations to Africa from egregiously low levels,” says
Aly-Khan Satchu, a Kenyan investment analyst, echoing a widely held
view among local and foreign investors. “This is not hot money – this
is long-term institutional investors buying Africa.”

Local factors are bolstering investor confidence. Julie Dickson, head
of equities at Ashmore, the London-based emerging markets asset
manager, says: “The economy is doing well; the current account is
under control and inflation is down.” The only risk is political, she
adds.

External factors, however, appear to weigh the most as investors
rediscover Africa, betting heavily on a small selection of markets.
Nairobi is one of only four African exchanges included in the closely
tracked MSCI Frontier Markets index. The others are those of
Mauritius, Tunisia and Nigeria.

Donald Ouma, director of markets at the Nairobi Securities Exchange,
says the combination of positive local and external factors has
propelled the market. “It is our best year in history: market
capitalisation is at the highest ever and share prices had been going
up since the beginning of the year,” he says.

The scramble for Africa – and Kenyan stocks – may well continue, even
if many are beginning to worry about sky-high valuations, particularly
in the much fancied consumer goods sector, according to investors and
bankers.

“There is pent-up demand for the blue-chips of Africa,” says Michael
Turner, a director of Actis, a private equity group in Nairobi.

Attention is increasingly being concentrated on a few stocks whose
price is rising rapidly relatively to the rest of the market. The top
three companies by market capitalisation on the Nairobi exchange
constitute a ‘who’s who’ of foreign investors’ preferences in Africa:
Safaricom in telecoms, East African Breweries in consumer goods, and
Kenya Commercial Bank in financial services.

Indeed, of the 65-odd companies listed on the exchange, just six or
seven are liquid and large enough to attract foreign investors en
masse. The rest receive the attention only of specialist funds.

As a result, local and foreign investors worry that demand for Kenyan
companies will not keep pace with supply.

The pipeline of initial public offerings for 2014 looks lacklustre,
and the government has yet to start a much-debated privatisation push
that could bring state-owned companies on to the market.

James Mworia, chief executive of Centum Investment Group, a local
listed holding company, says investors are struggling to find
attractive targets. “There is a shortage of quality companies,” he
says.

Investors and bankers say two obstacles stop more companies going
public. First, there are often differences among the family members
that still own many of Kenya’s top companies. Second are worries about
the transparency requirements once a company goes public. Also, few
private equity groups opt for a listing as an exit, instead preferring
a sale to another group.
Late last year, however, Actis floated Umeme, the Ugandan power
company that it bought from the Kampala government in 2005, on the
Kenyan and Ugandan exchanges.

The Nairobi exchange is working hard to bring new companies to market,
beginning with itself, says Mr Ouma. “We want to list the exchange in
2014,” he explains. “We plan to use the proceeds in part to pay down
debt and in part to upgrade the trading system.”

The Growth Enterprise Market Segment, or Gems, which was launched this
year, could provide a new source of flotations. Bankers and investors
say the new small-caps market is a strong development for the local
market, but they caution that Gems-listed companies are unlikely to
attract foreign investors, because of their small capitalisation, poor
liquidity and, above all, lack of disclosure.

According to Rich Management managing director Aly-Khan Satchu, the
defining characteristic of the bull market at the NSE has been the
foreign investor component that has also pushed stocks across the
sub-Saharan African equity markets.

http://mobile.businessdailyafrica.com/Money-Markets/Safaricom-value-up-Sh160bn/-/1143896/2022806/-/format/xhtml/-/riq99i/-/index.html

“The bull move has been relentless and I project a Sh10 per share
print this year. International Investors have been raising their SSA
equity allocation from close to zero to a little less of an egregious
weighting and it is this which has been a powerful rising tide,” he
said.

"These investors continue to reach for the big cap equities, of which
Safaricom is a part,” added Mr Satchu.

I think we are at the beginning of a multi-year rally in Africa. Have
you hitched a ride? 02-JAN-2013

http://www.rich.co.ke/media/docs/038NSX3112.pdf

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.

07-JAN-2013 ::On the Road

http://www.rich.co.ke/media/docs/036NSX0701.pdf

A market is considered in a bull trend when it rallies over 20 per
cent. The Nairobi all share has been in a bull market since the May 7,
2012 and has been resolutely bullish since then. Foreign investors
have been on the buy side since the start of 2012 and local investors
on the sell side.

And every local investor I meet no longer says;

‘I will buy the pull back. It always falls before the election.’

They are now asking rather forlornly

‘Its going to correct isn’t it?’

I believe we are in a one off adjustment in favour of Africa.

14-JAN-2013 ::The Sweetest of Sweet Spots

http://www.rich.co.ke/media/docs/036NSX1401.pdf

“WATER is fluid, soft, and yielding. But water will wear away rock,
which is rigid and cannot yield. As a rule, whatever is fluid, soft,
and yielding will overcome whatever is rigid and hard. This is another
paradox: what is soft is strong.” – Lao Tzu

Last year I wrote that a tsunami of cash might well wash up on our
shores. And I believe the tide started rising last year and has
continued to gain traction since then. Local investors have been
fighting the tape for quite a while now and this can be seen in the
sharp uptick in foreign Investors percentage holdings in our big cap
counters. Its really very dramatic. I do not think our local
shareholders have enough skin in the game. They cannot sell much more
otherwise their underperformance is going to be woeful. I mean woeful.

Therefore, This rally might well gather speed and not slow down.

read more



 
 
N.S.E Today


The Veracity of the Bull Acceleration Higher so far seen in November
is confirmed by the heavy volume action seen today of 1.551b shillings
which can be characterised as a Banner Session for the Nairobi
Securities Exchange.
The Nairobi All Share 0.713% to set a Record Closing High for the 7th
consecutive session.
The Nairobi All Share has now rallied +5.385% in November and is
+48.72% in 2013 and the All Share is now +107.37% since the Start of
January 2012 in what has been an outstanding 24 Month Bull Phenomenon.
The Nairobi NSE20 firmed 17.46 points to close at 5085.83 and this is
a Fresh 64 month High.
Safaricom set a 7th successive session all time High.
BAT closed at a record.
The Insurers maintain a red hot Vegas Style Streak.

I said the following to Javier Blas of the @FT

“The rally is driven by institutional investors increasingly raising
their allocations to Africa from egregiously low levels,” says
Aly-Khan Satchu, a Kenyan investment analyst, echoing a widely held
view among local and foreign investors.

“This is not hot money – this is long-term institutional investors
buying Africa.”

And today we learnt that  foreign investors were holding 22.4% of the
shares as at the end of September at the Nairobi Securities Exchange ,
a level close to the 2006 peak of 25.6 per cent.

And As I said previously the ''defining characteristic of the bull
market at the NSE has been the foreign investor component that has
also pushed stocks across the sub-Saharan African equity markets''



N.S.E Equities - Agricultural


Williamson Tea improved 4.15% to close at 226.00. Williamson trades on
a PE Ratio of 2.395.



N.S.E Equities - Commercial & Services


Safaricom improved 0.46% to set its 7th consecutive session Record
Closing High. Safaricom closed at 11.00 and traded lumpy volume of
53.346m shares worth 587.886m and 37.9% of what was a high octane
session at the Securities Exchange. Safaricom has rallied +12.224%
since releasing real muscular H1 Earnings in early November and has
posted a Total Return of 123.96% in 2013, which is simply eye popping.
I note via a Report on Bloomberg that ''Multichoice has held talks
with Vodacom Group Ltd (VOD) about providing access to its television
content'' and it is this Mobile Data and Content Trajectory which is
exciting Investors.

Nation Media rallied +1.92% to close at 319.00 and on solid volume of
632,900 shares [0.335% of its shares] worth 202.277m. Nation Media
trades on a Trailing PE of 20.06 and accelerated H1 PAT +23.989%.
Standard Group eased 0.88% to close at 28.25 and traded 8,000 shares.

Kenya Airways rallied +3.714% to close at 13.00 and was trading at
13.60 +7.94% at the closing Bell. Kenya Airways traded 356,100 shares.
There was Buy Side for 276% more shares than were traded during the
session, at the closing Bell. Kenya Airways is 7.47% below its 15
month closing High of 14.05 from the 13th of this month. The Next
Resistance Level is at 14.50. Kenya Airways has rallied +34.71% since
the 27th of September and as it finally snapped a long entrenched
Price Disequilibrium.

Uchumi was low ticked 8.64% to close at 18.50 on just 2,000 shares.



N.S.E Equities - Finance & Investment


Equity Bank closed unchanged at 35.00 and traded 3.509m shares worth
123.082m. Equity Bank was trading at 36.00 +2.86% and session Highs at
the Closing Bell.
Kenya Commercial Bank's weighted Average today was 48.99 which got
rounded down to 48.75 and -0.51% on closing. Kenya Commercial Bank
traded 2.254m shares worth 110.499m.
Standard Chartered rallied 1.6% to close at 317.00 and traded 13,000 shares.
CFC Stanbic rallied +1.19% to close at 85.00 on heavy volume of 1.001m
shares and for the 2nd session.

National Bank rallied 6% to close at 26.50 and traded 76,800 shares.
National Bank reported strong Q3 2013 Earnings.

The Insurers have been on a red hot Streak of late.

CIC Insurance spiked 6.48% higher to close at 5.75 and traded 3.851m
shares. Trailing PE is now 8.984.
Pan Africa Insurance rallied +4.86% to close at 97.00 and traded
29,200 shares. Pan Africa is now +42.64% since the start of the Month
and trades on a Trailing PE of 13.343.
BRITAM EA rallied a further +4.75% to close at 15.45 a Fresh Post
listing High. BRITAM trades on an 11.036 Trailing PE and is +51.47%
since the start of the month.
Liberty Kenya firmed +2.29% to close at 15.65 and traded 218,400
shares. Liberty Kenya trades on a Trailing PE of 9.099 and is +30.416%
since the start of the month.



N.S.E Equities - Industrial & Allied


BAT Kenya rallied +2.5% to close at a Fresh Record High of 590.00. BAT
Kenya traded 2,300 shares. BAT is +20.875% in 2013 and that is with
out accounting for the FY Dividend. BAT pays out 99.6% of its EPS as
Dividends.

Carbacid was the biggest Gainer at the Exchange and rallied +9.47% to
close at 52.00 and traded 24,400 shares.

Crown Paints was high ticked 6% to close at 79.50 on 1,000 shares.
--



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