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Satchu's Rich Wrap-Up
 
 
Friday 19th of August 2016
 
Morning
Africa

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Macro Thoughts


I think Sterling is a Buy with a 1.2750 STOP.

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To all my doubters, thank you very much because you guys have also pushed me. --@usainbolt
Africa


I must say I had a Lovely time in Malawi. Its kind of retro and a
throwback to another era. The Lake is stunningly beautiful as are the
higher altitude areas like Zomba Plateau.

I had Lunch with Tom a while back at Soysambu with his Family and mine
and He fed us Buffalo which I would not recommend. I liked him a lot,
in fact.

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I must say I had a Lovely time in Malawi. Its kind of retro and a throwback to another era. The Lake is stunningly beautiful as are the higher altitude areas like Zomba Plateau. I had Lunch with Tom a while back at Soysambu with his Family and mine and
Africa


Cholmondeley was the only child of the 5th Lord Delamere. It was the
3rd Lord Delamere, known to his friends as “D”, who stumbled across
Kenya’s Rift Valley while on a hunting trip in the 1890s. He ended by
selling his estates in Cheshire and moving to Africa permanently,
buying the family ranch, Soysambu (now a nature reserve), carved out
of Masai tribal grazing areas, in 1906. He persuaded other British
aristocrats to join him, quickly followed by assorted playboys,
adventurers, gamblers, seducers and dandies.

Opinions of Cholmondeley, a 6ft 6in cravat-wearing Old Etonian, were
divided. Those close to him described a charming man, a brilliant
farmer and conservationist and an enlightened employer who provided
hundreds of new jobs for local people and spoke to them in their own
language. A very different impression, however, was given in the
Kenyan press, which featured stories of his fierce temper and his
alleged abuse of people venturing on to his land to collect firewood
or allowing their livestock to encroach.

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And for the first time in history, the Shia Iranians have both the Russians and the Americans on their side -and Turkey tagging along Robert Fisk
Law & Politics


But Saudis and Qataris have a lot to answer for. It is they who are
supporting the insurgents in Syria. Syria – dictatorial regime though
it is – is not supporting any revolutions in Riyadh or Doha. The Sunni
Gulf Arabs gave their backing to the Sunni Taliban in Afghanistan,
just as they favour Sunni Isis and Sunni Nusrah in Syria. Russia and
America are aligned against both and growing closer in their own weird
cooperation. And for the first time in history, the Shia Iranians have
both the Russians and the Americans on their side – and Turkey tagging
along.

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Hello, want to push back at Uncle Sam? Then go to Syria BY M.K. BHADRAKUMAR
Law & Politics


Turkish President Recep Erdogan’s recent visit to St Petersburg to
meet Russian President Vladimir Putin, Russian jet fighters taking off
from an Iranian base for the first time to hit Syrian targets and
Erdogan’s proposed visit to Iran probably next week point to a
trilateral Turkey-Iran-Russia format emerging on Syria. China seems to
be entering the equation laterally as indicated by top military
officer Rear Admiral Guan Youfei’s meeting with Syrian Defense
Minister Fahad Jassim al-Freij in Damascus. Turkey, Iran, Russia and
China have a shared interest or even need to push back at the US, each
for its own reasons.

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Ex-Fed Chairman says low rates won't last 'very much longer' BBG
International Trade


“I cannot perceive that we can maintain these levels of interest rates
for very much longer,” he told former Securities and Exchange
Commission Chairman Arthur Levitt in a Bloomberg Radio interview to be
aired this weekend and next.

“They have to start to move up and when they do they could move up and
surprise us with the degree of rapidity which may occur,” Greenspan
added.

The yield on the 10-year Treasury note stood at around 1.55 percent on
Thursday, down from 2.27 percent at the start of the year.

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Currency Markets at a Glance WSJ
World Currencies


Euro 1.1335
Dollar Index 94.34
Japan Yen 100.25
Swiss Franc 0.9560
Pound 1.3138
Aussie 0.7640
India Rupee 66.925
South Korea Won 1116.75
Brazil Real 3.2393
Egypt Pound 8.8800
South Africa Rand 13.4114

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The Gold Medal for Buying Up Brazilian Assets Goes to China Inc.
Commodities


No country has done more acquisitions in Brazil this year than China,
which has grabbed the No. 1 ranking for the first time on record,
according to data compiled by Bloomberg. Chinese firms have announced
$4 billion of purchases in Brazil so far this year, the highest total
for a comparable period since 2010.

Latin America’s biggest economy has turned into a fertile hunting
ground for Chinese acquirers, as Brazilian firms look for suitors to
help them ride out the nation’s longest recession in decades. A 50
percent drop in the real over the past five years has increased
Chinese firms’ buying power, while political opposition to takeovers
is proving a smaller hurdle than in the U.S. and U.K.

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Political reform stalls Africa's fragile democracies Economist
Africa


SOME call it Africa’s second liberation. After freedom from European
colonisers came freedom from African despots. Since the end of the
cold war multi-party democracy has spread far and wide across the
continent, often with impressive and moving intensity. Remember 1994,
when South Africans queued for hours to bury apartheid and elect
Nelson Mandela as president in their country’s first all-race vote.

Many of Africa’s worst Big Men were swept away. Mengistu Haile Mariam
fled Ethiopia in 1991; Mobutu Sese Seko of Zaire (now the Democratic
Republic of Congo) decamped in 1997; a year later Sani Abacha of
Nigeria died in office (or, as rumour has it, in the arms of
prostitutes). In parts of Africa autocrats are still in power and wars
still rage. But most leaders now seek at least a veneer of
respectability; elections have become more frequent and more regular;
economies have opened up.

And yet, as our reporting makes clear (see article), African democracy
has stalled—or even gone into reverse. Too often, it is an illiberal
sort of pseudo-democracy in which the incumbent demonises the
opposition, exploits the power of the state to stack the electoral
contest in his favour and removes constraints on his power. That bodes
ill for a continent where institutions are still fragile, corruption
rife and economies weakened by the fall of commodity prices (one of
the fastest-growing regions of the world has become one of the
slowest). For Africa to fulfil its promise, the young, dynamic
continent must rediscover its zeal for democracy.

Freedom House, an American think-tank, reckons that in 1973 only about
30% of sub-Saharan countries were “free” or “partly free”. In its
latest report the share stands at 59%. That is a big improvement,
obviously, but it is down from 71% in 2008. Countries that are “not
free” still outnumber those that are. A big chunk in the middle is
made up of flawed and fragile states that are only “partly free”.

The best way for democracy to flourish would be to expand and
strengthen Africa’s emerging middle class. Increasingly connected to
the world, Africans know better than anyone the shortcomings of their
leaders. Take South Africa. Despite its model constitution, vibrant
press and diverse economy, it has been tarnished under its president,
Jacob Zuma. He has hollowed out institutions, among them bodies tasked
with fighting corruption. And yet South Africa also demonstrates the
power of voters. In municipal elections this month, the mighty African
National Congress lost control of major cities. For the first time, a
plausible alternative party of power is emerging in the liberal,
business-friendly Democratic Alliance.

But the West has flagged in its efforts to promote democracy,
especially in places, such as around the Horn of Africa and the Sahel,
where the priority is to defeat jihadists. That is short-sighted.
Decades of counter-terrorism teaches that the best bulwarks against
extremism are states that are prosperous and just. And that is most
likely to come about when rulers serve at the will of their people

Conclusions

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10 NOV 14 :: Therefore, the preeminent point to note is that protests in Burkina Faso achieved escape velocity
Africa


What’s clear is that a very young, very informed and very connected
African youth demographic [many characterise this as a ‘demographic
dividend’] – which for Beautiful Blaise turned into a demographic
terminator – is set to alter the existing equilibrium between the
rulers and the subjects, and a re-balancing has begun.

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Standard Bank Rises as African Units Boost First-Half Profit
Africa


Standard Bank Group Ltd. rose the most in more than seven years after
first-half profit from continuing operations at Africa’s largest
lender by assets climbed, boosted by higher interest rates in its home
market that lifted income.

The stock gained 7.3 percent to 153 rand by the close in Johannesburg
on Thursday, the highest in about a year. Earnings from continuing
operations before one-time items increased to 10.9 billion rand ($820
million) from 10.2 billion rand a year earlier, Standard Bank said in
a statement. The lender raised the dividend 12 percent to 3.40 rand.

The company achieved “excellent top line growth” as lending margins
widened, said Patrice Rassou, head of equities at Sanlam Investment
Management in Cape Town. Trading income was “strong,” while the
dividend increase was “pleasing,” he said.

Standard Bank’s South African business overcame an economy that
contracted in the first quarter as interest rates at their highest
levels in six years lifted the profit it makes from charges on loans.
Income growth from the company’s 19 units on the rest of the continent
accelerated from a year earlier, boosted by gains at its credit-card
unit and corporate and investment banking that offset losses in its
fledgling vehicle and asset finance division.

Return on equity dropped to 14.4 percent from 15.1 percent as
challenges started mounting from the rest of sub-Saharan Africa, where
the International Monetary Fund forecasts growth will slow to 3
percent in 2016. In Nigeria, where Standard Bank is one of the biggest
lenders, the devaluation of the naira and the decline in oil prices
have pushed the economy to the brink of a recession.

“Concerns relate to credit losses in the corporate and investment
banking division, particularly in West Africa where conditions are
tough,” said Neelash Hansjee, a banks analyst at Old Mutual’s
investment-management unit. “Personal and business banking credit
losses seemed relatively well contained.”

While Standard Bank has increased provisions to guard against any
deterioration in loan quality with South African consumers coming
under more pressure, retail bad debts may start to rise in the fourth
quarter of 2016, or first quarter of next year, Ben Kruger, co-chief
executive officer of Standard Bank, said by phone. Increases in food
inflation and a rise in the price of gasoline may hurt consumers, he
said.

read more



Mozambique Says Deal With Opposition Was Imposed by Mediators
Africa


The Mozambican government’s delegation at peace talks with the main
opposition party said it was forced by mediators to agree to a
proposal that the ruling party cedes control in provinces where its
rival had won elections.

The Mozambique National Resistance, or Renamo, has been fighting to
govern six provinces where it garnered more support than the ruling
Front for the Liberation of Mozambique, or Frelimo, in elections in
2014. The opposition party said Wednesday it had reached a deal with
the government that will lead to constitutional changes allowing it to
run its strongholds.

The government’s delegation signed an agreement to create the legal
mechanisms necessary for appointing governors from the opposition to
rule some regions, not to actually name any for the six disputed
provinces, according to Jacinto Veloso, head of the ruling party’s
delegation at the talks.

“There is no decision at all, ” Veloso told reporters in Maputo
Wednesday night. “If anyone says that the government has agreed to
appoint governors from Renamo for the six provinces this is wrong. It
is not true.”

read more




Nigeria's Naira Slumps to Record Versus Dollar as Forwards Rise
Africa


The naira fell 6.3 percent to 348.75 against the dollar by 3:08 p.m.
in Lagos, the commercial capital. Three-month non-deliverable forward
contracts climbed 4.1 percent to 364.5 versus the greenback, heading
for a record close. Contracts maturing in a year rose 3.5 percent to
403, also a record.

Nigeria’s currency has slumped 38 percent since the central bank ended
a 16-month peg of 197-199 per dollar on June 20. The capital controls
needed to defend the fix sent foreign investors fleeing and took the
West African country to the brink of recession. The International
Monetary Fund forecasts a 1.8 percent contraction of the economy this
year.

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Nigeria All Share Bloomberg -4.26% 2016
Africa


Ghana Stock Exchange Composite Index Bloomberg -8.55% 2016

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

Bob Diamond's Atlas Mara plunges as analyst slashes profit
targets. @PaulWallace123

https://twitter.com/PaulWallace123/status/766279875644813312

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Standard Chartered Bank Kenya Ltd reports H116 EPS +32.595% Earnings here
Kenyan Economy


Par Value:                  5/-
Closing Price:           208.00
Total Shares Issued:           343,510,571
Market Capitalisation:        71,450,198,768
EPS:             19.55
PE:                 10.639

StanChart reports H116 Earnings here

Loans and advances to customers (net) 114.265013b vs. 123.256075b -7.295%
Total Assets 255.948220b vs. 228.193508b +12.163%
Customer deposits 190.872512b vs. 163.211762b +16.948%
Total shareholders’ equity 43.581629b vs. 40.142122b +8.568%
H1 Loans and advances income 7.778323b vs. 7.176185b +8.391%
H1 Total interest income 13.043903b vs. 10.791877b +20.868%
H1 Customer deposits expense [2.740122b] vs. [1.659231b] +65.144%
H1 Total interest expenses [3.084111b] vs. [2.038838b] +51.268%
H1 Net interest income/ [loss] 9.959792b vs. 8.753039b +13.787%
H1 Total non-interest income 4.535623b vs. 3.434325b +32.067%
H1 Total operating income 14.495415b vs. 12.187364b +18.938%
H1 Loan loss provision [1.371367b] vs. [1.295045b] +5.893%
H1 Total other operating expenses 7.022816b vs. 6.594637b +6.493%
Profit/ [loss] before tax and exceptional items 7.472599b vs. 5.592727b +33.613%
Profit/ [loss] after tax and exceptional items 5.226314b vs. 3.877266b +34.794%
EPS 14.97 vs. 11.29 +32.595%
Dividend per share 6.00 vs. –
Gross NPL and advances 15.360300b vs. 8.347026b +84.021%
Net NPL and advances 5.824481b vs. 2.841681b +104.966%
Liquidity ratio 61.93% vs. 47.98% +13.950%

Standard Chartered Bank published their 1H16 financial results this
morning, EPS was up 32.6% y/y to KES 14.97 and PBT increased 6.49% y/y
to KES 7.0bn. Net interest margins increased y/y from 13.6% to 19.6%.
Net interest income grew 13.8% y/y to KES 10.0bn, this was mainly
attributed to increase in yields by 8.9% y/y as the loan book
decreased by 7.29% y/y to KES 114.3bn from KES 123.3bn in 1H15. The
cost to income ratio decreased to 48.4% from 54.1% the previous year,
this was on account of higher total operating income of 18.9% y/y to
KES 45.5bn, though this decreased by 42.9% ytd. The company’s foreign
exchange income increased by 48.8% y/y. Gross NPLs almost doubled to
KES 15.4bn (1.8x y/y) from KES 8.3bn, however, there was a marginal
decrease q/q. Given the results that Stan Chart has recorded in 1H16,
we expect full year results to be positive, as we do not expect a
sharp increase in loan provisions in 2H16, similar to that recorded in
2H15. Furthermore, we understand the group is actively seeking to work
out previous non-performing loans and we expect to see the benefits of
this in 2H16. The company’s Board of Directors have announced an
interim dividend per share of KES 6.00. -> kestrel Research

Conclusions

very strong results. a Key Beneficiary of the flight to Quality and
Earnings might accelerate from here - BUY

read more


Longhorn Kenya Ltd reports FY16 PBT +43.709% Earnings here
Kenyan Economy


Par Value:
Closing Price:           4.90
Total Shares Issued:         369,940,476
Market Capitalisation:      2,589,583,332
EPS:             0.66
PE:                 7.000

A leading Publishing firm in East Africa.

FY Sales 1.503512b vs. 848.377m +77.222%
FY Cost of sales [748.082m] vs. [373.729m] +100.167%
FY Selling and distribution expenses [194.314m] vs. [92.357m] +110.394%
FY Finance costs [25.002m] vs. [8.403m] +197.537%
FY Profit before tax 139.277m vs. 96.916m +43.709%
FY Profit/ [loss] after tax 104.063m vs. 71.726m +45.084%
EPS 0.66 vs. 0.70 -5.714%
Total assets 1.866944b vs. 689.320m +170.839%
Cash and cash equivalents at the end of the period 204.048m vs. 0.825m
Dividend per share 0.35

Company Commentary

Turnover grew from 848m to 1.503b mainly attributed to good uptake of
reference products
Company acquired distributorship rights of key products from Cambridge
University Press, Bible Society of Kenya, Biblica Kenya, Scripture
Union of Kenya and Educat of South Africa
Company realised 26% of its sales from export markets
Dividend 35cents a share

Conclusions

Strong Headline revenue acceleration.

read more


Deacons (East Africa) PLC reports H116 Earnings here
Kenyan Economy


Par Value:
Closing Price:           12.40
Total Shares Issued:          123558228.00
Market Capitalization:        1,532,122,027
EPS:             0
PE:                 0.000

H1 Revenue 1.026090b vs. 949.053m +8.117%
H1 Net operating profit 491.343m vs. 363.439m +35.192%
H1 Expenses [466.396m] vs. [392.840m] +18.724%
H1 EBITDA 24.946m vs. [29.400m] +184.850%
H1 Finance costs [46.848m] vs. [26.097m] +79.515%
H1 Profit from continuing operations [70.168m] vs. [99.098m] -29.193%
H1 Share of profit from associate – vs. 27.425m
H1 Profit before tax [70.168m] vs. [71.673m] -2.100%
H1 Profit/ [Loss] for the period [52.626m] vs. [53.755m] -2.100%
EPS [0.57] vs. [0.80] -28.750%
Cash and cash equivalents at the end of the period [49.399m]
No interim dividend

Company Commentary

Revenue growth +8.00% versus same period 2015 - This was driven by
Uganda Operations and new stores launched at the HUB and Garden City
in Q2 2016
Net Operating Margin for first half of the year is 48% up from 38%
last year same period
Expenses +19%
Exciting new developments at Two Rivers and Kigali Heights are
significantly delayed

read more


Kenya Shilling versus The Dollar Live ForexPros
Kenyan Economy


Nairobi All Share Bloomberg +1.11% 2016

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

Nairobi ^NSE20 Bloomberg -13.78% 2016

http://j.mp/ajuMHJ

3,484.08 -24.43 -0.70%

Every Listed Share can be interrogated here

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

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by Aly Khan Satchu (www.rich.co.ke)
 
 
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August 2016
 
 
 
 
 
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