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Satchu's Rich Wrap-Up
 
 
Tuesday 22nd of April 2014
 
Morning
Africa

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If you are tracking the NSE Do it via RICHLIVE and use Mozilla Firefox
as your Browser.
0930-1500 KENYA TIME
Normal Board - The Whole shebang
Prompt Board Next day settlement
Expert Board All you need re an Individual stock.

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

I thank Ian Donald of @Nestle for Dinner last night and it was a
Pleasure meeting Mrs. Sue Donald.

read more



Coffee July 2014 +80% 2014
Africa


Bullish bets on coffee gained 2 percent to 38,143 contracts. The
wagers have more than doubled since mid-February as drought hampered
crops in Brazil, the biggest grower and exporter. Prices surged 80
percent this year.

Macro Thoughts

read more


"Investment banking has a brilliant future," Rudloff, 73, said in an interview in Milan on April 16, "The industry is looking at a golden decade."
Africa


"It isn't about trading with the firm's money, but about allocating
capital and playing the intermediary" by originating, packaging and
distributing all types of securities, including derivatives, he said.

For Rudloff, chairman of Marcuard Heritage AG, a Swiss wealth manager
which oversees about $3 billion, Russia and the Ukraine crisis are the
greatest threat to global economic growth and prospects for an
investment-banking expansion.

"The attitude of western powers toward the crisis, if you analyze it,
what they're saying is that they'll wage war with different means,
financially, economically, diplomatically," Rudloff said. "If that's
the intention, what has driven the last 25 years' of development, that
is, globalization, will come to an end."

"Russian banks' access to short-term funding has gone, they're relying
on the central bank," Rudloff said. "There will be a huge credit
crunch."

Beyond Russia, "a divided world would come if we force countries into
isolation," he said. "Economic growth would take a huge hit. It's the
biggest regression the world could make economically."

Conclusions

When I started my career at CSFB [Credit Suisse First Boston] Rudloff
was a legendary Figure at the Bank.

Home Thoughts

We had a wonderful time in Dubai. I met my Nephew and Niece and the
girls met their cousins for the first time. It was a pleasure plugging
into all that c21st Infrastructure and we thoroughly enjoyed
ourselves.

read more






I, once, characterised Kenya as a transit state but in fact Dubai is the real transit state, a connection point in an interconnected century 24-FEB-2014
Africa


I have seen thirty year old photographs of Dubai and it was a blank canvas.

"There is nothing like a dream to create the future," Victor Hugo said.

And indeed when you look at what Sheikh Mohamed has achieved its truly
miraculous. Brand Dubai is one we need to learn from. We too are a
transit state. Of course, it would be madness to take a tilt at Dubai
but we can carve-out a similar position in East Africa.

read more


Joe Biden (left) was greeted by Ukraine's FM, Andriy Deshchytsia, when he arrived in Kiev on Monday BBC
Law & Politics


Putin Says that the Oil Wars with Russia will Make the West Bleed

http://www.globalresearch.ca/putin-says-that-the-oil-wars-with-russia-will-make-the-west-bleed/5378642

China calibrates distance from Russia

http://blogs.rediff.com/mkbhadrakumar/2014/04/16/china-calibrates-distance-from-russia/

From the guarded wording of reports and the low-key media coverage as
well as the body language as such by both sides regarding the Russian
Foreign Minister Sergey Lavrov's 'working visit' to Beijing on
Tuesday, China apparently showed reluctance to be drawn into Moscow's
current tensions with the West over Ukraine. Interestingly, from
Beijing Lavrov headed for Hanoi.

In a crisply-worded statement reported by Chinese television,
President Xi Jinping stressed the importance of high-level exchanges
between the two countries and the strengthening of "collaboration" in
international and regional affairs. But Xi merely "exchanged views"
with Lavrov "on the crisis in Ukraine".

Conclusions

This Crimea Referendum business is a geopolitical conundrum for China
31-MAR-2014

http://www.rich.co.ke/media/docs/038NSX3103.pdf

The problem being, if you allow that periphery states can vote then
you will definitely see a whole lot of China peel off real quick, from
Tibet to Taiwan to Xinjiang.

Chinese president meets Russian FM in Beijing [the poor body
language about Bhadrakumar was referring to]

http://news.xinhuanet.com/english/china/2014-04/15/c_133264616.htm

Vladimir Putin meets the newly promoted top officers from various
branches of the Russian armed forces and Interor Ministry; Moscow,
March 28, 2014.

http://www.newyorker.com/online/blogs/comment/2014/04/putin-and-the-russian-media.html

How China and America See Each Other And Why They Are on a Collision
Course Foreign Affairs

http://www.foreignaffairs.com/articles/140755/minxin-pei/how-china-and-america-see-each-other?nocache=1

The gap between U.S. and Chinese power, which was already narrowing
before the financial crisis, has since closed further. In 2007, the
United States' economy was four times as large as that of China; by
2012, it was only twice as large.

Any substantial shift in the balance of power between two countries is
bound to change their attitudes and behavior toward each other. It
should come as no surprise, then, that new strains have recently
emerged in U.S.-Chinese relations. China has adopted a more assertive
foreign policy since 2010, taking tough stances in territorial and
maritime disputes with its neighbors. Its rapid military modernization
program and cyberattacks have unsettled Americans and their East Asian
allies. And Beijing has seen Washington's response to this new
toughness -- the so-called pivot to Asia -- as a thinly disguised
attempt to contain Chinese power.

Indeed, the real value of Debating China is the extent to which it
reveals that the U.S.-Chinese relationship is heading in an
increasingly competitive direction. If the countries stay on their
present course, the old neither-friends-nor-foes label will become
irrelevant, and the most important bilateral relationship in the world
will no longer be defined by engagement; it will be characterized by
managed rivalry.

Sea Change 'Asia's Cauldron,' by Robert D. Kaplan New York Times

http://www.nytimes.com/2014/04/20/books/review/asias-cauldron-by-robert-d-kaplan.html?_r=0

Kaplan starts out from some basic economics. More than half of the
world's annual merchant fleet tonnage (including four-fifths of all
the oil burned in China) passes through the South China Sea. This
commerce, Kaplan says, has turned that waterway into "the throat of
the Western Pacific and Indian Oceans -- the mass of connective tissue
where global sea routes coalesce," investing its straits, shoals and
islands with extraordinary strategic significance. At the heart of
Kaplan's book is a striking analogy that aims to explain what this
will mean in the 21st century: "China's position vis-à-vis the South
China Sea," he suggests, "is akin to America's position vis-à-vis the
Caribbean Sea in the 19th and early 20th centuries."

The parallel Kaplan draws is straightforward and convincing. Between
1898 and 1914, the United States defeated Spain and dug the Panama
Canal. This allowed Americans to link and dominate the trade of the
Atlantic and Pacific Oceans, transforming the meaning of geography.
"It was domination of the Greater Caribbean Basin," Kaplan concludes,
"that gave the United States effective control of the Western
Hemisphere, which, in turn, allowed it to affect the balance of power
in the Eastern Hemisphere." In a rather similar way, he suggests, the
South China Sea now links the trade of the Pacific and Indian Oceans;
consequently, "were China to ever replace the U.S. Navy as the
dominant power in the South China Sea -- or even reach parity with it --
this would open up geostrategic possibilities for China comparable to
what America achieved upon its dominance of the Caribbean." Because of
this, the South China Sea is "on the way to becoming the most
contested body of water in the world."

Probably the biggest of these differences is that in the 1890s the
revisionist power in the Caribbean -- the United States -- was
militarily stronger than Spain, the status quo power, whereas in the
2010s the revisionist power in the South China Sea -- China -- is
militarily weaker than America, the status quo power.

Kaplan concludes, "the age of simple American dominance, as it existed
through all of the Cold War decades and immediately beyond, will
likely have to pass. A more anxious, complicated world awaits us."

The solutions that would be reached, though, might not be the ones
that most people around the South China Sea would want. In the course
of his travels, Kaplan found the spirit of Lee and Deng much in
evidence. One realist after another told him that they did not wish to
be Finlandized or to replace America's embrace with China's; but
realism teaches us that history is driven more by necessities than
desires. "At the end of the day," one Singaporean said, "it is all
about military force and naval presence -- it is not about passionate
and well-meaning talk." Since 2011, there has been much passionate
American talk of a pivot toward Asia; but Vietnamese officials,
realists to a man, respond by quoting a proverb -- "A distant water
can't put out a nearby fire."

An American warship in Da Nang for joint U.S.-Vietnamese naval
exercises in 2011, a reflection of increased tensions in the South
China Sea. Credit Hoang Dinh Nam/Agence France-Press--Getty Images

http://www.nytimes.com/2014/04/20/books/review/asias-cauldron-by-robert-d-kaplan.html?_r=0

Conclusions

02-DEC-2013 ::The Pivot to Asia bares its Fangs

http://www.rich.co.ke/media/docs/038NSX0212.pdf

I see the pivot to Asia as the encirclement of China, then the
shrinking of its operating theatre and then lighting the tinderbox
that is the periphery and Xinjiang might well morph into China's
Afghanistan. You will recall that the architect of Russia's defeat in
Afghanistan was Zbigniew Brzezinski @Zbig and he remains a foreign
policy eminence grise with the president's ear. The US probably feels
it holds a decisive hard power advantage at this moment and given that
the trajectory is one of gradual erosion of that decisive advantage
leads me to the view that this pivot to Asia has a logic and momentum
of its own. Therefore, I see the US being increasingly determined to
press its advantage. One might even posit that calming down the
Iranian front, allows the US to better concentrate its energies on the
pivot to Asia. One of the key elements of the Pivot to Asia is the
air-sea battle concept. This concept envisages the battle beginning
with a "blinding attack" against Chinese anti-access facilities and
incorporates "distant blockade" operations. China's dependence on
foreign oil is increasing just as the US' dependency is decreasing.
And interestingly, given my belief that the Eastern seaboard is a
fabulous energy prize, that puts the Indian Ocean in many respects
right into the geopolitical frame. If you are considering ''distant
blockade'' operations, one of those areas you will be blockading is
this part of the world, given the amount of energy that is likely to
be sold into Asia, in the future.

The Strangelove Effect

http://www.globalresearch.ca/the-strangelove-effect-how-we-are-hoodwinked-into-accepting-a-new-world-war/5378251

When Major T.J. "King" Kong goes "toe to toe with the Rooskies" and
flies his rogue B52 nuclear bomber to a target in Russia, it's left to
General "Buck" Turgidson to reassure the President. Strike first, says
the general, and "you got no more than 10 to 20 million killed, tops."

 President Merkin Muffley: "I will not go down in history as the
greatest mass-murderer since Adolf Hitler."

General Turgidson: "Perhaps it might be better, Mr. President, if you
were more concerned with the American people than with your image in
the history books."

The genius of Stanley Kubrick's film is that it accurately represents
the cold war's lunacy and dangers.  Most of the characters are based
on real people and real maniacs. There is no equivalent to Strangelove
today, because popular culture is directed almost entirely at our
interior lives, as if identity is the moral zeitgeist and true satire
is redundant; yet the dangers are the same. The nuclear clock has
remained at five minutes to midnight; the same false flags are hoisted
above the same targets by the same "invisible government", as Edward
Bernays, the inventor of public relations, described modern
propaganda.

read more



An elderly man and woman make pray offers at the Yasukuni Shrine in Tokyo.
Law & Politics


Abe sent the offering in a private capacity, Chief Cabinet Secretary
Yoshihide Suga told reporters yesterday in Tokyo. "The prime minister
himself will appropriately decide whether to visit the shrine," Suga
said.

Rebels slaughtered hundreds of civilians when they seized the South
Sudan oil hub of Bentiu, hunting down men, women and children who had
sought refuge in a hospital, mosque and Catholic church, the United
Nations said on Monday.

http://www.reuters.com/article/2014/04/21/us-southsudan-un-idUSBREA3K0UL20140421

After the rebels seized Bentiu, Dinka residents of Bor town in Jonglei
state attacked a U.N. base on Thursday where about 5,000 people,
mostly Nuer, were sheltering. The mob of armed civilians pretended to
be peaceful protesters delivering a petition to the United Nations
before opening fire in the base.

Plane Hunt Yields No Debris as Search Enters Last Zone #MH370

http://www.bloomberg.com/news/2014-04-22/plane-hunt-yields-no-debris-as-search-enters-last-zone.html

No physical trace of the Malaysian Airline System Bhd. (MAS) jet has
been found as the search enters its 46th day -- the longest hunt for a
missing passenger plane in modern aviation history.

Conclusions


I do not believe the Plane is anywhere near where they are looking.

read more



Saudi Arabia targets Khartoum Africa Confidential
Law & Politics


The National Congress Party's support for Egypt's Muslim Brothers is
exacting a heavy political and economic cost

Financial sanctions on Sudan by Saudi Arabia and the United Arab
Emirates are a political warning shot. The immediate targets are
Khartoum's backing for Egypt's banned Muslim Brotherhood and its ever
strengthening relationship with Iran, Saudi's regional rival. The
Riyadh officials who monitor money laundering and terrorist financing
issued a circular on 4 March banning all dealings with Sudan's banks.
Days later, finance officials in the UAE announced their own ban on
dealings with Sudan.

Conclusions


Which makes our President's State Visit to Qatar an interesting
geopolitical move.

read more



Currency Markets at a Glance WSJ
World Currencies


Euro 1.3794
Dollar Index 79.96 touched a session high of 79.988, highest level
since April 8.
Japan Yen 102.64 Japan's export growth slowed to its weakest in a year
The dollar held a seven-day gain against the yen, the longest winning
streak since October 2012
Swiss Franc 0.8848
Pound 1.6792
Aussie 0.9352 The Aussie gained 0.3 percent to 93.52 U.S. cents from
yesterday, when it touched 93.16, the lowest since April 8.
India Rupee 60.699 The currency depreciated 0.2 percent to 60.705 per
dollar as of 9:48 a.m. in Mumbai, according to prices from local banks
compiled by Bloomberg. It touched 60.7675 earlier, the lowest since
March 24.
South Korea Won 1039.15
Brazil Real 2.2379
Egypt Pound 7.0012
South Africa Rand 10.4968
The offshore yuan hit a fresh 14-month low of 6.2335 to the dollar on
worries over a slowing Chinese economy The Chinese currency has lost
around 2.84 percent against the dollar since the start of the year.

Dollar Index 3 Month Chart INO 79.96 [US 2 Year Yields at 3 year Highs]

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

The value of the dollar's net short position was $1.17 billion, the
first short position in nearly six months, compared with a net long
position of$3.09 billion the previous week.

The U.S. two-year notes being sold today yielded 0.435 percent in
pre-auction trading. The monthly two-year auction in March drew a
yield of 0.469 percent, the most since May 2011.

Euro versus the Dollar 3 Month Chart 1.3794 [Draghi is capping the Euro]

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

Draghi is scheduled to give a keynote speech in Amsterdam on Thursday.
He recently made clear the euro's strength is a possible trigger for
the central bank to ease policy.

read more


Commodity Markets at a Glance WSJ
Commodities


Gold 3 Month Chart INO 1287.18 [could break down very sharply]

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

Crude Oil 3 Month Chart INO 103.49 [expensive but could trade as
high as 105.50]

http://quotes.ino.com/charting/index.html?s=NYMEX_CL.M14.E&v=d3&t=c&a=50&w=1

read more


Copper 1 Year Chart INO 3.0320 -0.0110 (-0.36%) [SELL]
Commodities


Net-short bets on copper reached 14,892 futures and options, compared
with a bet on price declines of 13,419 a week earlier, the government
said. China's expansion moderated to the weakest pace in six quarters
and property construction plunged, the statistics bureau said April
16. The nation is the biggest metals consumer.

read more




Military spending in Africa increased by 8.3 per cent in 2013, reaching an estimated $44.9 billion.
Africa


Over two-thirds of the African countries for which data is available
increased military spending in 2013. Algeria became the first country
in Africa with military spending over $10 billion, an increase of 8.8
per cent since 2012, and of 176 per cent since 2004. Meanwhile, Angola
increased its spending by 36 per cent in 2013, to overtake South
Africa as the largest military spender in sub-Saharan Africa, and the
second highest on the continent. High oil revenues appear to be a
factor driving both Algeria's and Angola's military spending
increases.

Africa's Exports to China via @Calestous

https://twitter.com/calestous/status/457219537184636929/photo/1

In reality, Africa accounts for only a tiny percentage of China's
overall foreign economic activities:

http://www.brookings.edu/research/papers/2014/04/10-africa-china-foreign-policy-sun?_hsenc=p2ANqtz-9ASRXzKYudlU7HLZSBPE8jXOCrXb-obIFsaqcy40gZO5z8EnQ3wfKyYx88tLY-on5cfKhBJTKwygGXop5dZkACbwKo5K2_D6ka37uEF_FwZCVku50&_hsmi=12541198&utm_content=buffer58898&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer

China's investment in and trade with Africa represents 3 percent and 5
percent of its global investment and trade respectively.

Xi Jinping's Africa Policy: The First Year @BrookingsInst

http://www.brookings.edu/blogs/africa-in-focus/posts/2014/04/10-jinping-africa-policy-sun

It has been more than a year since Xi Jinping's inauguration as
China's new president in March 2013 and his unprecedented visit to
Africa in his first overseas trip as the head of state. During the
first year of the Xi administration, China's policy toward Africa has
shown several new trends that illustrate Beijing's evolving priorities
and strategies in the continent.

Most strikingly, China under Xi has greatly and assertively enhanced
its direct involvement in Africa's security affairs. Two months into
Xi's reign, Beijing unprecedentedly dispatched 170 combat troops from
the People's Liberation Army's (PLA) Special Force to the United
Nations peacekeeping mission in Mali. Compared with China's past
tradition of dispatching only non-combat staff such as engineers and
medical personnel, this is the first time China sent "combat troops"
to a foreign country under a U.N. mandate. It remains to be seen
whether the move changes PLA's tacit operating principle of "no troops
on foreign soil" given the U.N. authorization and local government
consent. Nevertheless, China's choosing Africa to dispatch combat
troops for the first time does suggest Beijing's rising interests,
enhanced commitment and direct role in maintaining peace and security
of Africa.

In another unprecedented but more surprising move, China under Xi
engaged in open intervention in the South Sudan conflict through
direct mediation. In 2013, China's special envoy for African affairs,
Ambassador Zhong Jianhua, paid more than 10 visits to Africa to
coordinate positions and mediate the South Sudan issue. Then, in
January 2014, in a rare overt political intervention, Chinese Foreign
Minister Wang Yi publicly called for an immediate end of hostilities
in South Sudan.  At Ethiopia's invitation, Wang Yi traveled to Addis
Ababa to meet with rebel and government delegations. He openly urged
"immediate cessation of hostilities and violence," and publicly called
for the international powers to back the Ethiopian-led mediation
efforts. Given China's considerable oil stake in the unstable South
Sudan (China imported nearly 14 million barrels of oil from South
Sudan in the first 10 months of 2013, twice that from Nigeria), many
believe that China is gradually abandoning its long-term
"non-interference" principle to protect its overseas economic
interests

South Africa All Share Bloomberg +6.03% 2014

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

Dollar versus Rand 3 Month Chart INO 10.49565

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

Egypt Pound versus The Dollar 3 Month Chart INO 7.001

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

Egypt EGX30 Bloomberg +20.33% 2014 Africa's best in 2014

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

8,103.67 23.19 0.29%

Nigeria All Share Bloomberg -3.39% 2014

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

Well in excess of 1,000 people have been killed in Boko Haram-related
violence in 2014

http://www.theguardian.com/commentisfree/2014/apr/21/boko-haram-rampage-nigeria-counter-terrorism

read more


"We are in your city," he said, addressing Nigeria's President Goodluck Jonathan
Africa


(AFP) - The leader of Nigeria's Boko Haram Islamists Abubakar Shekau
claimed responsibility for a bombing in Nigeria's capital that killed
at least 75 people, in a video message obtained by AFP on Saturday.
"We are the ones that carried out the attack in Abuja," Shekau said in
the 28-minute video, referring to the deadliest attack ever in
Nigeria's capital.

Seated with a kalashnikov resting on his left shoulder and dressed in
military uniform, the insurgent commander spoke in both Arabic and the
Hausa language that is dominant in northern Nigeria.

read more


NIGERIA Buying while there is blood on the streets Africa Confidential Subscriber
Africa


On the other side of the ledger, the picture is devastating. Capital
flight - through deliberately mispriced trade deals, contract
kickbacks and stolen oil cargoes - is at record levels: some experts
say it's well over 25% of export earnings. Jonathan's suspension of
Central Bank Governor Sanusi Lamido Aminu Sanusi in February, after he
called on the state oil company to explain its failure to transfer $20
bn. to the Treasury account in the past year, led to a run on the
naira, which the government has propped up by spending some $4 bn. of
its reserves, now at $37.9 bn. In percentage terms, those levels of
capital flight and state theft are among the highest in the world,
surpassing Brazil and Indonesia where, unlike in Nigeria, the bulk of
stolen money is recycled within national borders. The other difference
from such countries, whose population size and resource-base match
Nigeria's, is the failure of successive Abuja governments to invest in
education and health. Over 60% of Nigerians live below the
international poverty line.

Ghana Stock Exchange Composite Index Bloomberg +6.02% 2014

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

The cedi slumped nearly 20 percent against the dollar last year and
has lost a further 17.8 percent since January, hitting a record
2.7800/dollar on Wednesday..

http://af.reuters.com/article/kenyaNews/idAFL6N0N92RR20140417

The open question is whether, Ghana is in the cockpit or whether the
markets will simply elbow the Government aside 24-MAR-2014

http://www.rich.co.ke/media/docs/038NSX2403.pdf

Ghana's Eurobond has a 9 per cent handle and sentiment has soured so
much, it is entirely feasible that Ghana might print a double digit
yield. Ghana is a near perfect harbinger of what can go wrong when you
front load your recurrent expenditure in the expectation that revenues
are a rising tide. The open question is whether, Ghana is in the
cockpit or whether the markets will simply elbow the Government aside.

Between 1994 and 2010, Dakar house prices soared by 256 percent, the
Senegalese National Statistics Agency said. Regarded as a safe haven
in turbulent West Africa, Dakar's property market is a favoured
investment for regional elites.

http://www.reuters.com/article/2014/04/20/senegal-property-idUSL6N0N620220140420

read more


Vimal Shah, chief executive of Bidco
Kenyan Economy


When Vimal Shah and his older brother took their ambitious idea for
man u facturing consumer goods to potential backers in 1985, they
could not get a loan. "Unilever will kill you," one banker told them.
Since then Unilever has sold several brands to them; and international
rich lists put them top of the charts - most recently at $1.7bn - in
Kenya , where they have built their business. They aim to be market
leader in household products such as detergents, soaps and cooking
oils across Africa by 2030.

"That's something that's stuck in my hard disk," says Mr Shah, 53, of
that disparaging remark almost 30 years ago. Speaking in the company's
headquarters beside his factory in Thika, an industrial town outside
Nairobi, he says he also took a subsequent piece of advice to heart:
"Start small, aim big."

Named after their father, BD Shah, who is now company chairman, Bidco
is the result of a dream solution to a problem Vimal and his brother
Tarun first identified as students in Nairobi. Mr Shah is now chief
executive of the business, which turned over $500m last year.

Their father, a first-generation Kenyan whose Indian father was a dhow
boat trader sailing the route between his homeland and the African
coast, had shut down a small clothing manufacturing business in 1980,
after 10 years fraught with family wrangling. But the young brothers
grew obsessed with developing comprehensive agricultural "value
chains" from the old company's main ingredient: cotton.

They saw the futility of manufacturing cotton garments: credit-based
sales took months to deliver income, passing fashions made "dead"
stock impossible to shift and Asian synthetics imports were flooding a
market eager for cheap, wrinkle-free alternatives. But they became
fascinated by the potential for farming cotton seeds. The fibre can be
spun into thread, the seeds deliver animal feed, cooking oil and soap.
Cash sales common to the sector also meant a quick turnover business,
one that has ultimately made the Shahs their millions.

When no one would give them the big loan, they scaled the planned
business down into easier stages. Instead of growing seeds at home,
they shipped in oil from Malaysia but still in bigger bulk quantities
than the local competition. The $2.7m soap factory they built,
financed 60 per cent by banks and the rest by family and friends, did
well. When no one wanted to buy their new brands, including Kuku
(Swahili for chicken) and Saba Saba ("Seven Seven"), they went round
the country in a van, encouraging rural shopkeepers to stock their
lines and taking money only when they sold. Soon their more
aspirational product caught on.

"It wasn't the real dark blue soap that people were used to," says Mr
Shah. "We made it whiter and lighter; we put a slight perfume in it."

They since have moved further up the chain: creating oil-processing
factories for cooking oils as well as soap; buying land or contracting
farmers to produce ingredients; and making hundreds of brands for east
Africa's growing population of consumers. "We have a product for every
pocket," says Mr Shah. "Prince, minister, middleman, trader, common
man."

The company's greatest coup, be sides securing its first million, was
navigating one of Africa's biggest corruption scandals. Kenya claimed
to be exporting gold that turned out not to exist so the currency
crashed in 1992. Bidco was heading for a crash, too: it owed $13m for
a 1991 loan, which it was repaying at 16 Kenyan shillings to the
dollar. When the shilling slumped to 30, Bidco decided to repay the
loan in full at the new rate. "It was agony," says Mr Shah. "[But] we
said: 'Let's just get out of it, because what if it goes even higher?'
It was the best decision we took, because thereafter the exchange rate
went to 84 shillings. If we hadn't taken that decision, we'd have been
dead. And a lot of people did go under."

Mr Shah has not been to business school but he reads business
management and philosophy books every day. The company long ago
consulted ex perts in kaizen, the Japanese business philosophy of
continuous improvement. "You address a lot of waste - wasteful
practices, wasteful habits," says Mr Shah, who computerised procedures
in the late 1990s. Workers check in with biometric technology;
production statistics are recorded on a digital scoreboard.

"We don't audit, audit, audit, audit. Because if I have to check on
you every single time, why do I have you there?" says Mr Shah. "In
companies the biggest problem is people hide information from others
or they manipulate information to suit themselves. But nobody writes
reports here - they are generated by the system, real-time, online.
Good news, bad news, it's on the system."
Still, he says, this is no place for automatons. Workers and
management eat together. Mr Shah has no secretary, which means he must
be one of the world's most accessible CEOs. During a two-hour
interview, his father wanders into the room, along with a nephew
considering joining the family business. Mr Shah is thoughtful,
charismatic and at ease with himself. He and his brother, both of
whose families live in the same compound, do not compete, he says. It
is just that he is better suited to "extrovert front office" while his
"introvert" brother stays low profile. "We fit like a glove in that
sense. He handles today; I handle tomorrow."

Their father, at 82, is always around, working in his new office. "To
him it's very clear. Retirement means: 'waiting for my funeral'. He
doesn't want to retire, ever."

Inheritance, says Mr Shah, who has a 15-year-old son, is not part of
his motivation. The feeling that they are all "channels" for, and
trustees of, wealth rather than accumulators is core for the family,
who follow Jainism. And, he says, he is mindful that children of the
wealthy often lack the fire that propelled their parents from zero.

His younger brother was killed in the terrorist attack on Westgate
shopping mall seven months ago during a Bidco cooking competition for
children, a painful reminder of the insignificance of the material.

But ambition is something else altogether. When Unilever sold several
lines in 2002, Bidco - then third in the market - outbid rivals to buy
four brands of cooking fats and soaps. "The person with the fire in
the belly gets it," says Mr Shah.

That fire still burns. Mr Shah, who says wealth ratings vastly
overestimate Bidco's value, nevertheless bel ieves more growth is
coming. He wants to list the company in London, not Kenya: "We still
see more growth in Africa, and we'll take the whole of Africa." Even
business cards offer the mantra driving the team: to be leader in all
African markets by 2030. "We call it the big, hairy, audacious goal."

It is not impossible. Although the company exports goods to 16 African
countries, so far it has set up factories solely in east Africa. But
Mr Shah has just come back from a business trip to Nigeria. "So always
we are arriving. We never arrive."

read more



Crisis looms as rural economy is hit by a dip in cash crop prices
Kenyan Economy


The latest official data shows that farm gate prices of milk, tea,
coffee and sugar cane dropped by more than 20 per cent in the first
quarter of the year, reducing the incomes of close to two million
households that derive their incomes directly from the produce.

The producer price of milk fell 25 per cent from Sh40 per litre in
December to Sh30 at the end of March while the farm gate price of
sugarcane dipped 28.6 per cent from Sh4,200 to Sh3,000, reducing the
farmers' earnings by similar margins.

Tea prices at the weekly auctions dipped by nearly 30 per cent from
last year's peak of Sh389.87 per kilo to an average of Sh237.73 per
kilo last month.

Conclusions


I think we have crossed the Nadir in prices for most of the Farm Economy.

Coast, parks lose out in Easter holiday tourism boom

http://www.businessdailyafrica.com/Coast-loses-out-in-Easter-tourism-boom/-/539552/2288238/-/xr0b20/-/index.html

Kenya Association of Hotelkeepers and Caterers (Coast branch)
executive officer Sam Ikwaye said most hotels in the region reported
bookings of between 70 and 90 per cent. Despite election jitters last
year, Easter bookings were upwards of 90 per cent.

"We had a good turnout and the heavy presence of police, especially in
Mombasa, was a confidence booster for tourists," Mr Ikwaye said.

Hoteliers had resorted to reducing prices for domestic tourists in
order to boost numbers during the holiday, but still lost a
considerable number of local tourists to other destinations.

"VAT  has greatly affected the domestic market. The cost of going on
holiday has gone up. With the ban on night travel , which is  the main
transport mode to the Coast,  many people are opting to travel to
closer destinations like Nakuru and Naivasha," Mr Ikwaye said.

Conclusions


The Coast is very very soft.

03-SEP-2012 :: Coast problems are deeper than Riots

http://www.rich.co.ke/media/docs/036NSX0309%281%29.pdf

The week before last, we had driven through Tsavo West, exited the
park deep near the Tanzania border, driven to Diani and thoroughly
enjoyed ourselves. In fact, the phrase 'halcyon days' [ A period of
calm, often nostalgic: "halcyon days of yore", "halcyon days of
youth"] best described that week. We saw elephants in the morning and
in the evening we were walking barefoot on the beach. I met a fellow
named Volcker who told me that If I came back in February, he would
take me swimming with the whale sharks and I thought to myself, this
is a blessed place and if we marketed it right, the whole world would
want to come.

Then, last week, on the 27th of August, Aboud Rogo Mohammed was shot
on the always busy Bamburi Road, not far from Pirates. This proved the
spark that ignited a tinderbox and I watched events unfold with
trepidation. We now exist in a 24/7 always on world and for a moment
it looked like Mombasa was morphing into Waziristan and tsunami of
travel advisories would be winging their way through the air.

Equity targets retail business with 300,000 smartphones @bd_africa

http://www.businessdailyafrica.com/Corporate-News/Equity-targets-retail-business-with-300-000-smartphones/-/539550/2288164/-/11pw57x/-/index.html

Equity Bank will from next month issue 300,000 smartphones to
retailers to facilitate cashless transactions and deepen use of the
lender's new ATM cards that allow tap-and-go payments.

The top-tier lender said that customers would tap their Equity
MasterCard cards on the high-end-of-the-market mobile phones with
contactless payment technology based on Near Field Communication (NFC)
to make retail payments.

Equity will distribute the NFC-enabled phones free of charge to
supermarkets, restaurants, kiosks and barbershops as it seeks to boost
income from the payments processing business.

The Nairobi bourse-listed bank is turning to mobile phones as a
cheaper and more convenient point of sale (PoS) compared to the
traditional swipe card readers.

"Our new MasterCard ATM cards are 'tap-and-go' hence the need to put
mobile PoS devices with merchants to process payments," said Equity
Bank chief executive James Mwangi (right) when releasing the lender's
first quarter financial results.

"The NFC-enabled phones and cards will help Equity Bank be well
positioned to significantly increase volumes and commission from
payment processing."

Equity Bank share price data here +6.54% 2014

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

Equity Bank issued better than expected Q1 2014 Earnings here

http://www.rich.co.ke/media/docs/Equity%20Bank%20un-audited%20results_for%20the%20period%20ended%2031st%20March%202014.pdf

read more


"By the end of 2015, and with all our plants operational, ARM will be the largest cement and clinker manufacturer in [East Africa]," ARM Managing Director Pradeep Paunran told Business Beat.
Kenyan Economy


The ARM plant will be strategically situated along the
Tanga-Dar-es-Salaam Highway and is a few months away from being fully
operational. The manufacturer is also planning to set up a Sh34
billion cement plant in Kitui County. It already has five plants in
Kenya, Rwanda and Tanzania.

read more


ARM FY Earnings and share price data here
Kenyan Economy


Par Value:                  5/-
Closing Price:           84.00
Total Shares Issued:          495275000.00
Market Capitalization:        41,603,100,000
EPS:             2.74
PE:                 30.657

A mineral extraction and processing company which manufactures lime,
cement and other industrial fertilizers.

FY through 31st December 2013 versus FY 2012

FY Revenue 14.179208b versus 11.400569b +24%
FY Profit before Tax 2.000060b versus 1.790296b +12%
FY Profit after Tax 1.348803b versus 1.245638b +8.00%
FY Earnings Per Share 2.74 versus 2.51 +9.1633%
FY Dividend 60 cents a share versus 50cents +20%

Kenya Shilling versus The Dollar Live ForexPros

http://j.mp/5jDOot

Nairobi All Share Bloomberg +8.3863% 2014

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

148.11 +0.74 +0.50%

Nairobi ^NSE20 Bloomberg -0.100% 2014

http://j.mp/ajuMHJ

4,921.13 +14.17 +0.29%

Every Listed Share can be interrogated here

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

Nakumatt Holdings is hoping to have a Tanzanian court order barring
its takeover of Shoprite withdrawn this week, a top official said.

http://www.businessdailyafrica.com/Corporate-News/Nakumatt-seeks-to-have-orders-on-Shoprite-takeover-lifted/-/539550/2288154/-/xsh3ln/-/index.html

The bid by East Africa's largest retailer to acquire three branches of
South African-owned Shoprite supermarkets suffered a setback after the
Tanzania Union of Industrial and Commercial Workers (Tuico) last month
obtained an injunction suspending the takeover.

The court process resulted from Shoprite's failure to pay terminal
benefits to its employees.

read more



 
 
N.S.E Today


The Nairobi All Share firmed 0.11 points to set a Fresh All Time
Closing High of 148.22.
The All Share Index has rallied 8.466% this Year and to a record.
The Nairobi NSE20 shaved off 16.58 points to close at 4904.58 and
remains marginally and less than minus 1% in 2014.
The divergence in the performance of the 2 indices is noteworthy.
Trading was 611.006m and not a bad session the day after a long weekend.
Safaricom held the 13.20 level which is a record all time high for the
3rd consecutive session.
COOP Bank closed at an All Time High and is +19.718% this year.



N.S.E Equities - Commercial & Services


Safaricom closed unchanged at 13.20 a record All Time Closing high for
the 3rd consecutive session. Safaricom traded 11.643m shares worth
154.198m. Safaricom has rallied a blistering +21.65% in 2014  and
Investors are properly anticipating a strong FY Earnings Release.
Safaricom accelerated H1 Profit after Tax +44.8% and a handsome Full
Year Dividend increase is a racing certainty.

Kenya Airways firmed 0.39% to close at 12.65 and was trading shares at
session highs of 12.95 +2.777% towards the closing bell. The
Commercial Director signalled a Return to profit for the Full Year a
few sessions ago. This has yet to filter through the stock. We have
found good Buying below 13.00 and Sellers above 13.50 during 2014. I
expect a Thrust through 13.50 as the the news around Full Year
Earnings gets digested.

Express was the 2nd biggest gainer at the Bourse rallying +7.45% to
close at 5.05 and traded 500 shares. Express is +28.48% this year.



N.S.E Equities - Finance & Investment


Equity Bank rallied 3.816% to close at 34.00 and was trading at
session highs of 34.75 and +6.11% at the Finale. Equity Bank has
rallied 5.426% over the last 2 sessions and traded 2.951m shares.
Equity Bank is +10.569% in 2014. Equity Bank released better than
consensus estimates Q1 2014 Earnings. The announcement around the MVNO
License and today's story in the Business Daily regarding ''the issue
of 300,000 smartphones to retailers to facilitate cashless
transactions and deepen use of the lender's new ATM cards that allow
tap-and-go payments'' has piqued interest.

Equity Bank H1 2014 Earnings release here

http://www.rich.co.ke/media/docs/Equity%20Bank%20un-audited%20results_for%20the%20period%20ended%2031st%20March%202014.pdf

Kenya Commercial Bank firmed +1.058% to close at 47.75 and was trading
at 48.00 +1.59% for most of the session. Kenya Commercial Bank traded
1.581m shares. Kenya Commercial Bank is +1.058% in 2014 and +3.804% in
April. KCB will report Q1 2014 Earnings on the 30th of April.
COOP Bank rallied +1.19% to set an all time closing high of 21.25.
COOP Bank has rallied 19.718% in 2014 and was in fact trading at an
all time intra day high of 21.50 +2.38% at the Finale. Demand outpaced
Supply in the ratio of 13 Buyers for every 6 Sellers signalling this
Push into Fresh All Time Highs has legs. COOP Bank traded 703,100
shares.
Diamond Trust swam against the tide and retreated 3.51% to close at
220.00 with 92,300 shares changing hands. Diamond Trust is +14.82% in
2014 and is set to conduct a 1 for 10 held Rights Issue which will be
fully subscribed.
CFC Stanbic Bank had rallied +39.08% in 2014 and to a more than 5 year
High through this morning. CFC Stanbic eased 1.65% today to close at
119.00 and traded 91,400 shares. If the Momentum from 2013 where CFC
accelerated FY PAT 2013 +70.343% has spilled over into 2014, then we
will see another Leg higher.
Standard Chartered improved 1.57% to close at 323.00 and traded 24,600
shares. Standard Chartered is +6.25% in 2014 and has headroom. I
expect a Stock Split Announcement this year.

National Bank rallied 4.504% to close at 29.00 and traded 91,800
shares with Buyers outpacing Sellers in a Ratio of 17 versus 6, at the
finish line.

Kenya Re firmed 1.5% to close at 20.25 ahead of the imminent release
of Kenya Re's FY Earnings. Kenya Re is +30.64% in 2014 and a part of
what has been a dynamic and broad based rally in the Insurance Sector.
On a Trailing Price Earnings Basis, Kenya Re is the cheapest insurance
stock at the Bourse and trades on a PE of 5.0625.
CIC Insurance eased 0.56% lower to close at 8.85 and traded 1.245m
shares. CIC Insurance is +48.73% this year.



N.S.E Equities - Industrial & Allied


EABL ticked 0.70% lower to close at 282.00 and traded 338,800 shares
worth 95.731m. EABL was overdue a retracement after a scorcher of a
Rally of +9.65% April 7th through this morning. EABL heads to 290.00
at the very minimum.

ARM firmed 0.6% to close at 84.50 and traded brisk volume of 479,900
shares. The Standard carried a report quoting the CEO Pradeep Paunrana
as follows:

"By the end of 2015, and with all our plants operational, ARM will be
the largest cement and clinker manufacturer in [East Africa]."

Eveready surged 7.575% to close out the days biggest Gainer at the
Securities Exchange. Eveready traded light however with 21,800 shares
changing hands. Eveready is +31.48% in 2014.

BOC Kenya was the biggest loser at the Exchange and retreated 6.8% to
close at 137.00 and traded 1,200 shares.

BAT Kenya was low ticked 6.03% to close at 545.00.

--



by Aly Khan Satchu (www.rich.co.ke)
 
 
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April 2014
 
 
 
 
 
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