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Satchu's Rich Wrap-Up
 
 
Tuesday 18th of March 2014
 
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My weekly Piece in the Star

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17-MAR-2014 :: Of Matters UK And The Scramble For Crimea
Africa


I am writing this piece from London. Last year on August 12 I wrote:
''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.''

The economy in the United Kingdom has gained traction and momentum and
most economists expect the UK to be the fastest growing economy in the
G7 in 2014. My hosts were describing to me how they had been looking
to buy an apartment recently and had discovered that the owner with
whom they were negotiating had not completed on his purchase. This
fellow had paid £200,000 as a deposit for a £ 2,000,000 property and
was now seeking to flip it to my hosts for £2.4m.

Flippers are having a field day as they always do in a bull market.

Flipping is all about bagging your gains as some unlucky folks
discovered in Dubai in 2008 when the real estate market tanked and
flippers were left with a line of inventory which they never had any
intention of paying for.

So yes London is booming and I think the city and by extension the UK
is a little like Dubai. Both cities have become safe havens in an
uncertain world.

The news flow from around the world has been a little startling,
however. The disappearance of the Malaysian Boeing MH370 remains
perplexing. Do you know that there are 35,000 commercial aeroplanes
registered in the world?

Now lets turn to Ukraine and Crimea. The referendum is set to go one
way and in favour of Russia. In a delicious irony, President Putin is
invoking the R2P doctrine. The R2P doctrine stands for 'responsibility
to protect' ("RtoP" or "R2P") and was a new international security and
human rights norm to address the international community's failure to
prevent and stop genocides, war crimes, ethnic cleansing and crimes
against humanity.

It would be simply unconscionable for Putin to lose Crimea. It would
represent the castration of Russia as a geopolitical player.

It was Zbigniew Brzezinski who said:

"Ukraine, a new and important space on the Eurasian chessboard, is a
geopolitical pivot because its very existence as an independent
country helps to transform Russia. Without Ukraine, Russia ceases to
be a Eurasian empire."

"However, if Moscow regains control over Ukraine, with its 52 million
people and major resources as well as access to the Black Sea, Russia
automatically again regains the wherewithal to become a powerful
imperial state, spanning Europe and Asia."

The Ukraine crisis has seriously infected Russian assets. The Russians
might well have sold more than $100b of US treasuries in a counter
reaction over the last week or so.

Of course, gold is always beholden to tail risks. Tail risks have
grown in 2014 and gold is plus 14 per cent in 2014.

read more


Dubai from the Sky
Africa


Macro Thoughts

Buy Russia The Ruble and Micex.

read more



Moon over Muthaiga Mini Market Nairobi 6 days ago
Africa


At night, I open the window and ask the moon to come and press its
face against mine. Breathe into me. Close the language-door and open
the love-window. The moon won't use the door, only the window. ~Rumi

read more


Moon over Shepherds Bush 15th March 2014
Africa


Be melting snow. Wash yourself of yourself. ~Rumi

Snow capped Peaks Switzerland 25 days ago
http://www.twitpic.com/dw5d4c

You were born with wings, why prefer to crawl through life? ~Rumi

This world's existence is one night long. There's a great lively
gathering that night, but some people sleep through it. ~Rumi

read more


The US and the European Union retaliated over the Crimea referendum by targeting sanctions against Russian and Ukrainian officials on Monday, a move widely greeted with scepticism as "toothless".
Law & Politics


The White House imposed sanctions against 11 named individuals: seven
senior Russian politicians and officials and four Crimea-based
separatist leaders accused of undermining the "democratic processes
and institutions in Ukraine".

But the US pointedly avoided targeting the Russian president, Vladimir
Putin, or key figures in his inner circle.

The EU imposed sanctions on 21 individuals, including three senior
Russian commanders, the prime minister of Crimea, a deputy speaker of
the Duma and other senior officials.

There are divisions within Europe over how to respond to Russia, and
this is reflected in the fact that action is being taken against less
than two dozen from an original proposed list of 120.

The sanctions came on the eve of an address to the Russian parliament
by President Vladimir Putin on the next moves for Crimea.On Monday
night, Putin posted a decree on the Kremlin website, recognising
Crimea as a sovereign state - in what appeared to be a first step
toward integrating Crimea as a part of the Russian Federation.

The decree, which took effect immediately, says Moscow's recognition
of Crimea as independent is based on "the will of the people of
Crimea".

Conclusions

Well this is what I think.

Putin is way ahead. He is all Strategy and The US [because Victoria
Nuland tipped her hand] is all Tactics.
The Way the Argument is being made is just not resonating. We live in
a Multi Polar World and in an Information War, the consistently
hysterical Pitch is just not working.
Any Imbecile could see Putin was not going to just roll over and give
up his warm water Port.
These Sanctions are laughable.
Interestingly and from the previous Wrap-Up You will note Putin placed
his punch first by apparently liquidating about a $100b of Treasury
securities that Russia was holding.
And in a noteworthy Twist, Putin has reversed the R2P Doctrine [which
has been used to overthrow a number of Folks] in his Favour to argue
he was defending the rights of Russians under that doctrine.

President @BarackObama announces Sanctions

http://ria.ru/world/20140317/999875092.html

Dmitry Rogozin @DRogozin Deputy Prime Minister of Russia. Head of the
Military-Industrial Commission. Special Envoy of the President. PhD.

https://twitter.com/DRogozin

Here it finally came to me: the real world-wide acclaim)) I thank the
Washington Obkom! (Province Party Committee)

Dmitry Rogozin @DRogozin  14h I think some prankster prepared the
draft of this Act of the US President)

Comrade @BarackObama, what should do those who have neither accounts
nor property abroad? Or U didn't think about it?)

Putin's approval rating, bolstered after Russia hosted its first
Winter Olympics last month, reached a three-year high as he poured
troops into Crimea amid the overthrow of the Kremlin-backed government
in Kiev.

http://www.bloomberg.com/news/2014-03-16/putin-no-mad-man-to-russians-as-power-play-trumps-economic-risk.html

Russians see his defiance of the West over Ukraine as a sign of
strength, reinforcing his image as a leader who restored his country's
greatness from the post-Communism chaos of the 1990s.

Seventy-two percent of Russians approve of the work Putin is doing as
president, the independent Levada Center said March 13, citing a
survey of 1,603 people that had a margin of error of 3.4 percentage
points. A March 8-9 poll by the state-run All-Russia Center for the
Study of Public Opinion, known as VTsIOM, also gave Putin 72 percent.

"The involvement of the U.S. in a situation with which it has nothing
to do with is very irritating," said Ilya Knyazev, a 31-year-old sales
director at a food distributor in Moscow. "I support Crimea joining us
because otherwise NATO would be in Ukraine, hurting Russia's
security."

Crimea has been home to Russia's Black Sea Fleet since its founding by
Catherine the Great in 1783, after the Ottoman Empire ceded the
peninsula. It was part of Russia until Soviet leader Nikita Khrushchev
gave it to the Ukrainian Socialist Republic in 1954, when Putin was 14
months old.

Vladimir Putin

http://www.classybro.com/wp-content/uploads/2013/11/Vladimir-Putin-2013.jpg

Sevastopol, home to the Black Sea Fleet, is a symbol of Russian
heroism not unlike the Alamo for Americans. The city was under siege
by the British and the French during the Crimean War in the 1850s and
then by Nazi forces in 1941-1942.

http://www.bloomberg.com/news/2014-03-16/putin-no-mad-man-to-russians-as-power-play-trumps-economic-risk.html

In just the past year, Putin has cemented Russia's role in the Middle
East by brokering a deal that averted U.S. strikes on Syria and kept
in power President Bashar al-Assad, a Soviet-era ally and buyer of
Russian weapons. He's also encouraged the West to make concessions to
Iran over its nuclear program and struck a multi-billion arms deal
with Egypt's new military rulers after the U.S. suspended aid.

Putin, who once described the breakup of the Soviet Union as the
biggest geopolitical catastrophe of the 20th century, was named
"Person of the Year" in December by the Times of London for the accord
over Syria. That effort "propelled the president back into the front
ranks of effective world statesmen," the Times said.

"The country was in ruins under Boris Yeltsin," said Batashev, the
Moscow trader. "Despite all of Putin's disadvantages, he's a tough and
uncompromising leader who managed to transform Russia into a better
place than it was a decade ago."

With the presidential term extended to six years from four, Putin,
first elected in 2000, may stay in power until 2024 if he runs and
wins again in 2018.

Eyes on Crimea, China makes its move By Donald K Emmerson

http://www.atimes.com/atimes/Southeast_Asia/SEA-01-170314.html

While much of the world was busy watching Russia swallow Crimea, few
realized that an also dangerous territorial tit-for-tat had begun to
unfold earlier this month more than 5,000 miles away in the South
China Sea.

At Second Thomas Shoal, a handful of Philippine marines have long been
stationed and re-provisioned on the rusting deck of the BRP Sierra
Madre, a Philippine naval ship half-sunk into the reef in 1999. Ever
since, the vessel and the marines have served to embody Manila's claim
of sovereignty over the shoal. More recently, China has tried to raise
the salience of its own claim by intensively patrolling the area.

On March 9, 2014, China made a move to end the status quo at the
shoal. For the first time in 15 years, Beijing stopped Manila from
delivering supplies to the Sierra Madre. The Chinese Coast Guard
forced two Philippine ships to turn away. Manila answered the blockade
by successfully dropping food and water to the marines by air. It was
then up to Manila whether to send in another supply ship or plane, and
up to Beijing whether to leave it alone, chase it away, sink it, or
shoot it down.

China claims that the Philippine ships were "loaded with construction
materials" to build up Manila's position. Manila says the ships were
merely trying to re-provision the marines "to improve the conditions
there," not "to expand or build permanent structures on the shoal."

Everything We Know About Malaysia Airlines Flight 370 In One
Graphic businessinsider

http://www.businessinsider.com/flight-370-graphic-2014-3

The aim has been to try to find a residual marker for "inflation" -
the idea that the cosmos experienced an exponential growth spurt in
its first trillionth, of a trillionth of a trillionth of a second.

http://www.bbc.com/news/science-environment-26605974

Theory holds that this would have taken the infant Universe from
something unimaginably small to something about the size of a marble.
Space has continued to expand for the nearly 14 billion years since.

Inflation was first proposed in the early 1980s to explain some
aspects of Big Bang Theory that appeared to not quite add up, such as
why deep space looks broadly the same on all sides of the sky. The
contention was that a very rapid expansion early on could have
smoothed out any unevenness.

But inflation came with a very specific prediction - that it would be
associated with waves of gravitational energy, and that these ripples
in the fabric of space would leave an indelible mark on the oldest
light in the sky - the famous Cosmic Microwave Background.

The BICEP2 team says it has now identified that signal. Scientists
call it B-mode polarisation. It is a characteristic twist in the
directional properties of the CMB. Only the gravitational waves moving
through the Universe in its inflationary phase could have produced
such a marker. It is a true "smoking gun".

Speaking at the press conference to announce the results, Prof John
Kovac of the Harvard-Smithsonian Center for Astrophysics, and a leader
of the BICEP2 collaboration, said: "This is opening a window on what
we believe to be a new regime of physics - the physics of what
happened in the first unbelievably tiny fraction of a second in the
Universe."

Gravitational waves from inflation put a distinctive twist pattern
in the polarisation of the CMB BBC

http://www.bbc.com/news/science-environment-26605974

"We come spinning out of nothingness, scattering stars like dust." -- Rumi

read more




Currency Markets at a Glance WSJ
World Currencies


Euro 1.3930
Dollar Index 79.37
Japan Yen 101.82  It strengthened 1.9 percent last week versus the
greenback, the sharpest gain since the five days ended Jan. 24
Swiss Franc 0.8729
Pound 1.6637
Aussie 0.9082 The currency gained 0.7 percent yesterday, when it
advanced against all its major peers. The central bank said it saw
more signs record-low interest rates were boosting growth, and
reiterated a period of steady borrowing costs was likely.
India Rupee 60.95
South Korea Won 1067.50
Brazil Real 2.3488
Egypt Pound 6.9608
South Africa Rand 10.7674

U.S. policy makers will meet today and tomorrow in the Federal Open
Market Committee's first gathering led by Fed Chair Janet Yellen since
she succeeded Ben S. Bernanke last month. The central bank has cut
monthly bond purchases to $65 billion this year, from $85 billion in
2013. Yellen last month pledged further "measured" steps to slow the
buying if improvement continues.

Dollar Index 3 Month Chart INO 79.37 [trades very soft not sure a
meaningful Bounce is on the cards yet]

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 1.3930

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

Dollar Yen 3 Month Chart INO 101.82

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

read more


Commodity Markets at a Glance WSJ
Commodities


Gold 3 Month Chart INO 1361.15 [overcooked at these Levels]

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

Bullion for immediate delivery fell as much as 0.7 percent to
$1,357.13 an ounce and traded at $1,360.94 by 1:01 p.m. in Singapore.
Prices climbed to $1,392.22 yesterday, the highest since Sept. 9,
before closing 1.2 percent lower. The 14-day relative strength index
rose to 72.9 on March 14, signaling to some analysts who study
technical charts that prices may drop.

Gold advanced 13 percent this year.

Crude Oil 3 Month Chart INO 97.47 [Equilibrium Price is below
90.00 Iraq pumping big]

http://quotes.ino.com/charting/index.html?s=NYMEX_CL.K14.E&v=d3&t=c&a=50&w=1

Copper 1 Month Chart INO 2.9805 [big correlation with Zambia Kwacha]

http://quotes.ino.com/charting/index.html?s=NYMEX_HG.K14.E&t=&a=&w=&v=d1

Emerging Markets

Frontier Markets

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Africa- a new era for partnerships with the south
Africa


For the first time in 150 years, the combined output of the developing
world's three leading economies--Brazil, China and India--is about equal
to the combined GDP of the longstanding industrial powers of the
North--Canada, France, Germany, Italy, United Kingdom and the United
States (HDR 2013). This represents a dramatic rebalancing of global
economic power: In 1950, Brazil, China and India together represented
only 10% of the world economy, but it is estimated that by 2050, they
will together account for 40% of global output.

As part of the rising South-South trade, the share of developing
countries' capital goods imports from other developing countries has
increased steadily, from 35% in 1995 to 54% in 2010, rendering
developing countries as the major source of capital goods for other
developing countries.

South Africa All Share Bloomberg +1.88% 2014

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

Dollar versus Rand 3 Month Chart INO 10.7677

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 6.9608

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

Egypt EGX30 Bloomberg +21.16% in 2014 Africa's Best in 2014 and at a
more than 5 year High

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

8,161.05 +34.72 +0.43%

if the equity markets had a vote in Egypt, army chief general Abdel
Fattah al-Sisi would actually get one of those impossible- to-believe
votes of 99.8% 20-JAN-2014

http://www.rich.co.ke/media/docs/038NSX2001.pdf

Nigeria All Share Bloomberg -8.02% 2014

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

As Nigeria gets richer, more Nigerians live in poverty. That's the
paradox of growth in Africa's biggest oil producer, its most populous
nation and which, as of March 31, may be its top-ranked economy.

http://www.bloomberg.com/news/2014-03-17/nigeria-overtaking-south-africa-s-economy-masks-poverty-trap.html

The National Bureau of Statistics is recalculating the value of gross
domestic product based on production patterns in 2010, the first time
it's overhauled the data in two decades. That may boost the size of
the economy by as much as 60 percent to between $384 billion and $424
billion, according to London-based Renaissance Capital Ltd., putting
Nigeria ahead of South Africa and close to Austria and Thailand in the
World Bank's global league table.

Yet the most recent poverty survey by the Nigerian statistics agency,
published in 2012, shows that 61 percent of Nigerians were living on
less than a dollar a day in 2010, up from 52 percent in 2004. In the
desert north, where Amnesty International estimates more than 600
people have been killed this year as the government struggles to quell
a violent Islamist insurgency, poverty is even more stark.

"Reducing poverty and inequality requires not just economic growth but
also job creation and investment in improving the productive capacity
of the economy and its people," Giulia Pellegrini, sub-Saharan Africa
economist at JPMorgan Chase & Co. in London, said in an e-mail.

These tensions underscore the shortcomings of the region's economic
powerhouse, whose growth potential has spurred investment from
Cincinnati-based Procter & Gamble Co. (PG) to MTN Group Ltd. (MTN),
Africa's biggest mobile-phone operator. While Nigeria's economy has
expanded 6 percent a year since 2006, according to the World Bank, the
nation's power supply is less than a 10th of South Africa's.

Nigeria's benchmark stock index has dropped 11 percent since the
beginning of the year, after surging 47 percent in 2013. The currency
has slid 2.9 percent against the dollar since Jan. 1 and was trading
as low as 165.80 yesterday.

Oil production is concentrated in the south, with revenue accounting
for about 80 percent of government funds and more than 95 percent of
foreign income, according to the Finance Ministry. The government
anticipates oil and gas income of 7.16 trillion naira ($43 billion) in
2014.

Joblessness among young Nigerians may undermine economic progress in a
nation where 23.9 percent of the working population is unemployed,
according to data from the Central Intelligence Agency's World
Factbook. It estimates that 62 percent of the nation's 177 million
people are below the age of 25.

"The large number of underemployed youth is a serious threat to the
economic and political stability of the country. The median age in
Nigeria is 14, and the population continues to grow at a rate close to
3 percent" a year, John Litwack, the World Bank's lead economist for
Nigeria, said by e-mail.

"Growth in Nigeria has not been inclusive in decades," she said in an
e-mail. "Once agriculture gets the traction it needs we will have a
stronger and a more diverse economy."

Ghana Stock Exchange Composite Index Bloomberg +11.99% 2014

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

'One size fits all' marketing by global companies fails in Africa
March 16, 2014 1:08 pm By Katrina Manson in Nairobi

on.ft.com/1fQqddE

When a television advertising campaign promoting Indian mobile phone
company Bharti Airtel in Africa fell flat a few years ago, the
marketers went back into the cutting room to work out why.

Images of the savannah, actors from South Africa, along with the use
of coins - when many Africans use only paper money - had limited the
advert's appeal in some parts of the continent, no good for a company
with business in 17 African countries.

"They think everybody looks the same but just having black models is
no longer enough. It's like putting a Thai, a Chinese and an Indian in
the same Asia ad. People can recognise themselves," he adds."This is
where multinational companies go wrong. They come with their global
brand positioning and they want to cut and paste," says Bharat
Thakrar, head of Nairobi-based Scangroup, Africa's top marketing
services agency.

Just as US megastore Walmart and UK supermarket Tesco found expansion
into China tougher and slower than expected, global companies -
whether new or old entrants to Africa - face similar headwinds if they
fail to adapt their advertising to the continent.

The potential consequences of failure are significant as
multinationals from Heineken to Unilever and from Nestlé to L'Oréal
turn their attention to cracking Africa, investing millions of dollars
over the past five years to tap a market with a billion people, a
rising consumer class and some of the fastest growing economies. And
the arrival of foreign mobile phone and consumer companies to Africa
has led to an explosion in advertising on the continent.

While Africa still makes up a tiny proportion of the annual $500bn
spent on advertising worldwide, information researchers Nielsen said
that last year the Africa and Middle East region was the fastest
growing destination for advertising spending, which rose by 14.6 per
cent against 3.2 per cent globally.

The International Monetary Fund predicts economic growth of an average
5 per cent a year on a continent where some surveys put the number of
middle-class consumers at more than 300m people. Key for
multinationals is that consumer spending in sub-Saharan Africa is
expected to reach $1tn by 2020, up from $600bn in 2010, according to
research group Euromonitor.
The surge in marketing, however, is in some cases failing to deliver
returns, as companies have been too quick to characterise the
continent as a single entity and, as a result, have failed to connect
with consumers.

Airtel learnt this lesson and, shortly after its disappointing
campaign, put out a series of more tailor-made television adverts: one
about a pidgin-speaking hustler in Nigeria to reflect the country's
"bigger-than-life" appreciation for all things slapstick; another
about a Congolese mechanic whose poignant francophone tale was set to
captivating local rhythms; and others showcasing graduation ceremonies
to capture east Africa's "more conservative" culture.

Foreign companies starting to advertise in Africa face another danger:
homegrown companies that understand and respect the continent's
individual markets better than many global corporations and are
prepared to work in fragmented markets.

"There is growing competition from local companies and brands," says
Nestlé regional head Ian Donald, who oversees 21 African markets.

In the past decade, a detergent named Toss from homegrown Kenyan
company Kapa Oil Refineries, has begun to take market share away from
Unilever's 60-year-old market leader Omo. Unilever, the world's
second-largest consumer goods company after Procter & Gamble of the
US, says that increased competition is "driving a long overdue shift
to a consumer-centric marketing model in Africa".

The Anglo-Dutch company, popularly known for Lipton tea and Persil
detergent, now makes Portuguese-language adverts depicting traditional
chicken stews to sell Maggi stock cubes in Angola, while Amharic
script emblazons its adverts for Knorr products in Ethiopia.

Mr Thakrar of Scangroup says: "We tell multinationals all the time -
they have to produce advertising that's more relevant, that resonates
- it's costing more but it's the only way to do it."

Like Kapa, which serves 18 African markets, Kenya-based Bidco Oil,
which bought several brands from Unilever in 2002, plans to take
further chunks out of multinationals as it expands beyond east Africa.
"The barriers to entry are falling," says Bidco chief executive Vimal
Shah, arguing multinationals no longer have exclusive access to
technological knowhow, large capital and global networks.

"Plus, if you come with a brand that's not known in this market -
unless it's Prada or Mercedes - it could be famous in London but it
won't necessarily appeal to consumers out here," he says.

The most successful brands go so local they become part of society -
running marathons and musical festivals, raising money following
natural disasters or regularly responding directly to customers.

Bob Collymore, boss of Safaricom, Kenya's leading mobile phone company
in which the UK's Vodafone has a 40 per cent share, regularly tweets
to his 209,000 followers. Now some international companies have begun
recruiting local "influencers" to sell everything from vodka to
phones, beer to mortgages, paying them a monthly wage to assess
products on blogs and Twitter accounts.

It is early days, but foreign executives from consumer companies
privately acknowledge that they will have to adapt, and quickly. "It's
only just now that people are beginning to see Africans as consumers,"
says a European corporate executive.

"The time is coming when we and everybody else are going to have to
tailor and adapt brands - advertising and marketing, both - to the
different Africa markets," the executive says.

While big companies are beginning to tailor their marketing messages -
increasingly choosing local models, languages, music and food to reach
target audiences - some are also beginning to adapt their products to
the tastes of local African markets.

Manufacturers of soft drinks and confectionery typically sweeten
products aimed at African markets, while South Korea's Samsung
recently brought out extra-loud stereos to appeal to Nigerian
consumers, and fridges that can withstand power loss and fluctuations,
to cope in African markets where electricity regularly cuts and
surges.

"There was a habit in Africa of pumping out universal products," says
one European corporate executive, adding that companies had not
bothered to do market research. But that is changing now with the
arrival of competition - particularly from homegrown African
companies.

Swedish beauty company Oriflame set up in east Africa last year, but
could only introduce 300 products from its 1,500-strong line. Some of
its make-up was developed for the Indian market, but the company plans
to introduce darker shades of foundation for an African range soon.

Often, products are so entirely new to local markets that customers
are flummoxed. "Some of our customers try to put black mascara on
their lips - they don't know what it's for," says Tracy Wanjiru, at
east Africa's largest supermarket chain Nakumatt.

The company set up free nail bars and makeovers to spread the word and
tempt new custom for more expensive western brands entering the
market, including Revlon and L'Oréal's Maybelline.

Rwanda is Africa's most attractive market for retailers looking to
expand in the fast-growing continent, according to a report by
consultancy A.T. Kearney

http://www.reuters.com/article/2014/03/17/africa-retail-idUSL6N0ME2QI20140317

Rwanda is Africa's most attractive market for retailers looking to
expand in the fast-growing continent, according to a report by
consultancy A.T. Kearney that hails the small east African state's
economic reforms and business-friendly agenda.

"Rwanda has an efficient government and strong macroeconomic
indicators that reveal many opportunities for international retailers
that can offer basic packaged goods," said Marieke Witjes, co-author
of A.T. Kearney's first African Retail Development Index, released on
Monday.

The index, which will be compiled annually, ranks the 20 African
countries identified as having the best potential for retailers.

Rwanda's 11.5 million people are currently served by two Kenyan
supermarket chains, both owned by unlisted retailer Nakumatt Holdings,
and a slew of informal traders.

A.T. Kearney ranked Nigeria, Africa's most populous country and its
second-biggest economy, second in the index, citing its rapid
urbanisation, youthful population and rising middle class.

But the think-tank said the west African giant was the toughest market
in the index to master due to its opaque regulations, congestion at
its ports and a lack of land on which to build shopping malls.

"These are all the serious hurdles and roadblocks that will require
time and effort to overcome," Witjes said.

South African retailer Woolworths pulled the plug on its Nigerian
business late last year, citing high rents and duties as well as the
difficulty of marketing to consumers in the country of 170 million
people.

Other countries that made it into the top 10 included Namibia, Ghana,
Ethiopia and Tanzania.

South Africa, Africa's biggest economy and consumer market, came in at
seventh, with the report's authors saying the market was already
well-penetrated.

African growth prospects for retailers were highlighted in 2011 when
U.S. giant Wal-Mart bought a majority stake in South Africa's
Massmart, giving it a foothold in several frontier African countries.

Even though African per capita incomes are among the lowest in the
world, a decade of robust economic growth and rapid population
expansion have attracted the attention of international retail
investors.

Coupled with relative political stability, a rising middle class,
rapid urbanisation, and slower growth in Europe and South Africa, the
logic of setting up shop in Africa is not in doubt - provided
companies do their homework, the report said.

"It is essential that retailers understand where African countries are
in the evolution of the retail landscape and the stages of market
development to craft their expansion strategies for Africa," report
co-author Mirko Warschun said

GE, Bombardier Among Winners of $4.7 Billion Africa Deal

http://www.bloomberg.com/news/2014-03-17/transnet-awards-locomotive-deal-to-four-companies-including-ge.html

Transnet SOC Ltd., South Africa's state-owned ports and rail operator,
picked four companies to supply new locomotives as part of a $4.7
billion investment to renew its ageing fleet.

General Electric Co. (GE) and China's CNR Rolling Stock will supply
465 diesel locomotives while Bombardier Inc. (BBD/B) and China's CSR
Zhuzhou Electric Locomotive won the contract for 599 electric
locomotives, Chief Executive Officer Brian Molefe told reporters in
Johannesburg today. Most of the locomotives will be built in South
Africa and they will be delivered within three-and-a-half years, he
said.

read more



Kenyan police have arrested two men after they were tracked and found to have two large bombs that may have been aimed for use in the area of the port city of Mombasa
Kenyan Economy


"Our first suspicion is that they are al Shabaab especially because of
their origin," Robert Kitur, Mombasa police chief told Reuters, adding
one man was Somali and the other was a Kenyan of Somali origin.

Kenya, which neighbors Somalia, has a large community of ethnic Somalis.

Police recovered two large improvised explosive devices (IEDs), or
hand-made bombs, from the men, Kitur said. "We suspect they were
planning to detonate them somewhere around Mombasa," he added.

"If they had detonated, they would have caused massive destruction,"
Kitur said, adding police also found mobile phones which could have
been used as detonators.

Police had trailed the suspects after intercepting telephone
communications they were making with suspected accomplices in Somalia,
Kitur said.

Conclusions


Asymmetric Risks remain potent, I am afraid.

East African Cables reports FY PAT 2013 -23.72% Earnings Release here

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

Par Value:                  0.50/-
Closing Price:           15.85
Total Shares Issued:          253130000.00
Market Capitalization:        4,012,110,500
EPS:             1.37
PE:                11.569

Leading Kenyan cable manufacturer.

FY Earnings through December 2013 versus through December 2012

FY Turnover 4.502964b versus 4.300608b +4.705%
Profit from Operating Activities 595.944m versus 775.383m -23.141%
FY Profit before Tax 585.400m versus 753.243m -22.28%
FY Profit after Tax 398.202m versus 522.060m -23.72%
FY EPS 1.37 versus 1.74 -21.26%
Final Dividend 60cents a share [+40cents Interim] = 1shilling Total Pay Out.

Company commentary


The Growth of 5% in revenue primarily driven by export sales.
''low demand in the local market''
2014 Outlook ''The Group is focused on regional diversification and
product development to expand its revenue base and return more
earnings to its shareholders''

Conclusions


At the First Half Stage PBT was running at -18.33 and we have closed
the Full Year at -22.28%. Interesting that the local market was weak.
Given the Spike in the extractives, I think Cables has a bright medium
term Future.
Final Dividend is worth 3.785% of yield.

Kenya's beauty sector blossoms @FT @KatrinaManson Video

http://video.ft.com/3269850528001/Kenya-s-beauty-sector-blossoms/companies

The Africa Retail Development Index (ARDI) study however ranked Kenya
the 20th most attractive retail market on the continent

http://www.nation.co.ke/business/Kenya-ranks-poorly-as-retail-destination/-/996/2248134/-/t2401iz/-/index.html

"The country's ranking was hampered by low scores in market size and
time pressure, which measures how much of long-term opportunity a
market represents and the low growth rates for both the GDP and sales
per capita," states the report.

Kenya Shilling versus The Dollar Live ForexPros 86.509

http://j.mp/5jDOot

Nairobi All Share Bloomberg +5.10% 2014

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

Nairobi ^NSE20 Bloomberg +0.08% 2014

http://j.mp/ajuMHJ

Every Listed Share can be interrogated here

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

read more



 
 
N.S.E Today


The Nairobi All Share rose a marginal 0.04 points to close at 142.98.
The All Share is +4.63% in 2014.
The Nairobi NSE20 improved 6.08 points to close at 4928.74. Bulls want
this Index above the 5,000 Level.
The NSE20 closed above 5,000 January 8th through January 29th this year.
The Equity Market traded 587.396m with Safaricom +0.83% and Equity
Bank -1.57% trading 47.92% of that Volume.
East African Cables released FY 2013 Earnings where PAT retreated 23.72%.



N.S.E Equities - Agricultural


Kakuzi was high ticked +9.09% to close at 120.00 on 100 shares traded.
Kakuzi is +26.315% in 2014.



N.S.E Equities - Commercial & Services


Safaricom was the most actively traded share at the Securities
Exchange and firmed 0.83% to close at 12.20. Safaricom traded 11.639m
shares worth 142.003m and 24.175% of the volume traded at the Exchange
today. Safaricom is +12.44% in 2014 and within 2.008% of a record
closing High of 12.45 set on the 24th of January this year. It is
predictable and predicted that Safaricom will set a new life Time High
before the End of the Month.

Kenya Airways firmed 0.42% to close at 12.00 and traded shares as high
as 12.50 +4.602% during the session. It is set to rebound further from
an oversold position.



N.S.E Equities - Finance & Investment


Equity Bank retreated a further 1.57% to close at 31.25 making that a
8.088% 2 session slide and on heavy Volume. Equity Bank traded 4.423m
shares worth 139.489m. Thats a cumulative total of 7.297m shares over
the last two sessions. Sellers outpaced Buyers by a Factor of 31
versus 14. Equity Bank is +1.62% in 2014.
Kenya Commercial Bank firmed +1.09% to close at 46.50 and traded
1.846m shares worth 85.981m. Kenya Commercial Bank has rallied +6.28%
since releasing its FY 2013 Earnings where FY PAT 2013 expanded
+17.517%. Buyers outpaced Sellers by a Ratio of 30 versus 11
confirming the muscular high volume Nature of the Post results Rally.

CIC Insurance maintained its recent blistering post FY Results Release
Rally and closed 3.31% higher at 7.80 [a Fresh 52 week Closing High]
and traded 1.427m shares worth 11.138m. Buyers outpaced Sellers by a
Factor of 2 versus 1. CIC Insurance is +31.092% in 2014.

Centum firmed 1.33% to close at 38.00 and is +15.151% in 2014.



N.S.E Equities - Industrial & Allied


East African Cables retreated 0.95% to close at 15.70 and traded
38,600 shares in the first trading session after the release of its FY
2013 Earnings where FY Turnover expanded +4.705%, FY Profit After Tax
retreated 23.72%. Interestingly in the Company commentary. E.A Cables
cited ''low demand in the local market''. Cables is -6.26% in 2014.

Kenya Power firmed 0.344% to close at 15.00 and traded better than the
moving average Volume of 2.277m shares worth 34.154m. KPLC is +6.007%
in 2014 and sentiment [particularly amongst the Brokerage Research
Notes] mending.

EABL eased 1.54% to close at 255.00 and on the day that the Business
Daily carried a story that EABL will retrench a 100 Workers. This
should be seen as affirmation that the MD Charles Ireland has a firm
hand on the Tiller and shareholders should take note. EABL traded
127,700 shares.

East African Portland firmed 1.08% to set a Fresh 52 week High in what
has been Sequence of them in March. EA Portland closed at 93.50 and is
+35.50% in a more than decent Rally in 2014.

Mumias Sugar was the biggest loser at the Exchange today and retreated
4.29% to close at 3.35 and traded 659,900 shares. Mumias Sugar rallied
33.33% 24th Feb through March 3rd. Mumias has given back 2/3rds of
that Rally 3rd March through today and that is probably the correction
now done with it.

--



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