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Rants, Raves & Reviews
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20:06
From: Rants, Raves & Reviews
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Apparently one of Uchumi's buildings for sold for a song as well. If a transparent process had been followed then there would be no question of impropriety but it was not. So kirubi & kimunya are in the same boat. They may be innocent. They might not have benefited from the sale but it seems neither followed a transparent process. kirubi is also known to have political goodwill/connections with the current government. I think he was at the head of kenatco - which collapsed during or soon after his time there - which is a pale shadow of it's former self.
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19:40
From: Rants, Raves & Reviews
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Kimunya claims Orengo asked for a bribe (KES 3 million) from Adan+Wetangula Advocates. Furthemore, kimunya claimed that Orengo 'revealed' the GRH scam only after Orengo was told by A=W that there was nothing for him! Orengo denies he asked for a bribe from A+W while A+W also denies the incident. So Orengo said he will sue kimunya. Well, Orengo should not threaten kimunya but actually sue him. Pronto. We want to hear the truth. The only concern is whether the AG will take over the case & enter into a Nolle Prosequi order. On the other hand the AG seems to be on the 'other' side for once. Nevertheless, the Solicitor-general is thought to be a PNU/kimunya supporter. Of course, the AG is brilliant at figuring out in which direction the wind blows! I do not think kimunya benefited directly from the GRH deal but he needs to reveal all instead of being the fall guy. Who is he protecting (rhetorical question)? When will Kenyans get to doing some real work instead of politics? And look at what our neighbours are doing in the name of ' good governance'. ---------------- Listening to: Matthew Good - Born Losersvia FoxyTunes
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19:29
From: Rants, Raves & Reviews
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Kenya should desist from subsidies even if they are politically expedient. Especially if all they are politically expedient! Whereas agricultural subsidies seems a good idea they will create 'leaks' as politicians & civil servants resort to corruption. Kenya needs to fight - at the WTO - other countries that provide subsidies to its industries & agricultural entities. Solutions: - Better infrastructure so products can move easily to & from all parts of the country. This will reduce costs of transporting foods as well as reduce wastage.
- Better access to credit facilities but through private institutions e.g. KCB, Equity Bank, etc.
- Change from 'imported' crops (e.g. maize, wheat) to local/native crops like Sorghum, Millet, Cassavas, etc.
- Secure our forests & water catchment areas.
- Reduce population growth. Kenya's population grows much faster than it's real rate of growth. This is unsustainable. China has improved its per capita income by introducing severe measures to curb population growth. I do not advocate what they did but we need to work at reducing the rate.
- Improve agriculture outreach services while reducing direct subsidies. These better techniques can help farmers improve yields.
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15:01
From: Rants, Raves & Reviews
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OCHL has gone through an interesting year as follows: - Rights Issue (over-subscribed) which raised 420mn
- "Loss" of OCC (Botswana) as a subsidiary but later regained after OCHL's Rights Issue
- Inclusion of Paul Wanderi Ndungu (of CMC & KQ fame) as a director
- Increase in Issued Shares from 10mn to 40mn
- Change of year end from 31 Dec to 28 Feb (see the prospectus)
The results of 2007-8 were not anything to write home about. They can be downloaded from www.investinginafrica.net but the commentary was interesting (pasted below). Clicking on the subject header above will link to a Business Daily story on OCHL. OCHL's financing costs in 2007-8 were horrendously high but the process of a Rights Issue in Kenya takes too long so funds were 'borrowed' in the meantime. The Rights Issue in Botswana was concluded much sooner than in Kenya coz faster approvals. The repurchase of shares in OCC(B) did hurt OCHL since they were purchased at 50% more than what they were issued at 6 months earlier. Plush is OCC's largest subsidiary & has been performing below par in 2007. I hope it's performance improves. Kalahari Floor Tiles is the 'star' of OCC's subsidiaries but OCHL gets only 51% of the benefits/profits from KFT. The other acquisitions (Natwood & Mather+Platt) benefits, if any, will show up in 2009. I have said that 2009 is when OCHL is expected to shine as its cash (420mn) will have been fully invested. 2008 remains an acquisition year for OCHL. Of course, that is mere conjecture on my end hoping that Kenya & S.Africa remain peaceful & grow! There was an increase of 20% ownership of Avon Properties but the property firm cannot be consolidated since it is less than 50%. There will be substantial costs associated with the new PVC tile plant including paying for it, installing it & working capital. I hope the marketing team is up-to-speed since the production is expected to triple vs the old plant. The prospectus had some rosy numbers for Dunlop plant. A housing/construction slowdown in Kenya will severely hurt Dunlop since the plant will be commissioned as the construction industry sees a slowdown. I hope Dunlop can export to COMESA as well as compete & lock out the PVC tiles from China & Egypt. The core product/ingredient is petroleum based & that is a concern in the future. A plus for Dunlop is that higher transport costs from Egypt/China to Kenya may make Dunlop's products more competitive though the Kenyan market will shrink with higher prices. All in all, I see a better 2008 (got to get that PE down to reasonable levels) and an even better 2009. Of course, I hope Kenya and S.Africa does not see a recession or violence! Commentary The 14-month period ended 29th February 2008 was a very eventful time for the group. • Our subsidiary, which is listed on the Botswana Stock Exchange, Olympia Capital Corporation (OCC) migrated to the main board from the venture capital board and had a successful 1:1 rights issue in March 2007. This was to pay off debt used in the acquisition of 74% of Plush products (pty) Limited and resulted in our slipping from a majority position. In August 2007, we purchased shares putting us back in a controlling position in OCC. • In September 2007, we had an oversubscribed 3:1 rights issue on the Nairobi Stock Exchange (NSE) and raised Ksh 420 million. These funds have enabled us to look for expansion in existing and new areas. It is difficult to compare the year ended Dec 2006 with the period under review, mainly because of the acquisition of Plush in Dec 2006, which has now been consolidated for the full period and that the cash raised on the NSE, was raised in the later part of the period under review. Board Appointments: Following our rights issue in September 2007, we invited Mr. John Simba and Mr. Paul Wanderi Ndungu to our board. Thus increasing the number of directors to seven and we also had an increase of executive directors from one to two, with the appointment of Mwangi Wamae as Chief Operations Officer. Financials: As expected, turnover increased significantly from Ksh 397 million to Ksh 1.4 Billion. Profit from operations increased from Ksh 30m to Ksh 74m. Unfortunately, due to heavy borrowing, prior to the rights issue, interest costs rose from Ksh 4m to Ksh 36m. Without factoring new acquisitions and due to the rights issue being held at the end tail of the period, we expect this to come down significantly in the next year. Dividend: Our AGM will be held on 4th August 2008, and we intend to pay a dividend of Ksh 0.20 per share on 11thAugust 2008 to shareholders registered in our books at the close of business on 23rd July 2008. Our books closure dates will be 24th and 25th July. Post Balance Sheet Events: Following the end of our financial year on 29th Feb 2008, we have made three key investments. OCC entered into agreements to purchase 50% + 1 share in a Cape Town based business called Natwood (www.natwood.co.za). Olympia Capital Holdings Limited (OCH) entered into agreements to purchase 49% of a Kenyan business in the provision of Fire Systems, Water Services and Mechanical Installations called Mather + Platt Kenya Limited (www.mplattkenya.com) OCH has also increased it’s shareholding in Avon, the property company from 27.5% to 47.5%. Our focus is now on the growth and profitability of the businesses in our stable. I am also please to note that the new tile plant for our Kenyan subsidiary Dunlop Industries Limited is now on the high seas to Kenya. We expect this plant to be on line by October 2008.
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20:52
From: Rants, Raves & Reviews
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The NSE & CMA Investor Compensation Fund might not have enough funds to cover losses in the event of another broker collapsing. The issue here is FRAUD. If a client has shares then they are 'safe' with the CDSC but a client would lose cash & shares sold without their knowledge. Solutions? - CRIMINAL charges against fraud.
- Move to bank-backed brokers e.g. CFCFS & now NIC Capital.
- Move to strong brokers i.e. publicly published & audited financial statements like insurance firms have to do.
- Sell new licenses with 100% of the funds going into the IC fund.
It seems there is another broker on the ropes & several brokers are courting offers for sale or raising funds... There are buyers for 'new' or 'clean' licenses but there is little interest in existing licenses. Rumors (& that is all they are) have it that NIC Capital will raise more funds - from NIC Bank - to defray 'bad debts' & 'investor claims' accumulated under Solid Securities. Some NSE insiders claim NIC buying 60% of Solid saved Solid Securities since NIC Bank can't let NIC Capital falter...
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13:13
From: Rants, Raves & Reviews
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Is kimunya being sacrificed by kibz using raila & wako? When will he be resurrected? It seems that the CBK - owner of the Grand Regency Hotel - is being let off scot-free. Did ndungu support or oppose the sale in the opaque manner? Who else was involved in the sale? Did kibz know - rhetorical question! Will raila use his position to make hay while the sun shines? Will ODM get a say in the appointment of a new Finance Minister? Will the MPs get away with paying taxes as the Executive panders/bribes to them to make GRH go away? Notice how Martha Karua isn't her usual abrasive self defending kimunya, kibz, PNU or govt? The committee has wako (PNU or however the wind blows but essentially KANU), orengo & omondi (ODM), kilonzo (ODM-K but a KANU guy) & ringera (more of a GEMA guy). Kenya should go the India way & appoint a clean TECHNOCRAT as Finance Minister - not a repeat of saitoti!
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17:40
From: Rants, Raves & Reviews
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According to the Nation Susan Mudhune the immediate former chairperson of KCB has retired. Or is it poor reporting by Nation? Or slow updates by KCB? She still appears - as of 2 July - on the KCB Bank website as a director. The only other woman to chair an AGM, for a listed company, was Susan Mudhune chairing Kenya Commercial Bank, but without the benefit of a woman chief executive. Ms Mudhune retired from the bank’s board last month.
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16:11
From: Rants, Raves & Reviews
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Dear Chairman/CEO/CFO,
I would like to request the Board not to hold any meetings, functions, AGMs, EGMs or provide any patronage to the Grand Regency Hotel as long as the sale does not meet prudent & transparent guidelines expected in the disposal of public assets.
The GRH relies on patronage from businesses as its core client base. The denial of the business is a silent protest in the vein of Gandhian philosophy as practiced successfully by Dr. Martin Luther King & Nelson Mandela. I hope this drive the message home to the corrupt whether they be Sellers or Buyers.
It is my hope that the Private Sector takes the lead in protesting unfair policies that the political establishment pursues.
Thank you,
Coldtusker
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15:58
From: Rants, Raves & Reviews
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The GoK could have sold GRH to the public and make it a public entity... but there would be nothing there for the politicians... would there? GRH with a market value of KES 3bn would have been larger than the market caps Unilever Tea, Kakuzi, Rea Vipingo, C&G, Marshalls, Sameer Africa, etc... It would have been as large as ALL the AIMS firms combined! Of course, interested bidders for the management contract could have been Serena, Fairmont among others... but again what would kibz or kimunya have gotten? In Zambia, Lusaka's premier hotel, the Taj Pamodzi, majority shares were sold to the Taj Group of India but it remains a public listed entity... It seems Zambia have better government governance than we do... Who knows, KQ - publicly listed - could have taken a stake in GRH & marketed it as their exclusive hotel for its passengers & crew but would k&k benefit? I am going to boycott the GRH unless it is (re)sold for a fair price in a transparent manner. I will urge ALL listed firms NOT to hold their AGMs there in protest at the farce.
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17:36
From: Rants, Raves & Reviews
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I do not have additional details except as provided by Business Daily but this should be interesting... Nevertheless, is a broker really worth KES 600mn? We need more details coz some of the funds might be used to add capital to the business as well. I wonder what Suntra is valued at...? BTW, there is no value to Crossfield's business from what I have been told... so the price is merely for the license?
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18:43
From: Rants, Raves & Reviews
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I counseled against a 'combined' EA presidency but seeing as things are in Kenya, I might re-think my position. Many Kenyans & Ugandans are of the opinion that Kagame would win hands down if he went head-to-head against the incumbents esp kibaki & museveni. So what is happening in Kenya to warrant such sentiments? - A bloated cabinet whose obscene expenditures have to be paid for by taxpayers have to foot... and not the MPs who go scot-free...
- A 'coalition' government that leaves little room for dissent...
- MPs who live off the fat of the land but who contribute little...
- Safaricom shares sold at a KES 4bn discount to 'local foreigners'... while Kenyans were denied the shares...
- Anglo-fleecing suspects back in Kenya coz their protectors & godfathers rigged themselves back into parliament...
- Pattni off the hook coz he 'gave up' the Grand Regency Hotel in exchange for an amnesty... though the AG denies it... the KACC is in support of pattni's stand...
- GRH sold though a 'secret sale' for a song... no public bidding... after lies and denials... all is back to normal business... i.e. theft...
- The Kenya Petroleum Refinery sold to the libyans giving them total control over Kenya's oil industry... Libyans will also control the Pipeline and OilLibya (one of Kenya's largest Oil marketers)
Am I the only one who feels betrayed by our 'leaders'?
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23:12
From: Rants, Raves & Reviews
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22:31
From: Rants, Raves & Reviews
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Errors Galore... Business Daily at it again!
My comments/questions in RED...
City Trust banks on I&M regional expansion |  |  |
| Written by James Makau |  I&M Bank has assets worth Sh30 billion in Kenya.June 27, 2008: The star that once shone over City Trust Ltd at the Nairobi Stock Exchange (NSE) in 2007 seems to have dimmed, put out by low volumes of tradable shares that have led to stagnation of its share price at the local bourse.
Actually... prices on shares with low liquidity tend to be more volatile... if there are trades...
At the Alternative Investment Market Segment (AIMS) of the NSE, low liquidity and the lack of shares available for trading is the bane of firms , but this is one plight that City Trust had managed to side- step, making huge gains on its share price last year.
Little is still known of the firm which at one point in 2007 had floored the MSCI World Index— a free float-adjusted market cap index used to measure global equity performance— by a massive 157 per cent.
The press is allowed at AGMs... Did this reporter make the effort to attend an AGM? 'Little is known'... I think the reporters concentrate of the 'larger' sexier firms e.g. KQ, Equity, etc while ignoring the smaller firms then claim 'little is known'...
But in a remarkable about turn , City Trust —a listed investment holdings company—has lived to the AIMS billing; trading a mere six times this year, with the price changing only thrice.
The owners of City Trust, which is tucked away in the relatively quiet corners of the stock market, keep an equally low profile.
Picture this. The company, with a book valuation of Sh220 million and market value of Sh781 million, has no office or employees.
It has an office. Ask the directors. A shareholder asked them at the AGM & he was told where it is though by law all a firm needs is a registered office - which is at Kirungii for City Trust.
The business of the day is run by two of the four directors of the company board with the full board overseeing the company operations. The board occasionally meets at the Livingstone Associates offices, Westlands to plan and transact the business of the company.
Prime Securities Investment Trust Ltd is listed as the largest shareholder in the firm with a 49.98 per cent stake while local individual shareholders account for 29.48 per cent. Institutional investors control a 17.89 percent stake in the firm.
And with a dormant subsidiary —Kenstock Ltd—and modest earnings compared to other firms listed at the bourse, City Trust rising share price is likely to remain a subdued affair, outshone by the likes of titanic debutant at the bourse, Safaricom.
Erm, it's the Earnings Per Share rather than the Profit After Tax that is directly related to the share price.
But there’s still hope for City Trust, one that of course makes investment sense for its shareholders.
Analysts say that should a persistent investor willing to buy bits of City Trust over a long period of time to create a weighty portfolio, the consistent dividend payout from the firm is a worthy attraction.
What the heck is a 'weighty portfolio'?
The dividend per share of three shillings which is pocketed entirely by the firms shareholders is mainly attributed to City Trust’s stake in a rising star in Kenyan banking.
So... if the firm's shareholders don't pocket the "entire" dividend, then pray I ask... who does... Of course, the shareholders get the "entire" dividend (except withholding tax)!!!
Investment consultant with over 50 years experience of trading at the NSE Chandulal Shah in a previous interview with the Business Daily expressed the view that City Trust’s shareholding at Investment & Mortgages (I&M) Bank holds a crucial piece to the firm’s portfolio puzzle.
With a stake of 11 percent representing 1.1 million ordinary shares in I&M Bank, City Trust is the recipient of a tidy sum in dividends from the bank .“This is an investment company (City Trust) where any dividend derived is paid directly to shareholders.” said Mr Shah.
Actually, City Trust owns only 8.93% of I&M Bank represented by 1.94mn shares. This is public information if one reads their Annual Report.
City Trust which is expected to release its half year results this month is set to pay out a hefty dividend that will top up the Sh3.10 payout issued to shareholders last year.
I thought the 1H 2007-8 ended 31 Jan 2008 thus the 1H 2007-8 results should have been released by 31 May 2008 or they are in breach of some NSE regulation.
Income statements for the company at the beginning of the year put the firm’s investments at I&M Bank at Sh171 million. Last year, the firm increased its investment portfolio to Sh185 million.
In 2007, I&M Bank reported a pre-tax profit of Sh1.3 billion compared to Sh936 million the previous year. Following the steady growth and strong earnings derived from I&M Bank, the firm invested more funds in the bank, bringing City Trust’s investment to Sh185 million as at January this year. In March this year I&M Bank acquired 50 per cent shares in First City Bank (FCB) of Mauritius at a cost of Sh1.1 billion.
The acquisition of FCB represents the bank’s first investment abroad and is viewed as a launching pad for its regional expansion. FCB is one of the 19 commercial banks in Mauritius licensed to do both on-shore and off-shore banking business.
I&M Bank has assets worth Sh30 billion in Kenya and has 10 branches in Nairobi, Kisumu and Mombasa. The bank also announced a private offer for Sh600 million subordinated unsecured floating rate notes to shore up its capital base.
Low Liquidity
Even then, City Trust’s free float and tightly held share structure still have a major bearing on the firm’s trading price. With only 4 million shares listed at the Nairobi Stock Exchange, City Trust Ltd is one of the smallest firms at the bourse. But even with about 3.5 million shares available for trading; only a tiny fraction of these are actually traded.
Hmmm... according to the 2006-7 Annual Report, City Trust gave a bonus & this increased the shares to 5.2mn. I got this info from the NSE pricelist... No rocket science here...
With only a few thousand shares changing hands on a weekly basis, the low supply of City Trust shares at the bourse has allowed holders of the securities to quote high prices which are occasionally matched at the bourse leading to price distortion.
Wait... the same article (this one) claims there were only 6 trades this year... but the above paragraph claims that a few thousand shares trade weekly. Since it is June 2008, I would say we have had over 32 weeks this year...
ICDCI was in a similar case a while back before turning round are becoming one of the most profitable investment holdings firm in the country.
What has low trading volume & 'steady' price have to do with a firm's profitability? Sameer Africa , Eveready , Unilever Tea trade much more than City Trust but are they as profitable?
But one reason that market players believe is a key link behind City Trust’s meteoric rise is the possible share holder value derived from the sterling performance of its portfolio’s gem. |
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10:46
From: Rants, Raves & Reviews
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A friend has been trying to get information on or about the CMA but the website provides little or outdated information. There has been an improvements since I posted a rant about it.
Does this mean someone from the CMA reads my blog?
Anyway... so I checked the website out & whereas it looks better but there are problems with the downloads. The 2007 annual report would not open up & the message was 'a damaged file'.
No e-mails are listed so how does one get in touch with the 'powers-that-be'.
There was a complaints section but the complaints form was damaged & the complaints procedure was blankety-blank. Way to go...
I do hope someone from the CMA reads this & fixes it.
Does anyone have e-mail addresses for the head honchos there?
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4:21
From: Rants, Raves & Reviews
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Saf-Con... and the local foreigners... As I revealed earlier... how SafCon's OFS screwed Kenyans... Alcazar... who owns it? Told you so...
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3:54
From: Rants, Raves & Reviews
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Pathetic website. www.cma.or.keI could not find links on the site to provide feedback. The enquiries & feedback link was little more than a list of press announcements. Lousy website. Did I say that again? I could not find e-mail addresses for the management... or the Board. Talk of transperancy (or lack thereof). Snail mail contact info... how 1980s... Did I mention... the latest Annual Report they have online is for 2006... it is almost 6 months after their year end... And the CMA is supposed to enforce the requirement to publish results for Listed firms. Shouldn't the CMA be pro-active? Are you surprised why Kenya's financial markets are lethargic... scandals & scams abound... and incompetence is the order of the day? It starts at the top...
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3:33
From: Rants, Raves & Reviews
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So... I came across an interesting little tidbit in the Business Daily (18 June 2008)... But problems started emerging early this year when the NSE 20 Index fell sharply and the weakly capitalised brokers could not keep up with the teeming and lading game. What exactly is "teeming and lading" - in relation to stockbroking? And it continues... That is how Nyaga Stockbrokers, Francis Drummond and a few others got into much trouble. 1. Its is Drummond Investment Bank not Francis Drummond... 2. Hmm... I though it was Franchis Thuo & Co that was in hot water... 3. Isn't DIB/FD owed a copious apology? 4. Will this error remain frozen in cyberspace when I google Drummond? Well... surprise, surprise... BD has been nominated for the Diageo Africa Business Reporting Awards (DABRA). Well, I don't think Drummond IB was among those who voted for BD...
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6:13
From: Rants, Raves & Reviews
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5:08
From: Rants, Raves & Reviews
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Now... don't get all snotty... that Africa is a continent & not a country... Read the article first... linked in the subject header...
For all the racism in USA... there is more (deadlier?) tribalism most slivers of Africa than racism in the entire USA...
The BD article talks of an "Ivorite" - a former Prime Minister of Ivory Coast - being disqualified from running for the presidency coz he was not considered an "Ivorite" even though he was born in Ivory Coast!
Similar to a situation, say in 2012, if Raila is banned from running for prez in Kenya on the grounds he is "Ugandan" even though he was born in Kenya & was its PM at one point!!!
Similarly, examples of vitriol against Kenyan-born Whites & Asians... who are always on the edge during (almost) every election. Of course, during the 2007 election, the 'anger' was towards the Kikuyus (& others) who had moved to Nyanza or Rift Valley. The Whites in Zimbabwe (& increasingly S.Africa) also face similar situations.
Even a prosperous (in African terms) country like S.Africa had their share of xenophobia against fellow BLACK Africans. If not for the Football World Cup in 2010, the SA gov't (esp jacob zuma who thrives on populism) might not have reacted as they did but would have turned a blind eye to the lynching of fellow Africans.
Even the (generally) genteel Tanzanians are prone to (occasional) xenophonia esp against Kenyans.
Africa... where being African is a privilege not a right...
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5:23
From: Rants, Raves & Reviews
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Well....
Safaricom seems to settled at 7/- for now... For additional details go to Bankelele.blogspot.com
So the 'foreigners' got 2bn shares @ a mere 5.50 thus giving them KShs 3bn for doing nothing!
Whereas the 'retail' Kenyan's money was tied up for 7 weeks, the 'foreigners' had to pay on 4 June 2008... essentially paying almost zero in interest.
The 'foreigners' - less than 100 even though they got 2,000,000,000 shares... that is 20,000,000 apiece - and who are thought to be the faceless corrupt in the current government.
As someone asked... "Whose goat have you stolen"?
Who suffered? The poor Kenyan who got a mere 420 shares!!!! And the GoK who lost KSh 3bn by under-pricing the shares.
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13:56
From: Rants, Raves & Reviews
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Morgan Stanley (MS) & their local partner (Dyer & Blair) had sole rights to advertise and promote the SafCon OFS abroad. By bidding 5 cents, D&B became the Transaction Adviser (TA).
A conflict arose since the TA is also a stockbroker and placing agent. D&B advised that MS gets sole rights for foreign applicants. D&B then shares in the profits made by MS. So the 5 cents is elusive i.e. it cost Kenyans far more than 5 cents. it cost them billions!
MS could choose who they wanted to participate in the OFS. They could reject an application for any reason they deemed fit. They also could peek at the applications from other brokers thus allowing their clients (& themselves) to adjust the bids as needed.
Question: So what happened?
Answer: Well, MS picked applicants who were in their good books. This means THEIR clients who provide high-priced MS with business. Some of these applicants were 'connected' to the political establishment so while the ordinary Kenyan gets 30% of the application, MS+DB 'clients' could get 20%-35% unhindered!!!
MS could also buy for their own books meaning they reject valid applicants who offered more than 5.50 to leave the field clear for them.
Question: Why was 20-35% of a firm with 99.9% Kenyan subscribers & revenue being sold to foreigners who contribute little?
Answer: Well, it was a payback for political support. Coldtusker was NOT invited to participate! Many Kenyans would have willingly paid more than 5.50 ( including yours truly) for the 20-35% that was offered to the foreigners. It turns out there were applications/bids at 6.50 but 5.50 was chosen to benefit the so-called 'foreigners'. Therefore, at the MINIMUM, Kenyans lost (2bn shares x 1/-) KShs 2bn. The 1/- is what the real market would have paid above the 5.50 the GoK accepted.
If the allocation to foreigners was 35% then the loss could be KShs 3.5 bn.
Many Kenyans borrowed and had to pay upfront while the 'foreign' (in parentheses coz these foreigners were simply a front. There is NO scrutiny of they are!!!) applicants pay AFTER the allocation!
Equity was lending at 18% pa + 3% commitment fee.
10,000 shares@5 = 50,000. The issue closed on 23 April but refunds will be disbursed at the earliest on 10 Jun & clear 4-5 days later thus 60 days of interest on 50,000.
50,000 x 3% = 1,500
50,000 x 60/360 = 1,500 (Most banks use 360 days per year when charging interest)
allocation of 30% = 3,000 shares
Cost of 3,000 shares = 15,000 (for the shares) + 1,500 (Commitment Fee) + 1,500 (Interest) = 18,000
Cost per share = 18,000/3,000 = 6/-
The losses will run even higher than what I have shown above if the price of SafCon exceeds 6.50 per share - which is likely.
A pity but Kenyans continue getting screwed... royally screwed...
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10:53
From: Rants, Raves & Reviews
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Hear it here first!
Kenyans were taken for a ride by dyer & blair, morgan stanley, GoK crooks...
The foreigners - favoured by the idiots who set up the OFS- will pay KShs 5.50 for their shares!!! Yes, a mere 50 cents more than what wanjiku paid!
If I could get all the shares I wanted, I would have paid 6/-, let alone 5.50!!!!! So would have 1,000,000 other Kenyans.
I am pissed that the Kenyan government either got taken for a ride OR there was oddles of CORRUPTION.
Anybody interested in knowing how we got taken in?
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7:57
From: Rants, Raves & Reviews
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The WSJ is taking a belated look at African stockmarkets. Ryan Shen-Hoover ( www.investinginafrica.net) has a paid - worth every penny - newsletter focused on listed firms on Sub-Saharan African stockmarkets. I have a subscription & have picked up a gem or two. If you contact him and say the magic words "I am an African investor and I read coldtusker's blog" he (might) give you a discount. No, he is not paying me but please sign up in droves so I can angle for a 'free' renewal. Please mention COLDTUSKER. You will need a Visa/Mastercard and its billed in US$. No, I will not lend you mine. Subscribers also get access to hard-to-get financial reports for many listed African firms. Anyway, here is the link to the WSJ blog. Another firm highlighted in the blog - apart from Investing In Africa - is www.africanshareholder.com which has great info on African firms. Free. I would pay for it. Just don't tell them!
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7:16
From: Rants, Raves & Reviews
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NEGATIVE: The unaccountability of how tax revenue is spent continues unabated. Plastic manufacturers who pay 120% excise duty want to see the funds used to clean the environment. Makes sense but I think its being used to but new cars for the bloated cabinet! POSITIVE: Another broker is licensed though not admitted to the NSE. We need more competition. Chartered Capital used to be Town & Country. CCL belongs to Chase Bank. James Gachui (of Trancentury) is a shareholder of Chase Bank. NEGATIVE: Allegations of insider trading of Equity Bank shares. POSITIVE: Kenya gets $10mn from EU to boost tourism. Of course, most of it will be spent in the EU promoting Kenya. NEGATIVE: Nairobi's 'planning/zoning' is thrown out of the window as residential areas turn into commercial areas. Smells fishy to me. What say the Nairobi City Council? POSITIVE: KCC is now profitable and likely to go public in 3-4 years.
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3:26
From: Rants, Raves & Reviews
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After the greedy, selfish & irresponsible actions by the politicians - PNU, ODM , ODM-K, NARC, etc - Kenyans are agitating for 'more'. The problem is that ALL the 'agitators' are government employees. So not only do we have the BLOATED cabinet, we have to pay more to civil servants. So who suffers? The private sector who face tough trading conditions, poor infrastructure, insecurity & now have to contend with higher taxes. Nobody is paying attention to the vital industrial & agriculture sector on whom we rely on for real wealth creation. Why are we surpirsed when many manufacturers relocate their factories to other countries, farmer abandon their crops, businesses default on loans and horticulture exporters move to Ethiopia? Nurses give ultimatum to government
Teachers want higher salariesIncreased violent crime affecting businesspeople in NairobiPrison wardens strike for higher salaries and better conditionsEven the prisoners are on strike for higher pay!Mungiki threat is killing the rural economy
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22:38
From: Rants, Raves & Reviews
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I have said many times on my blog that Kenya needs to look to India for (positive) ideas & solutions on growth... Of course, we need to adapt these for Kenyan needs... and cut the corruption out! Well Laila Macharia agrees... in her Business Daily article linked here...
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22:25
From: Rants, Raves & Reviews
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China is growing in importance as a food exporter even with the recent 'food scares' in Japan and USA.
China has 1.2bn people but why is it that Kenya (a poor country with low 'cost' of living or low standards of living) can't compete with China?
Our flower, tea and horticulture exporters are crying over the strength of the KShs (vs the US$) while lamenting high costs of production,of which labour is a huge part, which makes them increasingly uncompetitive in world markets.
Why is Kenyan labour so expensive vis-a-vis China or India yet we have a (unofficial) 50% unemployment rate?
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22:11
From: Rants, Raves & Reviews
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Since Kenyans MPs earn huge salaries & perks ($180,000+) they do little but bicker in parliament while important economic matters are ignored. Amos Kimunya plans to raise KShs 27bn (US$48mn) to fund extra expenditures. 70% of the funds will go for recurrent expenditure including OPERATING EXPENSES of the new ministries! Not for 'development'. KPA needs $320mn to expand the port at Mombasa. The Japanese will loan them the money IF the GoK acts as a guarantor. The doubled capacity would enhance Mombasa's reputation as THE port in E & C Africa. It would create 1000s of jobs for Kenyans and earn Kenya additional forex. Well, the parliament needs to approve the guarantee but, hey, they don't give two hoots. Why? They care more about a position in the bloated government rather than the country. I think Kenyans are fools for electing these fools... We need to get some serious lawmakers in parliament. Why do we have thugs, fossils, thieves and conmen as MPs? Because Kenyans elected most of them except those who rigged themselves in. I am ashamed that Kenya is being held back by the MPs we have. We do have some bright sparks e.g. Martha Karua (I might not like her politics but she is a go-getter), James Orengo, Anyang Nyongo, Raila Odinga (when he stops politicking), Amos Kimunya (please STOP politicking!), etc. We need leadership from them. Now.
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8:12
From: Rants, Raves & Reviews
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Yes, it turns out that the GoK issued a 'revised' prospectus that most investors were unaware of. Does anyone know what the full extent of the 'changes' were?
The Safaricom OFS has been controversial from the beginning starting with the 35% allocation to foreigners to the Mobitelea's 'hidden' shareholders & stake.
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12:45
From: Rants, Raves & Reviews
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Zimbabwe was a jewel in Africa but for the disregard of (just) law, bad politics and worse economics! Minister for Agriculture Mechanization, Joseph Made, to a White farmer in recent times: "Why do you white people always hide behind the law" Then he goes on "We made the law we can change it" Huh? JM, you idiot... it's the law! You made it and if you do not like it, change it! You are the government! BTW, like Kenya there are superfluous ministries in Zimbabwe as well. There is a Minister for Agriculture as well, rugare gumbo. No wonder Africa is rich in resources but poor as hell in "wealth". What next a Minister of Toilets - in charge of wiping mugabe's arse? BTW, the Z$ is at Z$241mn vs US$1 (and the US$ has been tumbling of late).
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2:18
From: Rants, Raves & Reviews
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Sigh... Africa doesn't have much luck with Ms... exception being Nelson Mandela... (dan) moi - thief, murderer, turncoat, cheat... mwai (kibaki) - well, google the Kenyan blogosphere... 42 member cabinet... muamar (gadafi) - nutcase but believes he is entitled to be Africa's king... (bob) mugabe - where do I start with him? Virtually destroyed Zimbabwe.... museveni - once seen as progressive but... he is after anyone he perceives as a political opponent or critic. Sad... Will Africa see deliverance any time soon?
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15:52
From: Rants, Raves & Reviews
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I don't want to sound like an apologist for Kenya Airways but the Kenya Airports Authority has not helped KQ's cause. Corruption and poor management at KAA has led to a roof collapsing at Mombasa Airport. Last year the runway lights were not working leading to flight delays and cancellation of night flights. KAA has not repaired or replaced the underground cables for months. They rigged up a jua-kali system which was bound to fail. KAA needs to be privatized. Immediately! KQ is not off the hook either. Though larger and better run than most African airlines, it remains a poor competitor to the Middle Eastern and European carriers.
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15:13
From: Rants, Raves & Reviews
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6 brokers on the Watchlist according the Business Daily. Bob Mathews - In trouble once. In trouble again? Discount Securities - The owners tried to sell it at an inflated price but no-one bit at the time. Reliable Securities - In the news before. Jos Konzolo was the former NSSF head honcho. Crossfield - Securities - No idea. Solid Securities - Now NIC Capital. An operational matter or a problem with the prior owners. NIC Bank has enough money to keep them in business. NIC owns 60% of SS but I expect an 'internal' Rights Issue will increase their stake. Ngenye Kariuki & Co - A surprise on this list. It has been a 'steady' firm with a large retail base. The owner is a hands-on manager (unlike Nyaga Stockbrokers). Does any one have more to add on these firms? And a new broker- Chartered Capital. Info from Bankelele. I think the value of the 'licenses' will drop from the astronomical figures bid by Old Mutual (KShs 452mn) and Renaissance Capital (KShs 256mn). Rumours have it that there are another 4 new licenses waiting to be issued.
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11:18
From: Rants, Raves & Reviews
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On 10 April 2008, the Z$ was at Z$50mn:US$1 On 25 April 2008, the Z$ is at Z$220mn:US$1 Coldtusker is probably a Trillionaire.I tip in the 100s of millions. I carry at least 1bn in loose notes & change. (OK, put in perspective for those boggled by all the zeros... Z$1 trillion = Z$1,000,000,000,000 so it equates to approx US$4,500) Link to the OMIR rate
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18:29
From: Rants, Raves & Reviews
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Equity Bank is in the process of acquiring Uganda Microfinance Ltd. The smart folks at Equity are doing an all-share deal that will leave their 'extra' capital ready for more investments. KCB is expanding in Uganda, S. Sudan, Rwanda & Tanzaia. It will go for a Rights Issue to raise KShs 5bn. It has an excellent 1Q 2008 (when the troubles affected large swathes of Kenya) with a record KShs 1.7bn (pre-tax) profits. Co-op Bank wants to go public. They plan to raise KShs 5bn as well. I think they should go for KShs 10bn & will find takers for the shares since the Safaricom refunds will be itching for an avenue for re-investment. Of course, the other banks will be happy to lend additional funds for the IPO. Central Bank of Kenya K may be forced to sell the Grand Regency to the highest bidder. It is not all in the bag but I would like to see a transparent auction. I think the auction should allow the winner to put down 20% and pay the balance within 1 year. This will mean more bidders & a higher price. The 'pay later' will allow bidders to pay more since they can look for additional financing after the bidding process is over. If they default, CBK keeps the 20%. EABL goes green by building a local plant for canned beer. The cans are made of aluminum & can be recyled. The savings are in transportation since bottles are 'heavy' compared to cans. I hope more jobs are also created by bringing the manufacturing home. New varieties of rice will boost production in Africa leading to better food security. Why should we 'import' rice, maize & wheat? In addition, self-sufficiency means fewer means for government employees to skim Kenyans (e.g. sugar and maize import scandals). Let the farmers earn a decent living!
We need to force the State (GOK) to give up ownership of assets such as KAA, KPA & KPC. Of course, what I want to see are CLEAN deals meaning no favoritism to entrenched interests. NEMA after the Nakuru debacle is showing a greater interest in our environment but I have a gut feeling that corruption runs rampant there. Maybe I am being a little too skeptical? There is light at the end of the tunnel!
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18:26
From: Rants, Raves & Reviews
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I have spent too much time on politics. My blog was supposed to be business-oriented with little politics. I too the turn when Kenya's politics became self-centered on the politicians greed rather than good governance.
Since the "Grand "Thieving" Coalition" is in place with crooks & thugs like fred gumo as ministers, I need to look to the Kenyan business community for hope.
To the future. May it be peaceful & prosperous.
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14:10
From: Rants, Raves & Reviews
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Apparently the Libyans want in on Kenya but in a back-handed manner. They want to buy the Grand Regency Hotel for a song.
Mukesh Ambani (of Reliance India) & partners are offering an estimated KShs 8-12 bn while the Libyans want in at KShs 1.6bn. That is a glaring difference. I wonder who gets the difference between the 2 bids?
Solution: An open bidding process with a 20% deposit & allow the winning bidder to seek financing within 12 months. Failure to pay for the GRH in 12 months means forfeiting the deposit. In the meantime, the bidder can run the hotel JOINTLY with the CBK appointed receiver.
Kenyans will stand to benefit as they will get the best price for the asset they have paid for through their taxes.
Similarly, there is the issue of the Refinery. It is old & inefficient and needs a major upgrade but the GoK is stalling by not selling its shares to Essar - who won the tender by paying the highest price - nor agreeing to pony up 50% of the capital needed for the upgrades. The Libyans want in but they did not pay the highest price back then so why would they do so now? Kenyans lose no matter how you slice or dice it!
Solution: The GoK should let KPRL sell shares in KPRL to the Kenyan public to retain Kenyan ownership. So the GoK will be co-owners with Essar & the Kenyan public. It would be unsafe to cede the refinery to the Libyans who will favour OilLibya vs the other Oil Marketers e.g. Kenol, Total, etc.
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