Millers who approach the NCPB are told there is no maize. Even official complaints are swatted aside. BUT the NCPB sells maize to 'brokers' who sell to the millers at 26% markup. So...
- Who are these brokers?
- Why is the government competing with the private sector in procuring maize?
Regulation is one thing but the involvement of government in (direct) commerce is the road to ruin. And consumers have to pay the price.
Shouldn't the government spend money on improving the roads in the North Rift rather than buying maize from farmers? It's a rhetorical question because the latter allows for quick & easy corruption!
- Underweight bags of maize are purchased by NPCB
- Low quality maize is purchased by NPCB
- Maize is sold at a loss to 'favored' entities & persons by NPCB
Private millers would go out of business if they did the above!
Then the demolitions along Thika Road. Why were the officials in the Nairobi Crooked Council & Ministry of Landlessness not arrested & thrown in jail for allocating & allowing construction on road reserves?
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Rants, Raves & Reviews
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Big Governments, Inefficiency & Corruption - Bedfellows
» Rants, Raves & Reviews -
Kenyan 'business' reporting - Pathetic or Worse?
» Rants, Raves & Reviews Kenyan newspapers need to hire reporters who have a better understanding of ECONOMICS, FINANCE & BUSINESS.
An article by Wshington Gikunju titled "Foreign currency reserves slip below minimum" makes little sense!
I quote "The worsening of import cover position means that Kenya, a net importer, may face commodity shortages as importers struggle to obtain dollars to clear outstanding import bills."
There is no 'struggle' to obtain dollars. It's simply a question of paying for KShs for the US$. Furthermore, Kenya also imports from other countries e.g. Japan, Korea & the UK which can be paid in their own currencies & may have depreciated vs the US$.
Kenya has been importing foodstuffs among other non-essentials. These imports will be pricier thus benefiting local producers. Why do we import cereal (Weetabix is pretty good), eggs (crazy!), milk products like butter & cheese?
Fewer bags of grapes, apples & lychees isn't going to cause Kenyans much harm!
Fewer bottles of imported liquor, wine and beer will be good for KWAL, EABL & Keroche.
I quote "CBK could also be forced to limit its supply of dollars to the priority sectors of the economy such as oil, food and medicine importers. "
Huh? Did the guy say food? Except for wheat... there are few 'essential' foods that Kenya needs to import! Anyway, we should be encouraging production of sorghum & millet. Yes, these are much better 'foods' than wheat or maize.
Furthermore, in the long-term Kenyan importers will only import what Kenyans can afford. After all... they are businessmen...
As much as I shake my head at the silliness of importing cereals & eggs... at some point these will be too expensive to import & Kenyans will turn to local products.
I think Nation needs to hire someone with some sense of economics to review what these 'journalists' put out... Some of these comments/opinions create a sense of panic even though there is no need to be overly concerned!BTW... in typical Kenyan style... when someone becomes 'powerful' the sycophancy starts! So Kogelo, a back water village will soon have electricity, piped water & adequate security!
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Obama Day? Silliness...
» Rants, Raves & Reviews I don't get it & neither do many Kenyans.
Yes, Kenyans are proud that Barack Obama won the elections BUT he is an AMERICAN. Through & through. As for the vaunted Kenyan connection... it turns out his Kenyan father had little to do with raising Barack Obama. Kudos to his BO's Mother & maternal grandparents.
Obama the father abandoned Obama the son when BO was 1 month old... So Barack was NEVER a "Kenyan" in any sense of the word. He was not born in Kenya, not raised in Kenya, not a Kenyan resident nor a Kenyan citizen.
Congrats to Obama for the victory BUT why has kibz declared a holiday to celebrate Obama's win?
What of the loss of productivity for the typical mwananchi without a cushy government job?
kibz & roocy get paid whether they work or not. Not most Kenyans.
Election day in the USA was a working day for most Americans. There are no official holidays for any of the post-election days. So if the USA marks the historic occasion with a 'working day' why do Kenyans have a 'holiday'?
Who will pay the 1,000s of casual workers who only get paid if & when they work?
Who will pay for the loss of interest income for those whose cheques take 1 business day longer to clear?
Who will pay for the lost business deals/opportunities?
Who will compensate the farmer who delivers his produce but finds the markets are closed?
Who will compensate the businesses that rely on workers patronage e.g. food sellers in the CBD?
We have kenyatta day, moi day & now Obama day? As is, we do not need a krooked wa ngengi day nor a dan 'stealing galore' moi day!
Let Kenyans celebrate Obama's victory BUT not at the expense of their livelihood!
Other views:
Startups in Kenya
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I am wary of National Oil Corporation ...
» Rants, Raves & Reviews I am wary of National Oil Corporation of Kenya.
1) Does it receive subsidies from GoK? If yes, how much?
2) Does it receive favourable treatment from KRA?
3) How are its activities funded?
The problem is that any government 'support' costs taxpayers even more.- Subsidies means higher taxes on those who pay taxes (MPs excluded).
- Favored tax status means the other taxpayers are disadvantaged.
- Capital put into NOCK means other areas are starved OR the funds are borrowed from the money markets.
Strenghten regulation and quality controls. Which firm imported the low-quality LPG?
Various taxes on petroleum products should be reduced or eliminated. Or encourage public transport by offering 'free market' incentives e.g. lower taxes on buses & mini-vans.
Government 'support' will encourage cronyism, corruption & inefficiencies!
** Good news: Political clout on the decline. KCB sold off a farm that kenyatta had stolen. They had borrowed money using the farm as collateral & KCB foreclosed on it. Considering (not yet) uhuru is Deputy PM, this is great since other politicians will be running scared! -
Nairobi City Council - Bouquets & Barbs
» Rants, Raves & Reviews Bouquet - Increased burial fees. We need fewer burials & more cremations. Of course, murders can't be solved if the bodies are cremated BUT that only happens on CSI. In Kenya, 'investigations' are a joke. What was the idiot's name who claimed Robert Ouko 'killed' himself then set himself on fire?
Barb - Why would you raise the fees for LOADING BAYS from 60,000/- to 100,000/- in Nairobi?
Many world-class cities want businesses to open/remain in their downtowns e.g. New York, London, Chicago, etc... the idiots at the Nairobi City Council want to drive these businesses out! These businesses keep residents downtown longer & create vibrancy.
Higher costs of the various licenses will either push these businesses out by encouraging hawkers who pay no fees or charges! Violent & armed robberies are on the rise & the police as usual consider these as 'normal'.
Barb - Why doesn't the NCC get rid of the death traps - 14-seater Nissan matatus? I would post photos but I don't want my phone or camera being snatched! -
Kenya - No rule of Law
» Rants, Raves & Reviews What a waste!
The Nakumatt store among other buildings were bulldozed by the 'government'. I know there were cases pending but the impunity is horrendous.
Nakumatt had the property on lease - they do not own property - but seemed unaware of the operation. At the minimum, they would have emptied the store. The landlords say they never received the summons. Anyway, expect a lot of lawsuits back & forth. Or was this a case of the law gone amok?
(The demolishers may be right but the waste of food when Kenyans are starving. The sheer waste of equipment/utensils/beds, etc when Kenyan hospitals go without... It just galls me!)
How on earth did they get to build these structures on road reserves?
The Kenol petrol station had 26,000 litres of petrol. Yes, a spark and kaboom. Well, if I were the owner & you screwed with me, I would have probably lit a match and walked away... and helped lots of looters on their journey... upwards...
Associated Posts:
Real Estate in Africa - Very Risky -
Dead cat bounce at NSE?
» Rants, Raves & Reviews The volumes are modest but there is lack of supply thus higher prices expected on Monday.
Some counters were over-sold thus a significant discount on many shares to 'true' value.
Equity Bank released exceptional results leading to a huge increase in price.
HFCK released results that reflect growth. Add the effect of Equity Bank as the largest shareholder. Takeover in the books?
ARM & Carbacid had decent results given the poor economy post-election. -
KQ has profitable 1H 2008-9
» Rants, Raves & Reviews It has been a tough year for KQ since their busiest & most profitable quarter (1 April - 30 Jun) was severely affected by the post-election clashes as tourists & businessfolk canceled their flights to/from Kenya.
Hats off that KQ managed to pull together a profitable (though subdued) 1H 2008-9. The prospects for 2H seem encouraging with a weaker KES (90% revenues are in forex) & lower fuel prices. Unfortunately for KQ, the fuel hedges they entered into will reduce the benefits of lower fuel prices.
2008 has seen the demise of many airlines though mostly in USA which is a very competitive market. KQ on the other hand saw increased competition in 2008 from Fly540, Virgin & Air Uganda.
*** There was a major glitch at the NSE. Trading was supposed to start at 12.30pm -
Where is the Co-op Bank IPO prospectus?
» Rants, Raves & Reviews I can't find the Co-op Bank IPO prospectus online even though the IPO opens today.
And when will they release the 3Q 2008 earnings? -
NSE going to the dogs?
» Rants, Raves & Reviews Wow... what carnage!
(All said and done I think many shares are a steal if you have a backbone of steel)
KCB at 16.85 which is a 2x PB and less than 8 PER.
Equity Bank has not seen 114/- for almost 2 years. The price is even LOWER than it was at the height of the violence in 1Q 2008.
Warren Buffett would have a blast in the market & buy up a lot of stuff. I think it might sense for some firms to go private at this point!!!
There is little LBO cash but the possibility of buying out minorities... and then taking the firm private is so tempting. Hey, Unilever Tea (Brooke Bond) did just that!
Look at KQ (29/-) which is trading at a substantial discount to NAV. If they were allowed to buy-back shares, they had KES 12,000,000,000 in cash (2Q 2008 - 31 March 2008), and could buy back 200,000,000 shares at 30/- (KES 6,000,000,000). Suddenly, you have eliminated 40% of the shares thus allowing the remaining shareholders to earn substantially more on their investments!
KCB is at 16.85 & can generate over 13% on the shares based on current earnings. A buy-back would allow an increase in ROE without the need to take on additional risk. Just raise Tier 2 capital when the capital markets improve.
And the list goes on. Finally, ABSA could make a bid for Barclays Kenya. It was too pricey earlier but at 43/-, the price is rather attractive.
If I were Vodafone, I would buy 11% of the shares that gives me effective control of Safaricom so I can consolidate their results. And I can buy them at a rock-bottom price of Kes 3.50!
Equity Bank is in a position to make a takeover bid for HFCK. Offer 20/- & the minority shareholders of HFCK will make a beeline to sell the shares!
Safaricom should make a all-cash (20/-) bid for Access Kenya & in one swoop could own Kenya's largest ISP for corporates as well as the most extensive wi-max network in Kenya. I expect almost everyone except the Somens might be running to sell their shares! Heck, maybe even the Somens!
The cash rich firms e.g. KQ, Safaricom, Equity Bank can do wonders if they deployed the cash they have!
EABL is also cash rich but who would they buy that is complementary to their existing business?
CFC-Stanbic should look at buying out NIC Bank. Or perhaps even NBK now that NBK bad debts are manageable.
How about Equity Bank swooping in for HFCK as mentioned above. Or KCB buying out HFCK in its entirety & roll-up S&L into it?
I do not know if Centum is cash-rich after the recent happenings... but it could buy out 1 or 2 listed firms... if they have the cash!
Of course, we have Williamson Tea & Kapchorua... why do they list as different firms? A combination would be ideal at this stage! -
Kenyan Banks - Raising Capital
» Rants, Raves & Reviews HFCK raised KES 2.3bn & just in the nick of time. They had the backing of Equity Bank - which had raised KES 11bn in a very smart deal earlier - and BAAM.
I expect HFCK to post solid numbers in 3Q 2008 vs prior quarters. The 'extra' cash can be placed with various banks who are 'short' on cash. Also this sets the stage for a rapid expansion for HFCK into developments for low to medium income earners.
KCB raised KES 5.0bn but the current price has fallen below the Rights price.
I expect the price to recover based on its strong balance sheet & growth prospects outside of Kenya.
I&M Bank raised KES 600mn from a (private) Bond Issue but also attempted to raise another KES 600mn in Tier 1 equity from private sources. I expect it to have been successful since they have PROPARCO & DEG on their board.
Privately held therefore less information available. PROPARCO & DEG can provide access to funds if needed. Expansion into other market segments (new branch in Ongata Rongai) from its traditional 'upper market bank' image. Relies heavily on corporate customers BUT faces increased competition from Diamond Trust Bank & NIC Bank. An interesting addition for I&M Bank is the purchase of 50% of a Mauritian bank.
Co-op Bank wants to raise capital through a New Issue of shares. I expect they will be successful in spite of all the doom & gloom.
I think they will expand their footprint but will they be held back by their co-operative roots? Can they attract additional business from corporates? All said & done, I think the 'increased' privatization of firms that are farmer-owned will benefit Co-op Bank. -
History - We will NEVER learn
» Rants, Raves & Reviews Is there more to this not-so-sweet story than we know?- Are Kenyan sugar barons afraid of Kenana of Sudan?
- Was the sale cancelled because Spectre - owned by the odinga family - lost the bidding?
- How does this look to foreign investors when a 'clean' auction winner loses the deal while the Libyans get Grand Regency after a rigged purchase won by underhand dealings?
- G0K (read the taxpayer not the MPs) will have to compensate the winning bidders!
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beth 'brainless' mugo vs NEMA
» Rants, Raves & Reviews Well... after beth mugo (supposedly the minister for public health & sanitation)... but who acts like a total moron... fought with NEMA when they shut down a filthy abbatoir should go look at the the abbatoir AFTER they were forced to do the right thing...
Even then I think it's better to be a vegetarian...
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Corruption at the United Nations in Kenya
» Rants, Raves & Reviews Well... The corrupt UN employee was just following what her Kenyan gov't colleagues do... or what transpired under Kofi Annan...
For those who don't understand sarcasm or can't hear the dripping through the written word... I think she should not only be fired BUT taken to court! The UN should set an example of zero tolerance & prosecution but it fails miserably...
The UN is one of the world's most bloated & inefficient organizations. An attempt by Michael Bolton to clean up the UN failed since the corruption is entrenched! -
Kenya to pay $91 million in 2009 for anglo-fleecing
» Rants, Raves & Reviews Even though the GoK refuses to pay $91 million for the anglo-fleecing contracts... it seems that they might have to pony up the cash... why?
Coz these deal - though scams - were executed by the GoK... sigh... and the crooks/cronies all go free coz they are friends & family of the powers-that-were and powers-that-be... -
NSSF, Discount Securities & atwoli
» Rants, Raves & Reviews Is francis 'loudmouth' atwoli the head of a mob family?
Why is it that the workers don't kick him out?
The guy's (entire) family works at the NSSF & he is a critic of attempts made to clean up deadwood.
Kenyans should have a choice of NOT investing with/through the NSSF. Yes, they need competition from private providers. I am not saying the private funds will do any better but there should be a choice...
So... NSSF might have lost KES 1.4 billion ($20 million) by dealing through shady brokers... and this is the tip of the iceberg...
BTW... Centum and DSL shared the same office building... hmmm... do you think Centum invested thru DSL as well? -
Africa - The New Frontier (Part 1)
» Rants, Raves & Reviews Yes... Africa gets a bad rep... and often well deserved but there are interesting & positive developments on the continent...
Piracy
Not a good sign but at least it has united the Russians, Ukrainians and Americans... who all want to make sure the pirates don't win out. My solution is simple... BOMB the somalis back to the middle ages... no, even further back... make the coast of somalia a no-sailing zone for anyone who is somali (or even looks like a somali)...
Uganda
Uganda is making efforts to ensure the oil wealth is not wasted or skimmed off like the nigerians do... I do not expect it to be perfect after all theft in Africa seems ingrained among most politicians... but at least they could do much better than the nigerians.
Uganda's other mineral resources are attracting attention again. I hope they manage them well.
Of course... Uganda is also becoming the transit point for goods to Sudan, Congo and Rwanda...
And Uganda has 4 telecom players while Kenya has only 3. What's more... Uganda is set to have 2 more... HITS and I-Tel.
The same goes for Ghana who have an election this year... who have oil as well as being a transit point was many W.African countries.
Rwanda & Congo
Rwanda and Congo have a love-hate affair that started when the then Zairean government supported the Hutus against the Tutsis. As is eastern Congo has a strong Tutsi influence. Paul Kagame (prez of Rwanda & a Tutsi) and Laurent Nkunda (a Tutsi general who heads the 'rebels' in eastern Congo) have a dream of 'greater Rwanda' that is Tutsi dominated. After the Hutus massacred over 1 million Tutsis... one can't blame the Tutsis in securing the borders.
That said... there is huge potential in Congo and Rwanda will become a powerhouse if it annexes eastern Congo. Furthermore, the discipline that Kagame exhibits will make Rwanda the pride of Africa. If only they had a seaport... like Singapore.
BTW, Zain is looking at setting up shop in Rwanda. I definitely support the move. And it seems that Zain will put in decent infrastructure as Rwanda wants to become an ICT hub.
Ecobank Rights & New Issue
Ecobank got hit by the financial turmoil & had to extend the Offer to 31 Oct 2008. I hope they can collect the cash they need but poor luck with the timing. I think they should have dual-listed in Kenya as well since they bought 75% of EABS. As is they are listed on the Nigerian Stock Exchange, Ghana Stock Exchange & BVRM.
gaddafi
Of course... what would Africa without the crazies? So gaddafi wants to be the king of kings? -
Discount Definitely Discounted
» Rants, Raves & Reviews Yes... it is true... Discount Securities Ltd has bitten the dust but unlike prior failures (Francis Thuo & Conmen + Nyaga stealbrokers) the CMA is doing a Chapter 11... so the firm will continue in business while another partner is sought to inject funds into DSL.
I think the CMA's actions makes better sense than just closing it down but buyers want a 'clean' license.
Options:
1) CMA & NSE to accept the debts of DSL while suing the current owners for recoveries. Then sell the 'clean' firm to other investors.
2) CMA & NSE to put the firm in receivership & sell the license. Use the proceeds to pay off claims. This is similar to what happened at FT & Co. Best option.
3) Ask buyers to buy the firm 'as is' but with a backstop for losses. This is harder to achieve but saves the CMA & NSE compensation fund lots of moolah. NIC Bank bought 60% of (Not so) Solid Securities & are still paying for it! -
Discount Securities discounted...?
» Rants, Raves & Reviews Rumours has it that DSL is the 'Another One Bites The Dust'...
It was not unexpected but considering the recent spate of buyouts I am surprised there was no white knight. Of course, as NIC Bank learned that buying existing brokers is fraught with bad debts! Luckily NIC Bank has deep pockets & can buy its way out of the muddle.
Crossfield lucked out in being bought out by ABC Bank... but I think there are 2 more players who remain shaky...
Yes... the safcon IPO problems coupled with the current drop in the market is really decimating the investors and the players! -
Zain knock out SafCon
» Rants, Raves & Reviews I have never liked how SafCon would rip us off with horrendous calling charges... so I tried to support KenCell-Celtel-Zain when I could.
I was a classic double/triple SIMmer... I had 3 phones:
- SafCon for SafCon to SafCon (it has the largest subscriber users)
- Zain to Zain (occasional use)
- Telkom to Telkom (they had corporate reach for intra-company calls)
Now... I am 95% on Zain. I will even return missed calls when I sign up for the "Unlimited Package" between 6am to 6pm. Yes... $1/day buys me 12 hours of unlimited talk time... granted... I start using it at 8am at the earliest & only on Zain... but I can talk & talk & talk...
I was on PAMOJA but since I have to call some (non-progressive) folks on SafCon, I changed (vukad) to VUKA. I miss the 3/- Pamoja but its only 20/- to change tariffs on Zain on weekends.
If only Zain had introduced VUKA before the SafCon IPO... I betcha the over-subscription would have been much lower.
Zain has unlimited - albeit slow - internet access at 3,000/- per month. I currently use SafCon coz of (1) speed & (2) pre-paid but if Zain were to give me 3G... I would vuka that over as well.
When Zain introduces their 1,000/- phone... I expect many more subscribers to migrate to Zain.
There are some hardcore Suffericomers there... but I laugh at them when I can call them at rates 66% lower than they can call me... as is... I hardly call SafCon anyway! My new habit when I have to call anyone on safaricon or orange is... do you have a Zain number????
So... safcon shares may not be as cheap as they seem at KES 4.80...
I have not been paid by Zain... but if Rene Meze is reading this... I am responsible for at least 25 migrations over to Zain... -
Oops, alfie "foot in mouth" mutua does it again...
» Rants, Raves & Reviews So it seems the hijacked shipment of arms & tanks is not all it seems...
Kenya still buys most of its hardware from the West so the Russian tanks via the Ukrainians might not be for Kenya... and if Kenya was the buyer why buy Russian tanks from Ukraine instead of the Russians?
It seems there was another cargo of tanks that were shipped through Kenya to S.Sudan... Now I would not care if Kenya made some 'commission' on the sale but I think the 'commission' will end up in individuals' pockets not the Kenyan military! -
Just kill the pirates!
» Rants, Raves & Reviews Why aren't the world's navies simply blowing up the pirates' ships/boats...?
Just send a few planes to bomb the somali ports... and blow up any boat that looks remotely like a pirate ship... -
Kenya's inefficient refinery at it again...
» Rants, Raves & Reviews The government needs to stop dragging its feet and tell Kenya's refinery... its do or die... and sell its shareholding asap if it does not want to invest in the refinery... -
Warped priorities at Kenya Ferry Services
» Rants, Raves & Reviews The KFS is installing LED screens at KShs 50,000,000.
A good idea for revenue generation but... the ferries are old, prone to stalling and will sink one of these days... Shouldn't they be looking at buying new/better ferries???
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mswati - paedophile?
» Rants, Raves & Reviews Not my usual topic... but is mswati of Swaziland a paedophile?
Whereas there may be some cultural reason or justification... I just can't wrap my mind around it. It is abhorrent to me. Or am I being Euro-centric?
He is 40 years & is looking at marrying girls who are barely 16 years. He could have daughters that old!
In Kenya, we have the founder of Java Coffee House in court on charges of paedophelia. Should mswati be allowed to enter Kenya? Has he ever been to Kenya?
(My advice... if mswati is in town... lock up your daughters!)
What say you?
P.S. My personal opinion is mswati should be deposed, castrated then jailed for life. -
Kenyan Banks - Overweight... and still lousy...
» Rants, Raves & Reviews Experiences vary but Kenyan banks need to improve! Asap. Various experiences of friends & family (reatil clients) below... Most prefer a low balance Savings Account with a Cheque Book.
Keep at least 2 accounts if you can afford it just in case a bank's ATM is down or you need access to a branch for services not available at an ATM.
Equity Bank - Long lines at both the branches & ATMs... BUT what I like about Equity is that they introduce new solutions e.g adding branches, adding ATMs, internet access & access through mobile phones... They to maximise Finacle's functionalities e.g you can get upto 30,000/- cashback from any Nakumatt (some are open 24 hours) & avoid visiting an ATM or branch! The hours are so-so... BUT... among the best banks in Kenya.
Equity is going regional in Uganda & S.Sudan.
Conclusion: Definitely a good innovative bank for most but not all Kenyans... Equity credited all their customers' accounts with Safaricom refunds on the same day! Their customers seem happy & Equity gets a thumbs up.
NIC Bank - Lousy for retail customers. The customer service staff is friendly but generally clueless. The right CSR can make a huge difference. Their 'Orchard Account" which offers a cheque book needs a 50,000/- (formerly 20,000/-) minimum balance or a fee is charged. Even though they have online banking, folks want to ditch them. The previously free chequebook now costs a whopping 500/- (previously you only paid for the CBK/revenue stamp). Customers I spoke to plan to close their accounts or 'downshift' to other accounts to avoid the fees. BTW, their menu of retail accounts suck! Hours are pathetic... The Westlands Mall branch opens from 9-11.30am on Saturdays!
Conclusion: Nyet! No way Jose!
I&M Bank - Great service. This makes a huge difference. Slightly expensive but the service makes it worth the fees. It has been described as an affordable 'upmarket' bank.
Nice - 'fancy' by Kenyan standards - branches though sometimes the service is a little slow since the customer base has grown substantially over the past 2 years. Varied & affordable range of accounts. I&M has been aggressively marketing credit cards. Finacle (banking platform) installed in July will allow them to expand through the internet & mobile phones. Only 12 branches in Kenya (10 in Nairobi) but growing. Latest branch in Ongata Rongai while all others in CBD or upmarket areas. Electronic statements & balances via free sms i.e. they do not charge the customer when they an sms. No extra charge to sign up for the e-banking. Savings account with a chq book needs only 10,000/- minimum. Weekday hours suck vs other banks but longer hours are coming soon at selected locations. The employees are often available for meetings & discussions beyond 5pm... Now... that is GREAT...
Branches: One each in Mombasa & Kisumu. That is limiting for folks who travel all over Kenya. No regional expansion though they have a subsidiary in Mauritius.
Conclusion: Yes... A bank for those who want value. You pay for the service BUT actually get the service. Nice website though a work in progress! They need to expand their reach asap.
CFC-Stanbic Bank - Avoid like the plague. No more Savings with a chq book. Instead you get a Current Account with fees. Expensive. Hours are so-so... Unless you do lots of business in Africa, it is not a bank for the local retail investor. And they have the lousiest forex rates. Except for NIC Bank. Only star is CFCFS. I think Stanbic will scare the customers away! Imagine there is no internet banking for retail customers!
No... Nyet... Hapana...
Diamond Trust - The "Open" account if it makes sense for me. Seems decent but fee heavy. Relationship managers all around... Nice branches. Clientele is mid to upper market. Fees are negotiable. Forex sales & purchases ($5,000+) are negotiable.
Conclusion: Neutral for Kenya but great if you do business in E.Africa.
Standard Chartered - The X account is intriguing. 1,250/- per month gives you multiple benefits. No idea but the 9am-9pm at Nakumatt Ukay is an excellent idea.
Conclusion: Neutral coz untested. -
Entrepreneurship - Summarised
» Rants, Raves & Reviews
Credit to Maishinski. Check the link above for the original source...
Our guys back home have mob talent - but they simply don't know how to make money from it! So they get frustrated and throw stones at the police (blame government) or each other (blame other communities)... :-)
Many of us in Diaspora have experienced intense global competition - and as a result, we have gained useful knowledge that we can share with our fellow Kenyans to help make them successful as entrepreneurs or employees.
We have our part to play in Vision 2030, and we may even realize its objectives in 2020 if we can get as many Kenyans as possible to be successful and self sufficient.
Lesson 1: Know your talent & develop it. Have some general knowledge about your area of specialization - but be EXTREMELY good at one thing (e.g. Database Tuning / Financial Analysis / Applications Programming etc). Dont try to be an expert in everything - just the one thing you enjoy the most.
Lesson 2: Believe that you control your own destiny. Don't expect handouts from governments, politicians etc. Be a go-getter. Get one good suit; get appointments with potential business contacts; discuss our product/service with them and land some deals.
Lesson 3: Market yourself. Whats your unique selling proposition? Why should someone pay you for your talent? The answer to that is the value of your talent. Dont do what "river-road businesses" do (i.e. At XYZ enterprises river-road, we specialize in everything, cleaning, building, painting, computers, typing, ironing, babysitting etc) - no one believes them!
Lesson 4: Know some basic business:
-ACCOUNTING; Break even points, cash flow statements, balance sheets, P&L.
-LAW; contracts, sale of goods, forms of businesses, licensing;
- MANAGEMENT strategy making (five forces/value chain etc); HR issues etc
- SELLING, ADVERTISING and MARKETING - and the difference between the three!
- ENTREPRENEURSHIP - how to start and run your own business..
Lesson 5: Read. Read. Read. Read. You dont have to go to college to learn accounts, management, entrepreneurship, etc. Cultivate a reading habit.
Lesson 6: Stay curent. Go online once a week and visit Bloomberg, FT, Investopedia, Bdafrica. Approx 20 mins - 20bob. Reasonable cost/week to stay on top.
Lesson 7: Be CONSTANTLY on the lookout for new ideas or opportunities that can be turned into money makers. For example if in the budget they talk about ICT villages in upcountry - see whether that's something you can do. If the minister announces that Matatus will be parked outside CBD - consider a coffee shop near the station. If CBD is to be a pedestrian city in future, think of possible tourism opportunities and start working on proposals... if Fibre optic is coming, think of online sales, remote software contracts, shareware, value added services, IT consulting, BPO etc etc.
Lesson 8: Protect your intellectual property. Never give out source code for free. Never publish your invention/discovery without getting a patent first. Share your business - not your IP. IP is too valuable!!!!
Lesson 9: Don't give up. Read about successful business people. They all have failed in their initial effort. The only thing is they failed smartly - and learned from their failures. Failing smartly is about planning for eventuality of failure so you can minimize its financial impact! Always test your business idea at a small scale first. If it's an area you don't know about, volunteer to work for a future competitor for low salary so you can learn the nuances of the business and survival tricks before you start your own...
Lesson 10: Watch the Apprentice Season 1 (Donald Trump): You will learn that its easy to get rich legitimately. If you really want something you will get it. The episode where the guys made $1,000 selling lemonade really stumped me! The simplest of businesses brought in Ksh 67,000/= in ONE DAY!!! Why? Because the candidates put their ALL; they put their best efforts to win. No handouts from IMF, CDF or YDF - just plain simple brains and hard work.
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EcoBank Rights+Offering opens...
» Rants, Raves & Reviews We thought Safaricom was big... Ecobank's Rights+New Share Offering is 3x Safaricom...
KCB raised Kes 5 billion to fund its Kenyan & regional expansion... while Ecobank is raising almost Kes 175 billion to fund its African expansion... and it is doing so on 3 stock exchanges... Nigeria, Ghana and Ivory Coast.
BTW... Ryan Shen-Hoover of Investing In Africa was quoted... I have blogged on his excellent newsletter. I understand he is working on a local (Kenyan) method of payment for Kenyan subscribers... -
Investment in Africa not for the faint-hearted
» Rants, Raves & Reviews Virgin might dis-invest from Virgin Nigeria since the strong-arm tactics used by the Nigerian government were not to Virgin's liking. The gov't sent in goons to smash up Virgin's counters at the airport!
Many Nigerians were happy that VN brought in better schedules, better planes & safer aviation to Nigeria but regression to the old ways in Africa is not new...
I used to wonder why KQ did not expand its services to Nigeria but no wonder they are cautious about flying to Nigeria... And Nigeria might not be a very profitable market esp with the inefficiencies and corruption there. Did you know Nigeria - a huge oil exporter - imports refined oil products?
When will Africans learn that negotiations are a better way to go...
BTW, if you complain about Kenyan airlines, once you fly Nigerian 'airline matatus'.... you will never complain about Kenyan airlines! -
Real Estate in Africa - Very Risky
» Rants, Raves & Reviews I own no real estate in Africa...
Why?
The protection, offered by the law, of one's property in Africa is almost non-existent. If the laws are there, the courts or enforcers are lazy, corrupt, powerless or do not care.
Kenya is an example where kamau wa ngengi (aka jomo "land-grabber' kenyatta) and his family acquired huge chunks of the best land through theft. Many of the victims were law-abiding citizens who had bought their land. kamau who became senile in the early 70s still dreamed of acquiring more land even in his senility.
Zimbabwe is another example where for all the inequities, there were many who lost their land. Of course, the land was 'taken' to benefit the majority but given to mugabe's whores & cronies. Senile is too kind a word for mugabe. Why don't the Zimbabweans just assasinate him?
Tanzania nationalised the farms to catastrophic results.
Uganda's idi 'idiot' amin kicked out the Ugandan Asians, grabbed their properties without due process and coz he had some dream that he had.
Rwanda saw bloodshed with over 1mn deaths. All for 'land'.
Kenya has had land clashes over the years but it reached new heights in early 2008.
Anyway, I was watching a video on KenyanEntrepreneur's site... the house was being demolished... and it sorta explains why I rent... -
KPLC = mini-KRA
» Rants, Raves & Reviews KPLC is in a bind...
The firm has done rather well during the past 3 years - since the Manitoba guys came in - but there are dark clouds on the horizon.
KPLC has the following:- Oodles of cash on the balance sheet
- Cash generating/collection capability
- Large procurement needs
Things got so bad that the GoK was forced to appoint the Canadians - if KPLC wanted financing - to run the firm. After bringing KPLC back into the light... they are being dumped...
Furthermore, the GoK & KRA have made KPLC one of their 'collectors'... KPLC has to use fuel to produce electricity... the fuel is heavily taxed... and this is passed onto consumers making KPLC look like the bad guy! KPLC is also forced to charge VAT thus increasing the burden on the consumers & KPLC...
So KPLC has become a tax collector of sorts for KRA & GoK... - Oodles of cash on the balance sheet
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How the KRA & govt kill local businesses!
» Rants, Raves & Reviews Many local airlines are suspending operations coz the KRA introduced ill-thought out tax measures. This is just after the KRA introduced KWATOS at the port... without adequately testing the system...
And the KRA is lauded for 'good work'... yeah, right... -
Poor KPLC
» Rants, Raves & Reviews The GoK uses KPLC as a cash cow.
Petrol prices at the pump are 50% taxes... collected by the Oil Marketers on behalf of the GoK...
They do the same with electricity. GoK forces KPLC to collects taxes/VAT from consumers... so KPLC looks like the bad guy... while the GoK mandarins wallow in our money... -
African Despots - Back to the Future...
» Rants, Raves & Reviews African despots don't retire... they just extend their terms... by all means possible!
M has a great flowchart...
1) wade of Senegal got his presidential term 'extended' by friendly MPs...
2) paul biya of Cameroon chnaged the constityiyion so he can run again after the initial 2 terms
3) mugabe of Zimbabwe stole the election. Outright.
4) kibaki of Kenya... hmmm...
5) museveni of Uganda wants to be president for life.
The list goes on and on... perhaps the only way to get rid of them is how the Klingons did it in the fictional Star Trek? -
The Libyans lay down the law...
» Rants, Raves & Reviews It's rare when a ruler directly gets involved in a 'business' deal in another country but gaddafi has laid down the law for kibaki - who accepted money from gaddafi to fund his re-election - as regards the Grand Regency Hotel.
If Kenya kowtows to libya, then we have a huge problem coz we are selling the refinery and pipeline to the libyans. Bad idea... They will have us by our b***s. -
The good life...
» Rants, Raves & Reviews Who pays Adeninji to while his time away at the Serena? Hmmm... I need one of them cushy jobs! -
Makeovers at Nation & Standard online...
» Rants, Raves & Reviews The "makeovers" that Nation & Standard have implemented on their websites might make them look 'fancy' but with the excruciatigly slow speeds... loading these pages is a pain...
The old format was easier to navigate coz I knew which pages had what. I do not care much about pictures. Having videos is a nice touch but speed/data restrictions does not help....
I am sure I will get used to the new formats but I would rather they spent time & money IMPROVING THE QUALITY of articles and reporting... -
Spare the rod and spoil the child...
» Rants, Raves & Reviews What's wrong with the kids?
I remember the riots in university - that were less over 'rights' than allowances & food.
There is no point in destroying dormitory blocks and torching buildings...
For every kid caught with petrol intending to destroy property should be thoroughly whipped then expelled...
Me thinks they are in line to become MPs... considering the utterances of ntimama and his ilk... -
The case of disapperaing land...
» Rants, Raves & Reviews One of the pitfalls of investing in 3 World countries esp Africa is not knowing what you bought or didn't buy...
Delta Resources - backed by Mukesh Ambani of Reliance Industries - purchased land in Nairobi that is 30% less than what they thought they were buying!
The NSSF bought this land during the KANU years when KANU was rewarding its loyalists by raping Kenyans (not that PNU or NARC did any better) left, right & center.
So now the NSSF might have to give back KES 400 million (29% of the sale price) to Delta Resources.
What I find curious is that Delta did not dispute the 'error' earlier since you do not buy land at $11mn/ha and trust the seller before you survey it! Or was Delta Resources toying with NSSF all along while waiting to spring on them? Of course, NSSF is also at fault by selling what they do not own aka fraud. -
What Ghana's crooks learnt from Kenya...
» Rants, Raves & Reviews Kenya is Africa's teacher in the dark arts...
mugabe the neanderthal stole the election after seeing the success that kibz had in Kenya... and mbeki the appeaser has convinced MDC to 'marry' ZANU to form a "Grand Coalition'. Hmmm... sounds just like Kenya!
Now Ghana's crooked elite are planning a mobitelea on Ghana Telecom similar to Kenya's Safaricom... yes, Kenya has a lot to teach... pity it is all in the realm of the crooked ways!
So... as I posed in my earlier blog post... if Africans lined up all the corrupt politicians and drove a stake through their hearts, after shooting them - twice, just in case - through their noggins... would this be considered an act of kindness or genocide?
(Genocide... I ask? Well, it would eliminate an entire group... not bound by ethnicity but by lack of ethics) -
Can Africa be salvaged... in my lifetime?
» Rants, Raves & Reviews Africa as a continent fails in almost all positive metrics against any other continent... even Central & South America (I deliberately N. America as part of "America") which has seen its share of troubles over the past few decades including military juntas, hyper-inflation, etc...
S. America threw off the colonial yoke, suffered economic downturns, military regimes, etc but even they have surpassed Africa... by a distance... as of 2008... Whereas some part of Africa always has a famine every 2-3 years led by the superstar Ethiopia... I have never heard of a famine in America. Well, one in the recent past anyway.
Mexico with all its myriad problems and smaller oil & gas reserves than Nigeria beats Nigeria hands down!
Asia - even with laggards like Burma/Myanmar and Mongolia - has done much better than Africa. South Africa may be a 'performer' in Africa but barely makes the cut in Asia. Since 1990, many S.E. Asian countries have done much better than S.Africa including Taiwan, S.Korea, China, India, etc...
Japan's (or China's) economy is larger than the whole of Africa (including S. Africa and Arab Africa). Then there are the oil-rich gulf states, India, Taiwan among others... Even Russia is primarily Asian by land mass.
Would it be considered genocide if we (as Africans) lined up 90% of African politicians and shot them... dead... using an extra bullet just to make sure... Then bury them six feet under... -
Nairobi City Council - Idiots or Smart?
» Rants, Raves & Reviews Nairobi's inefficient City Council which has huge problems with a bloated workforce, corruption, poor enforcement of important by-laws, poor/outdated sewage system and poor maintenance of the road network.
Oh, but dare you prune the flowers in YOUR garden... the City Council will be on your neck... or is the joke on us since it opens more avenues for corruption! -
Set a thief to catch a thief...
» Rants, Raves & Reviews Yep, the whole gang behind the scandals during kibz' 2002-2007 run are all out i.e. the charges have been dropped against them...
Whereas Raila is asking John Githongo to return and even promised to find a place for him in the government... the folks associated with anglo-fleecing are all back...
mwiraria and the rest have gone scot-free. Anglo-what?
kamani & co - the Kenya Police (hardly a bastion of cleanliness) dropped their demand for the arrest of the kamanis. aNGLO-WHAT?
pattni & somaia are out an back in business thanks to deals with KACC. saitoti was 'released' as well... and got a job back as a minister! -
East African - Errors Galore!
» Rants, Raves & Reviews So the story is about 'small' firms being able to list on the Dar Stock Exchange...
However companies that wish to enlist through the enterprise growth market will have to have been in operation for three years, and will require a capital of $200,000 million as a precondition before being listed as opposed to the $500,000 million that is required for the main market segment on the DSE. But in case a company is operating as a subsidiary in Tanzania but is listed in country of origin, then it will be required to have at least immovable assets worth $500,000 million in Tanzania.
Well... unless they are talking Zimbabwean Dollars... and that would not make sense either...
So according to the East African... a 'small' business has to have capital of $200,000 million ($200 billion)... this would mean the firm would be an immediate entry into the top 500! -
Kenyans & AGMs
» Rants, Raves & Reviews Sunny Bindra writes about AGMs becoming entertainment rather than serious affairs.
I have been to a few AGMs and most are pathetic where little business is done & hardly any serious questions are asked.
The questions revolve around food (or lack thereof), freebies, share registrars and food. Yes, Kenyans take their 'free' food seriously.
I think firms should follow the Jubilee system which gave out vouchers for discounted Life Insurance. This keeps the riff raff out. The firms that want to curry favour with the shareholders - so no tough questions are asked - include BAT & Nation.
The Nation AGM started late courtesy of a song & dance gig - Sunny doesn't mention it but that is what he is referring to. I did like the 'newspaper' giveaway which is a nominal cost to them but did they have to do the bag?
It is disgusting to watch certain shareholders - names withheld - who are worth 10s, if not 100s, of millions scrambling for food. We know who they are.
Then the question time... the same shareholders ask the same questions year in, year out. They are long-winded and take ages to get to the point. If they ever do!
Then there are the shareholders who get flustered when there are 2 AGMs at the same time. They literally run from one to the other not for the questions but the food & freebies!
I have written on the waste of time these AGMs can be.
So why do I go? While the scramble for the food is going on, I can corner the MD or FD... -
$3 million house for VP
» Rants, Raves & Reviews WTF?
When we have lots of poverty, pathetic roads & lousy services... ka-loser gets a $3 million house. I wonder how much more we will spend annually to keep him in style?
And I believe this excludes the cost of land since it was built on government owned land...
Another ka-loser aka scammer jesse jackson goes after Barack Obama... Ati "I want to cut his nuts off." -
Uchumi real estate & Grand Regency Hotel
» Rants, Raves & Reviews 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. -
Orengo vs Kimunya. Don't threaten but sue!
» Rants, Raves & Reviews 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'.
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Listening to: Matthew Good - Born Losers
via FoxyTunes -
No to subsidies!
» Rants, Raves & Reviews 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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Olympia Capital Holdings - Final Results 2007-8
» Rants, Raves & Reviews 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)
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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