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Satchu's Rich Wrap-Up
 
 
Thursday 02nd of December 2010
 
Afternoon
Africa

www.rich.co.ke Register and its all Free.

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

It was a Pleasure to catch up with Gary Alphonso of CNBC today.

The Latest Daily PodCast can be found here
http://www.rich.co.ke/rctools/richpod.php

What is #Mindspeak ?
http://bit.ly/9mhe39

#Mindspeak Saturday 4th December 0930
Bob Collymore CEO Safaricom
We are hoping to be able to Live Stream This Event Direct to your Mobile Phone.
http://bit.ly/ecZZyP

I have noticed a bit of interest on Twitter via email @bobcollymore ->
Its just exploded

We will stream onto this Page on www.rich.co.ke
http://www.rich.co.ke/rctools/mindlive.php

Liza Mucheru-Wisner at #Mindspeak RICH TV
http://www.rich.co.ke/rctools/richtv.php

My Weekly Piece for The Star The Hermit Kingdom
http://bit.ly/gzglrT

Macro Thoughts



Home Thoughts

The Little One Hannah went to Kenton College for her Orientation Day.
I, of course, went to Kenton many Years ago. Here is a Photo from that
Time. http://www.rich.co.ke/prfle/index.php She apparently loved it.
She is very excited about her Christmas Road Trip to Mombasa, seeing
her Granddad, the Peacocks that live next door, the Cakes that the
German Lady makes in Ratna Square and the Beach, as am I.

Mombasa Beach
http://bit.ly/ePQOW5

That was the Beach closest to our House for the longest time. I liked
walking on it very early in the Morning with just Fisherman for
Company.

A Picture taken at 6.05 this Morning Twitpic
http://www.twitpic.com/3c2dcp

read more


Currency Markets Att A Glance
World Currencies

Euro 1.3119 The euro halted a four-day losing streak and climbed above
$1.31 Wednesday
Pound 1.5613
Yen 84.09
Dollar Index 80.77
Aussie 0.9665
Rand 6.995
South Korean Won 1149.20
India Rupee 45.37
Brazil Real 1.7050

Standard & Poor's has placed Portugal's A-minus credit rating on
negative credit watch.

Conclusions

You will note the Rand is back below 7.00.

read more


World Equity Markets At A Glance
World Of Finance

Dow Industrials , up 249.76 points, or 2.27% to 11255.78.
Biggest point and percentage gain since September 1
All 30 stocks closed up today and have done so 9 times previously in 2010
Nasdaq Composite , up 51.20 points, or 2.05% to 2549.43.
Biggest point and percent gain since October 5
S&P 500 , up 25.52 points, or 2.16% to 1206.07.
Biggest point and percent gain since September 1

Conclusions

Is it a Dead Cat Bounce or the beginning of a Christmas Rally.

read more


In Search of Beauty WSJ
Misc.

The perfect large nature painting here is Yamamoto Baiitsu's late Edo
"Plum, Bamboo and Pine: Three Friends of Winter," a double set of
six-panel screens, each about 5 feet by 12 feet. Words can't do
justice to the intricacy and accuracy of the plum-tree branches that
fill the left-hand screen, or the equally detailed needles of the pine
on the right, with a bit of a river and a few bamboo leaves underneath
them and faint clouds of gold dust sprinkled around.

Plum, Bamboo and Pine: Three Friends of Winter' (late Edo period) by
Yamamoto Baiitsu, part of "Flowers of the Four Seasons," at the
Berkeley Art Museum.

read more





Soft Commodities at a Glance INO
Commodities


COCOA (NYBOT:CC)                      CC.Z10.E    Dec 2010 (E)    2726    -25      -0.91%
COFFEE (NYBOT:KC)                      KC.Z10.E    Dec 2010
(E)    203.30    +2.35 +1.16%
COTTON #2 (NYBOT:CT)                CT.Z10.E    Dec 2010 (E) 131.95    +5.72 +4.24%   
SUGAR #11 (WORLD) (NYBOT:SB) SB.H11.E    Mar 2011 (E)    28.37    +1.09  +3.81%   

Conclusions

Look at How Cotton has bounced -

Cotton Dec 2010 INO 1 Year Chart
http://bit.ly/b345EU

Last Price    131.95
Contract High    157.23 Contract High Date    2010-11-09
Contract Low    53.87  Contract Low Date    2009-03-09
First Delivery    2010-12-21

Conclusions

I expect New Highs

read more


Cote d'Ivoire misses poll deadline Aljazeera
Law & Politics


Cote d'Ivoire has missed a deadline for releasing results in its
presidential election after a midnight cut-off point passed with no
announcement by electoral authorities.Youssouf Bakoyoko, the head of
the electoral commission, said on television minutes before midnight
on Wednesday that the body was still working to reach a consensus on
results.
Supporters of Laurent Gbagbo, the incumbent president, and those of
Alassane Ouattara, the opposition leader, have accused each other of
trying to rig Sunday's poll.The election commission was legally
obliged to announce a the results by the end of Wednesday, which then
have to be confirmed by the Constitutional Council, a body headed by a
close associate of Gbagbo.By midnight, however, journalists were still
being barred from the electoral commission's headquarters, which were
surrounded by soldiers and police.

Conclusions

Cocoa Prices have not reacted.

read more


South Sudan's January 9 independence vote in doubt Reuters
Law & Politics

Sudan has asked the United Nations to reopen a tender to print ballot
papers for the south's referendum on secession which will likely delay
the vote set for January 9, diplomats and observers said on
Wednesday.The referendum commission planning the vote -- which is
expected to create the world's newest nation -- has a tight schedule
and has said any delay could make a January 9 vote impossible.Despite
this, the commission asked the United Nations to reopen a tender to
print the ballot papers, which closed in mid November, to allow
Sudanese firms to bid, with a deadline of December 5.

"The commission just requested the bidding be reopened for some time
to enable Sudanese printing companies to apply if they think they can
compete," said George Makuer, acting spokesman for the commission. He
declined to comment on whether it would delay the vote.

But a senior official in the commission told Reuters it had taken five
weeks to print the registration materials and the United Nations says
it needs up to three weeks to distribute voting materials to the
south, which has little infrastructure.

"Everyone is in somewhat of a panic about this. It seems we may have
lost the January 9 date," said one diplomatic source in Khartoum.

Mohamed said northern Sudan's ruling National Congress Party and the
southern ruling Sudan People's Liberation Movement (SPLM) would need
to make a decision on the date.

Sudan's government printing press was at the centre of a scandal
during April elections which sparked a boycott by many opposition
parties. It won tenders to print ballot papers and registration
materials despite not being the cheapest option, which the opposition
said opened the door to fraud by the ruling party.

South Sudan referendum complicated by oil revenue CS Monitor
http://bit.ly/cgNYiJ

President Bashir made a speech in Juba where he said that if the South
elected for independence this January, during the South’s planned
referendum, he would be the first to congratulate President Salva
Kiir. It was hardly reported anywhere but I heard him loud and clear.
I remember turning to my companions, all of whom were in the
government of Southern Sudan. They were unimpressed.

“Aly-Khan, we are Bashir's back garden,” one of my companions said.
“We have most of the wealth.” They certainly have most of the oil, an
estimated 80 percent of proven reserves, and they are taking a haircut
on their share in the current 50-50 split of oil revenues. “Now how
does someone agree to just letting their back garden go?”

read more



Standard Bank Says Profit to Drop as Much as 12% Bloomberg
World Of Finance

Standard Bank Group Ltd., Africa’s biggest lender, said full-year
profit may fall as much as 12 percent as revenue came under pressure
and it incurred “substantial” costs to cut 1,745 jobs.Earnings per
share in the year to Dec. 31 are expected to be 3 percent to 12
percent lower than in 2009, the Johannesburg- based bank said in a
stock-exchange statement today.

Standard Bank, which is 20 percent owned by Industrial and Commercial
Bank of China Ltd., said on Oct. 29 it will cut 4 percent of its South
African workforce and 13 percent of its London employees to prepare
for a possible decline in revenue. First-half earnings climbed 15
percent.

“The pressures on banking revenues evident in the first six months of
2010 have intensified in the second half of 2010,” the company said.
In addition, “the group will be incurring substantial retrenchment
costs in the second half,” the bank said.

Standard Bank fell as much as 1.2 percent and was down 0.6 percent at
102.94 rand as of 10:28 a.m. in Johannesburg. That pared this year’s
gain to 0.9 percent, the worst performance among South Africa’s big
four banks.

Standard Bank share price data Bloomberg
http://bit.ly/c7g8tE

Price10,262.000   
Change-89.000    
% Change-0.860    
52-Wk High (07/27/10)11,900.000   
52-Wk Low (12/04/09)9,620.000   
1-Yr Return9.288
FUNDAMENTALS
Shares (Millions)1,584.399   
Market Cap (Millions)162,591.100   
Earnings7.575   
Price/Earnings12.598   

Standard Bank Sells 1.7 Billion Rand of Mortgage Bonds Bloomberg
http://bit.ly/dIdEKO

Standard Bank Group Ltd., Africa’s biggest lender, said it last week
sold two bonds backed by residential mortgages worth 1.7 billion rand
($242 million) as part of its securitization program.The Nov. 22 sale
included a 1.1 billion-rand note with an expected maturity on Nov. 21,
2015, that was priced to yield 160 basis points more than the
three-month Johannesburg Interbank Agreed RateReynold Leegerstee,
Standard Bank’s head of securitization, said in a telephone interview
today. The lender also sold a 560 million-rand note with an expected
maturity of Nov. 21, 2011, priced at 75 basis points over so-called
three- month Jibar, Leegerstee said from Johannesburg.

read more


Uganda offers 80 bln shillings of 5-year T-bond Reuters
East Africa

The Bank of Uganda said on Thursday it was offering 80 billion
shillings of 10.75 percent Treasury bonds maturing on December 3, 2015
at auction on December 8.The central bank offered 100 billion
shillings of 3-year Treasury bonds in October. The issue was
oversubscribed but the bank only accepted bids worth 30 billion.Yields
have been rising in Uganda and neighbouring Kenya amid more upbeat
growth forecasts in the east African economies and expectations that
inflation rates may have bottomed out.

read more


Abu Dhabi Company Forms Africa-Focused Investment Group, FT Says Bloomberg
Africa

ADS Holding, an Abu Dhabi-based commodities company, and Hutchison
Port Holdings have formed a group that plans to invest in African
infrastructure, the Financial Times reported, citing comments from
Mark Manders, chief executive of the venture.The group, called Baobab
Investments, is bidding for port and railway concessions in Africa and
is close to closing three deals over the next few weeks, the FT said,
citing Manders. The group also includes South Africa’s Grindrod Ltd.
and the World Bank’s International Finance Corp., the FT said.

read more


Mystery deepens as Raila reveals nature of US call The Standard
Law & Politics

Prime Minister Raila Odinga denied a senior US official apologised to
him over leaked embassy documents that cast Kenya’s leadership in bad
light. Instead, the PM said US Undersecretary for African Affairs,
Johnnie Carson, called to warn him that yet-to-be revealed cables
going back to 1996 "may not be very pleasant", as the WikiLeaks
scandal, now dubbed "Cablegate" continues to unravel globally.

Raila spoke in Parliament as he responded to requests by MPs for a
"full disclosure" over his Tuesday trans-Atlantic telephone
conversation with Carson, himself a former US envoy to Kenya.

Conclusions

A Cardinal Rule of US Policy has been never to apologise to anyone.

Raila and Mutua were keen for us to believe that This has now changed.

read more


World Bank Kenya Economic Update Edition 3 Kenya at a Tipping Point ICT Revolution and Mobile Money
Kenyan Economy


Page 5 Johannes Zutt

We have increased our 2010 growth forecast by almost a full percentage
point, to 4.9 percent.Second, economic growth in 2011-12 could range
between 5.3 and 6.0 percent, approaching levels of growth last seen in
2004-07.

Page 6

This edition was prepared by a team led by Jane Kiringai and Wolfgang
Fengler, together with Gabriel
Demombynes, Millicent Gitau, Fred Owegi and Roger Sullivan. The core
team also included Ed Al-Hussainy,
Allen Dennis, Peter Warutere, Sachin Gathani, Yira Mascaró, Rosemary
Otieno, Aly Khan Satchu,
Dimitri Stoelinga and Catherine Gachukia. The team also appreciates
the inputs from Andrew Roberts,
Andrew Karanja, and Kaoru Kimura.

Page 8

Kenya may be at a “Tipping point”, the theme of the third Kenya
Economic Update which has a special
focus on the transformative impact of Information and Communications
Technology (ICT) and
mobile money. Over the last decade, ICT has outperformed all others
sectors growing at an average of
20 percent per year. The benefits of ICT are starting to be felt in
other sectors, and have contributed to
the conditions for Kenya to reach this TIpping point.

Page 9

For 2011, the World Bank forecasts growth at 5.3 percent

In 1999 less than 1 in 1000 Kenyan adults had mobile phone service. By
mid-2010, there were 21 million ac􀆟ve mobile phone numbers,
equivalent toone per adult. Not all of the poor have access yet to a
mobile number, as there are mul􀆟ple subscrip􀆟ons by richer
individuals and many teenagers also have phones, but the “access gap”
is closing rapidly.While subscrip􀆟ons increased exponen􀆟ally,
calling rates and the cost of devices have dropped sharply, making
Kenya’s communica􀆟on costs among the lowest worldwide.

Page 10

Since 2000, Kenya’s economy grew at an average of 3.7 percent. Without
ICT, growth would have been a lackluster 2.8 percent

The World Bank estimates that by end 2010, 15 million Kenyans (3/4 of
the adult population) will use mobile money (see
figure 2), transferring an estimated US$ 7 billion annually (20
percent of GDP) by phone.

Page 11

Mobile money has the potential to become a game changer for the economy

Page 14

Global tea prices increased by another 1.5 percent in 2010 topping the
record prices of 2009.

Page 18

Recent estimates indicate that international remittances flowing into
Kenya for twelve months to June 2010 stood at US$ 1.9 billion (Kshs
154billion).¹

Page 19

In July 2010, the EAC adopted a common market protocol which creates a
free market of more than 130 million people with a combined GDP of
US$72 billion. Within the EAC, Kenya has the strongest economy
contributing 40 percent to EAC’s total GDP

Page 21

The outlook for 2011 and 2012 is promising: for the year 2011 the
World Bank forecasts that growth will be 5.3 percent and could even
reach 6.0 percent (key assump􀆟ons underlying the forecast
arepresented in Annex 4).

Page 23 The ICT Revolution and Mobile Money

The ICT sector’s growth has outperformed every other sector, expanding
by 23 percent annually during the last
decade (see figure 16). The sector is now six 􀆟mes larger than it was
at the beginning of the decade.

Kenya has experienced a triple technology transforma􀆟on: mobile
phones, mobile money, and internet.The first mobile telephone services
in 1993 began on an analog system and the service was expensive. Only
20,000 subscribers were connected over the next seven years.

114,000 in 2000 to 5.26 million in 2005, and is projected to reach 22
million at the end of 2010.

Access to the internet, via personal computer or mobile phone, now
exceeds 8 million and has now reached a 􀆟pping point for further
acceleration.

Compe􀆟􀆟on, high call volumes, and infrastructure investments have
been the basis for the sharp reduc􀆟on of average call tariffs. The
average call tariff declined from Kshs 16.8 per minute in 2002 to
about Kshs 3 per minute in 2010 (from 20 US cents to 4 US cents -- see
figure 18).

Page 26

Available data shows that over US$ 3.2 billion was invested in mobile
services between 2001/02 and 2009/10 while another US$ 3 billionwas
invested in fixed telephone services. Investment in the three undersea
fiber op􀆟c cables alone
is es􀆟mated at US$ 700 million. Another US$ 60million was es􀆟mated
to have been invested in internet and data services between 2006 and
2010, and US$ 500,000 in Business Process Outsourcing

Page 27

In the case of mobile money, regulation followed innovation

3.3 Will Kenya be the Home of Africa’s“Silicon Valley”?

Page 28

Since 2007, mobile money usage grew rapidly through 2008 and 2009.
Extrapola􀆟ng from data through April 2010 (figure 20), we es􀆟mate
that as of December 2010, the value of person-to-person transac􀆟ons
alone will exceed Kshs 38 billion per month, more than 20 percent of
GDP.

Page 30

By mid 2010, the number of mobile money customers exceeded 13 million,
and based on recent growth rates, we project that in December 2010 the
number of customers will reach 15 million, equivalent to more than 2
out of every 3 Kenyan adults.

Page 32

By mid 2010 nearly Kshs 4 out of every Kshs 10 of Kenya’s mobile money
transfer (deposits plus withdrawals)
took place within the capital city.

Page 33

Month-on-month growth rates in value of mobile money transfers are
high throughout the country, 118 percent on average, but most
remarkable in North Eastern province.

read more





 
 
N.S.E Today

The Nairobi Stock Exchange made it a 9 Day Losing Streak today.
The NSE20 closed down 2.55 points at 4388.43 making that a 6.71%
retracement from the 2010 Closing High.
The NASI was down 0.28 points to close at 97.41.
Market Cap was 1.161997 Trillion versus 1.158727 Trillion which looks
wrong given that the All share closed lower.
The Bourse traded 298.469m versus 266.675m last time.



N.S.E Equities - Agricultural

Kakuzi was unchanged at 82.00 and traded 35,100 shares.
Sasini Tea traded 12.75 unchanged and 32,400 shares.
Rea Vipingo traded 100 shares unchanged at 16.00.



N.S.E Equities - Commercial & Services

SAFARICOM

shares volume 13,455,000
total turnover     61,258,848
avg price     4.55 Closing Price 4.55
high price     4.60
low price     4.50
last price     4.60

Conclusions

Safaricom was unchanged at 4.55 and the most active share at the
Bourse. 4.50 Buyers have now stepped up to 4.55 Bid and Demand
outweighs Supply by a Factor of 14.8 versus 6.5 signalling the Price
is underwritten at these Price Points. Safaricom overeacted to the
Voice Price War  and that Price Curve has in fact bottomed out here
now. Come and engage with Bob Collymore This Saturday Morning at
#Mindspeak . Its a very Full House though so be early.

ScanGroup bounced 3.6% to close at 57.50 and traded 33,600 shares.

Kenya Airways was unchanged at 46.00 and traded 167,300 shares. Kenya
Airways reported 1st Half EPS at 3 shillings 11 cents and if that Run
Rate of 3.11 is maintained we are looking at a PE of 7.39, which looks
attractive.

Nation closed a shilling lighter at 158.00 and traded 7,500 shares.
Standard did not trade.

Access Kenya firmed 5 cents to close at 16.05 and traded 98,900 shares.

TPS Serena traded 30,700 shares and was unchanged at 68.00.

CMC Holdings traded 44,400 shares and closed unchanged at 12.00.
CarGen traded 3,000 shares at 50.00 unchanged.



N.S.E Equities - Finance & Investment

KCB traded 3rd at the Bourse and rallied 1.165% to close at 21.75 and
traded a 21.50-22.25 range. KCB traded 1.432m shares worth 31.432m.
KCB trades on an Implied Forward of less than 8.00. A Re Rating Higher
is inevitable, the Question is its Timing.
Equity Bank traded 2nd and firmed 0.97% to close at 26.00. Equity Bank
traded a 25.75-26.25 range and 1.212m shares worth 31.513m.
COOP Bank traded 5th and closed 0.26% easier at 19.00 and traded a
19.00-19.10 range and 1.269m shares worth 24.129m.
Barclays Bank retreated 1.64% to close at 60.00. Barclays traded a
60.00-61.00 range and 52,600 shares. There was a Further 236,000
shares for sale on the Board. Barclays has posted a 42.66% 1 Year
Return and has retreated 14.28% from 70.00 Its 2010 Closing High of
15th July. Barclays trades on a Trailing PE of 13.847.
StanChart was marked down 3.33% to close at 261.00 and traded 9,000 shares.

Housing Finance firmed 0.99% to close at 25.50 and traded a
25.00-25.75 range and 1.012m shares worth 26.066m which put it 4th at
the Bourse. HFCK crossed 30.00 this Year and has since drifted off
those levels but Buyers are supporting the Price again as evidenced
today by the Volume.
NIC was unchanged at 48.25 and traded a 46.00-48.50 range and 335,200
shares worth 16.219m. NIC reported strong 3rd Quarter Earnings and
Puts the Forward PE with a 9.00 Handle.
CFC StanBic eased 50 cents to close at 80.50 on thin Volume of 5,200 shares.
DTB was unchanged at 130.00 and traded 10,000 shares.
NBK retreated 2.53% to close at 38.50 and traded 49,200 shares. The
Government of Kenya confirmed that they were seeking a Strategic
Investor for the Bak within this Financial Year.

Centum eased 1.08% to close at 23.00 and traded a 22.75-24.00 range
and 964,600 shares worth 22.372m. Centum has posted a 114.407% 1 Year
Return and closed at 26.00 its 2010 High on 29th September. Centum has
underwritten 50% of the KPLC Rights Issue alongside Equity Bank.

Kenya Re closed at 11.00 and traded 70,900 shares only.
Jubilee closed at 189.00 -0.53% and traded 1,100 shares.
PanAfric was unchanged at 71.00 and traded 3,000 shares.

Olympia Capital closed lower at 6.35 and traded 2,800 shares.



N.S.E Equities - Industrial & Allied

EABL was marked down a further 1.89% to close at 208.00. EABL traded a
195.00 session low! EABL traded 41,300 shares worth 8.599m. The Price
Action in the last 2 sessions has been most curious. EABL closed at
225.00 a record closing High last week Monday.

Kenya Power rallied 4.31% to close at 24.25 and traded 170,800 shares.
The Rights traded 1.45m times and closed 26.25% lower at 2.95.
Arbitrage Traders would be looking at that Valuation Gap. You could
theoretically Buy the Rights at 2.95 exercise Your Rights at 19.50 and
sell at 24.25 but the Liquidity is not there, I can see.
KenGen firmed 5 cents to close at 16.15 and traded 362,600 shares.
Cables traded 38,400 shares and closed unchanged at 15.50.

Eveready rebounded 5.66% to close at 2.80 and traded 41,800 shares
having spiralled lower after a Profits warning which saw the Price
trade lows not seen since 2007.
Sameer eased a further 5 cents to close at 5.75 and traded 18,500 shares.

Mumias Sugar was unchanged at 9.55 and traded 1.248m shares. Mumias
Sugar is up 51.52% for the Year and trades on a Trailing PE of 9.293.

Bamburi Cement was unchanged at 195.00 and traded 76,400 shares.
ARM firmed a shilling to close at 173.00 and traded 7,300 shares. ARM
has traded an outsize number of shares at 170+ for a period of about 4
months signalling a Patient and material Buyer at patient work.
Portland did not trade.

KenolKobil closed lower at 9.80 and traded 241,100 shares. Its oversold.
Total traded 5,200 shares and closed at 29.00.

BAT traded 4,600 shares and closed at 278.00.

Crown Berger firmed 50 cents to close at 32.25 and traded 8,100 shares.

Carbacid closed a shilling lighter at 144.00 and traded 1,700 shares.
BOC Kenya did not trade.

Unga was marked down to close at 10.10 and traded 13,300 shares.



by Aly Khan Satchu (www.rich.co.ke)
 
 
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December 2010
 
 
 
 
 
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