Kenya Re suspended for a day
Kenya Re was yesterday suspended from trading on the NSE for releasing their ‘bad’ 3rd quarter results through the press without submitting it for approval by the NSE first. This is expected to affect the share price today, which may tumble a notch lower partly due to the poor results reported and the bleak future of the industry arising from huge claims occasioned by the post election violence on businesses.
Companies’ results
Other companies that have released their results recently include Accesskenya, Barclays, Bamburi and KPLC. Watch out for very impressive 2007 results from Banks {think Equity, KCB…}
Growthfin financing SME
With Only 11% of the Kenyan population having access to formal banking and many microfince solutions not working for kenyans, FSDKenya (Financial Sector Deepening) through a project called GrowthFin has come up with innovative, tailor made financing solutions for SME’s. FSDKenya is an organization that works with key partners to facilitate access to finance for Kenya's Small and Medium sized Enterprises. This can easily be confused by GroFin which also give financial support services to Entreprenuers. GroFin is an international company, while Growthfin is just a product of FSDKenya, a local company.
Celtel vs. Safaricom
It seems Celtel has resorted to dishing out very good offers and mad-slinging Safaricom to win back their lost customer base. They are now calling themselves the ‘Best Option’, just to indicate who they are fighting against. But sincerely, I like their new Pamoja Tariff. I believe it’s the lowest ever since mobile phones stepped in to Kenya. It doesn’t come better than this.
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KA-INVESTOR
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Kenya Re, Results & Others
» KA-INVESTOR -
KTN to show 'Apprentice Africa'
» KA-INVESTOR 
Apprentice Africa an African version of the popular TV series "The Apprentice" produced by Mark Burnet and hosted by U.S. multi billionaire, Donald Trump will be opening on tomorrow February 26, 2008 in Nigeria. KTN will has bought the rights to air it in Kenya, but am not sure if it will air it in ‘real-time’ as from 26th when it opens.
Unlike the original version where the winner goes home with annual salary of $250,000, the African version being sponsored by Bank PHB from Nigeria will earn the winner only $200,000 (wonder why?)
Biodun Shobanjo chairman of the Troyka Group, a holding company of several large firms, with over seven thousand employees and with a turnover in excess of N20 billion ($167 million) per annum, will be the CEO (Trump) of Apprentice Africa.
This is one of my favorite programs and i hope the quality will be as good as the ones from Mark Brunet. If it turns out to be just another Nigerian movie i will be so disappointed. -
My Two Cents to Msee Wetu
» KA-INVESTOR From my previous post i got this visitor's question that I would like to share with you and the answer i gave. What do you think?
His Question:
Dear sir,
I've been a regular of your blog and I've gained some very vital knowledge while here...to make the long story short I would kindly request your advice on two good buys (share) on the NSE, and your opinions as to why.
Thank you.
mseewetu@gmail.com
My Answer:
Hi Msee wetu,
Thanks for leaving your comment on my blog. Regarding the question, I don't think it is wise to buy into shares right now since political instability in the country is quite unpredictable. However, if you so wish to make long term buy I would advice you to go for the following shares:
1. Stan chart
I expect them to give out good dividend when they announce 2007 results. This is a strong company that banks on experience and efficiency.
2. KCB (watch the rights issue)
With an extensive branch network and investment in latest technologies across the East African region, this banks growth prospects look promising. They also have a very strong marketing strategy that sets them a head of the rest. They are planning to have a rights issue soon and you can get gain a bit from the price rally occasioned by it. I suspect they will announce good dividends coupled with a bonus issue when they give out their end year results, to sweeten the rights issue (remember NIC bank)
3. KQ (very long term)
I suggest this since it’s a strong counter that has received some battering of late. Their operating cost is high due to the increasing prices on the international market, there has been an increase in competition from international airlines and tourism which is their main source of revenue is badly affected by the effects of post election violence. Adding the resignations of their two directors, many people are off-loading them now to avoid further losses so you can get them at a bargain - less than Ksh.45. I would advice you to get this as a long term counter, 5 to 10 year. But eventually it will pay back well.
Several companies will soon be releasing their end year results and most of them are likely to post good profits for 2007. You can also buy in the depressed counter that you anticipate will perform well for short term gains from speculators (not a very good idea…it makes you a speculator too). The finance and banking sector had a very good year last year so check out this counters - specifically banks. Also consider companies in the construction sector that is likely to boom soon if the political stalemate is resolved (think Athi River and Bamburi)
Disclaimer: These are my personal opinions and should not be taken as statements of fact. Please consult your broker or investment advisor before making any transactions.
Thanks & regards,
Kainvestor
kainvestor@gmail.com -
Real Estates & Business Plan Writing
» KA-INVESTOR 
Bora Capital private placements
Bora Capital Ltd., a Real Estate Investment Management firm issued a private placement late last year to raise Ksh.700 million. The offer will be closing in April, so if you wish to diversify your port-folio into real estate checks out their offer. I believe real estate is the next big thing, as the NSE slows down. I hope Bora's placement turns out ok, some of the recent placements have been sort of failures, with Trancentury Ltd. Opting for an IPO instead.
NEBS business plan tool
I stumbled up on this great business plan writing tool from NEBS that helps you construct a great business plan even if you have no idea how to write one. I like it most because it helps you write each section step by step and save it to be worked on later. NEBS also give other useful tools such as Newsletter Tool, Business Startup Preparation Evaluation, Lease vs. Buy Analysis , and Loan Amortization Calculator
Nyaga stocks broker
Even after engaging in criminal acts that involved trading in their clients shares I didn’t imagine that they will still be considered as one of the top five brokerage firms in the country. Most of the money they make I’m sure is through unauthorized transactions that should be investigated. I think small investors are being edged out of the market slowly, but not before being squeezed out of their hard earned money.Safaricom Bahaving BadlyIt's quite uncivilized for safaricom to perfom a system change that affects all their pre-paid subscribers and the only notice I've seen is on their I&M building 'closed' office (with no one to answer questions). The notice is even signed by Micheal Joseph himself! I hope the signature appended on that notice is just an electronic one and MJ did not participate in a such treacherous activity. Most their pre-paid subscribers are wondering what is wrong? Nobody is able to load units into their phones, send sms, send money through M-pesa or make calls. Somebody need to be fired somewhere, or we are suing!
Where are they?
Where is Ringera? Where is Chief justice Gicheru? Where is the AG Amos Wako?
Hon. Kipkalya kones sued for bankruptcy
I saw an advertisement on Saturday indicating that Kipkalya Kones is being sued by his creditors (Diamond Trust bank and others) for bankruptcy. How does some one like him fall into bankruptcy when all the salary he get is earned for doing nothing at all, like all other MPs? -
Econet, Safaricom & Another 'Execution'
» KA-INVESTOR Econet Roll Out Deadline Shifted
The government, through Communications Commission of Kenya (CCK), has moved the roll out deadline for Econet Wireless by six-month to June 2008. Their earlier deadline was expiring at the end of this January. If they fail to roll out by June they risk losing concession. Econet was awarded a license more than four years ago but has since been beset by financial troubles and shareholder feuds. Econet paid its USD27 million license fee in September 2007, but is yet to announce a launch schedule. Earlier this month Indian conglomerate Essar Group bought a 49% stake in the parent company, Econet Wireless International
However, Econet says it is facing some difficulties setting up national roaming agreements with Safaricom and Celtel Kenya, which would allow it to piggyback on their networks until it completes its own rollout.Safaricom IPOThere are fears in the government circles that the current violence and unrest could result in lower returns from the planned public offering of Safaricom shares. The sale, which was postponed in December, is however still scheduled for the 1st quarter of 2008. The main fears is that that potential investors may be wary of buying into what is one of Africa’s most profitable firms. The success of this IPO will suffer both a broad and locally. The fate of the Euro-bond also hangs on the balance.
‘Crime of Passion’
Another ODM MP, David Kimutai Too – of Ainamoi, has just been shoot dead by a traffic policeman. The shooting has been quickly termed as a ‘crime of passion’ has it is said that the MP was having an illicit affair with the policeman’s girlfriend. This reminds me of Tony Ndilinge’s shooting.
It’s now official, all emails, phone calls and sms are being monitored. So be careful what you say, send or receive. -
KQ, NSE & The 2nd Wave
» KA-INVESTOR NSE Trading Halted {Again}
Trading at the Nairobi Stock Exchange halted trade for a few minutes today as the index fell 5% in accordance to trading rules. Apparently its said that there was too much supply of shares and this brought down the prices. Last week on Monday trading was halted for the whole day due to a ‘technical hitch’ in the NSE WAN that connect brokers and enable trading. Is it ok for investors to panic now?
KQ reduce fares
The National carrier Kenya Airways will review its current fare structure in order to offer competitive charges to its customers. This will include travel agents not paying commission fee as from April 1 2008. Online bookings will also not be charged. This will also encourage the uptake of on-line booking by clients. Now going to Mombassa by flight only cost Ksh.5,000 return ticket (plus taxes).
The 2nd wave
As I had mentioned before, this second wave of revenge killings was bound to happen sooner than later. Better prepare yourselves for the worst, because if things go on like this, we will loose all that hold so dear. In my opinion I don’t foresee any viable solution soon. And where is KIBAKI!?
Helicopters & rubber bullets
After letting Kenyans die for almost over a month, under the pretext of pre-election violence, the Kenya police is now using helicopters and rubber bullets to disperse gangs of youth wilding machetes in Naivasha. I’m just wondering why they did use the same in these other areas, especially why they didn’t use rubber bullets in Kisumu. Ours is a strange country.
Tribute to Mugabe Were
I
was shocked this morning to wake up to the news that newly elected Embakasi MP, Mugabe Were, has been killed. It’s very disheartening the way things are happening in Kenya. I don’t see the reason he had to die in cold blood. May God rest his soul in enternal peace. -
Kenya: “Not Free”
» KA-INVESTOR 
Freedom House has released findings that have down graded Kenya’s freedom index to “not free”. This is mainly due to the recent election atrocities committed by the government. According to the report released on January 16, Kenya is the most declined (in terms of freedom) country in Africa due to credible reports (EU & US observers’ reports) of vote rigging in the presidential contest and violence triggered by the official results.
Freedom House defines a “free country” as one where there is “broad scope for open political competition, a climate of respect for civil liberties, significant independent civil life and independent media”. Kenya has violated all of these in less than 20 days, moving us from a “partly free” state to a “not free” one. Kenya now rank in the same category as Somali, Zimbwabwe and Congo. SHAME!
In general, most African countries have slide backwards in 2007. -
Mobile Wars Continue
» KA-INVESTOR Safaricom
- Their IPO is scheduled for the 1st quarter of 2008. Probably in early March. I expect this to be a barometer of investors confidence on the market after the post election skirmishes
- They incurred a loss of over Ksh400 million in the post elections violence
- their 10/5 bob offer has bee extended to January 15th.
Celtel
- Launches a new cheaper pamoja service that will see its customers enjoy cheaper calling rates of up to 30% lower than the current charges
- I can’t wait to see what Safaricom will come up with in response to this. Remember when Celtel came up with their ‘one bob offer’, Safaricom responded with a 10/5 bob offer.
- Celtel lost over Ksh.200 million due to the post election violence
Econet
- Has sold 49% of its shares to an Indian communication company Essar Communication Holdings. I hope this will enable them roll out the much a waited third mobile phone service line.
- This will most definitely increase competition in this industry leading to price cuts for the consumers. -
Kenya at Gridlock
» KA-INVESTOR 
It has been over a month since I posted anything on this blog. All this time I was working on family matters and getting a rest for the hectic 2007 I had. After voting diligently as all Kenyans did, all I wanted was a fresh start, a new 2008 with new leadership and a much clearer vision for our beloved country Kenya.
I sat there, staring at the TV as the events at KICC unfolded. First, it was just a small delay in receiving official results from returning officers (all of these results had already been transmitted to Kenyans via TV and Radio). Then things took the wrong turn. I never imagined a simple process like tallying, which I mastered in lower primary school, could be so difficult for well paid grown ups at ECK. Then the worst happened and hell broke loose across the whole country.
Men turned into beasts and preyed for fellow Kenyans blood. Police shoot to kill and houses went up in flames. All this just because two men are fighting for power. All kinds of solutions have been suggested but none of them seems to be working or simply acceptable by anyone.
While our politicians are talking tough and trying to score their selfish political points, Kenyans are dying out there, living like refugees in their own country. Everything is headed for the worst and a new wave of fear is spreading as people expect an outburst of revenge. From what I am hearing, things are headed for the worst.
Personally, this wave of violence has hit home - literaly. A premises owned by my dad was torched just because he had rented one shop to a kikuyu lady. My dad did not only loose the three shops premises but also lost his chemist shop that was one of the shops. After taking a golden hand shake in the early 90’s he had bought a plot and constructed a small three shops rental premises. This has been his largest source of income that has seen us through education. All this is now gone thanks to elections 07. So my 60 years old mzee is back to square one.
So what future does Kenya hold? Even if Kibaki or Raila rules this country for the next five years how will they unit Kenyans? Kenyans have lost the innocence of being united for over forty years, the post election violence has brought out who we really are… tribalists to the core! Our democracy is based on tribal alignments and nothing else matters. Is it the system that has failed us or have we failed the system? -
Customer Deposits & CMA Perks
» KA-INVESTOR Of late, many banks have been publishing their Q3 results, which among other things indicate very impressive results. My main point of interest has been the growth in customer deposits graph that more often appears on the right side of the financial statements. Today I was looking at the Family bank results and I could not help noticing the upwards trend of their graphs. Most of them look like this:
Where has all these deposits come from? Ok you can say that many more Kenyans have bank accounts now days than they used to before. On the contrary, the number of banks has increased too. Banks such as equity, family bank and the recent entry of Islamic banks should have taken care of these extra deposits from former non-bankers. Even with increased remittance from abroad at least some bank will be showing decreased deposits as clients move from a bank they perceive to be expensive to the cheaper ones.
I’m not sure how they count their customer deposits but the vague idea I have is that they count the amount a customer has in his account at the time of making the balance sheet. I hope the deposit is not arrived at by counting the number of times customers deposit money in their account because this will not reflect the correct position of the accounts. What I mean is, if I deposit Ksh10,000 today and withdraw Ksh.10,000 tomorrow then bank the same amount the next day it would be wrong to say I deposited Ksh.20,000 in two days. In this case, if I do this the whole months it will indicate that I have deposited at least Ksh120,000 in that months. What is the case here?
Other issues:
Is Jimnah Mbaru insane or something? How can he open his mouth after attending a Ksh.1 millio-a-plate dinner to say that CMA staffs need huge pay hikes so as to retain quality staff? How can we pay the CMA chairperson Ksh.3 million per months for not doing anything other than what the government should be doing? For one thing, I believe the CMA is not big enough to warrant such kind of salary. Citing the Kenya anti corruption boss as an example was worst thing he did. KACA is a political post that I strongly believe should be done away with as the organ does nothing, and I hope CMA is not trying to emulate them. CMA need to do exemplary work first before asking for bigger pay. What would be the difference between CMA and Parliament if all they both do is pay themselves well while doing nothing? -
Loaded December
» KA-INVESTOR 
Is it just my imagination or this coming December is overloaded with government activities? Apart from the general elections, there is the Safaricom IPO and privatization of Telkom. Most probably, our holidays will be spent queuing at your stockbroker and worrying about the out come of both the Safaricom IPO and the General election. There is a possibility that the Safaricom IPO will open on 12 and not 3 December has earlier suggested. Come January, regardless of who wins, the stock market will be on a downwards trend with school fees and investors’ money tied up in refunds.
My favorite candidate already lost in the nomination {though he already had a plan B in the name of a certificate in AGANO} I still expect him to loss in the final ballot since he has failed to get the popular part in my constituency. Since I care less who wins the presidency, most likely I won’t vote. That leaves me with all the time to queue at my broker and worry about the refunds. I’m even thinking of providing my services to those who will busy campaigning. Definitely, I will charge a small fee before hand and a drink or two when the deal is done.
I don’t understand what is all this fight over whether Safaricom should be listed in a foreign market or not. They should have resolved this before they decided to have the IPO. When the government decided to fast track the IPO and have it in December instead of next year, they should have made all details clear. The issue of listing in a foreign bourse has been here since way back and they are still arguing up to the last minute. And how is the ODM court appeal going? Will it also affect the IPO?
Therefore, these general elections prepare to queue at the polling station and at the broker. Alternatively, you will have to choose which one gives you more value. As MOI once said “kama inaongeza sufuria za ugali na vikombe vya chai” -
KCB VS EQUITY
» KA-INVESTOR Yesterday morning I went to the ATM for the obvious reasons. At the entrance there were these three very unmotivated girls/ladies (I forgive them…it was around 9.00am, too early for them I guess) in KCB’s characteristic green T-shirts talking to clients on the line about the new sms banking the KCB want to introduce. Being an ardent KCB customer, I approached one who looked a little bit active of the three. To say I was disappointed is just but the least. Here are three ladies who have come to sell a new service to clients and they do not even know how the service works. To crown it all, she starts complaining to me how they have not been given a desk to work on. Either way, I presumed they were not well paid, so I got the message and took a print out to read for my self.
I left the ATM thinking, if KCB will be recruiting these kinds of staff, I will have to shift banks very soon. Then what bank would I join? Of late Barclays has been churning out very good offers and I thought trying them out would not be a bad idea. Equity bank came to mind too. This bank has seen all the bad publicity but has continued to perform exemplary. Comparing the two, I discovered that I could not. The comparison I needed to make was KCB vs. Equity and not Barclays vs. Equity.
The comparison between Equity Bank strategy and Barclays has been made severally. However, I think the comparison should be made between KCB and Equity. Why am I saying this? For starters comparing equity to Barclays is more of a Goliath – David case. I can say Barclays is in a different class….one that equity cannot even think of. Locally, you can say that the two are competing but if you factor in the international alignment that Barclays has you find that it is not competing in any way with Equity. Like the expansion strategy Barclays (k) is currently undertaking, is not to counter Equity’s but just by chance the two coincided. They both operate in the same industry, so they are bound to adopt the same strategy.
Both Equity and KCB are indigenous banks with a goal to expand within the East African region. KCB have a head start on the regional front with its branches in Kampala-Ug and Juba-South Sudan and soon they will be in Kigali - Rwanda. Good for them, but the last time I checked Equity was growing in an exponential rate and if it goes on like this, in the near future, they will be having branches allover East Africa. Soon Equity will be opening a branch in South Sudan. However, both banks still have a lot of room for improvement.
I looked at other factors like:
(sourced from Central Bank of Kenya report)
Considering the hassle associated with moving banks, I think it would be wise for me to stick with KCB. I have been with them since my University days when i was still courting HELB and I like their adverts, they make you feel warm inside. see what other banks offers:
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10 commandments to value investing
» KA-INVESTOR 
I was reading the pfblog archives and came across this excerpt. Thought it will be good to share with my fellow Kenyans. The coming general elections have caused a lot of uncertainness in the stocks market and at such time one need reassurance of how to maintain their investment value. Reading the 10 commandments to value investing sort of reminded me of what I should do. The commandments are as follows:
I. Be an Investor, not a Speculator
Graham wrote, "There is intelligent speculation as there is intelligent investing." It is important, however, to know the difference. Speculating when you think you are investing is a sure way to lose your money.II. Don't Lose Money
Successful value investors learn to avoid investments that could result in substantial permanent capital loss by ensuring that they are getting at least a shilling's worth of value for every shilling invested.III. Learn to Value Businesses
Every purchase of a stock should be driven by the conviction that the stock is selling for less than it is worth to a rational purchaser of the entire business, a conviction produced by confidence in one's ability to value the business in question.IV. Know Your Circle of Competence
You cannot make money in stocks unless you understand the business ... Every investing idea you consider offers a chance to widen or deepen your circle of competence, whether you act upon the idea or not.V. Demand a Margin of Safety
In The Intelligent Investor, Benjamin Graham ventured the motto "margin of safety" in an attempt to "distill the secret of sound investing into three words." In 1990, Buffett wrote, "Forty-two years after reading that, I still think those are the right three words."VI. Wait for the Perfect Pitch
The pressure to act, whether it is internal or external, must be resisted until a compelling investment idea presents itself.VII. Make the Market Your Servant, Not Your Master
Short-term supply and demand imbalances can create tremendous opportunity for the value-based investor. ... Rational investors do not look to the market for guidance, only opportunities.VIII. Invest for Absolute, not Relative, Returns
Good absolute performance is obtained by purchasing undervalued securities while selling holdings that become more fully valued. For investors, absolute returns are the only ones that really matter; after all, you cannot spend relative performance.IX. Watch the Business, not the Stock
Do not confuse real success of an investment with its mirror of success in the stock market. The fact that a stock price rises does not ensure that the underlying business is doing well or that the price increase is justified by a corresponding increase in business value. Likewise, a price fall in and of itself does not necessarily reflect adverse business developments or value deterioration.X. Know When to Sell
Buying businesses cheaply requires a willingness to go against the herd; selling businesses dearly requires parting with your investments when they are popular. You must learn to trust your own judgment rather than that of the market. -
Blog Drought & Changes
» KA-INVESTOR 
Ka-investor has been out of blogging for a while now but I have been up and about the blog world commenting on various issues, changed my blog design to a three column and just wondered off into the wilderness. I came across some nice personal financial blogs like nevblog and pfblog. These blogs have made me think a lot about my own personal finances and my plan to grow financially in the next five years. Odegle has also inspired me with the way he writes about his life and investments in a simple but likable way. It has made me shift my writings from the contemporary writing just on NSE and related companies to an inwards look of my life.
Nothing much has changed in my life. Only that last weekend I was appointed the secretary of a small investment club called the ‘The Big Bang Investment Group’. Being the youngest in the group most of the old member were so much impressed with my interest in stocks. Over the year, I have consistently dished out investment ideas that have seen the club gaining tremendously. Our investments in stocks has grown by over 46% since the correction in March and I can blow my own trumpet and say most of the winning buys were done because of my in-put.
Away from the club, I have been watching the Safaricom IPO saga and I am worried this sweet thing is turning into a campaign tool for both sides of the divide. ODM wants to come out as the peoples’ savior and win votes in the process while on the other hand the government wants to appease the voters by dishing out the IPO just before the election date. Either way, one side must win.
Future IPO’s: Nakumatt and K-rep have come out to say they are planning for an IPO within two years. This means that next year, apart from the KenGen OFS, we may be expecting another IPO from Nakumatt and most probably Family Finance bank. I like Nakumatt's the 24 hours shopping idea but what measures have they put in place to ensure there's enough security for the customers?
Stanbic-CFC merger: I simply do not like the angle the merger is taking. So what will happen if they loose the case? -
Service Delivery the Kenyan Way
» KA-INVESTOR I read this today and it made me think alot of how we kenyans just get bullied around and do nothing about it.Service Delivery the Kenyan WayWritten by James Shikwati in todays Business Daily
19-September-2007: A Düsseldorf based friend pointed out to me recently that…“The greatest weakness in developing countries is that people do not object to poor service delivery.”
Drawing from his experience in Cuba, he was amazed at how citizens fear government civil servants and shy away from demanding for good service. Government and even successful corporate entities bully people whom they ordinarily ought to serve with a brilliant smile.
Banks smile when you open an account but bully when you go in for services. Airlines smile when you purchase a ticket but bully when it comes to check-in time.
Politicians smile when soliciting for votes, but bully once they become honourables. Governments smile on receiving taxes but bully citizens through numerous pot-holes on highways and diversions. The private sector in Kenya too does not measure to expectations.
A Kenya Airways staff late March this year blocked a friend and I at the security entrance at the Jomo Kenyatta Airport on our way to Mombasa. She claimed that we were late (one hour 10 minutes to take off).
On pointing out the difference on check in requirements for international and domestic flights; the staffer owned up that the plane was full and had already been “balanced!” I asked security and Kenya Airports Authority (KAA) officials why we were being blocked at the security entrance instead of at the check in counter. At that point, a KAA official pointed out to the smiling airhostess at the entrance that the outer gate belonged to KAA!
Then came an honourable Member of Parliament, and it was evident that suddenly the plane had vacant seats! The good news though is that she refused to jump the queue; we later travelled on another plane. As a customer, what ought you to believe; lateness, full plane or overbooking in high-tech era?
The most shocking side of Kenya Airways service delivery took place when I saw off a friend destined to Zimbabwe (check-in time 5.30am on Sunday the 19th of August 2007).
At around 9.00pm same date, my guest sent me a text message pointing out that he had been booked at the 680 Hotel in Nairobi. What? More surprises; instead of a three hour flight, the guest landed in Harare on August 22, 2007!
As a patriotic African, I found this disgusting, and I am sure perhaps others out there care for great service delivery. But now let us go banking… I have banked with the Standard Chartered Bank for over 10 years. A very interesting phenomenon is taking place in some of the branches in Nairobi. After waiting for over an hour in an ever expanding queue, I observed that a number of tellers were idle.
I later learnt upon inquiry that the idle tellers were trainees and the bank had a specific assignment for them; to collect cheques only! In other words, practical banking lessons were on, but the customer was impolitely and inadvertently paying for this exercise through time wastage.
The Cuban story of a lady who was so scared of a government office, that she kept asking my Düsseldorf friend to get her “outer-o-here” kept ringing in my mind. I watched fellow customers impatiently hoping for the best to happen at the bank!
Kenya Airways and Standard Chartered Bank still remain my favourite, but they must create a deliberate effort to improve their service delivery to customers. To develop Africa, we need to improve service delivery to our citizens and customers.
Leaders and businesses in Africa under-perform precisely because citizens do not put them to task to ensure efficient service delivery. Our politics and business must live up to the “customer first” and “people first” policy.
Shikwati is the Director Inter Region Economic Network -
Opinion on Stock brokerage Firms in Kenya
» KA-INVESTOR 
Opinions expressed below are those of the person and do not constitute the offer to buy or sell investments through the named companies. Information on the performance on any brokerage firm in the country is unavailable and there is no supervision, due diligence or research report that is publicly available on the mode of operation or conduct of the member firms of the Nairobi Stock Exchange (NSE). Most investor decisions are made based on non factual conduct and mostly public perception of stock broking firms. Our report is based on these sentiments which have come to define the general mood and feel of the market.
{For more clear cut analysis and information check www.emergingafricacapital.com & www.smartbizafrica.com }
Suntra Investment Bank
Suntra is believed to be among the largest players in the Kenyan capital market. It doubles up as both a stock broking firm and an investment bank. It boasts of being the largest in dealing for fixed income securities. On stocks, they have an average rating from the retail investors most of who find them too large for them.
It would be a good recommendation for a corporate institution that wants to do a placement in the local market (whether public or private).
African Alliance
African Alliance, just like Suntra Investment Bank doubles up as both a stock broking firm and an Investment Bank. They have operations in both Kenya and Uganda but that besides; they can hardly place any good deals across the border in good time- back office woes.
However, they have been very popular to the high end investors. They have a minimum deposit which stands at Ksh. 250,000 or USD. 3,700. Their other major clients are mainly institutional.
They will probably outsmart any company's research department as far as regional company analysis is concerned. Their research reports on companies have been accurate and have shaped market direction on many occasions. A keen observer would remember them negatively for having once changed their recommendation on Uchumi Supermarkets Ltd from a buy to sell not long before the company closed its doors.
One would consider them if investing from outside the country but not the ordinary speculator- long term, serious investor.
Ashbhu Securities Ltd
Not popular but has a good retail outfit. Investors claim that the company changed a lot the last half of 2006 and must have undergone a management change. The small starter, this could be a good place for you.
CFC Financial Services Ltd
CFC is perhaps the corporate entity in the stock broking world that fits on both extremes. They have a good name both for the corporate and retail investors. They understand the rules and that gives a limitation to the day trader/speculator. Chances are, if you want to sell, you must present yourself and sign proper documents- no shortcuts.
Good for the long term investor and people who understand the market but want first class professional service.
Dyer & Blair
This is the most talked about Investment Bank/Stockbroker. They have a good name in as far as underwriting of large entities especially the pre-government entities.
Bloggers in the past have had debates that have had long strings of clients complaining about their slow service. They could do well if they packaged themselves entirely as a Corporate Finance Entity for the corporate.
Francis Drummond
Not very popular and hardly get anyone in the streets who invests through Francis Drummond.
A report carried in a blog late last year had it that they have a feed to the UK markets. That makes a good firm for the local investors interested in the European Market. However, at a time when African Markets are yielding returns that far outweigh those of the first class economies, is there need to think far West?Kestrel Capital (East Africa)
Kestrel mainly serves corporate and the high net worth individuals. Their research reports are also well presented and at most times, give a true picture of the market direction.
They represent a large number of investors who are based outside the country. They have however not done much in the corporate finance scene.Ngenye Kariuki & Associates
Ngenye Kariuki is a retail stock broking firm that has positioned itself well across the country through stock agents and branches. As far as the 'everyone can buy shares' mentality runs in the market, they would fall second after Nyaga Stockbrokers.
Their back office research has nothing to show. This makes them a recommendation only for the retail investor who operates his/her account through an agent.Sterling Securities limited
A client remarks, 'they are not the same anymore'. Sterling has had a good name in as far as execution of deals at the NSE is concerned. They have for the better part of last year and past two years grown to encompass a large retail and corporate client base. With the numbers increasing so fast however, focus seems to be slowly changing to a corporate structure. The company has a good front office and accessible research material from the research department.Apex Africa Investment Bank.
Stereotype never parts its way from the corporate scene. Apex Africa Investment Bank has an Asian outfit. They can be defined as 'trying' due to their efforts to enter the corporate finance market. Can be a good try for the corporate investor who is ready to grow with the companies that are trying to position themeselves in the region.Faida Securities
A retail investment house with huge deals and nothing for the small investor. If one can stand the queues, this will work. If not, you've got to know someone at back office.Bob Mathews
Very new firm that is almost positioning itself in online trading- however, very slow. They just received their license but telling from their office, a lot is desired considering that this is a market with little competition.
Standard Investment Bank
This is perhaps the most popular retail entity in portfolio management. Their managed portfolio accounts have been quite popular since 2004. However, this has created a niche leaving normal operations of the firm a bit undesirable. Being an investment bank has not won the firm many deals. Would highly recommend their portfolio accounts but don’t expect rocket science or black magic.
Solid Investments
Poor office set up, disorganized front office and unmotivated staff. Not your typical stockbroker. Their agents have better offices. Management also slow and evasive.
Reliable Securities
Good retail broker with a conservative market approach. Never get to hear about them unless you know their dealer
Discount Securities
Average retail broker with a very conservative market approach.Rennaisance Capital
Yet to start its operations but positioning itself properly in IT prior to their official launch. Would be interesting to see how they organize their client management- both front office, research and back office operations.
Comment on Francis Thuo and Partners and Shah Munge and Partners
Francis Thuo and Partners was suspended from the Nairobi Stock Exchange following mismanagement woes and loss of clients funds. The CEO and founder, Francis Thuo, the Managing Director had just passed on a few months before the Stockbrokerage firm was declared insolvent. It was the oldest stockbrokerage firm in the region.
Shah Munge was the largest and the best stock broking firms in the 1990’s. That was until they were charged with corrupt practices and involvement in financial crimes. The firm was suspended and to date, the suspension has not been lifted.
Nyaga Stockbrockers, who have also been accused of malpractice including trading in clients shares, have a policy of high secrecy. They even don’t have a website and thus every hard to gather info on them.
The Market as It is today
Brokers have tried to flex their muscles to win corporate deals in a very non-competitive market. New entrants include Sterling Securities and Bob Mathews Stockbrokers.
The biggest players in terms of underwriting deals include Dyer and Blair Investment Bank, Standard Investment Bank and Suntra Investment Bank. Corporate deals at the local market are also dominated by the same companies and in addition Kestrel Capital and African Alliance which have positioned themselves as a corporate stockbrokers.
Charges
All brokers charge a standard fee which is regulated by the Capital Markets Authority and the Nairobi Stock Exchange. The fee is based on a base rate of 2.101% for a single transaction of below Kshs. 100,000 and 1.8101% for a single transaction of below Kshs.100,000. Out of this, only 1.5% is brokerage commission while the balance is apportioned to CMA, NSE, Stamp duty (KRA). Sometimes, brokers give a rebate out of their 1.5% slice on high net worth investors.{For a Comprehensive report on Kenya's Financial Service Providers, write to editor@smartbizafrica.com}
Reblogged from Emerging Africa Capital.
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Get Rich or Die Trying
» KA-INVESTOR 
Kenyans seem to have taken this phrase to heart and they are trying to get rich in the most unscrupulous ways. They are even taking it to neighboring countries. Like the recent shooting of 15 Kenyans in an attempted bank robbery in Moshi, Tanzania and the numerous robberies in Southern Sudan by Kenyans {Including the Ksh.100 million theft from KCB}. These has left me wondering are we all Kenyans a rotten society? Is there anybody who does clean business in Kenya and gets rich just doing that?
The Kroll report clearly showed us that the guys we call leaders, role models or who-is-who in Kenya are all corrupt and this doesn’t spare those who were not mentioned because I’m sure they will eventually appear in another report. What worries me is the way every body seems to have accepted this and nobody seems to be bothered. You watch the TV, listen to the radio or read the papers and all you get are stories of robberies, people looting public resources, and others manipulating the stocks market.
This appalling character shown by Kenyans has even made our quest to invest across East Africa almost impossible. Apart from Uganda, we are clearly not invited to participate in any IPO in Tanzania. In fact a public statement from the TZ government said that the NMB IPO scheduled this months would only be open to Tanzanian firms and individuals. Not even one of Kenya’s stocks brokerage firm is allowed in TZ. Although the DSE is still very nascent in its activities there is a lot of potential which we can invest in.
It’s not bad to get your self rich. In fact only an irrational man never wants to be rich. But has we embark on this, lets check the ways we use. Short cut ways will only land us in trouble. From a personal experience, the stand off at the moment between Kenya and Tanzania is that of a lot of suspicion from the latter to the former. Some of my trusted friends are even finding it hard to associate with me just because I’m a Kenyan {trust me I’m honest}. This has killed my bid to participate in the NMB IPO through a Tanzanian proxy. -
Jimnah Mbaru: Fighting Insider Trading Allegations
» KA-INVESTOR 
The NSE chairman, Jimnah, has come out fighting the allegations on Monday’s Business Daily that there was insider trading regarding the recently bonus announcements by Mumias Sugar Co. Ltd and EABL. I like the way he dismisses BD at the end of the notice. But I still don’t think that the NSE can completely steer clear from insider trading as he claims {just a lot of mumbo jumbo}. Even much more efficient bourses like the NYSE still suffer such allegations.
The kroll report was released last week and I’m still reading it because I can’t believe such plunder of public property can take place and nothing is done to the perpetrators. Kenyanomics has an extensive summary on this.
In other business Tesco has decided to ditch Uchumi franchises deal and it’s now rebranding all the branches it had franchised. This is going to create even more competition for the ailing Uchumi.
And lastly CONGRATS to all Kenyans athletes that did us proud in Osaka, Japan. That was just exemplary. -
Cross Border IPO's
» KA-INVESTOR While we wait patiently for the Safaricom IPO which seems to be still in trouble, despite efforts to make it proceed as planned, I thought looking at cross border IPO’s will be a bit comforting. I came across some good IPO’s that will take place in Uganda and Tanzania soon:
National Microfinance Bank {NMB} IPO (Tanzania)
This IPO has been way over due since March, but will take place in September this year. Although it’s only open to Tanzanians, who knows we may find a way to beat them at their own game.NMB is a private company limited by shares with an authorized share capital of TShs.25,000,000,000 divided into 2,500,000 ordinary shares of a nominal value of TShs.10,000.00 of which 2,000,000 shares have been issued and are fully paid. It has 115 branches and it's the second largest bank in TZ ranked by assets. It is the principal commercial bank to the Government for payments nationwide.
In 2005 the TZ Government sold 49% of its shares to Rabobank Nederland, NICO Limited, Exim Bank and TCCIA.
Currently the shareholders of NMB are as follows:
v The Government of the United Republic of Tanzania - 51.0%
v Rabobank Nederland - 34.9%
v National Investment Company Limited (NICO) Limited - 6.6%
v EXIM Bank Tanzania Limited - 5.8%
v Tanzania Chambers of Commerce Industries and Agriculture …(TCCIA) - 1.7%The Government is planning to sell a further 21% of NMB shares through an IPO of which 5%will be sold to NMB employees.
The bank reported a net profit of USD 28 million for 2006, and paid out about USD 6.35 million in dividends.
Coming Soon: Another IPO from Tanzania is from the CRDB Bank. A resolution was passed in their June AGM to have the bank, which is the 2nd ranked in profitability terms, listed on the DSE.
National Insurance Corporation {NIC} IPO – Uganda
The NIC IPO in Uganda has already been publicized in the local dailies so all I can do is outline the details. The UG government will be ceding its remaining 40% stake in the company after selling 60% to IGI from Nigeria in 2005.
Dyer & Blair {Kenya} and Uganda's Merchant Bank of East Africa Brokerage Services are the lead advisors. (Remember D&B still have got Safaricom IPO)The timeline
• Aug-Sept: Due diligence ahead of IPO
• Sept-Oct: Approval of Capital Markets Authority and Uganda Securities Exchange
• Nov-Dec: Sale shares to the public
• Jan 2008: Listing on the stock exchangeThe NIC IPO seems to have already started affecting some counters in the USE as I learned from this lady Blogger from Ug.
Other IPO’s that are rumored to be on their way in Uganda include:
v Barclays bank Uganda
v Kakira Sugar Works
v Sheraton Kampala hotel -
Mid Week Business
» KA-INVESTOR Privatization
Investment secretary Esther Koimett is at it again. This time she’s on privatizing Development Bank of Kenya (DBK) where the government owns 89.3% of the Bank through ICDC while Commonwealth Development Corporations of UK owns the rest. The bank which was almost merged with Housing Finance in 2005 is also being sort after by TransCentury. With an assets base of Ksh.3.9 billion Its Kenya's 34th largest bank although it has been face with reduced profitability over the years due to stiff competition from other banks.Safaricom IPO still on courseDespite the efforts to stop the Safaricom IPO firms have been awarded tenders to provide professional advisory services to the firm. Seemingly the zero bidders have been left out and the following consortiums won the tenders:
Lead transaction advisor - Dyer & Blair
Legal Advisory Services - Muriu Mungai
Receiving Bank - Citibank, Na
Reporting Accountant - Deloitte & Touche
Advertising - Redsky Kenya ltd
Share Registrar - Image Registrars
Kenya Re shares hit the NSE floor in a bang on Monday but things are not likely to be as previous IPO’s has the share price dropped sharply from ksh.16 to ksh.14.60 yesterday thanks to speculators {banking on the first-week-rise theory}. But the share still has a lot of potential that may see it rise above the 100% mark in the short term.Watch listAccording to smartbiz Africa NIC bank and Access Kenya are the stocks to watch, while Kakuzi, KQ and Mumias are the stocks to be cautious on coming next month.
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Uchumi: Its time investors moved on.
» KA-INVESTOR 
The troubled Uchumi has kept investor guessing on their fate for over a year now and I believe its time to let go. I remember last December talking to a friend of mine who had just burnt her fingers after buying 1,000 Uchumi shares a few weeks just before it collapsed. She was very optimistic {in denial} that this fallen legend will be turned around by April this year. April came and the only thing that kept her hopes up was when the trade minister announced that Uchumi will be back on the NSE by the end of this year. Four months down the line nothing has happened to indicate so, but things have gone from bad to worse. The debenture issue advanced to the shareholders was snubbed and the creditors who had earlier promised to reschedule their repayment have refused to do so.
Uchumi is simply surviving on the Nationalistic sense by urging Kenyans to buy its goods since it’s an indigenous firm. But Kenyans seem to have had enough of this and have moved on. What’s the use of sticking to a partner that keeps on pulling you down? -
Access Kenya: Keeping the Promise
» KA-INVESTOR In their quest to hit the Ksh.1 billion revenue per year and to keep their IPO promise of using the cash raised for expansion, Access Kenya has acquired two smaller technology firms in Kenya - Openview Systems and Todays Online – in a span of one month. They also posted a 30% increase in profit in their H1 above the 2006 full year profit.
The Acquisitions
Open view systems with a turn over of 200 million last year, has a client base of about 200 who mainly consisting of lucrative government agencies. Access Kenya will take over 70% of Openview share holding in return of 4 million AK shares and the rest in cash. This will make Openview one of the largest shareholders in AK apart from the Somen brothers. The acquisition is still awaiting CMA approval.Todays Online ltd was acquired under the agreement that they will successfully transfer their clients to AK’s network. In that case an initial amount was paid and a future payment was promised based on the successfully transferred clients. Todays Online personnel were also to be taken in as AK selling agents.
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All on Safaricom
» KA-INVESTOR 
Ownership {now}
Telkom Kenya Ltd. - 60%
Vodafone PLC - 35%
Mobitelea Venture - 5%
mobitelea venture, which is associated with former precident Moi, acquired 25% of Vodafone in 2000 but reduced its share to 12.5% in January 2003 (just after they lost the elections)
Amount to be floated to the public 25%
Value of offer:
Ksh.34 Billion {in 2005 Vodafone in their bid for 11% more of Safaricom, valued it at Ksh.68 billion - RIP OFF!} Analysts say Safaricom is worth about $2 billion.
Profitability:
in the year ended March 31 2007 Safaricom recorded a pre-tax profit of 17.19 billion shillings ($258.3 million) , up 40 percent on the previous year.
Big names are already bidding to provide advisory services in the coming IPO (some even combining efforts and some pulling out due to conflicting interests)
Ownership structure {After}
Government{treasury} - 35%Public & other foreigners - 25%
Vodafone PLC - 40% {i wonder what happend to their demand for 9% more?}
The down side to the IPO
-Raila is narrowing down the hammer on Safaricom IPO;It seems like Raila i putting up a spirited war against the NSE and the government privatisation of Safaricom and Telekom. first he came up with the allegation that the NSE is thriving on drug money. this was quickly shrugged by the Jimnah Mbaru. Now he seems to be narrowing down to the specific governement privatisaton of Safaricom and this time he is using the law against the government.
-Kenya's investment watchdog also recommended delaying the initial public offering of Safaricom, east Africa's most profitable mobile phone operator, until its ownership is clear, -
Acquisitions, Waivers & Others
» KA-INVESTOR 
Was reading about the Barclays Bank bid for ABN Amro bank in Europe and I notice the sweet offer they are giving to the Amro’s shareholders. I think the local CFC-Stanbic merger should follow this precedence and forget about the waiver that may easily cost them the merger if CMA declines it. Already CMA has granted Equity Bank a waiver in the Housing Finance take over and if they keep on doing it their credibility will be in bad books. I think the cost of buying out the minority shareholders will be cheaper than cancellation of the bid at this very last stage. In fact Stanbic bank international has confirmed that they are still seeking to acquire more partners in Kenya and their aim was to get one of the 4 top banks in Kenya. Is the ‘new’ National bank next on line?
Other news:
- Kenya Re has been oversubscribed by 334% {just as expected} despite the shorter qeues compared to other IPO's, thanks to the allocation mode. most of the oversubscription was by Insurance firms and QII's.
- The East African stock exchange is on course with already 11 companies across Kenya, Uganda and Tanzania set to cross list in the three bourses soon. Comesa too has plans to integrate the seven East and Southern securities markets.
- The Telkom IPO may be coming early next year soon after the potential investor has been found in November this year. The government increased the bid to 51% to attract more potential investors.
- Barclays bank {Kenya} is looking for direct sale agents {read loan hawkers} to enable them meet their growth plan. They are offering a good package for new graduates. -
Finlay Acquires Homegrown: Who cares?
» KA-INVESTOR 
The just concluded acquisition of Homegrown {a Kenyan flower company} by Finlay Ltd could have as well just taken place in Europe. Both firms are 100% foreign owned and this acquisition will neither affect their local operation nor the management style. they call it "complementary acquisition". Infact non of the horticultural firms are listed in the NSE and the only way kenya benefit from it is through the taxes they pay to KRA or the casual labourers at the flower farms {who are really expoited}.
I came a cross this old article from the Standard and i could not help but feel a pitty for kenyans. they say 'kenya ina wenyewe' and for sure wenyewe ni wazungu. Can't the Government pass a law that will ensure ownership of firms in kenya are either fully by kenyans or majority share holders are kenyans?
On other news:
-Subscription for Kenya Re IPO ended yesterday and retail investors may have oversubscribed their allocation by over 100%. So just wait for 1,000 or less shares and a refund cheque. {oops}
- Apparently coal deposits have been found in Kitui and Makueni. I just hope this will change the fortune of the people in this Areas.
- Digital villages centres will be in operation in 100 days, says the governement. {remember we were also promised a new constitution in 100 days by the same guys in 2002}
- and in Uganda a microfinance is trying to pull a 'Cruiz ship' kind of job applications where applicants are asked to pay Ugsh.20,000 each. Already 6,000 guys have been short listed. {i feel sorry for them} -
Ryan Shen- Hoover on A United Africa Stocks Market
» KA-INVESTOR I managed to get this comment by Mr. Ryan Shen- Hoover, an investment researcher, from Business in Focus on merging of the stocks markets across Africa. Here's what he says;"…… I believe a continent-wide stock market would be a welcome development for all involved. It would greatly lessen the difficulty of opening trading accounts in a dozen or so different countries and therefore would be great for any investor seeking exposure to more than one country. It would likely also have the effect of unlocking value in some companies that are listed in markets that tradeinfrequently (e.g. Swaziland, Ghana, Malawi) and could have the opposite effect in some of Africa's more overheated markets ( e.g. Nigeria and Kenya).So, how would a common stock exchange be brought about? There are a couple ways it might happen.
- One way would be for all countries to sit down and hammer out the structure of a totally new market. They would agree on listing and reporting requirements, trading rules, location, etc. One obstacle I see to this is that most countries take a degree of pride in running their own national stock market. It would take a lot of political will to dissolve them in favor of one continent-wide market.
- The other way to achieve a common market is more organic. Already in East Africa we are seeing Kenyan companies trade on not only the Nairobi Stock Exchange, but the Ugandan and Tanzanian exchanges, too. This is called cross-listing. Some other companies cross-list on the Johannesburg and Namibian stock exchanges. If one of the big exchanges (perhaps Nigeria, Kenya, or South Africa's) would actively encourage cross-listings, we could see a common market develop quite quickly. And each country could continue to run its own national market if it wished to do so."
I think these are very good ideas that would help africa achieve the desired united Africa dream. East Africa is setting a good example for other regions to use as a blue print in intergrating their markets. What do you think of this?
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Of Polythene Bags & Forgotten Companies
» KA-INVESTOR 
The eminent ban on polythene bags in Nairobi and the increase by 120% on their taxes is a shock to many small businesses in Kenya. Almost every good they trade in is usually packed in polythene, from the mama mboga in your estate to the electronics’ dealer in the heart of the CBD. But one mans poison is another’s meat….or something of the sort, Tetra Pak Ltd {who specializes in the making of packaging materials} and Pan Paper {who were almost going under due to high operational costs} have now sort of found a renewed energy in this ‘misfortune’ as now more companies will be in need of non-polythene packaging. I hope this will help our environments and I totally support the initiative because for one it will help rejuvenate this almost forgotten companies and lead to an healthier environment. Others- The following companies have released their H1 FS reports: BAT, Athi River Minings Ltd., TPS and Nation Media Group. for more summary and analysis on this check the Nairobist blog
- Kenya Re IPO is closing tommorro. if you have not snacthed a share of it please do, despite the negative publicity, you've got nothing to loose. Smart Biz Africa has some analysis for you on Kenya Re and other counters that you should watch out for.
- Equity Bank have now partnered with Nakumatt supermarket chain to help its client withdraw money while buying. I like what this bank is doing.
- Nakumatt chain supermerts is goin regional by opening their 1st branch in Rwanda. when will they list on the NSE?
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Kenya Re IPO:Prospectus Summary
» KA-INVESTOR I managed to get the Kenya Re prospectus from Dyer & Blair website (here) and after going through it I found the following to be of much interest:
More dates & numbers
I had previously detailed the IPO's dates, numbers and who gets what here. But i got more of them in the prospectus:- Announcement date: 21st August {date of announcement of result of the allocation of shares}
- Commencement of crediting CDS accounts: 22nd August
- Commencement of trading on the NSE floor: 27th August
- Offer expenses: Ksh.289 million
- Net expected profit: Ksh: 2 billion
The formulas
EPS
- EPS for the 12 months ending 31/12/2006: 0.65
- Forecast EPS as at 31/12/2007: 0.89
DPS
- DPS for the 12 months ending 31/12/2006: 0.25
- Forecast DPS as at 31/12/2007: 0.25
PE
- Implied (historical)PE for 12 months ended 31/12/2006: 14.62
- Average NSE PE for the twelve months ended 31/12/2006: 20.56
- Implied PE as at 31/12/2007 based on the forecast EPS: 10.62
Dividend Yield
Implied dividend yield based on the DPS for the period ended 31/12/2006: 2.63%
- Implied Dividend Yield as at 31/12/2007 based on the forecast EPS: 2.63%
Other important facts & numbers
- Kenya Re cover only 21% of the local (Kenya) market
- 40% of its revenue is from foreign countries but mostly african countries.
- Kenya insurance penetration is still very small, at 2.6%, compared to other developing countries such as south Africa {14.6%} and India {3.7%}
- Incase of an oversubscription applicants will be allocated 100 shares in the first instance and thereafter in multiples of 100 on a pro rata basis.
- An applicant shall only apply for shares in one category only
- The shares are open to all East Africans i.e. Kenya, Uganda and Tanzania.
- Kenya Re will be admitted in the Main Investment Segment {MIMS} of NSE
- Kenya Re has two subsidiaries: Wedco ltd and Kenya re properties corporation ltd. these two are 100% owned and are both dormant. {???}
- While the net income increased constantly from 2002 to 2005, the net profit for 2006 declined by 48% {From Ksh.748.2 million in 2005 to Ksh.390.4 million in 2006}. This is said to be due to the tsunami and monsoon catastrophes in 2006. it is expected that profit in 2007 will grow by about 37% to Ksh.536.4 million.
- Apparently the government has been paying itself constant dividend of Ksh.150 million for the last five years. {hope this will still be the case}
- There are 4 participants In the Kenyan reinsurance industry. Namely{in order of biggest to smallest}:
o Africa Re ltd.- formerly the Organization of African Union (OAU)
o Kenya Re ltd.- 100% government until now
o ZEP Re ld. – 24% owned by Kenya Re
o East Re ltd. – 30% first charter, 20% Jubilee Insurance, 15% IFC’s investment and the rest by Kenindia & Pan Africa. - Kenya Re enjoys 18% compulsory ceding of all treaty insurance business from all insurance companies in Kenya. It used to be 25% but was reduced in 2000 to 18%. This may soon be phased out leaving the corporation to the forces of the market
- Re’s investment portfolio:
- government securities – 22.5%,
- Equity – 23.79%,
- mortgage loans – 6.53%,
- investment properties – 34.67%,
- short term deposit – 34.67%,
- land and building held for sale – 6.58%
- I found the PWC audit report a bit unfavorable, with a statement such as: "…….not all the matters that came to our attention have been adjusted for as information was not available in some cases." They also mentioned the Ksh.36 million management fraud.
My conclusion
I hold a short term buy on this IPO and one has to be very careful with the amount to invest. The minimum application of 2,000 share {Ksh.19,500} will be advisable to avoid holding up your money in refunds. One thing that stand out clearly from the prospectus is the way the AM Best review of Kenya Re, that gave them a B+ {very good perfomance}, has been has been mentioned at every possible chance. -
The Trouble With Equity Bank
» KA-INVESTOR 
Equity Bank seem to be rubbing Western Kenya politicians the wrong way. Sometime back, Bonny Khalwale - the Ikolomani MP, was accusing Equity for allowing criminals to get bank accounts by not asking for referees when someone opened a bank account with them. assidous had a detailed discussion on this.
Now Julias Arunga - Khwisero MP backed by still the one Bonny Khalwale, are on Equity's case again, but this time accusing the banks CEO, James Mwangi, for his role in the collapse of Trade Bank in the late 1980's ; owning the bank through nominee accounts and share price manipulation through Dyer and Blair Investment Bank. {see more here and here}
What i was wondering is this just a case of multinationals taking competition to a higher/bad level or just a case of favouratism by the current government? If Arunga's accussations are true, then we are looking at a serious case of both insider trading and gross negligance by the Capital Market Authority. I think its time Equity stops being tribalised and politicised for their own good. I don't know the effect of bad publicity on the NSE but i think its not good. -
CFC Stanbic or Stanbic CFC?
» KA-INVESTOR 
I'm getting confused about who is buying who in the so called Stanbic-CFC merger, or is it CFC-stanbic merger? after reading this comments byMungai Kihanya on the business daily. -
Kenya Re IPO II: The Numbers, QII's & The "Shoe Shiners"
» KA-INVESTOR 
Finally the Capital Market Authority has approved the long awaited Kenya Re IPO. Kimunya announced this yesterday and here are some of the numbers:
Total value of Kenya Re: Ksh.5.7 Billion
Value of the firm on offer: Ksh.2.3 Billion {40% of Kenya Re}
Number of shares on offer: 240 million shares
Price per share: Ksh.9.50
Offer dates: July 18 - 31, 2007.
Share allocation to "different" investors:- Insurance companies - 20%
- Qualified Institutional Investor (QII) - 30% {who the hell are these guys?}
- Kenya Re employees - 3%
- shoe shiners {you and me} - 47%
Employees and Directors
Minimum Application Size - 2,000
Thereafter in multiples of - 1,000
Insurance Companies
Minimum Application Size - 100,000
Thereafter in multiples of - 10,000
Qualified Institutional Investors (QII)
Minimum Application Size - 100,000
Thereafter in multiples of - 10,000
Retail (Corporate and shoe shiners)
Minimum Application Size - 2,000
Thereafter in multiples of - 1,000Note:
Prospectuses and Application forms will be available from July 18, 2007 {watch this space for a complete break down and analysis} you can also see a report on them here.
I'm told Qualified Institutional Investors (QII) are defined as a company whose ordinary course of business is to hold, manage or invest funds in connection with retirement benefits, insurance contracts, mortgage and saving schemes and any fund or scheme in the nature of a collective investment scheme or a unit trust. {in simple words they are the deal makers, the lead we follow}
QII will, for the first time in kenyan history, use the Delivery vs Payment where they shall only pay for the confirmed allocated shares (no upfront payment and chasing after refund cheques} For more storie on this check here, here and here.
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Merger: CFC-Stanbic bank
» KA-INVESTOR 
Finaly thing are on the way to finalising the Stanbic/CFC banks merger. Stanbic Bank - the kenyan branch for the internationally known Standard Bank of South Africa will be acquiring 60% of CFC bank. below are come merger statistics:
Asset base
Stanbic - Ksh.25 Billion
CFC - Ksh. 40 Billion
Shareholders Fund {As at 31/12/2006}
Stanbic - Ksh.2.7 Billion
CFC - Ksh. 4.7 Billion
Shareholders transfer to Stanbic Bank from CFC
113,341,663 shares
Plus: 50,868,846 ex-listed units from Gambit
Total: 164,210,527 shares which is 60% of CFC
Exemption by CMA
CMA will exempt them from regulation 4, governing take overs and mergers, that requires that a firm making a take over bid for a public listed firm to give the option to sell to all shareholders at the same price (including minority ones like you and me) -
Marion Jones Is Broke?!*#
» KA-INVESTOR 
How the hell do this African-Americans get broke so quickly? first it was Micheal Jackson, then Mike Tyson and now Marion Jones. Somebody needs to impact some financial management ideas into their thick heads! I'm i the only oe who has heard of saving and investing, or what? for more on this read here. -
Equity Bank: Setting the pace
» KA-INVESTOR 
Equity bank is on the run this year. it seems like everything good is happenig there. After hitting the Ksh.1.1 billion profit mark in february this year, they have goen forth to make some very strtegic moves that will make them one of the biggest players in the Financial sector. First, they want to acquire HFCK, a move that will see them opening a mortgage branch. HFCK being a very well known firm you can imagine the amount of good will Equity will be swimming in. They are now moving into the international money tranfer business. In collaboration with international financial institution, the bank plans to build an extensive global network that will help kenyans in the Diaspora remmitte money back home for both domestic use and investment. {check here for more on this} And on a higher note, they are planning to open 3 women only branches across kenya. This according the bank's CEO, James Mwangi will help more women access to loans and other banking services. Taking into account that the Youth Development Fund was dibursed through them too. Their CEO was also invited to the G-8 summit for the effort of the bank to enhance microfinance services in Kenya. -
Smartbiz Africa
» KA-INVESTOR 
Smartbiz Africa - an online business magazine - is the new business information link/website in town. For more information on it check their website at [www.smartbizafrica.com] -
My 2007 half year Green list
» KA-INVESTOR {Green list - this is a personal list of my prefered stocks in the market. It does not indicate certainity} They say the grass is greener on the other side of the fence. Thats why everyone is looking at the IPO's; which seemingly are just disappointing them. Especially the retail investors like me. Short term nvestors ... aha! I sat back and watched them being massacred in the Access Kenya IPO and now they are waiting patiently for Kenya Re and Safaricom IPOs. Of which they will still be sidelined. So the earlier we learn the better. Thats why i've come up with my small list of the most profiatable counters:1. East African Cables
After their split last year the share has been rather stagnant and was minimaly affected by the market correction of early this year. At the moment it has picked up and the management is restructuring to ensure profitability. they are already moving into new offices and have emberked on a thorough advertising scheme.
2. Access Kenya
After their IPO the price has stagnated between 12 and 13. most of the retail guys who got this shares are disposing and collecting their refund checks in disgust. and this is where the opportunity present it self. with this guys disposing off in mass the supply is too high making the prices to be lower than the intrisinc value. so once this guys have disposed and the prices move back to it true value which is higher than the current price, there will no turning back. it hit 20 before you can say AK.
3. KCB
This is the biggest bank in kenya in terms of number of branches and they are still expanding in other parts of East Africa. After the share split of 10:1 in march the shares have not been trading in the market until today. when they hit the market floor i believe they will be headed downwards and this presents a clear way for you to buy. anything below 20 is a sure buy. with the rentrenchment and management change the profitabiltity is also still looking good in the medium term. so i will also have this in my green list.
4. Equity Bank
this is the best perfoming stock in the market this year and things are still looking good. they are about to Acquire Housing Finance. the sooner you get on this train the better.
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safaricom: taking the lead
» KA-INVESTOR 
Safaricom has done it again! After posting a Ksh.12 billion gross profit last year, they have increased their profitability by a whooping 40% to Ksh.17 billion this year. This is the largest amount ever in profits to be made by an East African company. You can imagine what this has done to investors appetite for it coming IPO,considering that during the budget Kimunya assured Kenyans that it will be coming before the end of the year. I'm counting. The big question is: ARE MOBILE COMPANIES OVERCHARGING THEIR CUSTOMERS? this is a question to be answered later. For more informatin on Safaricom's success story look here, here and here. -
EAC: mix & match budgets
» KA-INVESTOR
Yesterday the three east African countries read their budget together as a sign of solidarity. Below is just a brief analysis of what the three finance ministers talked about:
Kenya: By Hon. Amos Kimunya- Ksh2.9 billion for secondary tuition
- Ksh1.3 billion for resettlement of internal refugees
- Bursaries-Ksh800 million
- Nairobi hawkers’ market building-Ksh400 millionExempt from tax
- Medical equipment ordered by hospitals
- Pensioner’s monthly receipts have also been exempted from income tax
- 20% duty slapped on imported used spare parts
- Duty on drinks up
- Excise duty on certain types of spirits, malt beer, mineral water and cigarettes were promptly increased to pay for the increased social spending.
- Licenses: Some 205 licenseas are to be scrapped, while a further 371 will be simplified.
- A Counterfeit Bill to be tabled in Parliament to rein in runaway trade in sub-standard goods.
- Sugar: Manufacturers who use imported industrial sugar will not pay a Sugar Development Levy on this product, which is used in making several fast moving consumer goods.
- Plastic bags: A 20 per cent excise duty has been slapped on plastic bags. Certain categories of the product at supermarket tills have been banned altogether.
- Goods and services to investors in low-cost housing for the urban poor will be zero-rated as long as more than 20 units are to be built.
- Other highlights: Ugandans and Tanzanians will enjoy the same rights enjoyed by Kenyans when investing on the Nairobi Stock Exchange. These will include the same number of shares and taxation.
Tanzania: - Education (18.0 percent), Roads (12.8 percent), Health (10 percent), Agriculture (6.2 percent) and Water (5.1 percent).
- VAT: Fire extinguishers, locally processed yarn, diapers, urine and hygienic bags for medical use exempt from VAT
- Excise: Tanzania has removed the marking requirement “FOR EXPORT ONLY” on exported excisable products. The requirement was been found to interfere with the country’s export drive.Excise duty on drinks up
- Excise duties on drinks shot up by 7 percent. The cost of Carbonated soft drinks have gone up from Tshillings 45 per litre to Tsh48 per litre.
- Beer made from local un-malted cereals is up from Tsh161 per litre to Tsh173 per litre. Other beers have shot from TSh274 per litre to Tsh294 per litre.
- Wine produced with more than 25 percent imported grapes is up from TSh 878 per litre to TSh 940 per litre; and Spirits, from TSh 1,302 per litre to TSh 1,394 per litre.Petroleum products prices up
- Motor Spirit Regular (MSR) and Premium (MSP), from shillings 315 per litre to shillings 337 per litre.
- Gas Oil (GO), from shillings 292 per litre to shillings 312 per litre; Illuminating Kerosene, from shillings 52 per litre to shillings 56 per litre; Heavy Furnace Oil (HFO), from shillings 109 per litre to shillings 117 per litre; and Industrial Diesel Oil (IDO), from shillings 366 per litre to shillings 392 per litre.
- Road and Fuel levy up : Fuel levy paid by road users has been increased from TSh 100 per litre to TSh 200 per litre of petrol and diesel.
- Motor vehicle licence fee up: Annual motor vehicle license fee has been amended from the current flat rate of shillings 20,000 per motor vehicle to a three-tier structure based on engine capacity. Motor vehicles with engine capacity not exceeding 1500cc will pay Tshillings 80,000 per annum.
- Engine capacity exceeding 1500cc but not exceeding 5000cc will be charged Tshillings 230,000 per annum; and engine capacity exceeding 5000 cc, will be charged Tshillings 100, 000 per annum.
- EAC : In line with the EAC with the common external tariff rates, Tanzania has reduced and exempted import duties on various items ranging from medical equipment, solar, raw materials and communication equipment.
Uganda - Road licence fees abolished -
- VAT on sale of residential houses down - International Airlines exempted from tax on income -
- Excise duty on diesel and petrol up -
- New local govt tax on wealth & incomes -
- 10% tax on used car spareparts -
- Soldiers & civil servants salaries up -
- Visa fees up to $50 -
- New tax on hotel room occupants -
- Loans for the poor to buy land -
- Tax holiday for industrial exporters -
- Amnesty for tax defaulters -
- Sh280b set for pension arrears -
- Airtime, drinks & mivumba unchanged
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Kenya Re. IPO: Lest We Forget
» KA-INVESTOR 
Kenya Re will be announcing an IPO very soon. Sooner than even next week. But the big question is WILL IT BE A GOOD BUY OR NOT? This most probably will depend on the pricing. I believe they will be pricing it less than Ksh.10 per share. The Access Kenya allocation style will also be followed here too, with the retail investors get very little after the IPO. Already D&B stock brokers have taken the deal and following what they did with KenGen I believe Kenya Re too will be a sure oversubscription. Lest we forget the corruption allegation levied on its top management late last year. Check here for more details on how Kenya-Re CEOs squirreled away funds.
I have also been reading the best rating they got from the A.M. Best Company rating report. It says that 'in their opinion' Kenya Re has a B+ {very good} for the 2005 - 2006. On this they say Re has a solid and very good operating perfomance over this period. They also believe that the forth coming privatisation will be a challenge to the management team. Much more on the financial statements have been discussed. You can check it here. -
Is Someone Hacking into Kenyan Websites?
» KA-INVESTOR 
First it was Business Daily with all the stories of sijui web hosting. Now the Safaricom website is permanently down for days now and while I was still wondering why they don’t have a back up hot site, someone hits the Jackpot and hacks into Equity bank's website and online accounts, exposing clients to so much risk. I’m the most risk averse person I know (if not plain paranoid) and I have had to stop anything involving internet n money. From M-pesa to mobile banking, even checking electricity bills via the phone is on hold now. Until I’m assured that some thing has been done to keep out this hacker from my money. I have heard stories of guys loosing whole or nearly whole of their earthly belongings to internet hackers n I’m not taking any chances. Are you?
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