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RIBA CAPITAL
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13:17
From: RIBA CAPITAL
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The cost of food is rising globally and Kenya is no exception especially after the interruptions recently we might be hit even harder. Case in point I buy a litre of milk @ 11 rands which translates to about Kes: 44 per half litre. Anyway, the effects r much wider goin to bread, cereals, fruits, vegetables etc. One of the reasons is definitely commodity trading where traders are speculating heavily with food including buying in volumes and holding this waiting for prices to rise therefore reducing supply. However, thats just one side of it. Bio fuels are also shifting supply and focusing production on corn and sugarcane etc. Making farmers to stop producing other crops. But a positive is that there plans to open a commodity exchange in the country bringing the benefits of higher prices close to the farmer.
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5:56
From: RIBA CAPITAL
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The Kenya Airways website has been hacked by a group from Turkey, or so they claim to be, if you visit their link www.kenya-airways.com , you will see that the group has taken over the website and defaced the homepage to reflect their messages. Please be warned also that there is a virus that will try and install itself into your computer once the page is open, so update your antivirus before opening the website. This adds to the problems Kenya airways is facing, who will book online if you risk your credit card information falling into the wrong hands?
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7:18
From: RIBA CAPITAL
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Today am publishing my article from the central business district in Nairobi,..that's how calm it is in town. And I actually used public transport, just incase riots erupted.
After yesterdays early closing of the NSE whereby it traded for around an hour, today things were much better, however the volumes are still low and share prices are still on a downward trend.
The killings have seized to some extent as there are no fresh reports of violence today, as yet.
The shilling has been hit very hard is down at the moment, with oil prices hitting the $100 per barrel today, this is very sad since the cushion of a strong shilling is being eroded by the day and Kenyans should brace for harder times to come as our fragile economy is being hit very hard.
The region is also choking from the instability in Kenya with Rwanda, Uganda and Congo report fuel shortages as the routes for transport are being blocked by gangs in Kenya.
Considering the leverage we have been enjoying as a regional hub, no matter who takes the presidency, our economy and the Kenyan people will be the hardest hit. Necessity is the mother of invention and if the regions decides to look for other partners they might just get better deals and we will have a very hard time reclaiming our prowess.
Furthermore, Kenya has been flourishing on Services and tourism, these sectors will be extremely hard hit if we continue on the violence path.
All in all, if we take one day at a time and have an example like today when there was peace and calm in most parts of the country, then may be we could just salvage the situation......
God Bless Kenya.
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8:05
From: RIBA CAPITAL
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 I was out and about today in the city centre and businesses were open however, not all. The Nairobi Stock Exchange also open and traded and most counters took a dip as expected, though some were resilient and gained marginally. However tomorrow if the NSE opens, stocks are expected to dip further since today is when most people got an opportunity to place sale orders as brokers had closed for the holiday season. I came across this blog which is providing some very intimate photos of what is happening across Kenya and does not make a very comfortable read. Read More. Banks were open and the financial system is fully operational and fuel supplies have resumed atleast within Nairobi. Things in general were stable today as businesses opened and people reported to work. However considering Raila has called for a mass action meeting tomorrow at the Uhuru park, most businesses are expected to close and the city centre could turn to a ghost town as was the case in the last few days..
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7:08
From: RIBA CAPITAL
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 ::: I love my country and this post is not on capital markets but the situation in Kenya::: I came back home to vote but what has happened since then is just unbelievable and sad. Maji yakimwagika haya zoleki.. We really, really need to move on. I am not taking any side here and as a Kenyan I cannot even imagine driving this country to where Rwanda was a couple of years ago. Ethnic cleansing will not solve anything, if anything. it will just make matters worse. Let the government and the opposition come together as Amb. Kiplagat has already set up a reconciliation team. Everyone knows the election tallying process was not solid and we can begin negotiations from there but killing our brothers and sisters is purely criminal. For heavens sake Raila's own son is married to a Kikuyu lady. and even in ODM's pentagon, the party's highest office, there is a Kikuyu, Joseph Nyaga. Similarly in PNU, Kibaki garnered votes from Luo's also and the issues about the election have no bearing to being a Kikuyu or a Luo. Kenyans are suffering and dying, yesterday(31/12/2007) I went out to try and buy some food, cabbage was retailing at Kes: 100.00 from Kes: 40 and less a few days ago, scratch cards are retailing 10% or higher above their marked prices.. War has never solved anything, look at Iraq and other Kenyan neighbours.... We don't need to be another statistic or example. We have always been sending peacekeepers and mediators around Africa, who will come to us?? if we are the ones who provide mediators?? Before the 27th,.. actually before the swearing in of Kibaki, no one really cared whether Riba is a Luo or Kikuyu, all you wanted was news on capital markets from a Kenyan.. Why shouldn't that be the same anymore.. We are Kenyans first and tribes don't really matter. Today (01/01/2008), is relatively peaceful and atleast from Eastlands in Nairobi where am publishing this article, I have not heard a gunshot or even seen smoke in the skyline, neither have I seen crowds running and shouting as was the case for the last few days.. I hope this continues to be the case... I am Proudly Kenyan.. and that won't Change... Tomorrow, (02/01/08), the stock market might open, depending on the situation of course. And I project a dip in prices as foreigners and locals withdraw from their positions until the country stabilises, this is so sad especially considering we were preparing for the biggest IPO in the region, currently I don't expect the Safaricom IPO to take place until some sense of stability returns and people feel confident to invest again, this was a great chance to project the maturity of the Kenyan economy and hopefully we can still salvage the situation by maintaining peace and calm as seen today. I will post some more as events unfold, but I also call on fellow bloggers not only to report on the dark side of these trying times but the positives too, for the sake of Kenya. For instance: Uchumi supermarkets were open for most of the previous day's and only closing when things went out of hand and I actually shopped there, despite heavy police presence and long queues. Today, the shops are open and Matatu's (public transport) is back on the roads and people can move around freely. KCB and Barclays ATM's are however down though they were previously working, the problem could be because they were not replenished once they run out of bank notes. Pesa point was also down but should be up very soon. MPesa, the Safaricom service has been working, but was down shortly, I still cant confirm whether its up again.
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8:02
From: RIBA CAPITAL
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Remember a few weeks ago, I recommended the purchase of EABL, well if you took my advise, then you are in the money at the moment. But my point is, there is a lot of action currently on this counter and somebody with very deep pockets is buying heavily on this counter, similarly, some people are also getting out. This is clearly evident by the trading volumes in the last couple of days. I will post more, but his is definitely a counter to watch..... Riba
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8:14
From: RIBA CAPITAL
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What’s next for Kenya’s Cement makers, with Lafarge holding substantial stakes in all listed Cement makers in the country. Any international development on Lafarge should be of key interest to us. Lafarge which is the world’s largest cement maker is in the process of acquiring Egypt’s Orascom Cement for a reported Euro 8.8 Bn. Read more This enhances its penetration in Emerging markets and in particular in Africa. The French company was also in plans to consolidate its businesses here in Kenya. Read more and also ; though unsuccessful at the first shot earlier in the year, it’s believed they could be currently working on a counter proposal. Lafarge has a 41 per cent stake in East Africa Portland and a 17 per cent stake in Athi River Mining Ltd. And a 58.6% controlling stake in Bamburi Cement. The company also holds a majority stake in Cement manufacturers in both Uganda and Tanzania with plans currently underway to double the capacity of the Uganda plant. With current market developments and the housing boom which is likely to be sustained come next year, Riba Capital holds a very positive outlook in the Cement industry. And I would recommend that we hold a cement company in our portfolio’s. The past few years have seen all the three companies post record earnings and with their current market prices at Bamburi - Kes:195.00, E.A Portland – Kes:136.00 and Athi River Mining at Kes: 92.00, I think these stocks are good. Though you I would recommend an entry during the Safaricom IPO, if it takes place later in the month or at least the week of elections when prices might take a dip.
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8:09
From: RIBA CAPITAL
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 According to the Business Daily the Safaricom IPO will be @ Kes: 5.00 per share with a staggering 15Bn shares on offer yes, 15,000,000,000 shares on offer. This values the company at Kes: 200.00Bn and the offer could rake in as much as Kes:75.00 Bn. With the shares having a Kes:0.50 par value. Minimum allocation is 1,000 shares at a cost of Kes:5,000.00 Though this is not confirmed and is from their sources, this approach is welcome and will favour the man on the street. Another key note is that for foreign investors, prices will be determined via book building which is like an auction with the lowest target being the offer price. Another development is that Stockbrokers want this IPO postponed and are against the book building approach for foreign investors with their suggestion being the use of a fixed premium price above what retail guys pay. On Standard and Nation. I fully support that foreign investors should pay a premium up and above what we pay for. Its taxpayer’s money that built Safaricom and thus taxpayers should be prioritized and the IPO should be tailored to their wallet. Local Institutional and corporate investors should as well pay a premium for the guarantee they get in preferred allocation and the fact that they only pay after allocation and thus the need to entice retail investors for the cost of holding money for a prolonged period only to be allocated a meager amount of shares. The split to get to 15Bn shares is very welcome so that there is enough cake for all of us to share and particularly reduce the need for refunds. I am also in the school of thought that local Kenyan individuals should have around 50% of this issue set aside for them, because there is enough capacity for us to accommodate the issue with the rest being skewed towards local institutions. But if this materializes as reported, then Safaricom will pay dearly for AGM’s, to host over 1 Million shareholders and also for the cost of dividend payments and distribution of financial reports. Previous posts on this topic . On a different note: > Another Kenyan emerges as the winner of the alternative Nobel Prize and raked in some $ 77,000. Read more. > Transcentury have also postponed their private placement reporting fear that investors might link their findraising efforts with their political affiliations. Notably is that some of the founding members are strongly aligned to political activity during this election period.
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3:42
From: RIBA CAPITAL
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TRANSCENTURY INVESTMENT COMPANY PRIVATE PLACEMENT REVEALED :  This deal Values the company @ Kes: 16.95Bn Trans –Century was incorporated in 1997 as an investment club of a few friends. TCL’s investments portfolio currently include a majority interest in EA Cables Ltd through the Cables Holding Kenya Ltd., a majority interest in Avery East Africa Ltd., minority interests in Kenya Power and Lighting Company, Equity Bank, Development Bank of Kenya and Rift Valley Railways. TCL is also an active private equity and venture capital fund investor, participating as a limited partner in the Aureos East Africa Fund, Aureos China Fund, Aureos South Asia Fund, the Helios Investors Fund and the Business Partners International SME Kenya Fund. TCL also has other minority positions in Nairobi Stock Exchange and the Uganda Securities Exchange. Private Placement Offer:
The main objective of this offer is to raise additional equity capital to finance TCL’s upcoming investment. Investment instrument:New ordinary shares of TCL ranking pari-passau to existing shares. Number of shares offered: 4,213,500 shares representing 17.7% of the company. Price:Ksh.712.00 per share. Minimum Investment:The minimum investment per investor is Kes: 335 Million (US$ 5 Million). The board of TCL reserve the right to accept lower amounts. Primary offer size: The total offer size is for 4,213,500 shares representing a percentage of 17.7% in the company at Kshs. 3 billion (US$ 45 Million) inequity subscription in the company. Green shoe Option: The shareholders have made available an additional 421,300 shares should there be an oversubscription in the private placement as a Green Shoe. The total shares offered by the existing shareholders for sale through Green shoe represent 2.1% of their existing shareholding. The existing shareholders will only offer their shares for sale if the primary offer is fully taken up and then only to a maximum of 421,300 shares. Entitlement to Dividend:The new shares will be entitled to any dividend that may be declared in respect in respect of the financial year ending 31 December 2007. SHAREHOLDERSShare holder__________ Director__% ShareholdingJames Mungai Gachui_______Yes_____8.4% Peter Tirus Kanyago________Yes____ 7.6% Michael Gitau Waweru______No______6.3% Zephaniah Gitau Mbugua____Yes_____6.1% Edward Njoroge___________No______6.0% Ndung’u Gathinji___________No______5.9% Jimnah Mbaru_____________No______5.8% Ephraim Kareithi Njogu_____ No______5.0% Stephen N. Waruhiu________No______4.7% Peter Mbogua_____________No______4.6% Total Shareholding ______________60.4%
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3:45
From: RIBA CAPITAL
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 Jack Ma, chairman and founder of Alibaba.com, celebrating his firm's IPO and his entry into Dollar Billionaires list at the Hong Kong stock exchange yesterday. Read the full story here... Quite interesting.
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0:59
From: RIBA CAPITAL
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 :::Kenol/Kobil Takeover::: Kenya Oil Limited stocks are showing some volatility at the Nairobi Stock Exchange on news that the company plans to acquire its trading partner, Kobil Petroleum Limited. Kenol and Kobil have been operating under a joint management agreement, where Kenol provides the management team. But both companies have had different shareholding structures. The firms are currently seeking approval from the CMA as well as planning a Emergency General Meeting so that shareholders can endorse their plans. Kenol intends to enter into a conditional sale and purchase agreement whereby Kenol plans to acquire 100 per cent of the issued share capital of Kobil Petroleum Limited, a company incorporated in Delaware, USA.This deal is almost the same as the one for BP/Shell, when BP exited from the Kenyan market and Shell purchased it business. One of the factors to note is the after a successful acquisition Kenol will automatically become the largest player in the Kenyan oil market with a market share of close to 25%. Another point is that Kenol will have solidified its presence in Africa with outlets in Kenya, Uganda, Tanzania, Zambia, Rwanda and Ethiopia and plans underway for further expansion. The Kenyan M&A market has seen some very active times and Investment banking as a career is picking up. Kenol has seen its average price for the past week rise from Kes: 103.00 to Kes:108.00. This is a good share to have in your portfolio especially in the LONGRUN. :::Safaricom IPO::: This seems well underway after signing of the contracts by the tender winners in the quest for the Government to offload its 25 % stake in the Kes:17Bn money minting machine. The government is still keen that the IPO can still be done by December this year, though I hold a more conservative view and think a first quarter listing next year would be more beneficial to whichever government will be in power and also to bring confidence to the markets after the elections. Michael Joseph also seems more keen for a next year listing. The winners putting pen to paper were: Dyer & Blair Consortium(Lead Brokers), Muriu Mugai (Legal advisers), Citibank Consortium (Lead Receiving bank), Deloitte & Touché (Reporting accountants), Red Sky (Advertisements) and Gina Din Communications(Public Relations ). :::Transcentury Private Placement::: This group has matured into Kenya’s Blackstone and plans are well underway for a private placement. Just 10 years(1997) after it was started. Transcentury evolved over the years from an investment club to one of the leading private equity firms in the Sub Saharan Africa with assets far in excess of Kes: 10Bn. And its shareholders are smiling all the way to the bank with their networth multiplying by the day. This private placement is to fund its investments and also reward current shareholders as the fund aims at investing further in Africa and Asia. Find a link to transcentury Portfolio. More details of the private placement will follow.
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7:29
From: RIBA CAPITAL
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Standard Bank has agreed a deal to sell a 20% stake for a total of Kes:348.65 Bn to China’s ICBC (Industrial & Commercial Bank of China Ltd) bank around $5.5Bn.
According to Standard Bank Kes: 196.65Bn of that amount would go to shareholders and Kes: 151.05 Bn to the Standard Bank Group.
Standard Bank sees China as a key component of its long-term strategy given its increasing economic linkages to the African continent and its impact on global economic growth.
ICBC, the world's largest bank by market value, will pay an average of Kes: 1,142.75 in cash per common share, 8.4 percent more than Standard Bank's closing price the shares jumped more than 5.9 percent in Johannesburg.
This goes to show that China is moving into Africa in a big way.
Standard Bank is listed on the JSE and on the Namibian Stock Exchange
Standard Bank Group is the largest South African bank and African by assets and earnings.
Its history dates as far back as 1862.
Represented in 38 countries: 17 in Africa and 21 in five other continents.
With over 746 branches in South Africa and approximately 240 in the rest of Africa.
They more than 40,200 people worldwide, of which nearly 32,650 are in South Africa.
Customers have access to approximately 3,770 ATMs in South Africa and 385 in the rest of Africa.
Its major subsidiaries include:
The Standard Bank of South Africa
Standard Bank - Africa and Stanbic Africa Holdings (in some countries)
Standard International Holdings
Standard Bank Offshore Group
Stanlib (48.33% effective)
Liberty Holdings (56%)
Liberty Group (52.2%)
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10:52
From: RIBA CAPITAL
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0:40
From: RIBA CAPITAL
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:::Equity Bank’s Profits Up 98%::: Equity Bank nine month pretax profits up 98% for the period ending Sept. 30, 2007. Jan-Sept 2007 Vs Jan-Sept 2006 (in millions of shillings)
Total interest income - 2,287 Vs 1,085 Net interest income - 2,002 Vs 1,007 Total operating income - 4,072 Vs 2,285 Total operating expenses - 2,541 Vs 1,511 Profit before tax - 1,531 Vs 774 Current tax - 306 Vs 232 Profit after tax - 1,225 Vs 542 And the exponential growth in Equity Bank continues. The volatility in this stock is not attributed to its performance but rather to market perception on its tribe affiliations and the current political climate. As noticed when Kimunya made his statement and Kibaki trialed in polls, the stock took a dive southwards, and when Raila gave a positive statement about the NSE, the stock gained. :::Krep Bank IPO in two years::: Krep Bank has announced plans to list at the NSE in two years time. This will be in an effort to seek funds to finance its expansion programme as it aims to open 25 more branches by 2010 and bring its total to 50. It also wants to focus more on electronic banking and its partnership with Celtel on the SokoTele product which competes against Safaricom's MPesa. The bank has a similar model and history as Equity bank and Family Finance though it has lagged behind these two in terms of performance and expansion. :::NIC Banks Rights Issue Timetable::: NIC Bank is offering a total of 16,482,910 new shares at Kshs 70 per share on the basis of one (1)new share for every five (5) shares held as at the record date of 2 October 2007. The Offer timetable is as follows:Record date > 02-Oct-07 Distribution of Information Memorandum and PAL’s to eligible shareholders >15-Oct-07 Commencement in trading in Rights on the NSE 22-Oct-07 Last date for immobilization of Rights and Renunciation (by way of private transfer) > 29-Oct-07 Last date for trading in Rights > 02-Nov-07 Closing date > 07-Nov-07 (* This is my birthday) Announcement of Offer results > 21-Nov-07 Electronic crediting of CDS accounts with the new shares, dispatch of Share Certificates and dispatch of refund cheques (if applicable) > 22-Nov-07 Commencement of trading on the NSE > 22-Nov-07 :::Terry Davidson joins Renaissance Group Kenya::: Terry Davidson has been appointed as the Managing Director and Senior Advisor for the Renaissance Group in Kenya. This appointment is effective at the beginning of February 2008. Terry is the immediate former Group CEO of Kenya Commercial Bank and also Regional Head for Citibank N.A. He is to help Renaissance Capital establish a strong franchise in the Region and also advise on the roll out of other Group businesses. In this capacity he should work closely with Renaissance Partners and the Group's merchant banking business on investments in the Region. www.ribacapital.com
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4:13
From: RIBA CAPITAL
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Finally, its now up and running.
Please view and drop a comment on whether the main page feels good, or we should work on it.
Suggestions are welcome.
Mianat, kainvestor and mushenzi... Thanks guys for the support.
Riba...
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4:06
From: RIBA CAPITAL
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We have just finished a model of www.ribacapital.com, its just a simple parked page which we have uploaded today. Please check it out and let us know if the idea is pleasing or we should go back to our drawing board and improve. Riba.....
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0:33
From: RIBA CAPITAL
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 ::: Volatile Times at the NSE ::: My take, is that multiple factors are coming into play at the same time. There is the factor of institutional players (fund managers) crystallizing profits for the third quarter reporting period. Then there is the heightened political situation as various political heavy weights take to the campaign trail making promises and hitting on their competitors from all angles, this factor affects more on foreign participants and retail investors who do not have any major links or contacts with the various political players. The third factor but of which is not fully fledged is some investors liquidating their positions in preparation for the Safaricom IPO later in the year if all goes as planned. The market has taken a bit of a knock, with a significant reduction in trading volumes and market prices after it had appeared to be recovering fully from the prolonged drop in share prices earlier in the year. But this is likely to improve as fund managers mop up shares at discount prices and consolidate their portfolios. My take is that we should also be taking advantage of this time to buy into the stable and sound companies with a sound dividend payment policy. RIBA TIP: Consider price to earnings ratio and dividend yield as key factors when taking up positions at this time, when the market is on a bearish run. :::CFC STANBIC LTD::: Treasury has already approved the CFC, Stanbic Bank merger and the move will see Stanbic Bank become a wholly owned subsidiary of CFC Bank and under the new entity, CFC Bank will change its name to CFC Stanbic Holdings Limited while Stanbic Bank will change to CFC Stanbic Bank Limited An agreement signed between the two banks sets out details of the merger through an exchange of shares by both institutions. First, CFC Bank will acquire 100 per cent of Stanbic Kenya and simultaneously the banking business of CFC Bank will be taken by Stanbic Bank, the end result though, will see Standard Bank group of South Africa own 60 per cent of the issued share capital of CFC Group including insurance, stock broking and investment banking units before consolidating both banking businesses into one entity. I am holding a positive outlook on this share since the new entity should wrestle more business in its various markets which means DTK, CBA, CITIBANK, NIC etc should re-think their strategy since this new entity has all the licenses, experience, and financial backing from its parent to take on virtually any organization in the wider financial services sector in Kenya. Stanbic is strong on:
Pension Fund management NGO Banking Corporate Finance and Investment Banking Corporate Banking Embassy Accounts Strong Financial backing CFC Group is strong on:
SME Banking Stock Broking Business High Networth retail Banking Fund Management Insurance Business Investment Banking (IPO’s, Rights Issues etc.) Local market knowledge :::RIBA PICKS::: I am currently taking advantage of the market slump and below are the shares I hold a BUY recommendation on: East African Breweries Ltd – To participate in the upcoming Dividend and Bonus issues and more so since this is a blue chip with a very positive dividend policy and hence a drop in prices would leave me enjoying dividends over the period. CFC Bank – To own a part of a larger and more capitalized group which can leverage the various licenses currently held to become the first complete financial services shop in the country and be a market leader in the various segments. Stanbic Uganda – To balance my portfolio over this election period and have a portion of it in a foreign land in a company that is enjoying a very strong growth momentum as well as take advantage of the possible merger of the East African stock markets. South Africa Digest: The JSE (Johannesburg Stock Exchange) is now the largest single stock futures market in the world. And trades in equities futures, options and various other derivative instruments.
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8:52
From: RIBA CAPITAL
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 MULTICHOICE, SA’s largest subscription-based satellite platform, will see its decade-long exclusive control over the pay-TV market come to an end in the next few months after the announcement yesterday(in SA) that four new players had been licensed to operate. The Independent Communications Authority of SA (Icasa) awarded broadcast licences to Telkom Media, On Digital Media (ODM) (No relationship with the Kenyan political party), e.sat and Walk on Water Television, as well as incumbent MultiChoice, which had been told to re-apply for a licence to comply with new legislation. The announcement ends MultiChoice’s monopoly and opens the market to competition and potentially billions of shillings worth of investments in the broadcasting sector. While there were originally 18 applicants vying for licences, only these were awarded. This comes hot on the heels of the opening up of this market in Kenya and chances are that most markets in Africa where MultiChioce has had a monopoly are now opening up for more players meaning the prices will definitely have to come down and hopefully the offering will increase and quality of the signal will also go up. Talk of compe. roho safi.
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9:22
From: RIBA CAPITAL
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Things we can learn.(The Passaris Way) The Johannesburg Stock Exchange (JSE), over 100 years old, is among the 20 largest in the world in terms of capitalisation. In 2001, the JSE was the fifth best performing stock market in the world (Merrill Lynch). In addition the JSE boasts a futures exchange and a bond exchange, all of which employ state-of-the-art electronic trading and settlement systems. There are over 450 listed companies on the JSE and a market capitalisation of overUS$182,6 billion as well as an average monthly traded value of US$ 6399 million The South African financial services sector has consistently been ranked in the top 10 globally in terms of competitiveness (IMD, Switzerland). This is as a direct result of its investments in the integration of business models with the appropriate IT technologies. The Mercedes Benz C-class, BMW 3 Series and the VW Golf/Jetta IV vehicles for all right-hand drive markets in the world are now produced in South Africa, as this provides a high quality vehicles at a low cost. SA is also the 25th largest economy in the world.
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1:02
From: RIBA CAPITAL
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 Telkom Kenya Privatisation plans underway. The government is requesting for proposals for the privatisation of Telkom Kenya limited from potential bidders. This is at a fee of US$ 20,000.00 The RFP contains the relevant details of the revised TKL transaction structure that calls for a sale of 51% of the shares of TKL to a strategic investor as a first phase and the second one scheduled to be implemented later through an IPO of 19% of the Govt’s and 11% of the strategic investors telkom’s shares. After which the ultimate shareholding structure of TKL will therefore be 30% for GOK, 40% for strategic Investor and 30% to the public through the NSE. Do not forget that the shares of Telkom Kenya in Safaricom are being transferred to the PS Treasury and thus Telkom will seize being a shareholder in Safaricom and therefore this deal does not in anyway mean you will own shares in Safaricom indirectly. **I am heading off to South Africa for some prolonged period and will scale down on my blogging activities at least in the short run. Apologies to all the visitors of Riba Capital.
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2:08
From: RIBA CAPITAL
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 :::Safaricom IPO::: Safaricom has a subscriber base of some 6.8 Million clients and a turnover of Kes: 47Bn. It’s also the most profitable company in East Africa and is currently owned jointly by Telkom Kenya Ltd (60%) and Vodafone Kenya Ltd (40%). The Govt. intends to sell 25% of its shareholding to the public through an IPO and transfer the reminder to the PS to the Treasury, The Government is currently running ads on the local papers for: Lead transaction advisers Legal Advisor PR Consultant Advertising Consultant Receiving bank And Share Registrar. This comes hot on the heels of the Kenya Re IPO slated for 18th July meaning the Govt. is serious o ensuring that both these stocks are listed by election time. This means the Govt. is opting to raise election funds by way of divesture as opposed to borrowing money either locally or internationally. The deadline for these services is 16th July. Finally the Safaricom IPO is seriously on the fast track, though let’s not forget that even Kengen’s second offer had reached this stage before it as shelved earlier in the year. But all said I think the government is putting undue pressure on the Kenya Re IPO as most investors would prefer to save their money for Safaricom.  :::NSE Price List::: Seems the NSE wants to start selling its price list and all other data which is currently available free of charge. This means that to access the daily price list we might be required to part with a few shillings. I am totally against this idea, it’s similar to companies selling their financial reports to investors which just goes further to sideline the small investors especially those streaming into the NSE for the first time. I really don’t think that the NSE has reached a critical mass of investors to warrant sale of data generated by daily trading. Why would an individual investing Kes: 10K spend Kes: 500 on accessing data and a further 2.02% of their money on paying commissions both at sale and purchase. Not forgetting the 5% on withholding tax for dividend payment. The NSE should not be a rich man’s club and its data just like financial reports and quarterly published reports should be a legal requirement to be provided to the public for free. Imagine the risk of exposure to insider trading and speculation that will surround the market.  :::CNBC comes to the market::: Plans are seriously underway to bring a Kenyan version of CNBC into the country as soon as within three months. KBC is already running the South African version to prepare the local investing community for the launch of a free Kenyan CNBC channel. This will go along way to distribute information further and make the NSE listed company’s info. Widely accessible.
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3:57
From: RIBA CAPITAL
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 Kes: 9.50 per share IPO opens on 18th July 2007 Minimum application is 2,000 shares @ Kes: 19,000.00 Individual shareholders have been allocated 47% of these shares. Kenya Re employees are allocated 3% Insurance Companies are allocated 20% Other Institutional investors are allocated 30% There will be 240 million shares on offer. This company was established in 1970 and is the biggest local reinsurance company with assets in excess of Kes: 12.80 Bn Kenya Re writes business in Africa, Middle East and Asia. The principal market of the Corporation is the Kenyan insurance market. There are 30 international markets namely Burundi, Bangladesh, Cameroon, Uganda, DRC, Ethiopia, Eritrea, Ghana, Iran, India, Indonesia, Jordan, Kuwait, Korea, Lebanon, Madagascar, Morocco, Nepal, Nigeria, Rwanda, Sudan, Senegal, Syria, Thailand, Tanzania, Tunisia, Togo, UAE, Zambia and Zimbabwe. This company has a paid up capital of Kes: 1.5 Bn against authorized capital of Kes: 2Bn. Currently its 100% owned by the Government of Kenya which is offloading some 40% of its shares. I will post my recommendation once the prospectus is out. More information available from below links. Detailed information about Kenya Re. Business Daily's post.
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23:55
From: RIBA CAPITAL
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I have two words for you. BUY HFCK Equity bank is on the verge of acquiring 24% of Housing Finance shares.This share is currently trading at levels of Kes: 32.00 and makes it affordable for us to get in. Transcentury value this share at Kes: 9.00 but this is also after considering that their takeover plans were halted by CDC. With this kind of news I hold HFCK as a STRONG BUY and ride out the acquisition euphoria then realize your profits immediately before the price correction. read my earlier post below on the issue.Safaricom Have you noticed the change in logos?Is Vodafone about to deny Safaricom use of their name, or is it in preparation of the IPO.Remember something similar happened to Alexander Forbes in Kenya when it had to change its name to Eagle Africa.  
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12:22
From: RIBA CAPITAL
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 My Easy Take on Mumias SugarClosed at kes: 26.50 I think this is a rip stock to buy.- Considerable number of investors who got in at Kes: 49.50, who are likely to hold on to avoid booking losses. - Brazil one of the World's top sugar producers among other leading producers are now directing their sugar towards production of ethanol and not consumable sugar thus creating a heavy need for sugar globally as its uses increase faster than production can keep up.- Its likely to win in the COMESA quotas allocation by limiting or maintaining as sufficient %age of importation of sugar.- The proposed removal of industrial sugar levy on imported industri;a sugar will have a minimal effect on Mumias since anyway even currently heavy user such as the Cocacola Company import their sugar since they claim that local sugar does not meet their quality standards.Actually its the 120% tax increment on palstic paper that could affect mumias moire, but this will be sorted out by mumias going back to their traditional paper possibly white and branded and not the ugly brown.- Their impeding production of electricity that will also be supplkied to the national grid is another income generator. All said, I think this is a good entry point for Mumias Sugar Shares.I hold a BUY on the stock.
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0:48
From: RIBA CAPITAL
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Stocks to watch: Equity Bank - Could be targeting to take over Housing Finance or even National Bank. read more.National Bank - Debt repayment by govt. could spark renewed take over interest. read more below. Housing Finance - Takeover target especially with the likelihood of one of the biggest shareholders CDC not keen on taking their rights issue.  NBK's share price continue to rise amid news of the govt. issuing non-negotiable bonds to cover the Kes: 20Bn it owes the bank. The bonds linked to the debt off set include: Kes: 4Bn at 9.50% with three years maturity, Kes: 5Bn at 11.50% with six years to maturity, Kes: 5Bn at 13% with 10 years to maturity and Kes: 6Bn at 14.5% with fifteen years to maturity. The issuance of the off-setting long term special bonds puts to rest uncertainty on the eventual repayment of the growing Kes: 20Bn guaranteed loans, but there are various views on the suitability of this decision to NBK shareholders. The bank will finally access liquidity from this debt via coupons and after maturity of the bonds, although they are non negotiable meaning that NBK will have to wait for their maturity and that is 3 years before the initial Kes: 4Bn matures. This is likely to pave way for the eventual buy out of this parastatal considering several banks have previously shown interest in it, these include Stanbic Bank that is in the process of merging with CFC bank and cash rich Equity bank. More info from NBK's website.
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7:04
From: RIBA CAPITAL
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 Could be sooner than we expect. Probably even this week, but most definitely before the Budget if all goes as planned. Link to more info.
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8:20
From: RIBA CAPITAL
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The mysterious Transcentury group was uncovered by Business Daily and here is a link to the story. A past article on G29 Factor.
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1:16
From: RIBA CAPITAL
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 Good Bye Trading Floor… In 6 months or so, stock brokers will be trading from their offices and won’t have to visit the NSE trading floor in Nation Centre. The NSE is currently setting up a Wide Area Network (WAN) platform that will connect all brokers to the main server at the NSE and coordinate and effect trading remotely. During the trial runs, stock brokers will for a period be allowed to trade from both their offices and from the NSE’s trading floor, as currently each stock broker has a computer terminal at the NSE trading floor connected to the market’s main computer server. The whole exercise will cost upwards of Kes: 30 Million, but, this is definitely money wisely spent. Other plans up the sleeves of the NSE include setting up their own offices, some sort of financial centre, that will not only host the NSE but also broker’s offices. This is planned in the next few years. Hot on the heels also is the merging of the Kenya, Uganda and Tanzania bourse which will precede the listing of the NSE to allow a wide and more independent ownership structure.  My hope is that with these developments we will cut the transaction time further to probably same day and allow day trading as is the trend with the more advanced nations, this will not only allow more participation but also open up the market to the more complex financial players globally.
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23:32
From: RIBA CAPITAL
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 I need to own one of these.. no I have to own one of these Ferrari's.Its 363% oversubscribed. Investors sunk in Kes: 2.90Bn against a target of Kes: 0.8Bn.The company will welcome 27,506 new shareholders into its books, this is an easy to manage figure which will allow for good dividend payments and cheaper administration costs against the backdrop of share registers like Kengen's 250,000+ and Eveready's 170,000+ shareholders. The allocation criteria was devised to favour institutions and company employees a point which the company does not deny. Especially with the fact that they amended the prospectus to allow full allocation of employee shares upto 10,000. Allocation: Employees applying for upto 10,000 shares get FULL allocation and 75% of anything above the mark. Retail Investors get 100 shares and 16% of anything above the mark. High Networth Investors get 10,000 shares and 17% of anything above the mark. Institutional Investors get 100,000 shares and 54% of anything above the mark. Shares start trading on 4th June 2007. while refund will be out by the 28th of May 2007.Riba Capital holds a view that in the immediate term this share will appreciate and then stagnate at a level of around Kes: 20.00
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10:12
From: RIBA CAPITAL
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 :::No more Red Jackets::: In line with the planned integration of the 3 East African stock exchanges, USE (Uganda Securities Exchange) which still uses the open outcry trading system will be automated as early as July this year. This will bring it at par with Kenya and Tanzania which had their stock markets automated last year and put an end to the shouting red jackets. When the 7 year old USE introduces ATS it will pave way for the merging of the 3 bourses to a single and bigger East African Stock Exchange which is the current global trend in pursuit of more liquid and active markets. Agents on the loose... Rogue agents are charging more than the CMA (Capital Markets Authority) required commissions and this has led to a media campaign by both the CMA and NSE advising the public on the charges. They currently stand at a maximum of 2.1% of total value of sale or purchase for transactions below Kes:100,000.00 and at a negotiable maximum of 1.82% for transactions above Kes: 100,000.00 :::Celtel Vs Safaricom::: Red Corner I am in my second month of a postpaid deal with Celtel after switching loyalties from Safaricom, in this deal which was orchestrated by my employer I get to make call across all networks at a rate of Kes: 12.00 all day every day and pay a monthly fee of Kes: 250.00. In the package I also got a new Nokia 6230i. Anyway, that’s not the point, but its all about Mambo 6 and Saasa 8 Celtel’s Mambo 6 per second billing tariff is for 7 days of the week from 11pm to 5 am and charges Kes: 12 from 5pm to 11pm and Kes: 24 from 5am to 5pm with a setup fee of Kes: 2.50 per call, the magic word here is that the charges are across all networks. Green Corner Safaricom’s Saasa tariff charges Kes: 8.00 from 2pm to 8pmfor 7 days a week, that is including weekends for all calls within the Safaricom network, but to at a different rate for calls to other networks. Though there is a call setup fee here also.
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7:45
From: RIBA CAPITAL
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 There is an interesting post by emergingafricacapital about the status of the Nation business daily newspaper's website; bdafrica.com
When I did a look up on the domain registration details, the above is what I got and if you try accessing the website you will realise its blocked. This must be a mega blunder on the part of Nation to register its website to a third party and and start clocking some 1 million hits.Guess we can only learn from their experiences and avoid such mistakes on the brands we control.
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4:58
From: RIBA CAPITAL
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 I have a dream, that rogue journalism will one day seize and JUSTICE shall be projected on our screens. I have a dream, that Western media (read CNN) will call US by name and not by race. I have a dream, that Africans will rise and that ONE we will become. I have a dream, that BLACK and WHITE are just colours and not a reflection of our ability. I have a dream, that the families mourning their lost ones will HEAL. I have a dream, that Kenya Airways will remain the PRIDE of Africa. Yes, I have a dream, that Martin Luther will FOREVER be emblazoned in our hearts. This article was inspired by the screenshot below on CNN’s coverage of our BELOVED ones lost in the KQ plane crash. Thanks tHiNkEr’S rOoM for your post.  Here I quote CNN's coverage: The people on board included one American, five Brits, one Swiss, one Swede, six Chinese, and 15 Indians. The remainder were Africans, including at least 35 from Cameroon and at least nine from Kenya, according to airline figures.
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23:35
From: RIBA CAPITAL
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 Over 300% oversubscribed. After targetting only Kes: 800 Million, the raked in an impressive Kes: 2.9 Billion and have to refund Kes: 2.1Bn in a record less than 1 month period after results.The final tally will be communicated officially on 24th May together with the allocation criteria though according to the Prospectus, the company had said that if the offer was massively oversubscribed then retail investors would get a minimum of 100 shares whiles us corporates and high networth individuals would get 10,000 shares.Shares will start trading on 4th June as scheduled.And refunds should be made by end of May. The majority of the applications were actually retail investors and from the interim results , chances are that this company will welcome more than 30,000 new shareholders into their register.The stock market is likely to recover marginally in the interim after the refund cheques have been released as investors look for alternative investments. This could mean that Access Kenya shares might actually rise faster than most research analysts had predicted, since most said that this was a suitable longterm investment, though from these results we could see people cash out in the short run and make profits.
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11:08
From: RIBA CAPITAL
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::: Stanbic Uganda Dividends :::Stanbic Bank Uganda Limited recommended a final dividend of Ushs: 6.06 per share for the year 2006 for declaration by the shareholders at the Annual General Meeting. The Register of members will be closed from 31st May 2007 to 22nd June 2007, both days inclusive, for purposes of preparation of the dividend payments. This translates to around Kes: 0.25 cents per share. Not to be dismissed considering there are more than 1 Billion shares listed. And since in Kenya the minimum shares applied for were 10,000 then the minimum most Kenyans will get is Kes: 2.500.00 if they have not offloaded any shares. This share was sold at Ushs: 70.00 (Kes: 2.80) and is currently trading at Ushs: 160 (Kes: 6.40) Read more on the Stanbic Uganda IPO here.  ::: Housing Finance Rights Issue::: At Kes: 5.00 each This share is currently trading at Kes: 25.00 Shareholders have approved a proposal to raise Kes: 575 Million through a rights issue. The company will offer 115 Million shares to existing shareholders at Kes: 5 each. Last year this firm posted improved profitability with 57% growth, from Kes: 90Million in 2005 to Kes: 141Million in 2006. With after tax profit growing from Kes: 59Million to Kes: 101Million.
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1:10
From: RIBA CAPITAL
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Dar es Salaam Here we come...  National Microfinance Bank (NMB) is to list on the Dar es Salaam Stock Exchange (DSE) in July 2007. Tanzania’s largest Initial Public Offer (IPO) ever. Current shareholding structure: (according to the company’s website)
ABSA Group Ltd. 55% Government of the Republic of Tanzania 30% International Finance Corporation 15% (According to Tanzania’s media reports)
The government is off-loading a 21 per cent stake in NMB out of its 51 per cent of the shares in the bank. The other 49 per cent shares are owned by a consortium led by the Rabobank of the Netherlands. Also in the consortium are the Tanzania Chamber of Commerce Industry and Agriculture (TCCIA), Exim Bank and National Investment Company (NICO). The current divestiture of NMB will leave the government with a 30 per cent stake in the bank. The government had earlier announced that the remaining shares would also be off-loaded to Tanzanian firms and individuals at a later stage of privatization.  The planned sale of 21 per cent of the shares of National Micro Finance Bank is attracting unprecedented public interest in the country’s nascent stock market, but Tanzanians don’t know much about trading in shares. This should be the first local financial institution to be listed on the DSE. The bank has a huge countrywide network of over 100 branches and agencies and an impressive profitability record at around Tshs. 26bn from its operations in 2006. The banks deposits stand at more than Tshs.400bn More links on this article. Business WeekThe East African
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0:44
From: RIBA CAPITAL
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 This company has declared a bonus issue of 1 for every 4 held. Final dividend of Kes: 3.25 per share. The goodies come a result of strong earnings in 2006 with revenues growing from Kes:3.9 Bn to Kes: 4.4Bn a 10% increase, there was also a 41% increase in profitability with the group profit before tax growing from Kes: 471Mn to Kes: 665Mn Earnings per share were also on upward momentum rising from Kes: 9.66 to Kes:14.67 Dividends will be paid on 20th July 07 and books close on 29th June 2007. This company is cross listed in Kenya, Uganda and Tanzania. The group attributes the impressive performance to strong growth across all lines of business, good contributions from Ugandan and Tanzanian subsidiaries, continuing development of innovative products and an excellent investment performance. The last point is quite a unique perspective which has contributed to strong performance in many companies in Kenya, most insurers, banks and other liquid companies have been investing heavily in equities and 2006 was a particularly good year with almost all counters gaining substantially, but the problem is that this is not a sustainable performance and might turn out to be the same story as the performance of Treasury Bill and Bonds (were doing around 70%) in the early 90’s when banks would make unimaginable profits from holding massive amounts in these instruments. With the change in times, banks are now hawking accounts and camping outside campuses and town centres in the hope of signing up new clients and dishing out loans to any willing person without security. Fast forward today and all insurance companies are reporting strong earnings from non core operations, i.e. investing activities. This should be a trigger to a closer analysis before long term investment decisions are made since, if a company is not reporting growth in the core business, then there is a problem and I hold the opinion that we should ride on the wave and make a few coins but, cautiously, and for long term investment decisions, then we should keep off. The NSE, like all markets will have its ups and downs, and companies like Jubilee should shield their earnings from the bear runs by having their core businesses account for the biggest percentage of the profitability pie.
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0:16
From: RIBA CAPITAL
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