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Satchu's Rich Wrap-Up
 
 
Tuesday 13th of May 2014
 
Morning
Africa

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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 look forward to hosting the “Banking CEO of the Year” for 2014
National Bank Chief Executive Officer Munir Ahmed at #Mindspeak May
17th

read more





I flew to Milan to at-tend the mercurial Francesco Confuorti’s 6th Edition of ‘Global Perspectives for Growth and Trade’
Africa


From the wonderfully green Warsaw, I flew to Milan to at-tend the
mercurial Francesco Confuorti’s 6th Edition of ‘Global Perspectives
for Growth and Trade’, which this year has a special focus on East
Africa. Mr Confuorti (the President of Advantage Financial, about
which I am sure you will hear a great deal in the near term) is a
magnetic personality whom I met in Nairobi and he is kind of
irresistible. I am a deep believer in serendipity and the ‘power of
pull’ and I like being in the company of folks who can bend
serendipity at a personal level. I have found that in life, you can be
the most intelligent person on the block but without serendipity and
the power of pull, all that intelligence can be a wasted asset.

Serendipity creates an environment that allows you to tap into its
sweet spots. When you do not have it, you know it. Great ideas
flounder because there is no forward momentum. Of course, nothing
comes without hard work and passion but hard work plus passion and
serendipity is an unstoppable combination.

Here in Milan, you feel the heartbeat of Italy, the wonderful qual-
ity of the workmanship and of the design – just think Ferraris and
Prada handbags. And if we wish to ride up the global value chain
(because that is where the juice is in the 21st century economy), we
can learn from Italy.

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12-MAY-2014 :: China Should Invest in Kenya's Bonds Equities
Africa


Macro Thoughts

Home Thoughts

Looking forward to returning to the Family tomorrow.

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India Exit Polls Signal Modi Bloc Winning Majority in Election
Law & Politics


India’s main opposition bloc led by Narendra Modi is poised to win a
majority in a national election, most exit polls signaled, boosting
his chances of taking power in the world’s second-most populous
country.

Modi’s Bharatiya Janata Party and its allies will win 249 to 340
seats, according to six exit polls today, with 272 needed for a
majority. The Congress party and its allies, in power for the past
decade, are projected to win 70 to 148 seats. Results will be
announced on May 16.

“Let’s place people over politics, hope over despair, healing over
hurting, inclusion over exclusion and development over divisiveness,”
Modi, 63, said in a statement sent by the BJP today. “It is natural
for the spirit of bi-partisanship to get temporarily lost in the midst
of an election campaign, but now is the time to regain it.”

The S&P BSE Sensex climbed 2.4 percent to a record 23,551 in Mumbai
today and the rupee touched a nine-month high before the exit-poll
results.

Conclusions


I said a while back @NarendraModi is a Shoe In.

read more




Salva Kiir said South Sudan will postpone presidential elections scheduled for 2015 as country's warring factions will need time to reconcile, with a new poll possibly taking place as late as 2018
Law & Politics


In a manner of speaking, Russia and China appear to be this week on a
path of testing the limits to American power.

http://blogs.rediff.com/mkbhadrakumar/2014/05/10/asia-pacific-ukraine-unrelated-so-far-at-least/

Separatists claim victory in eastern Ukraine; Kremlin calls for talks
with Kiev government

http://www.washingtonpost.com/world/europe/separatists-claim-victory-in-eastern-ukraine-kremlin-calls-for-talks-with-kiev-government/2014/05/12/135ceba9-824c-486d-98e1-e1aa49627fa3_story.html?hpid=z1

“Moscow respects the will of the population of the Donetsk and Luhansk
regions and hopes that the practical implementation of the
referendums’ results will proceed in a civilized way, without repeated
outbreaks of violence and through a dialogue between representatives
of Kiev, Donetsk and Luhansk,” the government of Russian President
Vladi mir Putin said in a statement.

Roman Lyagin, who heads the Central Elections Commission of the
self-proclaimed Donetsk People’s Republic, told Russia’s Interfax news
agency that he was not sure when final tallies would be ready but that
preliminary results suggest that 89 percent of the voters supported
some sort of self-rule. He said a final referendum report would be
issued later Monday.

Gazprom Threatens to Halt Gas Shipments to Ukraine on June 3

http://www.bloomberg.com/news/2014-05-12/gazprom-threatens-to-halt-gas-shipments-to-ukraine-on-june-3.html

Tomorrow, OAO Gazprom (GAZP) will send Ukraine a bill for June, Chief
Executive Officer Alexey Miller said today at a meeting with Russian
Prime Minister Dmitry Medvedev. If the bill isn’t paid by June 2 the
neighboring country won’t receive any Russian gas from 10 a.m. the
next morning, Miller said.

“It’s time to stop coddling them, notify them tomorrow and move to
pre-payments,” Medvedev said during the meeting. “I think that all
possible ways to settle this situation using other measures were
undertaken by Gazprom.”

"We have won in Syria," said Alaeddin Borujerdi, chairman of the
Iranian parliament's national security and foreign policy committee
and an influential government insider.

http://www.theguardian.com/world/2014/may/11/syria-crisis-iran-assad-won-war-tehran

"The regime will stay. The Americans have lost it."

Conclusions


Syria has been destroyed so what is a Win in such a situation.

read more




Currency Markets at a Glance WSJ
World Currencies


Euro 1.37485 Draghi refers
Dollar Index 80.06 [Euro drawdown has lifted the Dollar]
Japan Yen 102.274
Swiss Franc 0.88758
Pound 1.685375
Aussie 0.9340
India Rupee 59.79  The rupee touched 59.5175 yesterday, the strongest
since July. [My Objective is 57.50]
South Korea Won 1022.2
Brazil Real 2.21475
Egypt Pound 7.0536
South Africa Rand 10.3158

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With $327 billion in annual sales, @Samsung dwarfs Apple ($170.9 billion in revenue) and Google ($59.8 billion) combined.
International Trade


All together, Samsung accounts for about 23 percent of South Korea’s economy.

@Samsung Electronics sold 10 million Galaxy S5 units worldwide in the
smartphone's first 25 days on the market, according to the Korea
Economic Daily

http://www.bloomberg.com/news/2014-05-12/how-samsung-s-10-million-galaxy-s5-sales-stack-up-against-the-iphone.html

read more




India Rupee 1 Year Chart INO 59.79
Emerging Markets


Sensex hits record high above 24,000 [Predictably]

http://in.reuters.com/article/2014/05/13/sensex-nifty-bjp-idINKBN0DT04P20140513

The BSE Sensex rose as much as 2.2 percent to a record high on
Tuesday, surpassing the key psychological level of 24,000 points as
companies focused on the domestic sector surged after exit polls
showed the Bharatiya Janata Party and its allies winning a majority in
the elections.

The Sensex rose as much as 2.2 percent to hit a record high of
24,068.94. It ended up a provisional 1.36 percent.

Frontier Markets

read more


10 Memorable Quotes From The 2014 World Economic Forum On Africa
Africa


Africa is an article of faith. I believe in this continent. – Sunil
Bharti Mittal, Chairman, Bharti Airtel
Nowhere in the world do you get the kind of returns you get in Africa.
– Olabisi Onasanya, Group CEO, First Bank of Nigeria
Africa is going through growing pains, but the potential is great. –
Mohamed Alabbar, Chairman, Emaar Properties
This is the right time for anyone to come and invest into Africa.  -
Stephen Olabisi Onasanya, Group CEO, First Bank of Nigeria
Africa’s rise will make the world more stable, more democratic, more
robust. – Chinese Premier Li Keqiang
Africa’s people have taken their destiny into their own hands. –
China’s Li Keqiang
Don’t be afraid to invest in Africa. – Jean-François van Boxmeer,
Chairman of the Board and Chief Executive Officer of Heineken
International
Africa has been rising for a long time. I hope we will eventually get
to a point where we have risen. – Albert Kobina Essien, Group Chief
Executive Officer of Ecobank Transnational
As the economies of Africa grow, progressive businesses will grow with
them. – Jean-Francois van Boxmer, Chairman of the Board and Chief
Executive Officer of Heineken International
Africa represents our fastest-growing region in the world. If you want
to be relevant, you need to be in this part of the world – Dominic
Barton, Global Managing Director of McKinsey & Company

read more


South Africa All Share Bloomberg +7.96% 2014
Africa


Dollar versus Rand 6 Month Chart INO 10.3175 [will reach for 10.00]

http://quotes.ino.com/charting/index.html?s=FOREX_USDZAR&v=d6&t=c&a=50&w=1

Egypt Pound versus The Dollar 3 Month Chart INO 7.0536

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

Egypt EGX30 Bloomberg +23.29% 2014 Africa's Best in 2014

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

Nigeria All Share Bloomberg -3.68% 2014

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

A new video released by Islamist militants Boko Haram claims to show
around 130 girls kidnapped from a school in Nigeria last month.

http://www.bbc.com/news/world-africa-27373287

The group's leader, Abubakar Shekau, said they would be held until all
imprisoned militants had been freed.

He said the girls had converted to Islam. The video, released on
Monday, claims to show them praying.

Boko Haram abducted more than 200 girls in northern Nigeria on 14
April and threatened to sell them.

The BBC's John Simpson in the northern city of Maiduguri said Boko
Haram's comments showed signs that the group was willing to negotiate.

Three of the girls - wearing the full-length hijab - are shown
speaking in the 17-minute video, obtained by French news agency AFP.

US flying 'manned' missions to track down Nigeria girls

http://news.yahoo.com/us-flying-manned-missions-track-down-nigeria-girls-222427673.html

The United States is flying "manned" intelligence missions over
Nigeria with the government's permission to try to track down more
than 200 abducted schoolgirls, a senior US official said Monday.

Washington had also shared "commercial satellite imagery" with the
Nigerian authorities in the hunt for the missing teenagers, the senior
administration official said, asking to remain anonymous.

Ghana Stock Exchange Composite Index Bloomberg +4.80% 2014

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

read more


@Safaricomltd reports FY Earnings here FY PAT +31.24% Dividend hiked +51.61%
Kenyan Economy


Par Value:                  0.05/-
Closing Price:           12.85
Total Shares Issued:          40044601000.00
Market Capitalization:        514,573,122,850
EPS:             0.57
PE:                 22.5438

FY Revenue 144.67b versus 124.29b +16.4%
FY Voice Revenue 86.3b versus 77.33b +11.6%
FY Messaging Revenue 13.62b versus 10.15b +34.19%
FY Mobile Data Revenue 9.31b versus 6.62b +40.63%
FY Fixed Service Revenue 2.57b versus 2.11b +21.8%
FY M-Pesa Revenue 26.56b versus 21.84b +21.61%
FY Direct Costs [51.96b] versus [[47.17b] +10.15%
FY EBITDA 60.94b versus 49.24b
FY PAT 23.02b versus 17.54b +31.24%
FY EPS 0.57 versus 0.44 +29.55%
FY Dividend 0.47 versus 0.31 +51.61%
Dividend Yield 3.65%
Free Cash Flow 22.69b versus 14.51b

Company Commentary


Strong growth of 28% in non-voice service revenue, now 36% of total revenue
• 11.1% growth in customer base to 21.6m customers (19.4m in FY13)
• Voice service revenue growth of 11.6% and non-voice service revenue
growth of 27.8%
• Average blended rate per minute is Kshs 2.88 for national outgoing calls*
• 2.6% increase in outbound (on/off net)calling time to 98.2 minutes
per customer per month
• 9.0% decrease in inbound calling time to 12.8 minutes per customer per month

SAFARICOM LIMITED ANNOUNCES AUDITED RESULTS FOR THE YEAR ENDED 31 MARCH 2014.
KEY HIGHLIGHTS

Solid growth in all revenue streams with continued significance of
non-voice revenue in revenue generation
 Total revenue increased by 16% to Kshs 144.7bn.
 Service revenue growth of 17% to Kshs 138.4bn of which – Voice
service revenue grew by 12% to
Kshs 86.3bn and Non-voice service revenue increased by 28% to Kshs 52.1bn.
 Customer base grew by 11% to 21.6m.
 SMS revenue grew by 34% to Kshs 13.6bn.
 M-PESA revenue increased by 22% to Kshs 26.6bn.
 15% increase in 30 day active M-PESA customers to 12.2m – 56% of our
total customer base.
 Mobile data revenue grew by 41% to Kshs 9.3bn.
 34% increase in 30 day active mobile data customers to 9.6m – 44% of
our total customer base.
 Fixed data revenue growth by 22% to Kshs 2.6bn.
Strong financial and commercial performance
 24% growth in EBITDA to Kshs 60.9bn with an EBITDA margin of 42.1% -
up 2.5ppt.
 Profit after tax increased by 31% to Kshs 23.0bn.
 Free cash flow has improved by 56% to Kshs 22.7bn.
 Capital expenditure for the period increased by 12% to Kshs 27.8bn.
Bob Collymore, Safaricom Limited CEO commented:
“Once again we have demonstrated our relentless dedication to growing
shareholder returns through superior commercial performance across our
entire service portfolio as evidenced by our strong financial results.
We continued to deliver on our goal to transform lives by providing
unmatched services; we made huge improvements in our network quality;
and we deepened financial inclusion with the introduction of Lipa na
M-PESA on the M- PESA platform.
We have grown our total revenue by 16% to Kshs 144.7bn through
focusing on providing quality services that resulted in double digit
growth across all our service revenue streams. Voice service revenue
which now stands at 60% of total revenue grew at 12% while non-voice
service revenue which accounts for 36% of total revenue, sustained its
growth trajectory with a 28% increase to Kshs 52.1bn driven mainly by
Data and M-PESA. Devices and other revenue contributes 4% of total
revenue.
Mobile penetration in Kenya stood at 76.9%* with Safaricom recording
the largest subscriber share of 67.9%*. Our customer base has grown by
11% to 21.6m while churn rate dropped to 19% as a result of efforts
centered on retaining and rewarding our loyal customers.
Voice service revenue grew to Kshs 86.3bn and accounted for 62% of our
service revenue (down from 66% in the previous year). This growth was
supported by our loyal customer base attracted by a superior network
experience, convenient airtime distribution and attractive consumer
propositions and promotions such as the ‘Tetemesha’ campaign.
Messaging revenue once again posted an impressive performance having
increased by 34% to Kshs 13.6bn which represents 10% of our service
revenue. This was driven by increased usage from affordable SMS
bundles and SMS based promotions such as‘Bonyeza Ushinde’.
Page 1 of 6
News Release
M-PESA, now contributing 18% of total revenue, continues to be a
significant driving force for our growth. This was driven by a 15%
increase in 30 day active M-PESA customers to 12.2m as well as an
increase in the average number of transactions per customer. In the
year, we expanded our M-PESA agent outlets to 81,025 thereby promoting
accessability of the service to our customers. With its launch, the
Lipa na M-PESA service has enabled cashless merchant payments and
facilitated trade between businesses and their customers while
improving business efficiency. As at 31 March 2014 the service had
122,000 registered merchants, of which 20% (24,137) were active on a
30 day basis.
Mobile data revenue grew at an impressive 41% driven by an increased
uptake of affordable data bundles and a 34% growth in 30 day active
mobile data customers to 9.6m. 3.1m customers are on 3G enabled
devices of whom 1.9m are on smartphones. Fixed data revenue increased
by 22% to Kshs 2.6bn on the back of 4% growth in fixed data customers,
and a 16% increase in fixed service ARPU.
We continue to focus on our ‘Best Network in Kenya’ program with Kshs
27.8bn invested in the network during the year, our goal being to
provide the best customer experience through improving our network
quality, capacity and coverage. We have increased the population
coverage of our 2G and 3G networks, completed network modernization in
six key cities and rolled out fibre to 50% of our base stations in
Nairobi. In October 2013, we commissioned independent drive tests to
measure key quality metrics such as dropped calls, voice quality and
data speeds, these tests show that our network delivers the best data
services and comparative voice services.
Direct costs grew at 10% but at a lower rate than the 16% growth in
revenue. This in turn resulted in an improvement in the contribution
margin to 64%.
Our operating costs stood at 22% of total revenue as we continue to
explore further cost reduction initiatives focused on transmission
costs, network operating costs (including fuel) and IT operational
costs.
For another consecutive year, we have delivered robust results and
ensured value for our shareholders supported by growth across all our
revenue streams. This increase in revenue coupled with cost efficiency
has driven the EBITDA margin to 42.1%, a 2.5ppt improvement.
Free cash flow has increased by 56% to Kshs 22.7bn as a result of the
strong trading results and positive working capital.
In light of the strong financial performance in the past year, the
Board recommends a dividend of Kshs 0.47 per share – an increase of
52%. Pending approval by shareholders we will pay out a dividend of
Kshs 18.83bn, which represents 82% of our net income, for the year
ended 31 March 2014; once again, the largest dividend in Kenyan
history.

Conclusions


These are really strong results and that is evidenced in the +51.61%
uplift in the Dividend which is the loudest Signal in the Noise.

read more


The planned railway line will be Kenya’s largest post-colonial project and should “eventually unify all of East Africa,” President Uhuru Kenyatta said at today’s signing ceremony in Nairobi.
Kenyan Economy


“This is indeed a major undertaking that will boost the connectivity
and integration of the East African sub region,” Chinese Premier Li
Keqiang said. China Communications Construction Co. (1800) will be the
lead contractor of the project.

Construction of the first part of the line will start in October and
take 42 months to complete, Kenya’s presidency said on its Twitter
page.

Kenya Shilling versus The Dollar Live ForexPros 87.149

http://j.mp/5jDOot

Nairobi All Share Bloomberg +11.7% 2014

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

Nairobi ^NSE20 Bloomberg +1.00% 2014

http://j.mp/ajuMHJ

4978.20

Every Listed Share can be interrogated here

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

read more



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