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KA-INVESTOR

• July 04, 2009
• 6:53

  1,000+ Tweets Later…

   » ‎ KA-INVESTOR
  
  This is yet another excuse for a real post. I guess I’ve been spending far too much time on twitter and neglecting kainvestor Blog. Six months of tweeting has seen me post over 1,000 tweets (not much compared to a few twitter gurus) ranging from simple links on business issues and other news to very personal tweets. And its proving to be addictive, that is if you find your self thinking in 140 characters constantly!
  
  For those who have not yet discovered Twitter, it is a free social networking and micro-blogging service that enables users to send and read others' updates, simply known as tweets. Phenomenal if you ask me, but who am I to say.
  
  Looking back at some of my tweets, I think I have loosened up a lot on the personal information front. Something that is not quite easy to do in a blog post here (Ask @PinkM with her new ‘serious’ blog). From following 251 tweeps, being followed by 330 of them (bless them all!) and 1,022 Updates, I’ve made great online friends.
  
  I would highly recommend following @bankelele, @coldtusker, @kachwanya, @InvestingInAfrica @Alykhansachu and @moseskemibaro for some serious business insights. @Ayittey for a serious dose of Africa leadership reality. @kahenya @roomthinker, @ArcherMishale, @alfredmutua and @mwaikibaki for some funny tweets and my friends @michaelmusau and @teyie if you don’t mind not getting any updates from them.
  
  Funny that no one really answers the one simple question, ‘what are you doing?' the guys at Twitter.com brain stormed and came up with.
  
• June 18, 2009
• 3:59

  Budget 09: Capital Markets Proposals

   » ‎ KA-INVESTOR
  Following Uhuru’s budget reading there has been a renewed investor interest in the NSE. The NSE 20 share index surpassed the 3,000 mark after a 14 days continuous rise. Analysts are predicting further improvement in the market activities in days to come. It seems the 09/10 budget reading brought some life into this market. Below are the proposal indicated there in:
  

  - Increase in stockbrokers and investment banks minimum share capital from Ksh.5 million and Ksh.20 million to Ksh.50million and Ksh.250 million respectively by December 2010. This could see some mergers, acquisitions and entrance of foreign investors to achieve this new capital requirement.
  
  - Industry players to publish half and full year (audited) financial statements in at least two national dailies (It’s about time we saw what this guys do)
  
  - Monthly reporting to CMA and submission of quarterly portfolio reports
  
  - Agents restricted to only one broker for easier scrutiny
  
  - Approval from CMA before any change in the shareholders, Directors, CEO’s and other key personnel of a brokerage firm
  
  - All brokers will be required to get an indemnity insurance of an amount not less than five times their daily average turnover to compensate investor losses due to irregularities. (the cover is a bit low and may not be able to cover all claims – from experience)
  
  - As incentive to firms that list on the NSE, the listing fee will be halved to 0.15% from 0.3% of the value on issue. Similarly, withholding tax on long term bonds of 10 year or more maturity has been reduced to 10% from 15%. (this incentives are not good enough and no significant change in likely to be seen)
  
  - Proposed amendments on the Retirement Benefit Act to limit investments by pension schemes (such as NSSF) to only invest in government securities and bonds from public institution could see reduced activity at the NSE.
  

  You can also read the full budget speech here and a PWC-Kenya Budget Bulletins here.
  
• June 11, 2009
• 6:35

  Budget 09 - live

   » ‎ KA-INVESTOR
  <a href="http://www.coveritlive.com/mobile.php?option=com_mobile&task=viewaltcast&altcast_code=2cae31a899" >Kenya Budget Reading 2009</a>
• June 09, 2009
• 6:05

  Sin Tax, Zain & KCB

   » ‎ KA-INVESTOR
  As usual, this year’s Kenya budget reading will not miss a dose of ‘sin tax’ for smokers and beer lovers. How effective these ‘sin taxes’ are is still a matter of contention, but this Mercatus Centre policy paper discourages them. In summary it says:
  

  - Sin taxes are the result of anticompetitive behavior rather than true public-interest concerns. Most of them are used by industry leaders to fight back at their competitors (EABL, Keroche, tax stamps)
  - Sin taxes are not used for their intended purpose and consumer of the taxes product don’t have control over the raised funds (which ends up funding political agendas anyway)
  - The weight of sin taxes fall disproportionately on the poor
  - Consumers of sin products are usually not responsive to increase in prices and may only substitute the product for a lethal alternative – defeating the objective
  - Then there is the issue of same products from neighboring countries finding their way into the market albeit illegally.
  - The effectiveness of ‘sin tax’ is thus trivial and a total failure (it even feeds immorality!)
  

  No more Zain (Again!)
  
  Zain Group is reported to be looking to sell its African unit, Celtel International. It’s said that Zain has been approached with a USD12 billion deal to sell Celtel to an unnamed French company. Zain has also received inquiries from firms in India and China. And still on Zain, its Zap money transfer service has been approved in Uganda and will be now be operational across East Africa.
  
  Another first from KCB
  
  KCB has announced a tender for an internet acquiring gateway, which according to @moseskemibaro is an indication that the bank would be offering an e-commece services platform locally. Following the passing of the ICT bill into law earlier this year e-commerce is now easier in Kenya and KCB may be the first to launch it. (ok let me not indulge more lest I become a ‘corporate cheerer’)
• June 05, 2009
• 0:56

  KCB: Big in the East

   » ‎ KA-INVESTOR
  
  Talk of going regional and KCB Group comes first to mind. The rate at which Mr. Martin Oduor is expanding the bank regionally can only be said to be phenomenal. Last week there were opening their fifth outlet in Southern Sudan and sealed a Ksh.38.4 billion ($452 million) mortgage deal with the Government of Southern Sudan. The S&L (KCB’s mortgage subsidiary) deal to finance construction of 1,750 houses for Southern Sudan civil servants is the biggest deal a Kenyan firm has ever got in any of its East Africa subsidiary.
  
  Compared to other indigenous banks, KCB regional expansion strategy/ implementation eclipse them all. And it’s been paying off. KCB's businesses in Tanzania and Southern Sudan have already crossed the profitability threshold, while the one year-old Ugandan subsidiary is likely to break even this year.
  
  A look at the Groups 2008 financials indicates that KCB Uganda assets grew to Ksh.2.4 billion after operating for a year, with its banks loan portfolio, reaching Ksh.660 million, while deposits grew to Ksh.1.48 billion. KCB Sudan returned a pre-tax profit of Ksh.530 million while KCB Tanzania, which reached a breakeven point last year, recorded a pre-tax profit of ksh.32 million.
  
  In Kigali Rwanda, KCB is also the first to be cross-listed (listed) on the Rwanda's Stocks Exchange. This would see KCB’s stocks trade in four securities markets in East Africa; Nairobi, Kampala, Dar-es-Salam and Kigali.
  
  The bank further plan to open 30 additional branches in Kenya and 20 more in Sudan, Tanzania and Uganda. Other Kenyan banks that have ventured into the larger Eastern Africa region include Equity (Uganda); NIC (Tanzania); and DTB (Kampala/ Dar)
  
  Notice that most of these banks have shied away from Ethiopia and Somali (for security reasons: but isn’t the piracy money worth the risk). For Ethiopia I’m yet to understand why Kenyan banks don’t even mention their intentions to go there, probably due to the big government there. But I can bet KCB Group will be the first to set office there.
  
  *Opinion*
  
  From a personal experience with KCB’s below par service, my opinion is skewed towards investing in the banks stocks and not considering to be their client (unless you travel a lot across Kenya or East Africa)
  
• May 24, 2009
• 12:39

  Broken Integrity

   » ‎ KA-INVESTOR
  What would you do if you discover that your so much cherished investment that you’ve been thinking is safe with your ‘trusted’ broker is not actually there has the CDS statement has been indicating? You don’t have to imagine, because this is the exact nightmare that hundreds of NSE investor are going through. And it doesn’t matter if your stockbroker is one of the few investment banks or the many shaky brokers constantly under CMA’s red list.
  Seeing shareholders turning the Barclays Bank AGM into a cry session against unscrupulous brokers was a really sad turn of events. It’s now clear that the NSE, once the symbol of renewed confidence in the Kenya’s investment markets and a darling of all, has been turned into a shell by shameless brokers (owners and employees) who lack any sense of integrity and professionalism in their duty.
  I see Uganda Securities Exchange (USE) turn to the electronic shares system, with investor having CDS accounts instead of share certificates, and I shudder. The advent of the same system at the NSE was just but the beginning of the investors’ troubles. Unlike with the physical certificate system the CDS gives brokers a pass to trade in clients shares without their knowledge.
  A CDS statement indicating a cash balance is a magnate for brokerage employees to forge documents and defraud clients. Even worse is a case where the statement is forged to indicate that an investor has shares in his account when in real sense the shares don’t exist. The shareholder never receives dividends from companies he’s purported to have invested in nor does he get invited to the firm’s AGM. This happened a lot with Nyaga clients before it went down.
  Nothing could be worse to an investor than discovering your investment that has lost over 60% was further pinched by your ‘trusted’ broker/investment banker (after moving two brokers – one collapsing and another being bought out by a bank). Brokers’ integrity at the NSE at the moment is at its lowest and so is investors’ confidence.
  Will the perpetrators of these scams ever be prosecuted? Or investors will continue to be given lip service from CMA and NSE on what measures are being taken to bring back sanity to this ‘ponzi’ market? Micah, you’ve been served.
• May 19, 2009
• 2:19

  Magazine Review: HOST Africa

   » ‎ KA-INVESTOR
  
  Yesterday I was privileged to receive the premiere issue of HOST Africa magazine from my good friend Ken (thanks). Went through it in the evening and thought a small review on it won’t hurt. The magazine focus is mainly on the hospitality and tourism industry and all its stories are skewed towards these. The magazine goes for Ksh.350 (≈US$.4.50) per copy.
  
  The first issue cover story is on fibre optic and what it means for businesses in Africa, particularly Kenya with the landing of SEACOM at the Kenyan shore next month. The issue also features a story by Lee Simon, an award winning kitchen designer and the author of “The Restaurant Dream?” (a must read for food lovers) among other writers (both local and foreign).
  
  Great topics such as hotel security, reinventing Kenyan tourism and brand changing in the hotel industry, have been discussed (even a review of my favorite traditional delicacies hotel – Amaica). For a start I think these guys at Mondeas ltd. have done a great work. I will be waiting for their follow up issues in the coming months.
  
  To subscribe check their website at www.hostafricamagazine.com or email host@mondeas.com
  
• May 18, 2009
• 9:51

  Investing in Re-opened Bonds

   » ‎ KA-INVESTOR
  The demise of the NSE has seen Central Bank of Kenya (CBK) become the biggest beneficiary with bonds and bills being over subscribed every other week. Late last year government reduced the minimum initial investment amount in treasury bills to Ksh.100,000 from Ksh.1,000,000. CBK has now resorted to reopening of bonds issued in the previous years. Last moths CBK reissued a Ksh.7 billion 5-year bond that was successfully subscribed and is now planning to reopen a 15-year bind that was issued two years ago (07).
  
  Reopening of securities is a common practice in the developed markets. This is done when seeking to eliminate bond market fragmentation (existence of too many but small outstanding bonds scattered everywhere in the secondary market). Fragmentation leads to unstable and uncertain bond prices and reduces free trading due to few investors (who buy and hold bonds reducing liquidity)
  
  When a bond is reopened, an old bond is offered to the market on a date other than its original issue with a view to increasing its outstanding amounts and expanding the original amounts. On reopening investors are offered the same instrument (bearing the same features as the existing bond – same maturity date n coupon rate) except for offer date, offer price and yield.
  
  Requirements to participate in a reopened bond are the same as those of any government securities auction i.e. you need to have opened a CDS account with CBK and complete the application form with all the details has specified in the prospectus.
  
• May 12, 2009
• 7:25

  Centum: A Close-up

   » ‎ KA-INVESTOR
  
  Centum Investment just impresses me with their over-optimism (if there is anything like that) when it comes to their dwindling performance and aggressive investment plans. Despite its Full-Year 2008 profits dropping 64% (to Ksh.313.2 million; investment income dropped by 33% to 392 million) and making some unwise investments in Uchumi and RVR (Rift Valley Railways), the investment firm is going forth with an aggressive 5 years plan (2009-2013) and has announced a Ksh.2 billion bond issue.
  
  It has already appointed transaction advisors for the issue set to open in three months time and is seeking regulatory approval for the same. cash raised in the bond issue will be invested in regional securities (both public and private) taking advantage of the investment opportunities created by the global recession that has seen value of securities dropping significantly as foreign divested.
  
  The firm had issued a profit warning earlier in April indicating that it expected its full year profit to fall by up to 80% mainly due to an 84% drop in the value of its holding in RVR. The bear run at the NSE further eroded gains realized by the firm from publicly listed shares. Its current portfolio is valued at about Ksh.6.4 Billion from Ksh.8.67 billion in at its peak in 2006.
  
  
• May 09, 2009
• 0:59

  Dividend Hunting at the NSE

   » ‎ KA-INVESTOR
  Over the recent weeks NSE firms have been releasing their full year results for 2008 and most of them have announced dividends for their shareholder. In this bear NSE the only thing we have now is dividends that we can take advantage of. In developed markets its called dividend investing, which focuses on identifying solid companies with a record of growing dividends each year and buying their stocks expecting that it will continue declaring dividends.
  
  One thing that investors need to know when dividend investing is that it’s particularly different from normal value investing, where one invests in a stock considered undervalued with an expectation that it will rise to its true value or higher. And a combination of the two can yield some very good results:
  
  Dividend Investing + Value Investing = Great Returns
  
  Dividend investing focuses on identifying solid companies with a record of growing their dividends each year; and an expectation that it will continue into the future (almost speculative). This sounds so short sighted, but history has proved that stocks that pay constant/growing dividends have always out-performed those that don't.
  
  Dividend investing is usually associated with the bear market since dividend yields are considered relative safe in down markets.
  
  Signs of a Dividend Stock
  
  There are several things to look out for in a stock before considering it a dividend counter:
  

  • Dividend yield doesn’t mean much. dividend yield (annual dividend divided by the current stock price) simply indicate if the stock price is low or high, which is based upon current stock price and historical dividends thus not capturing the actual facts at a particular time.
  • 
  • A company that has a history of paying a consistently growing dividend is better than one that pays a consistent, but steady dividend. And the consistent but flat dividend is better than a company who has had to cut its dividend.
  • Cash flow is King. When it comes to dividend investing net income does not mean much. Cash pays dividends so operating cash flow per share is more important. Consistency of the cash flow is also important. A company that generates a steady or growing operating cash flow is better able to fund a dividend than a company that cannot consistently generate cash. A company’s dividend coverage ratio (operating cashflow per share divided by the expected annual dividend). If this ratio is 1.0 or better, there can be a relatively high degree of confidence that dividends will be paid in the foreseeable future.
  • 
  • The stronger the balance sheet the better. Stronger here meaning less bank debt. A company with no bank debt has a stronger balance sheet because it can borrow if necessary to support operations and the dividend if need be.

  Firms at the NSE that I consider to be dividend stocks include EABL, BAT, Standard Chartered and Total among others. If you're looking for something that pays you a steady income stream, just like fixed securities (bills and bonds) you might be better off with a stock that offers a high dividend.
  
• May 06, 2009
• 9:57

  Tweak Post

   » ‎ KA-INVESTOR
  After contemplating this for a while I finally decided to change my blog template and do away with too much junk the old one carried. I picked this new look from Btemplate, a free blogger templates resource (I’m Kenyan; we don’t pay for things we can get for free – ‘Sare’). Only problem with this great looking templates is that the back end sign-in bar disappears and you have to go through other normal blogger sites to get to your own back end (so if you get me trespassing, I’m just trying to get into my own house). Hope it will serve me well.
  
  Suicidal Fan:
  Just learnt that a die-hard Arsenal fan hanged himself after Man-U beat them to the UEFA final. Sad happenings indeed…but is it worth it?
  
  More beer: SABMiller Plc, the world’s second- biggest brewer, plans to build its fourth factory in Tanzania at a cost of $55 million by November, boosting beer production by 22 percent. The firm, through Tanzania Breweries (owns 52.8% stake), is also spending about $24 million to upgrade its Arusha and Mwanza breweries.
  
  Trump coming to Kenya: US property tycoon, Donald Trump, is one of the 44 parties interested to invest in the multi billion shilling Nairobi Golf City development located on a 73-acre land that currently belongs to Kenya Railways. Other interests are from Commercial Bank of Africa, Associated Motors, Spencon International, TPD Serena, Premiere Flour Mills and Actis.
  
  Prepaid power: KPLC is set to commence the first phase of the prepaid metering project. This will see consumers shift from the current postpaid system, giving them control over power consumption and avoiding several inconveniencies from the electricity monopoly supplier (sigh)
  
  
• April 25, 2009
• 12:25

  The Real Jay Z

   » ‎ KA-INVESTOR
  *I’m write this while watching (on Aljazera) Zuma deliver a painfully slow speech at a press conference in Pretoria*
  
  As greatly anticipated Jacob Zuma (or Jay-Z as he is nick-named down south) has easily cruised to victory and is now poised to becoming the next president for Sub-Sahara’s strongest country - South Africa. Now we wait to prove the divergent and controversial sentiments the man has elicited across the continent and the world at large.
  
  Despite his popularity in SA, the man is known by the outside world for all the wrong reasons. Unabashed polygamist, uneducated freedom fighter and a canny politician with a way around justice are some of the few (cruel) words used by TIME and The Economist to describe him. Some consider his presidency a big gamble for SA that may back fire.
  
  Power has a way with revealing the inside persona (we saw it with our own kibs in 2003). So now we wait and see who the real Jacob Zuma is.
  
  
• April 16, 2009
• 11:10

  Scangroup Peek

   » ‎ KA-INVESTOR
  
  Scangroup Ltd. has announced its FY08 results indicating that:
  - PBT went up 24% to Ksh.437 mln;
  - revenue rose 21% to Ksh.1.4 bln;
  - Net asset/share increased by 60% courtesy of WPP investment;
  - EPS grew by 20% to Ksh.1.79
  - Free Cashflow up 98%
  
  I had the honour to listen to Lowe Scanad (K) Ltd.(a Kenyan ScanGroup subsidiary) MD, Sameet Ambegaonkar, delivered an invigorating presentation yesterday on strategy and tactic at the British Council – leadership forum. The guy has vast experience and knowledge (29 years in strategic planning for major FMGC firms that has seen him work with Amu – India, Tata, Coca cola –India n Kenya, EABL, Safaricom) in advertising.
  
  The Group, in a joint venture with Hill & Knowlton, has also launched a new public relations firm known as Hill & Knowlton East Africa. (51% Scangroup, 49% WPP – which still owns 27.5% in Scangroup)
  
  More scanned info @Grains of Masala
  
  
• April 09, 2009
• 10:03

  e-book - It's Our Turn to Eat

   » ‎ KA-INVESTOR
  This email is on behalf of my friend who is a friend to Michela Wrong who is a friend to Githongo (So I'm a friend to Githongo!)
  
  April 9, 2009
  
  Dear All,
  
  Harper Collins have finally come up with an e-book of "It's Our Turn to Eat", which has been widely circulating in pirate form on websites and mailing lists in the last few weeks because of a boycott by Kenyan bookshop owners nervous of being sued. So Kenyans can now buy and download a legitimate PDF file of the book, by clicking on (thanks steve for the link correction):
  We've tried to keep the price as low as possible - you'll see that it is a lot cheaper than the hard copy. We're also hoping to make this something Kenyans who don't own credit cards can buy on M-Pesa, but at the moment that's proving a logistical nightmare.
  
  Please spread the word. There’s no reason, now, to circulate or download bootleg copies of the book.
  
  Michela Wrong
  
  Consider this my Easter present. Happy Easter guys!
  
  
• April 08, 2009
• 5:33

  Equity Bank Suspended!!

   » ‎ KA-INVESTOR
  Kenya's Central Depository and Settlement Corporation (CDSC) has suspended Equity Bank as a stocks agent for two weeks, it said in a letter to stockbrokers dated Wednesday...read more
  
  up-date: this was later in the day revised by CMA after Equity banks appealed. (Something does not sound right here)
  
  
• April 05, 2009
• 3:00

  Subaru Kenya: Courting Disaster

   » ‎ KA-INVESTOR
  
  Nairomour has it that Subaru Kenya (currently under the management of ECTA (K) Ltd.) may be going the Marshals E.A. way with the withdrawal of Subaru products from its chain of business. Toyota Kenya is fighting hard to get the Subaru dealership from ECTA, citing economies of scale as it general reason.
  The rivalry between Toyota Kenya and Subaru Kenya is said to have stem when ECTA poarched a high level manager from Toyota. The Toyota manager in the eye of the rivalry is said to have been very instrumental in Toyota Kenya’s business development. In a bid to get back to ECTA, Toyota Kenya management, who are fellow country men (Japanese) with Subaru, decided to under cut their Kenyan competitors by convincing their bosses in Japan to cease the Toyota dealership with ECTA and sign up with them
  
  As if that’s not enough, poor management decision has seen ECTA hire too many highly paid top managers since the passing on of the founder and neglecting the little small workers. Their Shock absorbers competitor, Robbs, has capitalized on this mistake and has launched an aggressive campaign to poarch some of the best, experienced workers from ECTA by offering them almost double their salaries and a better working condition. Right now things are looking really bad for ECTA.
  
  
• April 03, 2009
• 14:28

  March Tweeter

   » ‎ KA-INVESTOR
  
  Ok, I agree with you, I’ve not written anything coherent on this blog for a very long time. The recent few have been more of announcements than blogging, just to keep the blog alive. March was my tweeter month of the year (and one very hectic month). Tweeter is simply a micro-blogging platform that makes it easier communicate with other people (Tweeps, tweeples, tweeterers) over the internet. It’s sort of a chat room that goes beyond that and has more functionalities than simply chatting – tweetpic and so many other things I’m still learning more about.
  
  My journey on tweeterville has led to meeting great people. some I never knew before like @kahenya – the fire tracker, @pinkm – the excel expert, @louizah, @kaboro, @paulakahumbu – the wildlife expert, @EdObie, @JustDes and others I knew before – some personally some just over the net like @bankelele, @RyanShenHoover, @Cho1 and @ConceptAdvisory. Despite the time its taken me from meeting some deadlines and neglecting Kainvestor blog, its a great experience that you can carry around in your mobile phone, keeping you busy in a boring situations (not in cars or matatu’s – it can be dangerous depending with type of phone and route taken)
  
  My quest on tweeterville continues as I learn more tricks to answering one simple question, ‘What are you doing?' in only 140 words.
  
  
• March 30, 2009
• 9:17

  Global Bug Bites: 25% Lay Off @ Zain

   » ‎ KA-INVESTOR
  
  Thanks to @louizah tweets
  
  I’m informed that Zain has announced a plan to lay off 141 workers in its Kenya subsidiary as it restructures to wedge off the expected effects of the global economic recession on the African continent. The firm also plans to outsource some of its functions including network building, operations and information technology systems, and make some strategic acquisitions on the continent. The Group has set aside USD1-2 billion for its Africa’s operation in 2009.
  
  Despite Zain Kenya's growing subscriber base to 3.07 million (18% market share), the mobile service provide registered huge losses last year. its main competitor’s – Safaricom, has over 13.3 million subscribers or 77% of the market.
  
  
• March 25, 2009
• 13:23

  Enter the Kingdom

   » ‎ KA-INVESTOR
  Cooperative bank has finally sealed the coffin for Bob Mathews Stockbrokers by buying the troubled broker off (was the Ksh.20 million part of the deal or a song buy?). The bank has acquired 60% of the brokerage firm, taking with it the 12,000 accounts and the entire Bob's staff (excluding the owner). The bank now takes over full management control of the brokerage firm and has already rebranded it to ‘Kingdom Securities Limited’. The deal has not yet been approved by CMA and coop bank shareholders.
  
  
• March 19, 2009
• 8:51

  Mulika Mwizi: Pyramid Schemes Die Hard

   » ‎ KA-INVESTOR
  Thanks to Rafiki Kenya tweets
  
  Even after several Kenyans lost millions of hard earned money to shoddy investment schemes such as Deci and Sasa, pyramid schemes seems not to be dying out. There is a new con artist in town (The Net Wealth) who even targets post-election violence victims as its model clients. Any one reading this should please keep off such schemes that promise heaven and earth. If its too good to be true….then it isn’t. Guess I’ve done my part in the mulika mwizi (spot a thieve) campaign.
  
  Wikipedia has a detailed analysis why pyramid schemes don't work, but this illustration summarises it all:
  
  
  
  
• March 17, 2009
• 6:48

  Safaricom Robbery: Shape Up or Shape Out!

   » ‎ KA-INVESTOR
  I almost missed this mail from a reader who is so annoyed by Safaricom's service that he had to say something about it. Many of us may have fallen victim to this injustice but never noticed or blamed someone else. No wonder they make billions as their competitors make more losses.
  

  Dear Editor
  
  I am writing this on Wednesday March 11, 2009 at 11:30pm. I am worried because I have had a very strange occurrence which I have never imagined can be happening in this era of IT. In the course of the day I loaded my safaricom number with Kshs. 400 only. I made various calls to my friends, relatives and enemies. I used the same to browse the web for my mails and other information I wanted from the web, which I believe helped me keep in touch with my environment.
  
  However towards the time at which I am writing this mail, I made a call which lasted 3 minutes and 49 seconds, which according to my tariff (Ongea) should have cost me Ksh. 30.54.
  
  
  However due to abnormal reduction of my credit balance I was forced to call customer care. The first time I called, I was told that there is call log update time lag of 10 minutes. I did wait for the proscribed 10 minutes and called again. This time I was lucky because the log was now complete and I was given a complete audit of how my meager 400 bob was spent.
  
  Believe it or not the aforementioned call of 3:49 long cost me Kshs. 70.62. I am just wondering whether this is a thing that regularly happens at Safaricom. Is this the main contributor towards the billions they are going to post at the end of the year?
  
  As a hustler trying to make ends meet in this economic near melt down era, I have lost confidence in this service provider. The Customer care service executive I talked to promised me that she has forwarded my complain (She never told me to who) and that I shall get my refund within 48 hours. I told her that I hope I shall receive what is justly due to me.
  
  I am perplexed because it took them only 3 minutes and 49 seconds to get Kshs 40.08 from me which was not due to them. Why should it take them a whole 48 hours to refund me the same? How many unsuspecting Kenyans are undergoing this kind of robbery without noticing while imagining that its their wayward sons, daughters, spouses and siblings misusing their handsets?
  
  I do feel that Safaricom should come clear and inform the public of what they are doing to ensure that the public gets quality service at an affordable price. So far they are the most expensive even though I have remained loyal to them.
  
  This incident has been a loud wakeup call and safaricom should be sure that should they not a visible move towards thinking of me (Clients) before the billions and silverware they will bag, then one day not so much in the future they might find themselves in the Panpaper Webuye paper Mills Ltd Situation. It would be a shame on all of us and an example of greedy executives not caring about their clients and investors.
  
  Thank you.
  
  Yours faithfully
  E. O. Otipa

  
• March 12, 2009
• 2:23

  Gates Back at the Top on Forbes Rich-List

   » ‎ KA-INVESTOR
  Forbes magazine has released its annual list of the world's richest people, most of who have been hit really hard by the global financial crisis. Total net worth of the 2009 list is US$.2.4 trillion - down from US$.4.4 trillion in 2008. Total world billionaires reduced to 793 from 1,125 in 2008, as more billionaires fell off the list with the crisis. The average net worth per billionaire on the list dropped 23% to US$.3 billion from 3.9 billion dollars in 2008.
  
  According to Forbes, the top 10 richest people in the world and their net worth are as follows:
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  Name	Company	Net worth US$’billions’	Change in Net worth compared to 2008
  William Gates III	Microsoft	40	-31%
  Warren Buffet	Berkshire Hathaway	37	-40%
  Carlos Slim	Telecom	35	-35%
  Larry Ellison	Oracle	22.5	-10%
  Ingvar Kamrad	Ikea	22	-29%
  Karl Albrecht	Aldi	21.5	-20%
  Mukesh Ambani	Petrochemicals	19.5	-55%
  Lakshmi Mittal	Steel	19.3	-57%
  Theo Albrecht	Aldi, Trader Joe's	19.3	-16%
  Amencia Ortega	Zara	18.3	-9%

  
  Billionaires by region:
  
  

  Region	Billionaires	Net worth US$.’Billions’
  US	359	1,100
  Europe	196	655
  Asia-Pacific	130	357
  MidEast/Africa	58	156
  Latin America	50	175

  
  Changes in the world billionaires list: 44 new billionaires joined the list (including a Mexican drug lord), 656 dropped out of the list and 52 didn’t change in position.
  

  
  

  
• February 27, 2009
• 13:19

  Bob Mathews: Obituary of a Reincarnated Broker

   » ‎ KA-INVESTOR
  
  Bob Mathews Stockbrokers seems to have failed to learn from its past and has once again been suspended from trading at the NSE for 10 working days. A limited liability company, Bob was incorporated on 6th April 1994 and licensed by the Capital Markets Authority (CMA) on 1st July 1994 and become a full member of the Nairobi Stock Exchange (NSE) and Central Depository Agent (CDA) of the Central Depository and Settlement Corporation (CDSC). Due to liquidity problems Bob only managed to operate for one year before closing down (suspended) in 1995.
  
  13 years later, in 2007, Bob Mathews (surprisingly) reopened its doors to the public in the middle of a bull-run. As tradition would have it the broker (among other five) was once again faced with liquidity problems a year later after failing to fulfill some very basic requirements for license renewal by the CMA. Bob was let off the suspension hook at the last minute. Fate has finally had its way and now the broker faces a threat of being permanently suspended from the NSE once again.
  
  
  
• February 23, 2009
• 8:46

  Open Letter to Micah Cheserem - CMA Chairman

   » ‎ KA-INVESTOR
  Dear Mr. Cheserem,
  
  First, I would like to congratulate you on being appointed to the Chair of the Capital Market Authority (CMA) of Kenya. Despite others approval, I personally I find it disturbing for a man of your caliber to head an institution that has been rendered powerless by cartels of market insiders. You have done ‘great’ thing before, but I’m afraid this is not the time or place to repeat history.
  
  I have decided to detail in this open letter my uttermost disgust and fear of what our Nairobi Stocks Exchange (NSE) has become. I believe by doing this I address the concern of many NSE investors like me and touch on the principal causes of concern of each one of us.
  
  Following the unfortunate turn of events at the stock market, two stockbrokerage firms have collapsed, one placed under statutory management and others left with questionable characters. In all this we investors have bared the brunt. And all we have received from the people we entrusted our hard earned money to is excuses, from the mundane ones like computer errors on the CDS statement to the Global financial crisis.
  
  Is this thing we call NSE just another legal pyramid scheme where investors can loose their investments and no one is prosecuted? All we get is press statements from the concerned authorities (CMA & NSE) and promises of instituting tough regulations, while the perpetrators of the ‘crimes-against-investors’ go scot-free.
  
  I would want to believe that you are more knowledgeable of the above details and much more that’s contained in the Nyaga-PWC audit that has been kept secret from us. Nevertheless, I would like you to do some drastic changes lest the NSE collapse before the end of this global financial crisis. Starting with demutualization of the NSE, reduction in family ownership in brokerage firms or just constitution of a parallel/new securities market.
  
  If none of this can be done, then simply close down CDSC, outlaw all (remaining) brokers and revert to share certificate and open-out-cry method of trading. At least then I will trust that my shares are safe under my mattress.
  
  I wish you well in your work to clean up this mess called the NSE.
  
  Yours truly,
  
  Kainvestor.
  
  
• February 06, 2009
• 6:41

  Business Daily Focus on Blogs

   » ‎ KA-INVESTOR
  
  Kenya’s Business Daily has today produced a special report on the blogging culture in Kenya. As much as the pieces on blogging we interesting to read, I find the impression given in some articles about blogging to be utterly uninformed. Like this which says:
  

  “If you are looking forward to entering into the business of blogging, please don’t. There was a time when it made millions, that is now gone….”

  I don’t think in the 21st century anybody would get into blogging for the money – adsence or any other kind. There is no money in this blogging world, just some few pennies here and there that don’t count much. its all about what you love and expressing yourself unconstrained by rules. but either way one has to be careful with the kind of information you post.
  
  And in Kenya, blogging is not a very serious information source to warrant a threat to the main stream media; not even with the fibre optic landing this June. But it’s still great that more and more corporate blogs will grace the Kenyan blogosphere soon.
  
  
• January 29, 2009
• 1:08

  Radio Africa Holdings IPO

   » ‎ KA-INVESTOR
  Radio Africa the holding company to several Kenyan fm radio stations is seeking to have its IPO on the NSE this year to finance its expansion plan. The Group owns Classic 105, Kiss 100, East Fm - 106 fm (for the Asian community) and an additional three new radio stations namely Jambo Fm, X FM and Smooth Fm. The targeted amount for the IPO has not yet been disclose ( to be up dated).
  
  The group also publishes the daily newspaper, Nairobi Star (I call it the gossip paper). The Nairobi Star, which acquired its own printing press, is set to expand to the rest of the country in the course of the year. Before acquiring the print press the paper was being printed by Nation Media Group printers. The paper does not separate its employees between radio and newspaper, with most of its radios presenters doubling up as its columnists e.g. Caroline Mutoko’s Monday column where she says whatever she likes. The paper also employs other renowned personalities as their columnists’ e.g. Aly khan Satchu’s (Stocks – Star Portfolio) and Tajudeen’s - Bio (Commentaries).
  
  Initially the paper got some very harsh reviews but over time it has managed to prove that it's a champion in solid grapevines. On lauching the paper sold over 50'000 copies in a day but its has since dropped. Competition from Nation Media's Metro did not manage to dumpen demand by its target market of between 18 to 35 years olds.
  
  Radio Africa Holdings IPO would bring the number of listed media firms on the NSE to three, after Nation Media Group and Standard Group. Surprisingly, neither the Group nor its subsidiaries (fm radio’s and newspaper) websites are up and running. Something, I think, they should act on before going into an IPO.
  
  
  
  
• January 26, 2009
• 3:47

  The End of Cheap Money

   » ‎ KA-INVESTOR
  Revelations that many Kenyan banks are in trouble over loan defaults are continuing to deepen with a recent indication that most of the personal loans given were mostly to individuals under 30 years of age. Unconfirmed report indicates that over 50% of the loans were given to young persons to finance their quest to owning cars and homes in major Kenyan cities.
  
  These young borrowers end up not able to repay their loans and have to choose between paying their mortgages or loans, with most of them opting for the mortgage. They then take a loan refinancing option that consolidate all the other loans and end up with one huge monthly installment due to the even higher interest to be paid to the refinancing bank (mostly KCB). Tough economic times that have seen some employees being laid off have worsened the situation even further.
  
  Bank loans sales agents (loan hawkers)
  
  Many of these young borrowers were as a result of loan hawkers who were keener on getting higher commissions than the quality of borrowers they got. The end results may be an increase in volume of non-performing loans, which may force the central bank to react by increasing the banks cash ratio – rescinding an earlier decision to lower it. The only options for the banks are in rescheduling the loans repayment periods without increasing interest costs to the borrower or resort to external credit collectors, who may see many borrowers in court.
  
  I’m surprised that the government’s revolving funds, such as the youth and women’ funds, have performed better than commercial banks’ unsecured loans.
  
  
• January 22, 2009
• 4:02

  State of Kenya's Telecoms Industry

   » ‎ KA-INVESTOR
  I stumbled upon a research report by Budde Communication Pty Ltd. on the state of telecoms, mobile and broadband in Africa in 2008. Though I couldn't access the full report due to the cost implication here is a summary of what the report said about the state of Kenya's telecoms industry:
  

  "Despite the civil unrest which cast a shadow on Kenya at the beginning of 2008, the fundamental transformation of its telecoms market continues. A consortium lead by France Telecom acquired a 51% stake in the national telco, Tekom Kenya. The IPO of the country’s leading mobile operator, Safaricom, went ahead very successfully in April, which is an encouraging sign for Telkom’s planned IPO. A new, simplified licensing regime designed to increase competition was introduced mid-year. Several competing wireless broadband networks and national fibre backbones are being rolled out, and several international submarine fibre optic cables are expected to launch from 2009. This will bring bandwidth prices down and open the Internet up to the mass market. The country’s GSM mobile market finally moved beyond a duopoly at the end of 2008 when Econet and Telkom Kenya launched services as the third and fourth players. Convergence is ever-present in this dynamic and fast growing market with voice, data and video/broadband TV (triple play) services, the introduction of 3G mobile services and mobile banking empowering the largely un-banked population."

  Read more on other African countries here
  
  On a light note: What exactly does Orengo mean when he says this
  

  “I have said that at a certain stage if things continue the way they are, then some of us will be prepared to say things that probably as a member of the Cabinet, may be inappropriate for me to say,”

  Just say it like it is Orengo!
  
  
• January 15, 2009
• 6:09

  Obama Phone Launched in Kenya

   » ‎ KA-INVESTOR
  
  Handset vendor, Mi has launched a Barack Obama branded mobile phone for sale here in Kenya - the home country of the President Elect's father. The handset is co branded with the Obama colours and logo and is being sold for Ksh.2,500 (≈$30). Read more
• January 06, 2009
• 9:30

  We Are Not Alone

   » ‎ KA-INVESTOR
  
  
  
  
  
• January 02, 2009
• 5:37

  Welcome to 2009

   » ‎ KA-INVESTOR
  2008 is finally around the corner and we are in the New Year 2009. 2008 was quite a busy year, but as time goes by it will only be a fading memory. I took the liberty of writing a final annual summary for the business year 2008 and some things I expect in 2009.
  
  The NSE
  
  The NSE was full of surprises in 2008. First there was the biggest ever Safaricom IPO that went sour, ushering in the bear run and brought back some sanity to our over-valued securities market. The Cooperative bank IPO that followed was only 81% subscribed a sure investor confidence reality check. Unilever got de-listed, Uchumi did not get re-listed, and some two rights issues from KBC and Housing finance graced the NSE during the year.
  
  Broke Brokers
  
  Yet again another market player, Nyaga stockbrokers, went under and several other were put on the warning radar. Discount Securities was put under statutory management following some internal squabbles and one of the biggest securities agent Tsavo was also in some trouble of its own. The depressed market was not doing any good to the brokers as commission revenues diminished.
  
  Strange Deeds
  
  2008 was full of strange things in the Kenyan business cycles. the resignation of Centum’s CEO, Peter Mwangi, and a month later NSE Boss, Chris Mwebesa, a few months after reappointment. The former ended up replacing the latter on the NSE seat, making it seem like it was all choreographed by the big boys. Mwebesa later went back to his former job at CFCfs, leaving a begging question if he was pushed out?
  
  Then there were several share manipulation allegations that rocked the market, particularly the Crown Berger and East Africa Portland Cement cases. Despite CMA’s efforts insider trading is still very rife in our bourse. In good light though, the Uchumi insider trading case was opened where former KCB CEO, Terry Davidson, was charged.
  
  Facing the Bear
  
  Finally, after the perpetual bull ride that had characterized the NSE for the last few years, the bourse was hit by a full blown bear run. Investors are still counting their paper losses, while the searching for the elusive bottom. Every time the indexes hit a ‘decisive point’ analysts are in haste to say that the market will not fall bellow that (NSE 20 – 4000, 3500 or 3000), but every time it just keep on dropping. The market index has dropped 43% from a high of about 5,445 in December 2007 to as low as 3,106 in December 2008.
  
  Investor’s Goodies
  
  In light of the changing investors’ sentiment, investment firms and also the government have come up with better investment packages that target the low earners. Old Mutual launched the Toboa investment scheme that allows investors to invest as low as Ksh.7,500 per months in their different unit trust combinations. Similarly the government lowered the minimum investment in Treasury Bills, to attract small investors and also help the blotted government to raise the much required funds.
  
  Acts of God
  
  The year saw some major changes both in Kenya and the world scene. Kenya opened the year on a bad note with the post election violence rocking every sector of the economy (some firms are yet to recover?) most importantly the political terrain. The Global financial crisis could not have come at a worse time, with the oil and food prices sky-rocketing everything went to the dogs. Obama’s win was a lifting moment from all these misery.
  
  Expected in 2009
  
  I’m not very optimistic about this New Year. However I expect the following to occur during the year:
  - A few more IPO’s from Nakumatt, K-rep and some de-listings or suspensions on the NSE (Eveready? Marshall E.A.)
  - the NSE will either plateau at between 3,500 and 4,000 or drop even further with most of it pegged on the listed financial firms
  - the global financial crisis may get worse in the first half of the year before getting any better
  - new regulations by CMA will reign some sanity to the market and in the process some brokers may fold
  
  
• December 22, 2008
• 11:40

  Why I blog about Africa

   » ‎ KA-INVESTOR
  Bankelele tagged me to share my reasons for blogging about our beloved continent, Africa.
  
  As an African blogger, I consider myself lucky to be born in this ‘virgin’ land of hidden opportunities and vast potentials. For these I tell the untold story of the millions of voiceless Africans that are caught in the straggle for survival and the inequities we’ve all been subjected by the few and foreign.
  
  I blog for Africa as my chronicle of the happenings in the business Africa that few know but many participate without knowing. To tell the stories that others don’t have time for, but yearn for unconciously. It’s my secret sense of pride to speak for the black soil my fore fathers stood steady on, fought the wars and drew blood to shape my destiny and for those that will come yonder. I speak of African issues from an African boy's view and not the negativity and misrepresentations i see in the foreign media that i don't and can't relate to.
  
  I blog about business and finance, among many other salient and puny issues, in Africa to widening my scope of thinking and learning about the Africa frontier markets. To share out my wild thoughts and let other invade them with their own. I share what I’ve gathered in the asymmetrical African financial world, where the story of the stockbroker and fund manager is told with a bated breath and not for the investors that oil the wheels of the markets.
  
  In this assimilated African blogging sphere, I’ve met and made many friends, associates and acquaintances – some faceless, others nameless but all in all making this journey worth taking. I thus tag the following African Bloggers: Savvy Investor, UG Investor, Kenyanomics, Business in Focus, Concept and Emerging Africa Capital
  
  
• December 15, 2008
• 4:31

  Shoes: Another Weapon of Mass Destruction

   » ‎ KA-INVESTOR
  
• December 11, 2008
• 5:51

  Is Standard Group Acquiring Radio Simba?

   » ‎ KA-INVESTOR
  
  Nairumour (as Bankelele puts it) has it that Radio Simba is winding up its operation in preparation for a take-over by a leading Kenyan media house in the New Year - 2009. Could this be the Radio station Standard Group mentioned they were in the process of acquiring for Ksh.250 million in a press release earlier in November this year?
  
  In the Standard Group’s November press release it says:
  

  “…. The Standard Group wishes to announce that it is at advanced stages of concluding negotiations that would lead to the acquisition of an entire interest of a company that holds radio frequencies covering most of the country. The modalities of these transactions are being worked out and the timing of commencement of operations and related details will be announced at a later stage. The Standard Group plans to invest within the next one and half years an estimated of Kenya Shillings Two Hundred and fifty Million only (Kshs 250 million) inclusive of the acquisition cost and in the development of a robust infrastructure.”

  Radio Simba is a joint venture between Toads Media Group Kenya and FM holdings who own Radio Simba Kampala. In Kenya it operates from Nairobi.
  
  
  
• 5:00

  Nakumatt Express (Up date)

   » ‎ KA-INVESTOR
  
  I spoke too soon about this in the previous post. It has now come out that Nakumatt has decided to go the convenience stores (better known as C-Stores) way to capture a wider market base. The Kahawa Wendani Nakumatt Express is just the pioneer of many to come in several (mostly Nairobi) estates.
  
  Related stories:
  - will their 2009 IPO materialize?
  - Nakumatt wins Planet Retail’s innovation award
  
  
• December 09, 2008
• 4:17

  Government Goodies

   » ‎ KA-INVESTOR
  Lower TB cap
  
  The Central Bank of Kenya (CBK) has finally agreed that the Ksh.1 million cap on Treasury Bills (TB) investment in the primary market is a little too discriminating and kills the alternative investment avenue that its supposed to create. CBK has now lowered the threshold to Ksh.100,000, which is a bit affordable to retail investors. Over concentration of investment in stocks mostly by local retail investors has over the last few year lead to the NSE getting overvalued.
  
  KRA public auction
  
  Kenya Revenue Authority (KRA) will tomorrow conduct a public auction of several imported goods abandoned at their JKIA custom service department over the year. The same will be conducted at Kilindini harbor on 23rd of December. Several items ranging from wines, cloths, computer accessories to cars will be on offer at both ridiculous and competitive prices. These can come in handy as gifts to friends, relatives and loved ones this festive season. I 'm planning to attend it for the first time just out of curiosity.
  
  Nakumatt meat & poison
  
  Last months has the Nakumatt supermarket on Thika Road was brought down the owners , lead by the Nakumatt Operations Director Thiagarajan Ramamurthy and many shoppers complained that the government was being unfair and not encouraging investment in the country from the way they selectively conducted the demolitions along the highway.
  
  Demolition of Nakumatt Thika Road
  It seems the demolition of Nakumatt Thika Road was a blessing to some (these guys and me) as they are now planning to open a new outlet called Nakumatt Express in Kahawa Wendani (at the former Uchumi Wendani premises – a few meters from my landlords house) to capture their customers along the highway. Renovations and even carpeting of a previously very bad road are underway.
  
  Nakumatt Express launch preparations
  
  
  Carpeting of the road
  This plan may have been already in place and has only been accelerated by the demolitions, since Uchumi closed shop in Wendani August last year.
  
  Related story: Nakumatt Mega goes 24 hours
  
  
• December 01, 2008
• 9:23

  Econet/YU Crazy Tariff

   » ‎ KA-INVESTOR
  
  Normal 0 false false false MicrosoftInternetExplorer4 st1:*{behavior:url(#ieooui) } /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-parent:""; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin:0in; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:10.0pt; font-family:"Times New Roman"; mso-ansi-language:#0400; mso-fareast-language:#0400; mso-bidi-language:#0400;} YU has launched today one of the craziest tariff I’ve ever seen in Kenya. Apart from charging the cheapest calling and sms rates in the market of Ksh.7.50 per minute (billed per second) and Ksh.2.00 per sms across all networks, subscribers to this network get a 75 cents (Ksh.0.75) bonus airtime per minute every time they receive a call from any local network! Are these guys serious? How long will this ‘bonus offer’ last? And you can still reserve your 'old' mumber with their 0750 prefix.
  
  Econet also plans to introduce a mobile phone money transfer service in conjunction with Opal Pay(to compete M-Pesa) and a 3G internet service.
  
  
• November 23, 2008
• 12:08

  1st Tujuane Mixer Roundup

   » ‎ KA-INVESTOR
  The 1st Tujuane Mixer, dubbed 'The Road from Employee to Employer', was held in Nairobi on the evening of Friday 21 November 2008, at Anhui Restaurant, Loita house. To say the event was great does not even begin to explain how fantastic it was. The event began at around 6.30pm. The networking mood was caught right from the reception with every guest having a name tag with their hobby labeled on.
  
  There was plenty of time to network as more guest streamed into the Chinese restaurant. The place was filled with all sort of professionals and entrepreneurs; academicians, bankers, IT techs, insurers and even Bloggers! Each one of them pitching for their own products or services, and trying to network with as many people as possible. And the food was great (though mine came in a little late).
  
  The event was opened with an introduction from Liko Makatiani, Nairobist.com Founder and Strategy Director, currently based in Boston USA. From the brief introduction he gave I picked that Nairobist was founded in July 2005 as an "information packaging" outfit that aims to gather online content and network Nairobians (and East African in the major towns of Dar es salaam and Kampala) through its different components that include Tujuane (the networking section), Nairobi Kilakitu (a Nairobi business directory) and the Stocks & Market section.
  
  As guests waited for the key note speech to be delivered by Dr. Mulengani Katwalo, the director of the Institute for Strategy & Competitiveness (ISC) at the Strathmore Business School, each group/table was given an entrepreneurial question to discuss and come up with points that were to be presented later on after the key note speech. My group deliberated on when do one (as an employee) know that its time to quit and move to your own business. These discussions proved to be the biggest ice breaker, as they got guest to talk more freely.
  
  By the time Dr. Katwalo was being introduced to make his presentation every one in the restaurant was already thinking like an entrepreneur. And he did not disappoint us either. He gave an eye opening and entertaining talk on six key pillars of entrepreneurship that local entrepreneurs need to learn in order to become the best. Bankelele has done a great piece on the speech, so I would just point out the main points. The speaker opened the talk by mentioning that over 60% of new businesses fail in there first year of operation. To avoid this, local entrepreneurs should learn to embrace the following six pillars:
  
  a) Skills/Training
  - make sure you fill in the skill gaps that would enable you do your business professionally
  - take short curses and read related books
  - entrepreneurs should contribute more in driving the agenda to higher education has they understand what is needed in the field
  
  b) Innovation
  - get involved in research & development in order to get new ideas
  - engage in the process of buying and selling knowledge
  - copying from the best = bench making (economies like China grew on this, Tata too and Nyayo buses project failed for not doing it)
  
  c) Culture
  - local entrepreneur need to develop better legacies (it take a lot of effort to do this)
  - They should also understand that customer service is not a favour. Its what attracts and retain customers
  - Adopt a reading culture – most local entrepreneurs are ignorant even to the happenings in their own industries
  
  d) neighborhood/market
  - Know your market well it will help you know opportunities that exist beyond your business spheres
  - See the greater market – don’t just concentrate in Nairobi/Kenya (30 million people), there is a bigger market (100 million people) in the greater East Africa and far much more in the greater Africa region.
  - The perception we have of what we see or hear helps in expanding the horizon of our business
  
  e) Competition vs. Cooperation
  - the age of cut-throat competition is over (Cooperation + Healthy Competition = Coopetition)
  - entrepreneurs should learn to cooperate with their competitors in order to grow their businesses and the larger industry
  - knowledge exchange with competitors is good for your business
  
  f) Working in linkages/networks/co-operations
  - Entrepreneurs should network with related industry players - forums like Tujuane are doing a great job in achieving this
  - Networks open new opportunities for your business and making working on deals easier.
  
  The event ended with some guest winning 'early Christmas gifts, while others floated their questions to the chief speaker about the talk and asking if the Tujuane mixer could be made a monthly event. It was clear to all that we have been missing a lot. The doctor did not commit himself but promised to look into the honorable request. More networking went on as guest left the event at about 11pm.
  
  I can’t wait for the next Tujuane Mixer.
  
  
• November 20, 2008
• 3:30

  The 1st Tujuane Mixer

   » ‎ KA-INVESTOR
  
  My favorite stocks analysis and contend site, Nairobist.com, will be hosting a networking mixer evening event tomorrow Friday 21 November 2008, for both their Tujuane Network member and other professionals and entrepreneurs interested to network with a cross section of professionals and budding entrepreneurs from Nairobi. The event will be held at Anhui Chinese Restaurant, Loita Street from 6.00pm to 9.00pm. So for you professionals in Nairobi who don’t have plans for Friday evening consider yourself invited. I’m sure you’ll find the Tujuane Mixer both entertaining and professionally fulfilling. Talk of an evening well spent! Anhui Restaurant is the place to be this Friday evening. See you there.
  
  If you miss it, don’t worry, I will blog about it here.
  
  Here is the official invitation from Tujuane Network.
  
  
• November 10, 2008
• 3:55

  No Country for Foreign Investors

   » ‎ KA-INVESTOR
  When it comes to investment in the stock market and other business issues Kenyans are renowned for their ingeniousness. In fact residents of most East African countries have come to both revere and despise Kenyans particularly for this reason. In the most recent IPO’s in Tanzania and Zambia, Kenyans and other East African’s (who are always considered as local investors in Kenyan IPO’s) have been left out on flimsy ground of nationalism and in some cases (Celtel Zambia – IPO) only foreign institutional investors were allowed but still some Kenyan fund management firms got nothing.
  
  The Safaricom IPO in Kenya was the last stroke that broke the horse back. In this ‘mother of all public offers’, all and sundry were invited to participate including some dubious ‘foreign investors’ who dumped shares at first instance of a profit. Tanzanians were not allowed by the Bank of Tanzania (BoT) to buy into this IPO and they are happy now that they didn’t do so. For Ugandans who risked to invest in it painful results followed and some of them have sworn never to invest in Kenyan offers, while some legislators who now want a law passed to stop Ugandans from investing in Kenya and vice versa.
  
  It seems we are reversing on the pledge of having an East African Securities Market any time soon. Although Kenya firms such as KCB Group are will and in the process of cross-listing, joining others like KQ and Jubilee Insurance which have already done so, our partners in regional bourse integration seem to have sinister ideas of the same process.
  
  Last year I had mentioned of some cross border IPO’s that were expected to materialize but were delayed due to reasons well known to the offer advisors (including Dyer & Blair). Eventually only the NMB IPO in Tanzania came to pass – and Kenyans were kept out, with the following impressive results:
  
  NMB IPO results and performance
  
  The NMB offer was over subscribed by 300% with Tanzanians forking out over Tsh.189 billion ≈ Ksh.11.8 billion for the offer that was expected to raise Tsh.63 billion ≈ Ksh.3.94 billion only (Tsh.48 billion ≈ Ksh.3 billion or 76.2% for Tanzanian investors and the rest for the bank’s employees). Despite the listing offering the banks existing 20,264 shareholders an exit mechanism, the huge appetite for NMB shares was carried forward to the DSE when they started trading last week on Friday with the counter jumping 70% to close at Tsh.1,020 ≈ Ksh.63.75 from the listing price of Tsh.600 ≈ Ksh.37.50 per share with a minimum of 100 shares per applicant (Ksh.37,500 – which I think is reasonable pricing compared to the Safaricom disaster). The share is expected to continue increasing in price, as its demand is so high, given the prospects that NMB was the most profitable and biggest bank in Tanzania's banking industry and is considered undervalued at the current price.
  
  NICL IPO (Uganda)
  
  This IPO has been postponed three times now since the last time I wrote about it. I’m still waiting to see if Kenyans and Rwandans will be allowed to participate in it after the recent development. Tanzanians are technically out of this one.
  
  Salute to Miriam Makeba
  
  
  A minute of silence for a fallen hero.
  REST IN PEACE MAMA AFRICA.
  
  
• November 05, 2008
• 3:38

  President Elect Barrack Obama!

   » ‎ KA-INVESTOR
  This is an historic moment we are witnessing. One we may never see in our lifetimes . . . . the first black president of the United States of America. Congratulation Obama! And make us proud in your presidency. After the jubilation settles, the whole world will be watching you.
  
  Watch and read the winning acceptance speech here and here
  
  
  Embedded video from CNN Video
• October 16, 2008
• 7:34

  Centum CEO Quits

   » ‎ KA-INVESTOR
  It’s being reported that Centum’s (former ICDCI) CEO, Mr. Peter Mwangi, has thrown in the towel and immediately replaced by the company secretary, Mr. David Owino, in an acting capacity. After working in the investment firm for over eight years and raising to the highest position it come has a shock that he just decided to quit? The reason behind the move is yet to be made public but I guess it will be known soon. (Updates to come)
  
  The firm has further postponed the AGM and the issuance of dividends that had been scheduled for today, to January next year. This will do no good the company’s share price that’s now at Ksh.18, especially with the already jittery market following the recent unfolding.
  
  
• October 13, 2008
• 9:50

  Mobile Wars Continue: Part III

   » ‎ KA-INVESTOR
  (Part I & II)
  
  Safaricom
  
  After the IPO, Safaricom has gone silent and it no longer cares about their subscribers or how aggressively its competitors are wooing them. In the face of very stiff price wars from Zain and ‘New Telkom’ (with Orange – secret ingredient) the Giant is still asleep. But I think it’s a matter of time before it jumps in to save face (subscribers’ base). Apart from their innovative ‘M-pesa’ service, every other service Safaricom has is facing stiff rivalry.
  
  Update: The Giant has reacted with a rather confusing offer.
  
  Zain
  
  These guys have changed ownership, name and management so many times until we’ve almost forgotten they used to be some inefficient, overcharging per minute firm called KenCel. No price is too low for them in their bid to woo subscribers. Zain has launched an aggressive price cutting war that hits both existing players (Safaricom) and new entrants (Telkom and Econet). This has been cited has being unfair competition backed by oil money. The firm seems not to care much about profits after last year dismal performance in Kenya. Their IPO in Zambia was a big success. This is the firm to watch.
  
  ‘New’ Telkom (with Orange – secret ingredient)
  
  The one shilling rate offer has just put them in a different light. But this does not really sound sustainable – it’s a gimmick/mirage to me. But Orange, the new Telkom owner, has acted fast to launch their presence into the market, unlike Econet which has been coming for ages now. Plagued by an almost dead fixed line system, gross government mismanagement and non-performing employees it will be a near miracle if this giant catches up with the top two any time soon. They have outsourced their customer care department to Kencal – something I always hoped Safaricom should have done a decade ago.
  
  Econet
  
  The 49% stake they sold to Essar Communication Holdings does not seem to help much. The only thing it’s done is to rekindle the old promise of launching soon. The deadline was June 31st, and then moved to September 30th and now nobody is talking about any deadline. They have however recruited staff, got dealers and even talked of partnering with an existing service provider to ride on their infrastructure in readiness for the roll out, but all these have just been an anti-climax. When will this firm roll out?
  
  
• 8:39

  DSL under Statutory Management?

   » ‎ KA-INVESTOR
  
  I’ve read (here and here) that a Kenyan stockbrokerage firm, Discount Securities Ltd., has been placed under KPMG’s management for what is now called “corporate governance challenges”. There have been several complaints against this stockbroker for a while now. It comes as no surprise that they been placed on what I can simply term as a ‘friendly’ statutory management.
  
  And they are not the only ones, other players are also rumored to be in financial distress. Is this market going down due to the players inefficiencies and crooked ways of cartels?
  
  
• October 08, 2008
• 4:34

  Safaricom 3’s

   » ‎ KA-INVESTOR
  Safaricom shares seem to be the black sheep of the NSE. The counter has bee hitting new lows every day. It hit a new low of 4.05 today with a supply that’s over 8 times the demand. It seems investors (banks that gave loans for the IPO?) have decided to get out at any price and cut back on their losses. I anticipate that if this goes on tomorrow it may be in the Ksh.3 range by the time the NSE opens next week. An earlier valuation of this counter by some pessimist indicated it should have been listed at about Ksh.2.50 per share. So the down wards spiral is not stopping now.
  
  Market Halt(Update)
  
  There has been a market Halt in today's NSE trade after the index went down by more than 5%, this is in accordance with clause 9.4.1 of the Trading Rules. (source: rich.co.ke - live data feed)
  
  Astrology and the Bear Market
  
  In India, astrology is being used by many stocks investors to gauge the market trend. Like this astrological analysis of the Bombay bourse that indicates that the bear market will persist up to the end of this year. I don’t know how true this is, but I was wondering if our own ‘prophets’ can tell us when this NSE bear will end. Apparently Suntra’s MD, Mr. Murugu thinks that when the market hit 4004 two weeks ago the bear runs was about to end. But I think he’s so wrong, this beast from the pole will be with us for a while and we aren’t seeing anything yet.
  
  Pic of the Day
  
  
  This one made my day. Lol!
  
  
• September 30, 2008
• 6:08

  Missing TEDAfrica 2008

   » ‎ KA-INVESTOR
  After hearing, reading and watching stories from TED Africa conference 2007 in Arusha, Tanzania, I was so much psyched for this year’s TED Africa 2008 in Cape Town, South Africa. I saw a tip off from White Africa (read more here) and I rushed to apply. I even went further to mark my outlook calendars (something I rarely do) for the entire period - September 29-October 1, 2008 - that event was to take place, just incase I forgot. But on May 18th 2008, the event was canceled, dashing my dreams and hopes of ever attending this phenomenal conference.
  
  Time went by and I totally forgot about it. But yesterday, my outlook started posting notes on my screen. So I thought, why not remind everyone of an opportunity we missed and let’s hope that the next one (if it ever be) will be planned well in time.
  
  Online Reminder: I’ve been in trouble many times for forgetting some major events and anniversaries. Can someone please suggest to me a good online reminder application that one can use easily?
  
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• September 24, 2008
• 1:45

  African Securities Markets Feel the Pinch of Global Linkages

   » ‎ KA-INVESTOR
  For the last two months, investors at the Nairobi Stock Exchange (NSE) have watched in horror as the market dropped to a three years low. The NSE 20 shares index, which is used to gauge the general performance of the market, dipped to a 4,000 low from about 5,400 in mid July (a 26% decline), a level last seen in 2005. Market analysts have attributed this to among other reasons the financial crisis in the United States of America (USA) that has seen financial giants like AIG, Lehman Brothers and investment bank Bear Stearns go belly up or get bailed out by the US government.
  
  Several other African bourses have experienced the same decline, with the Nigeria Stocks Market being the worst. The Nigerian market has seen a six months free fall in share prices that has worsened the liquidity crisis in the country. This has forced the Nigerian federal government to institute harsh measure to curb the crisis.
  
  Apart from factors such as inflation and increased oil prices in the international market, the link between African securities markets and the financial crisis in the US is not quite clear. Could African markets be facing their own crisis? Are the effects of the US crisis more direct than anticipated? It would be prudent to understand the relation between our markets and the developed markets.
  
  Africa has been a closed continent to the rest of the world. Little is said of the vast investment opportunities in the continent that have attracted big fund managers from the developed countries. As they seek to diversify from their saturated developed markets, investment firms such as Morgan Stanley and Goldman Sachs have injected colossal amounts in Africa and even participated in public offers like the recently concluded Safaricom IPO. This can be said to be the most direct linkage African bourses have with the developed markets, especially the US.
  
  Most of the money invested in Africa’s stock markets also comes from Africans in the Diaspora. Many Africans have over the years left their countries to go for ‘greener pastures’ in the developed world. They usually send huge amounts of money to their families and relatives in Africa for personal use and investment. Most of the investment money ends up either in real estates construction or in the stock markets. A clear example is the Nairobi Stocks Exchange where about 30% of the money injected in comes from the Kenyans in Diaspora.
  
  The ongoing US financial crisis which is termed as the worst since the Great Depression of the 1930’s has seen Africans in the diaspora laid off fro their jobs and sources of income reduce. Many Africans in the diaspora do odd jobs to make ends meet and have something to send back home. Such menial jobs have been the first casualties of the US crisis as every sector seeks to down-size and break even during this period. The stream of investment funds from the diaspora has consequently reduced considerably as some of them sell their investments to pro-up their declining incomes. This can be said to be an indirect linkage between African bourses and the developed markets.
  
  Another indirect connection is from the ‘Aid industry’. With the possibility of the US financial crisis turning into a global phenomenon, the amount of aid funds that have been the driving force in most African government budgets are set to dwindle. Humanitarian aid may continue trickling in as development aid reduces to the bare minimum. In the one-day conference on Africa in New York, UN Secretary General Ban Ki-moon issued a plea for US$ 72 billion per year in foreign aid if Africa is to reach any of the Millennium Development Goals (MDGs). Without this funding, the economic outlook of most African countries is bleak and this will definitely affect the continent's securities markets.
  
  African economies as well as other emerging economies around the world have been feeling the effects of the ups and downs of finance in the U.S. and other developed markets. When commodity prices were high, mobile global capital flowed into Africa and pushed asset prices up, making capital cheap and fueling growth. With the opposite cycle in place, a reverse in economic growth for many African countries is expected. That is why Africa should not depend on aid for development.
  
  (My recent article in the African Executive online magazine)
  
  
• September 23, 2008
• 9:26

  SA Investors’ Confidence shaken as Trevor Manuel Quits

   » ‎ KA-INVESTOR
  
  After diligently promising investors that he will not quit, Trevor Manuel – SA finance minister quit office today along side 10 other minister in support of Mbeki’s resignation. This is likely to have a devastating effect for the economic stability of South Africa, Africa’s most powerful nation. Although he says he will be ready to serve the new government in any capacity, Manuel’s resignation has shocked many investors who had put a lot of trust in him. In reaction the JSE has been faced with a case of panic sales that will affect it negatively before investor confidence returns to the bourse. The rand had depreciated sharply today.
  
  It’s sad enough that the strongest country on our continent faced xenophobic related violence earlier in the year; political instability in SA will affect the continent adversely. Countries in the southern region will be negatively affected, due to their dependence on the continent’s economic powerhouse. I hope this political transition does not degenerate into something else – violence.
  
  see more on this:
  

  • South African finance minister resigns
  • South Africa's Finance Head Quits, May Work With New President
  • S. African finance minister quits but could stay
    
• September 22, 2008
• 7:32

  Will “New” Telkom Edge Out Safaricom?

   » ‎ KA-INVESTOR
  (Mostly from Ratio Magazine)
  
  After Orange acquisition at the end of 2007, the “new” Telkom launched its mobile services in Kenya officially on September 17th 2008. The market is now full of new and revamped service providers (Orange, Econet and Zain) that are looking to eat into Safaricom’s near-monopoly 80% market share. “New” Telkom is targeting 1.5m mobile subscribers in it’s the first year of operation, which transplant to about 10% of the market share assuming it grows by the same margin in 2008-2009.
  
  France Telecom won the bid to acquire 51% of Kenya’s Telkom at the end of 2007 and has now launched its Orange brand with an integrated services offer. Telkom Kenya is currently said to have 600,000 customers across all its old services. The Orange brand launch has introduced the mobile service in Nairobi and Mombasa, and aims to cover all major towns in Kenya by the end of the year.
  
  But will the “New” Telkom edge out their former partner Safaricom as they paint a rosy outlook? Here are some of the issues to watch:
  
  • Integrated Services: In contrast to its competitors, Orange can draw on the full range of services that Telkom was already offering its customers – mobile, fixed line and internet. Telkom had introduced the wireless CDMA technology to supplement their fixed line network. Zain and Safaricom have both introduced internet services through portable modems, but Telkom Orange claim to be the only provider who offers real broadband.
  
  • Quality: In the immediate future, Orange will only run the wireless network under its brand. The fixed line network, as a result of years of neglect and vandalism, does not yet meet Orange’s quality standard. As new CEO Dominique Saint-Jean stated, Telkom would have to both improve the physical infrastructure and retain the trust of customers before integrating it into the Orange range of services. Can they live up to this quality focus and extend it throughout all services?
  
  • Customer Service: In their launch presentation, Orange executives placed a lot of emphasis on their intention to offer superior customer service. If they manage to fulfill this promise, they will certainly earn bonus points from customers: Not only is customer service generally a headache with most service providers in Kenya, but it is also an area where Safaricom has been less than distinguished, especially in their prepaid service. Orange has outsourced their customer service to Kencall, a local call-centre company, which is encouraging. However, it remains to be seen whether the interface between Kencall staff and Telkom is sufficiently well established to resolve customer complaints.
  
  • New products and services: Even though they are trying to keep a very low profile with this service, Safaricom’s M-PESA mobile money transfer service has been a milestone. Similarly, the removal of roaming charges within Zain’s entire network across Africa and the Middle East had been a global first. Both companies have tried to match the competitor, with Zain introducing Sokotele money transfers, and Safaricom signing agreements with other operators in the EAC to mimic Zain’s One Network. Orange is expected to launch Orange Money, a service currently being trialled in Cote d’Ivoire that allows transfers as well as bill payments and payments to retailers. In addition to confirming that Orange had signed the usual roaming agreements, Sain-Jean also alluded to a not yet specified ‘special offer’. This indicates that both Safaricom and their parent company Vodaphone as well as Zain have set new standards that other companies feel some pressure to live up to.
  
  • Regional expansion: Saint-Jean was guarded on the details, but stated that Orange did indeed consider Kenya a regional hub from which new country operations in the region would be launched. Zain already has operations throughout the EAC, and Safaricom has signed co-operation agreements with other operators.
  
  • Local branding: The use of a pan-African campaign and art work turned into a headache for Zain: As Safaricom CEO Michael Joseph already noted, Kenyans are ‘peculiar’, and one of these peculiarities was that the Kenyan public disliked the models in Zain’s campaigns as ‘not Kenyan looking’. Seemingly not a very substantial issue, it has nevertheless cost Zain – and Safaricom’s more pedestrian art work has served its purpose well. Telkom Orange management stated that while they would respect the global format of the brand, it would be adapted to the respective local environment.
  
  
• September 16, 2008
• 9:19

  NSE 20 Share Index beckoning 4,000

   » ‎ KA-INVESTOR
  
  Listed stocks on the NSE have taken a thorough beating in just two days of this week. The NSE share index is already nearing the 4,000 mark (which some skeptics expected it to reach by the end of the year). Most of the counters are trading at prices last seen during the post election crisis period. The NSE 20 share index is now at 4,093.82, after falling 131.71 points. It seems we are not so immune to the global financial crisis that has seen financial giants in the US see red.
  
  Safaricom Trading Below IPO Price
  
  Finally Safaricom shares on the NSE have started trading below the IPO price of Ksh.5 just two months after it started trading. The share was today trading between Ksh.4.55 (a new low) and ksh.5.55, with a turnover of 236 million. The counter finally closed the day at an average price of Ksh.4.70. At some point when the counter was trading at Ksh.6.20 it was said to be widely undervalued, so what’s making it to go even lower than the IPO price?
  
  Rumor mills: Another Broker in Financial Distress?!
  
  Rumors are going round that another brokerage firm in the Kenyan financial market is in distress and may bite the dust if stern actions are not taken soon. The undisclosed ‘investment bank’ is said to be trying every trick in the book but the bearish trend at the NSE is not helping the situation. I’m not sure how true this is, but I think it would be wise to check with your broker that everything is ok. It’s better to be safe than sorry.