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Satchu's Rich Wrap-Up
Thursday 13th of March 2014

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17-FEB-2014 ::  STAYING AHEAD OF THE CURVE A Presentation I made to @Oracle

I am looking forward to being in London this weekend for The
Homecoming Revolution Event

Join us on Sat 15th or Sun 16th March 2014 at Olympia @Angel1Jones

It was Angel Jones @angel1jones, the Founder of @HomecomingRev who
came and found me in my Office one afternoon.

Her Tagline on Twitter ''Ex-advertising chick. A Yippie (Yuppie + Hippie)''

read more

Many top African companies flying into London this weekend @Homecomingrevolution

Macro Thoughts

Home Thoughts

I am looking forward enormously to being in London this week-End. I
lived in London from the Age of 13 until I was 40 except for 3 years
at Durham University.

I have walked from Hampstead Heath to Putney and it really remains one
of the most globally fluent Cities in the World.

You will I recall I called the UK Recovery the last time I visited
which was last year.

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12-AUG-2013 :: The Recovery in the West is not a Mirage It Is Real

So how does an investor play this recovery. I think you need to be net
long sterling. I reckon There is an outside chance that UK property,
which is projected to rally 25 per cent over five years achieves that
in 24 to 30 months. I like looking for narratives that are embedded
and entrenched and where I can see an Inflexion Point. The United
Kingdom, Europe and the US have inflected. Watch closely how the
narrative starts changing.

I cannot recall the number of times i caught the No.14 Bus back to
Putney Heath.

Putney Heath FLICKR

"Every battle is won before it's ever fought."  -- Sun Tzu

"Be extremely subtle even to the point of formlessness. Be extremely
mysterious even to the point of soundlessness. Thereby you can be the
director of the opponent s fate."  -- Sun Tzu

"Then it is dark; it is a night where kings in golden suits ride
elephants over the mountains." John Cheever

read more

Fracking is turning the US into a bigger oil producer than Saudi Arabia
Law & Politics

Even predicting future oil output isn't the precise science you'd
expect. "We keep raising our forecasts, and we keep underestimating
production," Lejla Alic, an analyst with the International Energy
Agency noted recently. Last year US production reached 7.4 million
barrels a day, an increase over 2012 of 15.3 per cent. A jump that
large hasn't been seen since 1951. This year the US should produce 8.3
million barrels a day.

Take another indicator - the volumes of crude being moved by trains,
often a mile long, from the shale fields to refineries and terminals.
In all of 2008, train companies moved 9,500 wagons of the black stuff.
Last year, 400,000 of them rumbled across America.

How long America's shale boom will last is hard to forecast also. In
Texas, which on its own is set to increase production to 4 million
barrels a day this year, the drilling peak still hasn't been reached,
says Mr Gallegos. But, he suggests, "in the end it's not the oil
fields or the wells that will determine where all this goes. It's the
politicians around the world who set the price and make the markets."
Increasingly, the decisions that matter will rest with the US, as it
adjusts to its new status as a glut producer.

"The United States is now poised to become an energy superpower,"
write By Robert D. Blackwill and Meghan O'Sullivan, in the current
issue of Foreign Affairs magazine.

"Since 1971, when US oil production peaked, energy has been construed
as a strategic liability for the country, with its ever-growing thirst
for reasonably priced fossil fuels sometimes necessitating incongruous
alliances and complex obligations abroad," they write. "That logic has
been upended, and the newly unlocked energy is set to boost the US
economy and grant Washington newfound leverage around the world."

As vivid as the gas flares in the Texas sky at night, however, is
America's new-found love affair with fracking. Environmentalists warn
loudly of water contamination disasters and some home owners speak of
being rattled by man-made earthquakes, but there is no giving it up
now. It's a whole different world to 2008, when US oil production was
at a historical low and Sarah Palin was drawing liberal ire declaring
that "Drill, Baby Drill!" was the answer to all of America's problems.
Suddenly she seems to have been right.

America's Energy Edge The Geopolitical Consequences of the Shale
Revolution Foreign Affairs


Only five years ago, the world's supply of oil appeared to be peaking,
and as conventional gas production declined in the United States, it
seemed that the country would become dependent on costly natural gas
imports. But in the years since, those predictions have proved
spectacularly wrong. Global energy production has begun to shift away
from traditional suppliers in Eurasia and the Middle East, as
producers tap unconventional gas and oil resources around the world,
from the waters of Australia, Brazil, Africa, and the Mediterranean to
the oil sands of Alberta. The greatest revolution, however, has taken
place in the United States, where producers have taken advantage of
two newly viable technologies to unlock resources once deemed
commercially infeasible: horizontal drilling, which allows wells to
penetrate bands of shale deep underground, and hydraulic fracturing,
or fracking, which uses the injection of high-pressure fluid to
release gas and oil from rock formations.

The resulting uptick in energy production has been dramatic. Between
2007 and 2012, U.S. shale gas production rose by over 50 percent each
year, and its share of total U.S. gas production jumped from five
percent to 39 percent. Terminals once intended to bring foreign
liquefied natural gas (LNG) to U.S. consumers are being reconfigured
to export U.S. LNG abroad. Between 2007 and 2012, fracking also
generated an 18-fold increase in U.S. production of what is known as
light tight oil, high-quality petroleum found in shale or sandstone
that can be released by fracking. This boom has succeeded in reversing
the long decline in U.S. crude oil production, which grew by 50
percent between 2008 and 2013. Thanks to these developments, the
United States is now poised to become an energy superpower. Last year,
it surpassed Russia as the world's leading energy producer, and by
next year, according to projections by the International Energy
Agency, it will overtake Saudi Arabia as the top producer of crude

The American energy revolution does not just have commercial
implications; it also has wide-reaching geopolitical consequences.
Global energy trade maps are already being redrawn as U.S. imports
continue to decline and exporters find new markets. Most West African
oil, for example, now flows to Asia rather than to the United States.
And as U.S. production continues to increase, it will put downward
pressure on global oil and gas prices, thereby diminishing the
geopolitical leverage that some energy suppliers have wielded for
decades. Most energy-producing states that lack diversified economies,
such as Russia and the Gulf monarchies, will lose out, whereas energy
consumers, such as China, India, and other Asian states, stand to

The biggest benefits, however, will accrue to the United States. Ever
since 1971, when U.S. oil production peaked, energy has been construed
as a strategic liability for the country, with its ever-growing thirst
for reasonably priced fossil fuels sometimes necessitating incongruous
alliances and complex obligations abroad. But that logic has been
upended, and the newly unlocked energy is set to boost the U.S.
economy and grant Washington newfound leverage around the world.

The most dramatic possible geopolitical consequence of the North
American energy boom is that the increase in U.S. and Canadian oil
production could disrupt the global price of oil -- which could fall
by 20 percent or more. Today, the price of oil is determined largely
by the Organization of the Petroleum Exporting Countries, which
regulates production levels among its member states. When there are
unexpected production disruptions, OPEC countries (primarily Saudi
Arabia) try to stabilize prices by ramping up their production, which
reduces the global amount of spare production capacity. When spare
capacity falls below two million barrels per day, the market gets
jittery, and oil prices tend to spike upward. When the market sees
spare capacity rise above roughly six million barrels a day, prices
tend to fall. For the past five years or so, OPEC's members have
attempted to balance the need to fill their public coffers with the
need to supply enough oil to keep the global economy humming, and they
have managed to keep the price of oil at around $90 to $110 per

As additional North American oil floods the market, OPEC's ability to
control prices will be challenged. According to projections from the
U.S. Energy Information Administration, between 2012 and 2020, the
United States is expected to produce more than three million barrels
of new petroleum and other liquid fuels each day, mainly from light
tight oil. These new volumes, plus new supplies coming on line from
Iraq and elsewhere, could cause a glut in supply, which would push
prices down -- especially as global oil demand shrinks due to improved
efficiency or slower economic growth. In that event, OPEC could have a
hard time maintaining discipline among its members, few of which are
willing to curb their oil production in the face of burgeoning social
demands and political uncertainty. Persistently lower prices would
create shortfalls in the revenues they need to fund their

The North American energy revolution is here, it is big, and it will
only increase in importance as the United States comes close to
becoming a net energy exporter, which is set to happen around 2020.
The resulting shift in global energy supplies will benefit consuming
countries and erode the power of traditional producers. These
developments could also undercut OPEC's traditional role as the
manager of global energy prices, perhaps to the extent that energy
prices plummet. Such a disturbance could, in turn, cascade through all
countries that depend on hydrocarbons for their public finances. Even
without such a dramatic drop in prices, the global flow of energy will
continue to be transformed -- and, with it, economic and geopolitical


Aly-Khan Satchu * a few seconds ago

Energy is China's Achilles Heel in the Pivot to Asia. America has a
unique ability to conduct ''distant Blockade'' operations and switch
the light off.

China's dependence on imported crude oil is increasing and the US'
interestingly is decreasing August 19th 2013


Professor Felipe Fernández-Armesto explains why 'The precocity of the
Indian Ocean as a zone of long-range navigation and cultural exchange
is one of the glaring facts of history', made possible by the
'reversible escalator' of the monsoon.'

I have no doubt that the Indian Ocean is set to regain its glory days.
China's dependence on imported crude oil is increasing and the US'
interestingly is decreasing. I am also certain the Eastern Seaboard of
Africa from Mozambique through Somalia is the last Great Energy Prize
in the c21st.  Therefore, the control of the Indian Ocean becomes kind
of decisive and with control China can be shut down quite quickly. A
Sine qua non of President Barack Obama's pivot to Asia is US/NATO
Power Projection over the Indian Ocean.

A Photo Tour of the Eastern Seaboard of East Africa

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US hits 'provocative' China move on Philippine ships
Law & Politics

Washington (AFP) - The United States on Wednesday accused China of
raising tensions by blocking two Philippines vessels as it urged
freedom of navigation in the tense South China Sea.

The United States, a treaty-bound ally of Manila, said it was
"troubled" by Sunday's incident in which China prevented movement of
two ships contracted by the Philippine navy to deliver supplies and
troops to the disputed Second Thomas Shoal.

"This is a provocative move that raises tensions. Pending resolution
of competing claims in the South China Sea, there should be no
interference with the efforts of claimants to maintain the status
quo," State Department spokeswoman Jen Psaki said.

The Philippines on Tuesday summoned China's charge d'affaires,
accusing Beijing of a "clear and urgent threat" to Manila's interests.
Beijing countered that the ships "infringed China's territorial
sovereignty" and violated a 2002 declaration of conduct in the South
China Sea.

The United States rejected China's stance, saying that countries had
the right to "regular resupply and rotation of personnel" to locations
before the 2002 declaration.

The Second Thomas Shoal, which sits around 200 kilometers (125 miles)
from the western Philippine island of Palawan, is claimed by the
Philippines, China and Taiwan. Beijing calls it Ren'ai Reef.

read more

U.S. investigators suspect that Malaysia Airlines 3786.KU -2.04% Flight 370 stayed in the air for about four hours past the time it reached its last confirmed location @WSJ
Law & Politics

U.S. investigators suspect that Malaysia Airlines 3786.KU -2.04%
Flight 370 stayed in the air for about four hours past the time it
reached its last confirmed location, according to two people familiar
with the details, raising the possibility that the plane could have
flown on for hundreds of additional miles under conditions that remain

Aviation investigators and national security officials believe the
plane flew for a total of five hours based on data automatically
downloaded and sent to the ground from the Boeing Co. BA -0.99%  777's
engines as part of a routine maintenance and monitoring program.

U.S. counterterrorism officials are pursuing the possibility that a
pilot or someone else on board the plane may have diverted it toward
an undisclosed location after intentionally turning off the jetliner's
transponders to avoid radar detection, according to one person
tracking the probe.

But the huge uncertainty about where the plane was headed, and why it
apparently continued flying so long without working transponders, has
raised theories among investigators that the aircraft may have been
commandeered for a reason that appears unclear to U.S. authorities.
Some of those theories have been laid out to national security
officials and senior personnel from various U.S. agencies, according
to one person familiar with the matter.

A total flight time of five hours after departing Kuala Lumpur means
the Boeing 777 could have continued for an additional distance of
about 2,200 nautical miles, reaching points as far as the Indian
Ocean, the border of Pakistan or even the Arabian Sea, based on the
jet's cruising speed.

See yesterdays Rich Wrap Ups

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@BOEING warned of computer takeover of 777 #MH370
Law & Politics

The integrated network configurations in the Boeing Model
777-200,-300, and -300ER series airplanes may enable increased
connectivity with external network sources and will have more
interconnected networks and systems, such as passenger entertainment
and information services than previous airplane models. This may
enable the exploitation of network security vulnerabilities and
increased risks potentially resulting in unsafe conditions for the
airplanes and occupants. This potential exploitation of security
vulnerabilities may result in intentional or unintentional
destruction, disruption, degradation, or exploitation of data and
systems critical to the safety and maintenance of the airplane. The
existing regulations and guidance material did not anticipate these
types of system architectures. Furthermore, 14 CFR regulations and
current system safety assessment policy and techniques do not address
potential security vulnerabilities which could be exploited by
unauthorized access to airplane networks and servers. Therefore, these
special conditions are being issued to ensure that the security (i.e.,
confidentiality, integrity, and availability) of airplane systems is
not compromised by unauthorized wired or wireless electronic
connections between the airplane information services domain, aircraft
control domain, and the passenger entertainment services.

Malaysian Transport Minister Hishammuddin Hussein in Kuala Lumpur
briefs media on the search mission on Wednesday. Reuters


Within a week of its building being taken over by armed gunmen last
month, the regional parliament in Crimea was voting in favour of the
Ukrainian region becoming part of Russia.


How that was achieved under the leadership of Sergei Aksyonov, 41, a
Russian separatist whose political party won 4 percent of the vote at
the parliamentary election in 2010, was a master class

Moscow denies any role in installing Aksyonov, who is known from his
business days by the nickname "The Goblin". But even those close to
the Kremlin say Russia picked him.

"Moscow always bet on Yanukovich. But after the coup in Kiev on
February 22 ... Moscow decided it needed to back the secession of
Crimea from Ukraine. Then they looked for who could be its leader,"
said Sergei Markov, a political analyst sympathetic to the Kremlin who
often explains its workings abroad.

"They chose Aksyonov."


I do not see how Vladimir Putin retreats. He cannot lose Crimea is a
Geopolitical Red Line because of Sevastopol.

To lose Sevastopol would be the equivalent of castrating Putin and
Russia. Its unconscionable. The Europeans see that clearly, I believe.



Russia really wants to go east. It has no designs on former East Bloc
states, which are all now, NATO members but the west wants to bait the
country into a confrontation on its western flank.


This is a very key word. We are seeing today a revival of this
containment policy, which was designed to curb Soviet, might
throughout the cold war. In addition to containment there is a
conscious intent by Brussels  (NATO HQ) and Washington to strangle
Russia, by cutting it completely off from sea and land access beyond
its borders or for its fleet and military supplies to remain mobile.

@Aiww's The Snake and the Policy of Encirclement


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Currency Markets at a Glance WSJ
World Currencies

Euro 1.3934 The euro climbed 0.3 percent to $1.3938 as of 6:43 a.m. in
London after touching $1.3949, the highest since October 2011
Dollar Index 79.45
Japan Yen 102.76
Swiss Franc 0.8730
Pound 1.6660
Aussie 0.9070 Australia's dollar surged after the statistics bureau
said employers added 47,300 positions last month, surpassing the
15,000 gain forecast in a Bloomberg survey. Full-time employment
increased by the most in more than 22 years. The jobless rate held at
a decade-high 6 percent.
India Rupee 60.905
South Korea Won 1066.45
Brazil Real 2.3551
Egypt Pound 6.9596
South Africa Rand 10.7643

The U.S. dollar has weakened 1.1 percent this year, according to
Bloomberg Correlation Weighted Indexes, which track 10
developed-nation currencies. The yen has risen 1.8 percent while the
euro is up 0.5 percent.

Dollar Index 3 Month Chart INO 79.45 [trades real soft or ''Pony''
[It runs like a Pony and not like Zarkava]


Zarkava wins the Arc


Euro versus the Dollar 3 Month Chart 1.3934 [1.3384 STOP]


Dollar Yen 3 Month Chart INO 102.76


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Commodity Markets at a Glance WSJ

A dizzying fall in copper to a near four-year low


Global stocks fell for a fourth day and copper, often regarded as a
proxy for China's economic fortunes, hit its lowest level since 2010
after Shanghai futures had again fallen by their 5 percent daily

At least one U.S. scrap copper trader has suffered "large" losses
after a buyer in China defaulted on a deal in the past week, one of
the first signs that sinking prices and tightening credit are
affecting the physical market.

read more

Gold 3 Month INO 1373.235 [Gold jumped 1.3 percent yesterday after Ukraine's Prime Minister Arseniy Yatsenyuk warned that Russia is massing troops near its border]

Bullion for immediate delivery rose as much as 0.6 percent to
$1,375.17 an ounce, the highest level since Sept. 19, climbing for a
third day. Gold traded at $1,369.34 at 3:04 p.m. in Singapore, poised
for a sixth weekly gain.

The precious metal advanced 14 percent this year as demand for a store
of value increased on the confrontation in Ukraine and concern growth
in China is slowing. Crimea is preparing for a March 16 referendum
that may pave the way for the Ukrainian region to join Russia. China's
retail sales, industrial output and investment last month trailed
estimates, data showed today.

Crude Oil 3 Month Chart INO 98.30


The U.S. Department of Energy plans to shortly release up to 5 million
barrels of crude oil from the Strategic Petroleum Reserve, a
government source says.

I think I am going to go back to swinging a meaningful Line at the Nymex.

Emerging Markets

Frontier Markets

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African Union peacekeepers and the Somali army have begun a major offensive against al Shabaab militants, the U.N.'s Special Representative to Somalia said on Wednesday, urging donors to fund logistical support.

Special Representative Nick Kay said the push started this month when
Ethiopian troops took control of towns in southern Somalia, including
Bakool regional capital Hudur.

"(The offensive) is progressing quite well," Kay told Reuters via
telephone from Mogadishu.

"The Ethiopians clearly have been doing well, recaptured several
important towns in Bakool and in Gedo (region)."

Kay said al Shabaab had to be pushed out of territory where it was
training more insurgents, taxing businesses and importing arms through

"That's why this AMISOM and Somali National Army (SNA) offensive is
really important to deprive them of those bases," Kay said.

In a rare move, the U.N. has passed a resolution to provide logistical
support to the SNA troops fighting alongside the 22,000-strong AMISOM
force, which has been in Somalia since 2007.

Kay said this support will see one U.N. agency carry out medical
evacuations and provide rations, transport and tents for the Somali
army, which analysts say is badly trained, poorly equipped and lacks

The U.N. Support Office for AMISOM (UNSOA) needed more funding to do
its job and so far only Britain and United States have pledged a total
of about $6.5 million, Kay said.

"The rule of thumb was that, to begin with at least, $20 million would
be a good amount to keep going," he added.

South Africa All Share Bloomberg +2.53% 2014


South Africa's Zuma Said to Choose Ramaphosa as Deputy President


Cyril Ramaphosa will become South Africa's deputy president and will
be tasked with managing Africa's biggest economy and putting a 20-year
government plan into action following May 7 elections, according to
two people familiar with the plans of South Africa's ruling party.

The ANC is set to win the national elections, having secured more than
60 percent of every vote since the end of apartheid in 1994. Even
though Johannesburg-based Ipsos, a polling company, said ANC support
has dropped to 53 percent in a survey published Jan. 11 that was
almost three times the support the next most popular party, the
Democratic Alliance, was forecast to get.

"Ramaphosa's inclusion would be positive for business," Isaac
Matshego, a Johannesburg-based economist with Nedbank Group Ltd.
(NED), said in a phone interview yesterday. "This is one of the
architects of our constitution. This is a guy who can get things

Dollar versus Rand 3 Month Chart INO 10.765


Egypt Pound versus The Dollar 3 Month Chart INO 6.9578


Egypt EGX30 Bloomberg +19.44% 2014 Africa's best in 2014


Nigeria All Share Bloomberg -4.96% 2014


Ghana Stock Exchange Composite Index Bloomberg +12.4% 2014


How Africa tweets Portland Communications


Where most tweets come from over a 24-hour period Africa


read more

CIC Insurance reports FY PAT 2013 +1.4285% Earnings here
Kenyan Economy

Par Value:
Closing Price:           6.60
Total Shares Issued:          2178195820.00
Market Capitalization:        14,376,092,412
EPS:             0.67
PE:                9.805

CIC is the leading provider of micro insurance and other financial services

FY Earnings through 31st December 2013 versus FY Year through 31st December 2012

Gross Written Premiums 11.061282b versus 9.009893b +22.768%
Gross Earned Premiums 9.155682b versus 7.288180b
FY Total Income 10.887100b versus 8.901993b +22.299%
Net Claims and policyholder benefits [6.020059b] versus [4.644801b]
Operating and other Expenses [2.351499b] versus [1.956564b] +20.185%
TOTAL OUTGO [9.215110b] versus [7.242665b] +27.233%
FY Profit before Tax 1.671095b versus 1.649591b
FY Profit after Tax 1.408032b versus 1.388201b +1.4285%
FY EPS 0.67 versus 0.64 +4.6875%
Final  Dividend 10cents a share
Proposing an Increase in company's share capital from 3b to 6b
Bonus share of 1 for every 5 held

Company Commentary

Claims incurred grew by 30% to 6b This was mainly due to bad claims
experience of our medical, motor private and Employee Group Life

Via the Investor Briefing

CIC plans to make a bonus issue of 1 new share for every 5 paid up
shares. #CICInvestorBriefing
In Micro-Insurance, CIC wrote over Kshs 600 Million of premiums in
2013. We have set a target of 1 Billion in 2014. Our key focus areas
will be Micro-Health, Life and Micro-Pensions. #CICInvestorBriefing
In Real Estate CIC Insurance Group owns 512 Acres in Isinya and 200
Acres in Kiambu . We plan to commence development of the same.
CIC has identified alternative distribution channels. We have
partnered with Tuskys to offer #Shopassurance . This will be
accessible countrywide on the 40 Tuskys outlets. #CICInvestorBriefing
We have partnered with 17 Banks to offer Bancassurance. The premium in
2013 was beyond Kshs 1.7 Billion. #CICInvestorBriefing
CIC is expanding regionally. We are already operational in South
Sudan. We are also completing the agreements in Uganda and Malawi. We
plan to commence operation by July 2014. #CICInvestorBriefing


I think they have spent a few basis points on chasing Growth.
There is some headroom from these levels of 6.60.
Investors at the NSE prefer lower denominated shares.
They are clearly expanding their Geographical Footprint.

Kenya Shilling versus The Dollar Live ForexPros 86.502


Nairobi All Share Bloomberg +4.29% 2014


Nairobi All Share is +4.141% in 2014 and within striking distance and
1.56% to be exact of an All Time Closing High from the 24th of January
this Year.

Nairobi ^NSE20 Bloomberg +0.20% 2014


Every Listed Share can be interrogated here


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

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