urn:www-mashada-com:feeds:atom Mashada Blogs » Tags » NSE 2009-11-22T00:01:00-05:00 http://bankelele.blogspot.com/2009/11/nse-portfolio-november-2009.html 2009-11-12T00:44:00-05:00 2009-11-12T00:44:00-05:00 http://bankelele.blogspot.com/2009/10/olympia-capital-2009-agm.html 2009-10-06T02:27:00-04:00 2009-10-06T02:27:00-04:00 http://bankelele.blogspot.com/2009/08/nse-portfolio-august-2009.html 2009-08-07T06:34:00-04:00 2009-08-07T06:34:00-04:00 http://bankelele.blogspot.com/2009/06/pyramid-schemes-in-east-africa.html 2009-06-05T09:26:00-04:00 2009-06-05T09:26:00-04:00 pyramid schemes that had mushroomed and would eventually ‘burn’ thousands of investors in Kenya.

And the last year has revealed bigger pyramid scams in the form of Bernie Madoff and Alan Stanford, and just yesterday in the Kenya Parliament, some political leaders were un-masked as some of the master minds behind some of the collapsed Kenyan schemes.

Image of pyramid investors from another business daily newspaper article on pyramids

So what was the genesis of the schemes and how they ended? And more important, can they happen again?

Pyramids Rise
- Early investors reaped, and told others about their success - i.e. doubling, tripling or even greater returns in a few months span
- Some schemes were promoted by churches (who received tithes in return)
- Pyramids opened new offices and hired new staff all around the country
- New pyramids opened up cloning existing ones, but promoting a slightly different product/concept
- People took loans to invest in pyramids
- Peoples sold land/ shares / other assets to invest in pyramids
- Pyramid investors cut across all sectors from rural farmers to bank managers

Pyramids Peak
- Early investors reaped, but were greedy and ploughed back as much as they won
- Pyramids grew so big they overwhelmed their managers – some stopped accepting new depositors (but not new deposits which were essential to the chain)
- Banks complained they were losing deposits at a time when interest rates were very low
- With IPO's few and far between, stockbrokers complained they were losing investors during a bull market period

Pyramids Fall
- Banks put the squeeze on pyramid schemes, by freezing these recipient accounts with the funds in them
- Pyramids without cash, tried to switch to different banks and accounts to process their funds
- Banks warned other banks and the Central Bank issued some cautionary notices on schemes
- Some pyramids tried to convert into cooperative societies
- Some schemes bad-mouthed other pyramid schemes as unstable
- When locked out of banks, pyramids moved to safe houses in residential areas where they continued to receive/pay cash
- media coverage kicked in; some angry investors complained on TV about lost money and brought media crews to the safe houses showing other angry investors
- Deposits dried up, and investors demanded their cash.
- Pyramid schemes all collapsed largely at the same time in 2007

Sifting the rubble

Could they have been prevented?
- They were unregulated: Neither the central bank, capital markets or co-operative sector regulator had over-sight over the schemes. Parliament was focused on micro-finance and anti money-laundering regulation bills.
- KYC: Schemes relied on the banking system to move around the money; and if banks applied true know your customer (KYC) principles, they’d have smelled a rat - with hundreds of people queuing in their halls to deposit funds into a single customers account

Unanswered questions
- What happens to the millions of shillings frozen in bank accounts?
- What happened to employees of these schemes? And if rogue stockbrokers were partly brought crash down by thefts from within (internal fraud /‘robbers robbing robbers’) could this also have happened at some schemes?
- Legal grey area still exists. Have any promoters being charged in court? Can any investors sue promoters for losses? The Cooperatives Ministry Task Force is looking at how to compensate investors - but is this justifiable?
- Can schemes rise again? History teaches us that pyramid/ponzi schemes will happen again and again. Maybe using the mobile money transfers, or next time there’s an election. The Business Daily mentions they may have spread to neighbouring countries ]]> http://bankelele.blogspot.com/2009/05/nse-portfolio-may-2009.html 2009-05-07T04:10:00-04:00 2009-05-07T04:10:00-04:00 hit bottom? Time to buy?

Last quarterly check of the Nairobi share portfolio was in February 2009 and a year ago
The Stable

Diamond Trust ↓
Kenya Airways
KCB ↑
Safaricom ↓
Scangroup ↓
Stanbic (Uganda) ↓

Review:
- Best performer: KCB up 2%
- Worst performer Stanbic down 30% (combination of share drop and weaker Uganda shilling), and Safaricom down 10%
- In: Kenya Airways
- Out: none
- Increase none
- Decerease none
- Unexpected gains/losses: none

Events & Outlook:
- Performance: Portfolio is up 1% in the last three months while the NSE Index is down 3.5%
- Bought KQ, tried to buy illiquid Kenol at 30

Looking forward to
- Dividend payments expected from Diamond Trust, KCB, Scangroup, Stanbic (UG)
- Privatization commission has lined up several companies that may be availed later in 2009 ]]> http://bankelele.blogspot.com/2009/04/new-rules-for-nairobi-stockbrokers.html 2009-04-21T07:37:00-04:00 2009-04-21T07:37:00-04:00 stockbrokers to remain hidden

The Kenya Capital Markets Authority (CMA) has published new rules at its website on how they propose to regulate stockbrokers. They have also published proposed rules for Kenya real estate investment trusts – a.k.a. REIT’s as they are called.

Unlike with other plublications like the Treasury Budget process or (new rules from) the Communications Commission of Kenya, the CMA is not inviting public comments or suggestions; these are finalized new rules.

What they include

The Capital Markets (Conduct of Business) (Market Intermediaries) Regulations, 2009
- Intermediaries (i.e. stockbrokers / investment banks) will be required to engage in know your customer (KYC) practices (to prevent money laundering)
- brokers will not recommend unsuitable transactions once they know profile of their customer
- No cold calling allowed (does that happen in Kenya? Banks and insurers sometimes do that)
- Brokers must have policies for customer confidentially, handling customer complaints,
- Brokers barred from front running and account churning
- Brokers must separate client funds and stockbroker funds
- Broker employees undertake not to use information gained from clients for personal gain

contentions clauses
- Will customers really have a right to be paid interest on their funds held?
- Will brokers prepare objective client agreements that will be signed between them and clients – and which call on them to disclose third party remuneration, conflicts of interest etc?

The Capital Markets (Corporate Governance) (Market Intermediaries) Regulations, 2009
- Each stockbroker must have board of directors, who are not children (i.e. under 25 years), and one must not be related to any other director; also the CMA will have to approve any board changes
- new rules vest management of the broker in the board of directors on matters such as audit, risk assessment, key employee hiring & duties
- broker to hire a compliance officer
- broker to hire an internal auditor
- employees to disclose securities they or their close associates own

REIT rules

The Capital Markets (Real Estate Investment Trusts) Regulations, 2009
- REIT/schemes will distribute at least 90% of after tax income as dividends like in other countries
- Scheme may borrow for investments, but these will not exceed 1/5 of total assets
- REIT must have an independent Principal valuer to value the scheme assets. He/she must be changed every three years
- Trust founders may not own more than 50% , and publicly listed ones may have a minimum of 100 members

Summary: The CMA to be notified in advance of key events at stockbrokers; e.g. new key managers, likely changes in ownership, material pending lawsuits, auditor changes. Also, the new compliance rules make it more expensive for small stockbrokers to comply; this may force them to merge or seek new shareholders.

Stockbrokers will however remain hidden as their disclosure requirements remain only to the CMA even on the basic issue of sharing financial returns with the public; stockbrokers are required to prepare only annual balance sheets and profit & loss statements using IFRS; but these they will only be shared with the CMA – not published for the public. Contrastingly , the rules are lenient for stockbrokers and harsher for REIT’s who will publish its (quarterly) un-audited financial results in at least two national daily newspapers of national circulation. REIT’s are also required to employ auditors recognized by the institute of certified public accountants of Kenya (ICPAK), but that does not apply to stockbrokers whose auditor qualifications are not spelt out. why not? ]]> http://bankelele.blogspot.com/2009/03/rea-vipingo-2009-agm.html 2009-03-28T01:54:00-04:00 2009-03-28T01:54:00-04:00 Rea Vipingo Plantations Limited and one of leading producers of sisal held’s its’ 2009 annual general meeting on March 27 2009 at the Panafric Hotel Nairobi

Meeting started at 11 a.m. sharp with a short video shown about the company explaining more about its background and what it does - Created by an amalgamation of companies in 2003 that acquired more estates in Tanzania in 1995, got listed on the NSE in 1996. Since it was listed sales have grown from Kshs 537 million to Kshs 1.2 billion and production is now at 17,000 tons per annum

The meeting led by company chairman Oliver Fowler went straight into shareholder questions immediately after the video

Professional shareholder alois chami stood to ask a question (he’s at every AGM and always asks a couple of inane questions – virtually all company chairmen & secretaries know him by name) – but his mobile phone went off and he had to sit and answer it about a half dozen phones go off at every meeting, and some shareholders magnify this discourtesy by answering the calls

how the company’s’ performance was in 2009? Chairman said it was quit good, maintained their markets, still getting good buys from China, while the weak shilling/strong $ has also helped them

impact of the global economic crisis? performance still good as company has good cash position, scaled back capital expenditure and made some cutbacks. Still they can’t predict how the sisal industry will perform and are also nervous

competition from petrol twine versus their sisal twine (the price of oil is 1/3 of what it was a year ago). Chairman said their primary competition, was not from synthetic twine, but from other sisal produces – as they were all competing for a diminishing pool of customers

if company doing well, why reduce dividend? (from Kshs 0.8 per share in 2007 to 0.2 in 2008) Chairman said at the time of the decision, they actually intended to pay no dividend since the outlook was so grim (and wanted to conserve cash), but since they got some contracts, decided to make a modest payment

does low share cap hinder borrowing?no it does not, their borrowing is quite low considering the value of the company’s assets and which bankers look at more. Their facilities are up fro renewal next month, but don’t expect any hitches

how much are contingent liabilities? (no figure was indicated) chairman said they would be mostly for industrial claims covered by workmen compensation and there were no material claims of substance

no logo/signature by directors & auditors in the published accounts Chairman assured shareholders that they had been signed and the auditors had signed and the accounts could be verified a their office or the company registry (Chami got his act together and asked this, he was later brushed aside by another shareholder when he kept hammering this trivial point)

subsidiaries part of profit came from fair value gain (a book profit, not actual profit) as well as from revaluation of biological assets

does having a golf course add value to the company? Chairman took a moment do correct a misunderstanding that is occasionally repeated in media and the company Rea Vipingo is not the developing real estate or golf courses in Vipingo, Kwale (Coast Province) it is being done by another company adjacent to the sisal estate (and while they were all part of the original sisal estate – the land that was not suited for sisal production (sandy beach) is being used by the other company)

what does company do for CSR? Company engages in corporate social responsibility – staff are housed at sisal estates in Kenya and Tanzania and receive medical care while children are schooled in nursery and primary school on estate, with some getting scholarships to high school . they have in the past been involved in famine relief and distribution in Makueni district, but in 2009 the government has not requested their assistance

dry season affect sisal? sisal is drought resistant, but prolonged dry season can affect production

bank borrowing chairman was asked, but explained they had take some foreign loans, and one from a supplier (Wigglesworth) since they were a lower rates than bank loans

director elections after 12 years of service director Musa Sang retired from the company board during the year and he was replaced by Brown Ondego (chairman of rift valley railways, and former MD of Kenya ports authority). shareholders confirmed his election, but also (again) asked to consider getting (i) female directors and (ii) younger directors (these will being new skill like ICT to c company which did not have a website till a few years ago)

hot button moment director allowances in asking the shareholders to approve non-executive directors remuneration for 2009, the chairman mention that they will rise by 10% - from Kshs 30,000 per month to Kshs 33,000 per month (~$400). Some shareholder briefly protested that their dividend was being cut while directors get paid more, and that the directors’ increase should also wait till the economy and company’s performance improved. The board poorly defended this matter, but it was passed without much interruption

special business shareholders approved the board decision to purchase an additional 330 hectares for sisal production from vipingo estates limited (VEL)

goodies one shareholder stood and complained that the company had NEVER given shareholders a token item of appreciation, unlike other companies, and the chairman said they would once, performance improves. Tea and snacks were served outside by the pool, but it was a mad scramble that left many unhappy as the bitings were finished by the early grabber

networking had a nice chat with Coldtusker and Ryan Shen Hoover while this was going on ]]> http://bankelele.blogspot.com/2009/03/equity-bank-2009-agm.html 2009-03-27T00:33:00-04:00 2009-03-27T00:33:00-04:00 Equity Bank 2009 AGM (it’s 5th) was held at the Kenyatta International Conference Centre on Thursday March 26. This capped another year of spectacular performance by the bank during an otherwise difficult 2008 US$1 = Kshs 80



Start on time? Last Equity forum was 45 min late: this one was scheduled to start at 10 a.m. and was late by about the same delay. Last time we were entertained by an entire Boney M album, this time it was a series of advertisements for the bank, with a patriotic them recalling images of tourist splendor (majestic Mara), agricultural potential and athletic achievements (Kipchoge Keino, safari rally, safari sevens rugby) all ending with the line we are proud to be Kenyan

The main speakers of the day were Peter Munga (Chairman – Chair), James Mwangi CEO and Mary Wamae (Company Secretary)

The Chairman took up a long time by reading his entire written speech – almost 20 minutes. He handed over to the CEO who also ran down a series of financial highlights for the year including;

- Market capitalization rose in 2008 from 54 billion to 66 billion (only NSE company whose shares appreciated in 2008 - by 3%)
- Earning per share up from 6.9 to 10.6 - and dividend per share also up 50% from 2 to 3
- Cost to income ratio unchanged at 60%, and down from almost 80 four years ago
- Helios investment (sale of 25% for 11 billion) was the smartest thing the board did – gave the bank the capital & muscle to grow. With their 19 billion capital and subordinated debt of 6 billion gave the bank 27 billion of capital (most cap bank)
- Opened 35% branches, installed 150 ATM’s

Speech also took about 20 min as he added:
- All the awards the bank won in 2008 (Euro money, Africa Investor) which were on display for good measure
- The bank is a case study at Columbia, Harvard, Stanford, IESE and Lagos

The company’s secretary also read out the report of the directors never seen that happen

Fun stuff at AGM's is always the Q&A with shareholders:

Bad blood in banking sector one shareholder commended the bank for the fight-back in his area (Machakos) where a rumors led to a run at the branch, and a team (with cash) visited to reassure residents that the bank was strong. The bad blood was attributed to competitors who are jealous of Equity’s bank success - CEO mentioned a proverb of a tress that grows taller than the forest canopy and then gets buffeted by winds from all directions. He said they can withstands such challenges because of (i) capital of almost 27 billion (ii) liquidity of almost 66% and (iii) good asset quality

Why borrow foreign funds? one shareholder asked why the bank borrowed. The lines provide long-term funds for long term lending 3-5 years). E.g. a German loan was to support investment in irrigation schemes, of which there are now 3. CEO assured the shareholders that the loans from (Dutch, French, and German institutions) were all denominated and would be repaid in Kenya shillings, cushioning the bank from exchange losses

Most generous company in Kenya one shareholder asked why the company did not publicly participate in corporate social responsibility (CSR) programs? CEO said that Equity, unlike other companies, which gave a little money with a lot of publicity, was actually the biggest corporate spender in Kenya – bigger even than the Telco’s (Safaricom?, Zain?) and gave some examples
– when they opened 4 branches in Nyanza in 2008, they donated 20,000 beehives to women’s group’s as well as 10,000 avocado seedlings –avocado’s and honey were the most promising products of the region (i.e. beehive can generate 36,000 to 48,000 annually) .
– in Eastern province, they donated sorghum seeds to the residents of Ukambani – and will partner with east African breweries (EABL) to ensure that harvest from the residents will be bough by the beer giant.
– In the education sector they sponsored 186 top performing high school student by paying their university fees at a cost of 112 million shillings
– Fanikisha loans (to women groups) has become their flagship product with over 187,000 loans, and in agriculture disbursed 70,000 new loans in 2008
This kind of CSR that Equity engages in, is not publicity, but it is actually sustainable and transform lives by giving individuals the power to generate incomes

Regional diversification Uganda was a takeover, Sudan is a green field and they will watch the growth to see which strategy is better for expansion to other African countries.
- Uganda starts operations at end of March with 30 branches (the biggest branch network in Uganda), and open another 20 this year – he said they had already increased profit by 100 in the second half of 2008 since they took over, even while doing a re-brand operation. CEO said Uganda had better growth prospects than Kenya which had a lot of negative politics
- Sudan starts in April
slip of the tongue? CEO at one point said … “...when we open in South Africa” while also mentioning looking at Rwanda and Tanzania as being next

Buy other Banks? one shareholder asked that they buy up more shares in housing finance, while another suggested they also buy up National Bank of Kenya in which the government is offloading more shares. CEO said they would do their due diligence on NBK and if they were announced as being in the running, shareholders would know soon, but if not, then there was something they did not like after their analysis of NBK (as far back as 2005, Equity have been interested in NBK). CEO mentioned that RBS of Scotland took over a bank before the economic crisis, and choked on that toxic investment that has reduced its value to a mere fraction (from $119 billion to $3 billion)

Enough bad loan provisions? these increased from 600 million to 1 billion, but was that enough one shareholder asked, considering that some of these were for Safaricom shares? CEO said they lent individual 80% for Safaricom shares with investor paying 20%, then the over-subscribed IPO allocated just 21% (which the investor paid or), and so the 1% loan was repaid in the first week

Poor bank netwoek systems one shareholder complained about the downtime of the bank’s IT systems – at branches or at ATM’s which perhaps led to people saying the bank was shaky. CEO said they have been upgrading the platform over the last few weeks and it has caused some hiccups but they would be over. Equity is now branchless, you can bank in Kenya, Uganda, and Sudan seamlessly. Also look for new branches as queues and crowds will no longer be an issue

Kenya immune from global crisis? CEO said in year 2000, Kenya economy shrunk by 2% while equity grew by 100%
- stock market dipped in 2008 as foreign investors (who constitute 70% of trading) left the NSE, but they are now coming back
- said Kenyans were being scared. there are no toxic loans in the sector. If Kenyan economy get by 2.8 in 2008 and is expected to grow by 3.6% in 2009 , and even though tourist number and export will be affected, overall we should not unnecessarily panic about... except in the capital markets

Argument against being a stock-broker one shareholder asked why they did not buy a stockbroker like NIC (bought Solid stockbrokers) and yesterday Coop bank (bought into Bob Matthews stockbroker)? CEO said that not going to happen as stockbrokers have such bad reputations and toxic assets. Equity already has a custodial license, they already employ 8 stockbrokers, and get 70% of the transactional income – so why the need to become a broker? They get the profit now, without the hassle
- said as custodian, they are the largest custodial account holder with over 50% of all CDS accounts in Kenya
- he exhorted all shareholders to transfer their shares from their stockbrokers to Equity Bank.

Shareholder votes
- first and final dividend for the year of Kshs. 3 per ordinary share of Kshs. 5
- Election of directors: Ernest nzovu was re-elected while Dr Ezekiel Alembi (of Kenyatta University) and Professor Shem migot- Adholla (former GoK dream team PS) were elected as new directors. The Chairman mentioned that Peter njeru Gachuba (Africap) and Linus Gitahi (CEO Nation media Group) had retired to make way for the new directors.

Share split
can’t be selfish when doing well
- Special Business was the share split that every ordinary share be sub-divided into ten shares
- CEO explained that shares had become too expensive at the Nairobi Stock Exchange, which made it difficult for shareholders to judge their true values. E.g. to buy minimum 100 shares of equity costs 12,700 while to buy KCB costs 1,700 and co-op just 610 shillings
- company has 10,000 shareholders and 3.5 million customers. The share split will enable more customers to become shareholders
CEO gave history of bonuses and splits
i Year 2000: share split- 1 share sub-divided into 4
ii 2004 bonus - 5 bonus shares for each one held
iii 2007 bonus - 3 bonus shares for one held
iv 2009 split - 1 share split into 10
- so if you had one share in 2000 worth 20 shillings, that share was now worth 7,500
- the register closed yesterday (march 25) and the new shares start trading on May 25
- CEO exhorted shareholders to hold on to their shares, as they could be expected to go from the current 13 (130) to 34 (340 was the previous high before the bear market)


Odd moments
- Managers and board were asked stand and bow to the shareholders
- CEO was at one time referred to as chief servant
- CEO seemed to delight in the woes of citi bank and the US banking sector
- Meeting started and closed with a positive prayer by Canon (priest) who obviously must be a shareholder too.

Goodies
Buffet snacks served outside by safari park catering staff tea/soda – with samosas, cake, fish fingers, croissants,

Summary
Nice AGM. Equity is now media savvy and the event was well attended and covered articulately by the press ]]> http://bankelele.blogspot.com/2009/03/difficulties-changing-nairobi.html 2009-03-21T08:40:00-04:00 2009-03-21T08:40:00-04:00 tales continue to abound.

The reality is that, sooner or later, you may need to change your broker and while I've had this post for over three years about how simples the process of transferring shares from one broker to another should be, the reality is very different!

Kenyan shareholders have had the option not having share certificates for a few years now. With a central depository system (CDS), you surrender your share certificates e.g 1,000 Kenya airways (KQ), and in exchange get an electronic account/statement which is updated each time you buy or sell, shares. You also get all your dividends and annual reports by mail.

Still to buy and sell shares you have to go through a stockbroker, who ideally should have the same tally as your CDS statement. Recently problems have been had with rogue brokers, who would sell share without informing clients – and clients would only find out when they got a CDS statement showing less shares than what the broker said they had. Later the frauds went even further when brokers would ensure that even CDS statements didn’t get up-to-date records of share sales.

I had to change broker for a company account this week and the reality was much more than. I had a team of people, the transfer was between two viable brokers and we were able to get all the (numerous) documents that were asked for. Yet it still involved almost a dozen trips to the office and took almost two weeks.

The steps taken included
(i)Open an new CDS account with new broker
(ii)Close old CDS account with old broker
(iii)Move shares from old to new CDS account

Documents that were asked for included
- 3 copies of Certificate of incorporation with – one stamped by old broker, one stamped by new broker, one for the CMA (all stamped by company seal)
- Memorandum & articles of association requested by new broker (was not required at old broker so copies had to be traced and photocopied)
- 3 copies of director ID or passports – stamped by old broker, stamped by new broker, one for to the CMA (all stamped by company seal)
-2 copies of form of shares being transferred one called CDS 4A and one called CDS 4B, signed by directors and stamped with company seal. One form must be stamped by old broker, one stamped by new broker
- 200 shillings ($2.50) transfer fee

Now imagine what it is like trying to reconcile accounts, reclaim investments or move from a collapsed stockbroker? Or a fraudulent one? Or one who doesn’t have motivated (paid) staff, or proper records?

Also until last year, IPO’ were considered sure winners – and people would open several accounts e.g. in the name of their mother, grandmother, cousin, maid, driver etc, all in a bid to get more shares after the fractional allocation that characterized Kengen and Safaricom IPO's, but before the price rocketed up on day one. Many CDS accounts were opened, many by new temporarily hired staff in a bid to get as many applicants in as possible during the limited (IPO’s usually 2 -3 weeks) and some rules were readily relaxed. I explained these to the new broker, but they said CMA can come and audit their files and they have to comply CMA have their hands full with collapsing or non-compliant stocbrokers!

So, finally, the new account is now open, after a very tiring two weeks, during which I confessed that it was maybe better to sell all the shares held at old stockbroker and open a new account at new stockbroker than to attempt to transfer the shares. ]]> http://bankelele.blogspot.com/2009/02/kenya-infrastructure-bond.html 2009-02-16T10:11:00-05:00 2009-02-16T10:11:00-05:00 infrastrucre bond closes on Wednesday and looks to be a successful fully subscribed offer that will raise Kshs. 18.5 billion (~$231 million).

It will have proved irresistible to funds and institutional investors who have been looking for investment outlets as the Nairobi Stock Exchange slump persists, and the sure 12.5% annual return from the Government of Kenya over the next 12 years is a sure bet. The 12.5% interest payments will be paid semi annually with principal repaid in 2015, 2017 and 2021. Bonds from Mabati and Barclays were fully subscribed in 2008

Through the minimum investment is just Kshs. 100,000 (~$1,250) it looks like there’s little interest from retail investors, with many smarting from the free falling NSE and more concerned with protecting their existing investments (read these great tips) from rogue stockbrokers to sign up for bond which, the fire-fighting Capital Markets Authority (CMA) has not gotten round to providing much investor education. The short window (about 3 weeks from Jan 28 to Feb. 18) may also not have favored retail investors.

The success of the bond which is earmarked for road, geothermal and water projects comes despite some reservations (little infrastructure spending identified, limited oversight, may affect Kenya’s credit rating). The bond was first set out in the 2008 budget by the Minister of Finance.

Read more bond perspectives from the Kenya Capital Investment Group blog

Opportunities

Start your own collection agency from Collection Africa

- Join embattled Suntra investment bank as a manager - investment banking & fund management or manager - stock broking ]]> http://bankelele.blogspot.com/2009/02/equity-leads-kenyan-economy.html 2009-02-13T01:10:00-05:00 2009-02-13T01:10:00-05:00 Equity Bank with the usual staggering financial results (PDF) for 2008 with 101% growth in profits and 103% in loans.

But a closer look at the numbers show some more subdued stats that may indicate an economic slowdown, and which may be confirmed when other banks (especially Barclays and KCB) release their year-end results in the next two months.

- Equity’s growth in assets is 45% from a year ago, but 6% in Q3 and 3% in Q4
- Equity’s deposits are 55% up from a year ago, but this breaks down to 23% in Q2, 10% in Q3 and 6% in Q4
- Equity’s’ loans are up 87%, but the 41% increase in Q2, was followed by 17% in Q3 and 2% in Q4
- Expansion costs - income up 98% from a year ago, but expenses have kept track – up 97% from a year ago (in 2007, the spread was 73% and 52% in 06/07)
- Factor in Safaricom IPO lending (interest and fees) estimated at– and Q2 income was 3x higher than in any of the other two quarters
- Cross-checking against the 2007 election and disruption in economic activity, in 4Q of 2007, Equity had growth of 18% in deposits and 33% in loans with 54% in profits in same quarter, with in 1Q of 2008, had 8% deposit and 11% in loans, rates which outpace 4Q of 2008

Shareholders will be happy with the Kshs. 3/= dividend, but the 1 for 10 share split, will add a huge float of shares to an overflowing NSE pool.

Bank opportunities
most from the daily papers this week
- African Development Bank is currently accepting applications for its Young Professionals Program . Apply online by 20/2
- Barclays seeking debt recovery agents – auctioneers, re-possessors, valuers and investigators. D/L is 28/2
- Commercial Bank of Africa: senior manager finance. Apply through KPMG by 25/2
- Family Bank Bancassurance Manager. D/L for online applicatiosn is 6/3
- IFC Investment officer (private equity & investment funds division) Africa, based in Nairobi. D/L is 27/2 ]]> http://bankelele.blogspot.com/2009/02/share-portfolio-february-2009.html 2009-02-10T03:07:00-05:00 2009-02-10T03:07:00-05:00
Quarterly portfolio review after last snapshot in November 2008



The Stable
Diamond Trust ↓
KCB ↓
Safaricom ↓
Scangroup ↓
Stanbic (Uganda) ↓

Changes
- Best performer: Diamond Trust -8%
- Worst performer Stanbic – 33%, Safaricom -23%
- In: none
- Out: none, but sold a little KCB in January

Events & Outlook
- Performance: Portfolio is down 20% in the last three months while the NSE Index is down 25%
- Did not buy KQ and Kengen as expected, but that should happen in the next few weeks as prices continue to drop
- Sat out the Co-OP IPO and made just one trade in three months (sold some KCB in January). Are brokers generating enough income to stay afloat? I hope they don’t try and introduce new charges levied on dormant investor accounts
- Money markets: Got started in money markets by signing up with a CBA Unit Trust
- Bond markets: The Government of Kenya has lowered the minimum investment for GoK treasury bonds to just Kshs. 50,000 (~600)
- Investor awareness: The CDSC started sending out monthly statements by e-mail to investors, cutting out the postal service, and alerting investors each time shares are bought/sold using their account. ]]> http://bankelele.blogspot.com/2009/02/profit-warning-friday.html 2009-02-05T23:10:00-05:00 2009-02-05T23:10:00-05:00

KQ Profit warning for Who?
Kenya Airways issued a profit warning a few days after media reports had painted a rather rosy picture of operations at the airline with increased capacity and utilization. (That’s what happens when you release operating results without any shillings or dollar attached.

The fuel price , PEV, and reduced tourism has been well known within the investment community and this did not appear to impact the price until the actual ad and media corrections were carried in the newspaper , perhaps spooking retail investors and the stock is down 22% this week. The operational figures already show that the airline is in turnaround mode and is being hammered when it has already hit the bottom. I need to attend more investor briefings. Nether announcement appeared at the Nairobi Stock Exchange (NSE) website where company quarterly announcements usually run

Profit warning at the NSE
On Thursday, the Capital Markets Authority (regulator) release a brief (copy here ) addressing issues perhaps that should have been said by the NSE. It noted that bear markets do happen (NSE declined 50% between 2000 and 2002), stockbrokers are in trouble (reduced activity, means low turnover and low commission), are restructuring (layoffs and branch closure s), and exposed (risks could arise from fraud. Nevertheless, shares are safe and better left to long-term investors!

We are not rogue this came a day after directors of Suntra Investment Bank, made a similarly candid admission of trouble ”business is so low at the moment that we are actually eating into our own funds” - one of the few times a financial institution has admitted being in difficulty, as they tried to contain damager (a single court case), but which left spooked customers flocking to transfer their shares

Executive on profit
Michael Joseph the CEO of Safaricom, Kenya’s most profitable company, launched an unusual rant against the government and business climate saying the first three things an investor needs in Kenya are (1) a generator (ii) a 4WD car (iii) a security firm – before they can even think about making any investment in Kenya. he said they spend 1.5 million euros on diesel and called the new universal service fund tax stupid as mobile sector is already over-taxed
- Man who sees no losses on the horizon is the CBK governor, an eternal optimist after launching an infrastructure bond. Kenya plans to raise Kshs. 18.5 billion (~$245 million for roads, electricity generation & distribution) from investors who will pay a minimum investment of Kshs. 100,000 or ~$1,250). 12.5% interest will be paid semi-annually with principal repaid 2015, 2017, 2021. He had earlier commented that global meltdown should not have much impact because Kenya is primarily a rural agro-based economy

What else happening?
- Kenyan knows Madoff: listed among the hundreds of fabulous fraudster Bernie Madoff’s clients is Sangare Ranch of P O Box 24 Mweiga Kenya Africa
- Barclays Uganda counters rumors of a collapse/closure
- Global credit rating of South Africa, previous rate triton high credit ratings of Kenyan companies with collapsed oil firm Triton downgraded to DD, Sasini’s ratings maintained at BBB+ (triple B plus) and A2 (single A two) for the long and short term respectively, and Eveready East Africa Limited downgraded to BBB+ (triple B plus) and A2 (single A two) for the long and short term respectively. Moody have downgraded Toyota today, so who’s safe?
- Fuel shortage was experienced in Nairobi – back and forth between Kenya pipeline company, ministry of energy, oil companies who all absolved themselves for any responsibility; Read more at Coldtusker
- Who’s the Total Man at the NSE?
- Mumias profit down 73% to 231 million at the half year half year on sales of 6.2 billion (down 8%) ]]> http://bankelele.blogspot.com/2009/02/insuring-masses.html 2009-02-05T03:45:00-05:00 2009-02-05T03:45:00-05:00 Equity Bank is making some quiet strategic moves for the long term, that may shake up the insurance sector in Kenya.

They have started selling insurance cover to their customers through their wholly owned subsidiary Equity Insurance Agency. Like with the health care package they started selling last year, it is quietly marketed to customers within the banking halls only – no public adverts so far and little mention elsewhere. Customers can sign up for motor vehicle insurance, domestic over, personal accident & travel, medical, and fire & burglary for businesses.

Equity continues a trend of rolling out products that are useful but have low penetration in Kenya like medical insurance and mortgages (they own a ¼ of Housing Finance)

Also they were earlier reported to have acquired an investment banking license from Juanco Investments - a little known company who's also one of their shareholder. ]]> http://bankelele.blogspot.com/2008/12/broke-brokers.html 2008-12-04T06:15:00-05:00 2008-12-04T06:15:00-05:00
Buying and selling of shares in a commission generating business. Like at supermarkets, banking halls, movie theatres, pubs, hotels - foot traffic means customers which translates to income and then hopefully a profit.

But some stockbrokers’ offices have gone back to being relatively quiet and in many cases empty for the most part of the day. Offices opened in the hey day of the Safaricom IPO are now empty desks.

Disocunt expanded furthest and fell first. For the others; are they generating enough income? Will they be able to pay the rent? Staff? Or are their customers trading online? Trading volumes at the NSE are down (as will commission income for all) – and not all of them are investment banks able to generate income from other avenues. Even as they wait for another IPO for a boost, will it make a difference? Co-Op Bank, whose IPO ended last month, handled a significant chink of their applications in house, and did not generate much traffic elsewhere ]]> http://bankelele.blogspot.com/2008/11/share-portfolio-november-2008.html 2008-11-10T00:10:00-05:00 2008-11-10T00:10:00-05:00 August 2008

The Stable
Diamond Trust ↓
KCB ↓
Safaricom ↓
Scangroup ↓
Stanbic (Uganda) ↓

Review
Best performer: Scangroup -8%
Worst performer Stanbic – 36%, Safaricom -28%
In: none
Out: none
Changes: None - Market down this last three months, no trades made (and no commission generated for stocbroker).
Performance: Down 12% in the last three months while the NSE Index is down 16%
Looking forward to: Possibly picking up some Kenya Airways, Kengen, and Safaricom if their shares continue to get cheaper, but sitting out the Co-Op IPO. ]]> http://bankelele.blogspot.com/2008/10/discountstockbrokerscom.html 2008-10-23T07:01:00-04:00 2008-10-23T07:01:00-04:00 http://bankelele.blogspot.com/2008/10/ignore-financial-news.html 2008-10-16T01:56:00-04:00 2008-10-16T01:56:00-04:00 http://bankelele.blogspot.com/2008/10/scangroup-sellout-part-ii.html 2008-10-03T11:50:00-04:00 2008-10-03T11:50:00-04:00 http://bankelele.blogspot.com/2008/09/missing-kenya-airways-party.html 2008-09-26T08:40:00-04:00 2008-09-26T08:40:00-04:00 http://bankelele.blogspot.com/2008/09/crown-restored.html 2008-09-08T05:25:00-04:00 2008-09-08T05:25:00-04:00 http://bankelele.blogspot.com/2008/09/stolen-crown.html 2008-09-04T07:37:00-04:00 2008-09-04T07:37:00-04:00 http://bankelele.blogspot.com/2008/08/olympia-turnaround.html 2008-08-18T03:01:00-04:00 2008-08-18T03:01:00-04:00 http://bankelele.blogspot.com/2008/08/share-portfolio-august-2008.html 2008-08-08T10:52:00-04:00 2008-08-08T10:52:00-04:00
Drowning in Safaricom juice

8-8-08 is supposed to be a good luck date or something. 2008 has been a rough year for most companies since January. The Safaricom IPO was supposed to be the savior for investors, but has instead become an albatross on the Nairobi Stock Exchange

Heres’ my portfolio that has changed May 2008

The stable
Diamond Trust ↓
KCB ↓
Scangroup ↓
Stanbic (UG)↔
Safaricom ↓

What’s changed?
In: Safaricom
Out: Express, Sameer, Total
Increase: KCB, Safaricom
Decrease: --
Dividends Paid: KCB, Stanbic, Diamond Trust, Total, Scangroup
Unexpected gains (none) /loses everything else
Outlook: Shifted focus to banking and communications, and got out of manufacturing related stocks as the political and oil shocks continue to be felt through the economy. No foreseeable changes till next quarter, but will look at Kenya Airways if it dips lower. ]]> http://bankelele.blogspot.com/2008/08/old-mutual-toboa.html 2008-08-01T00:10:00-04:00 2008-08-01T00:10:00-04:00 Old Mutual Loosens Up Part II (Corrected, thanks Joyce)

A few years ago Old Mutual unit trusts in Kenya had a minimum entry amount of Kshs. 500,000 ($7,462). Last September, they dropped this to Kshs. 200,000 and now they have gone even lower.

Old Mutual Kenya has launched the Toboa Investment Plan which costs just Kshs. 7,500 ($112) per month to start other funds in the family are money market and balanced fund. Speakers at the launch included Deputy Prime Minister Musalia Mudavadi, NSE CEO Chris Mwebesa, CMA CEO Stella Kilonzo, the new boss of Old Mutual Kenya, and Laura Chakava head of Old Mutual Assets in Kenya – who all spoke of the need for affordable collective investment schemes in the country

- Mudavadi said that while local government act mandated that the town councils should have savings and capital funds to cater for unexpected expenses, these are largely ignored – with only 40 of the 175 councils able to comfortably pay their salaries. Also high savings are a part of Vision 2030, but Kenyan savings rates which were already below the average of other African countries, were dropping
- Mwebesa lamented the 1.5 to 1.8 million CDS account holders in the country; the number is un-serviceable (mailing budget for statements of the CDSC costs almost $1m per year – and this compared unfavorably to account holder level in South Africa (100,000) and Brazil (500,000). He said more people should access the market through collective investment schemes such as unit trusts but whose entry levels had been high (elitist) until now
- Kilonzo and Mwebesa both alluded to a recent survey on investors (June 2008) that showed the level of investor education in teh country was not good. Most people relied on the media for share investment information, and were ignorant of the risks of investing in shares.
- Chakava said Kenyans have appetite for investment as shown in the IPO queues and pyramid schemes. OM now gives them an affordable, professionally managed vehicle for investment beyond the unpredictable buy low, sell high mantra that most investors try and follow.

Toboa will invest in fixed income, equities and off shore. OM, which pioneered unit trusts in Kenya, manages about Kshs. 10 billion, but CIS only control about 2% of the NSE. Other OM trusts have an initial fee of about 3 – 7% and annual fee of 2%, the Toboa will probably be slightly higher than this and will use Posta (post office) outlets to collect payments.

Edit: Interesting discussion on Old Mutual investment plans from the Stockskenya forum ]]> http://bankelele.blogspot.com/2008/07/stockbroker-mirrors-society.html 2008-07-14T05:02:00-04:00 2008-07-14T05:02:00-04:00
First thing I did when I got there, was to talk to the askari (guard) Why – rule of queues - there was a queue outside the office, which many people join blindly, and waste an hour. The queue was for Safaricom refunds – and if you’re doing KCB or other transactions, you get admission upstairs.

At the entrance, there’s a ticker paper machine - and you get a number which will be called upstairs for you to get served. So at 9:10, I got number 436 and proceeded upstairs to sit with about fifty other shareholders all waiting for service.

There were five desks where customers were being served, and as each broker representative finished with a customer he/she pings a message, which called up the next sequential on an electronic notice board e.g. 437 go to counter 6, then 438 to counter 3.

It’s a first come first served system, easy to understand to anyone trading shares, is fair, and works. The alternative would be for us to form a long queue, perhaps all the way outside the building, but this one allows investors to sit and wait for their turn. Over the next hour, this went on well. The queues are slow, but what else can be done?

I was sitting there, reading the newspapers, when I notice one of the counters. The officer there did not ping for the next customer. He served whoever slid into the chair in front of him. He served an old man, with an assistant (probably grand daughter), then an old woman who just walked in. Then the person who was in the seat next to mine, went and got served, followed by the person who took the seat next to me.

The brokers were totally ignoring the numbering system that had kept us in an orderly state for the last hour. By 10:20 when I get served, and was able to apply for my share rights (taking two minutes), he had, by my count served seven people who did not present numbers.

I wanted to lean over and ask him why she is violating the system he is paid to serve, but didn’t and I left as soon as I was done. There are so many questions I should have asked him;
- Am I at fault for focusing on him, when 4 other counters worked well for the stockbroker serving dozens of investors?
- Am I at fault for not asking him why he did not follow procedures? Like many other Nairobians, simply bury my head in the sand and ignore the wrongs around me
- Am I a fool for not taking advantage of the opportunity, and ignoring my number (hierarchy/position in the society)?
- Is his boss at fault or his colleagues for not noticing this? I saw some of them shoo away customers, asking them to wait their turn
- Are the customers at fault for taking advantage? What he was doing is obvious to many observers in the room, and some customers change sits to be near his desk, ready to leap into the visitors chair as soon as it is vacant. Enjoy the ride is the mantra of our matatu culture. In our culture of poor customer service, employees are taught to assist all customers, and that only those customers who are brash or loud get served, while the meek and quiet will spend the whole day there. But this institution has set up an (expensive) system for orderly customer service, to serve them better (unlike others), but which was all being undermined by one of the staff
- Or is this all a misunderstanding - and was his ping machine/signal broken or defective - [like so many facilities in our society - traffic light, road signs - leading to an inability to communicate the rules?]

As I walk out and read notices on the walls, the queue is now longer than before with more patient investors even standing on the staircase. ]]> http://bankelele.blogspot.com/2008/06/uh-oh.html 2008-06-30T04:57:00-04:00 2008-06-30T04:57:00-04:00 Here we go again The Indian Ocean Newsletter reports

Just a few months after the collapse of the Nyaga Stock Broker , a large company heavily indebted to its clients, another stockbroker on the Nairobi Stock Exchange (NSE) is in turn facing financial problems

Did the unintended collaboration of Coldtusker / Business Daily unearth the firm? This comes after several recent articles in the Business Daily on the renewal of broker licenses by the Capital Markets Authority.

Plastic cheaper: KCB lowering their credit cards fees. Annual fees for the KCB card will now be was 3,000 (~$47) from 4,000, while their Visa Gold will now be 4,000 (~63) from 6,000. Card penetration remain lows, I believe Barclays are the biggest company with 81,024 cards in 2007 (double 41,019 in 2006)

Entry-level opportunities (and expiry dates)
most from the daily papers last week
- Graduate trainees at the East African Portland Cement company (15/7)
- Management trainees at Unilever Kenya (7/7)
- Management trainees at Telkom Kenya (7/7)
- Young processionals program at the World Bank (15/7)

Safariom Day 16: Deals 3,939 Turnover 270.8 million shillings [$4.23 million] Avgerage 7.44 Closing 7.40 [+ 2.07%] High 7.55 Low 7.30 Last 7.45 Volume 36.4 million shares. Commentary: A constructive session. Bouts of indigestion are to be expected but those who had to flip [over leverage] have done so by now, given the volumes we have witnessed since the IPO. [Commentary and data provided by Rich.co.ke - Nairobi Stock Exchange Authorized Data Vendor] ]]> http://bankelele.blogspot.com/2008/05/diamond-trust-2008-agm.html 2008-05-30T07:15:00-04:00 2008-05-30T07:15:00-04:00 http://bankelele.blogspot.com/2008/05/share-portfolio-may-2008.html 2008-05-21T01:43:00-04:00 2008-05-21T01:43:00-04:00 http://bankelele.blogspot.com/2008/05/wanted-nse-ii.html 2008-05-20T04:19:00-04:00 2008-05-20T04:19:00-04:00 http://bankelele.blogspot.com/2008/05/wanted.html 2008-05-13T05:38:00-04:00 2008-05-13T05:38:00-04:00 http://bankelele.blogspot.com/2008/05/cma-gets-teeth.html 2008-05-02T09:21:00-04:00 2008-05-02T09:21:00-04:00 http://bankelele.blogspot.com/2008/05/new-media-stocks-at-nse.html 2008-05-02T01:37:00-04:00 2008-05-02T01:37:00-04:00 http://bankelele.blogspot.com/2008/04/cma-2008-licensees.html 2008-04-25T10:35:00-04:00 2008-04-25T10:35:00-04:00 http://bankelele.blogspot.com/2008/04/ipo-train-full-on-board.html 2008-04-01T02:47:00-04:00 2008-04-01T02:47:00-04:00 http://bankelele.blogspot.com/2008/03/rogue-brokers.html 2008-03-12T07:40:00-04:00 2008-03-12T07:40:00-04:00 article in the wake of the collapse of Nyaga Stockbrokers last week – fingers four more brokers that the (now awake) regulator has issues with. An article of this magnitude about a bank could cause a run on deposits or worse.

But the firms - Solid Securities, Reliable, Crossfield and Discount Securities appear not to have been affected, and a causal visit to their offices shows they are are devoid of crowds of panicked investors as seen on TV last week. These are not ‘rogue’ brokers robbing their clients, just some brokers who have other regulatory issues to sort out. ]]> http://bankelele.blogspot.com/2008/03/failure-to-learn.html 2008-03-07T08:01:00-05:00 2008-03-07T08:01:00-05:00 much larger operation than the former.

In the collapse of the second stockbroker, there is a failure to learn from the mistakes of the former, and also myopia in regulation and awareness.

The CMA and NSE continue to treat Nyaga and FT stockbrokers like a rogue computer that has gone amok and chewed up stockbrokers funds. It was not - it had directors, managers, and employees. Who are these people? We have not heard any names or their stories, explanations, their questioning/arrest/convictions/disbarment's/fines etc.

It’s a trend we have here: looking at all the recent financial scandals we have had Charterhouse, Invesco, Francis Thuo, Euro Bank, and even the Electoral Commission of Kenya (bad math in 2007) - an organization is condemned (after it collapses), a beautiful report is written (and filed away), while the principals/employees walk away scot free.

From the big scandals of the past, over 40 bank collapses in the 1990’s, including giants Trade and Trust Bank’s not many lessons have been learnt. We have a culture that does not allow us to learn from the past, and dooms us to repeat those mistakes in future. It was only with Goldenberg (and to a lesser extent Anglo Leasing) where after the principals and officers were called forward to explain their odd (& previously secret) actions that some level of truth came out. That should be a model for dealing with other and future scandals; public hearings, not behind boardroom doors, and public reports, which will make it easier for anti-corruption prosecutors.

It is a dark secret in banking that very few employees are ever convicted of financial crimes and scams at their place of employment. What happens to these bank and stockbrokers employees, and where are they now? I don’t want them to move to CFC, but chances are they will get jobs with other brokers and bankers. They will lie low, but it's only a matter of time before the easy money trap sets in again; if they have amassed enough, they may even dabble in politics, or go for MBA’s...

There, I hope they encounter business classes looking at the past scandals, case studies on Goldenberg, Trade, Trust, Prudential Building Society, the genesis of Consolidated Bank, and the collapse of stockbrokers in 2007/08. Etc. Otherwise such events will recur in 2009 and 2010.

But some things can’t be fixed, and one Kenyan bank will collapse about every other year, a trend that is likely to continue as the industry continues to absorb the shocks of the post election period.

Other timely reading
- Are the shocks over? Coldtusker hints at other brokers
- Riba Capital’s infamous rogue broker alters from October 06 and April 2007, the second of which had Nyaga brokers at the top of the list
- Nyaga Stock Brokers
Nyaga Stockbrokers has received a warning from Capital Markets Authority in regard to their issuing of Bouncing cheques something similar to what Francis Thuo and Partners did.

This broker has been struggling for several months to clean up its act to avoid being suspended but the problems have been running deeper with the MD claiming that the only bouncing cheques they issued were those of Eveready IPO refund a claim which Eveready refutes and which other stockbrokers disagree with.

There are reports also that this broker was involved in illegal ‘shorting of the market’ whereby they would sell clients shares without authority on a market peak and buy back on a market slump. The CMA is said to have summoned the broker 2 weeks ago and given them an ultimatum to clean up something which the NSE had raised much earlier. If this does not happen, then we could see another broker going down due to money trouble.

- How to change your broker ]]> http://bankelele.blogspot.com/2008/02/icdci-agm.html 2008-02-21T06:46:00-05:00 2008-02-21T06:46:00-05:00 Shareholder woes: My first AGM this year is that of ICDCI which was held on Thursday February 21 at the Safari Park Hotel.

Sometimes it’s painful to be shareholder and today was one of those days. I’m out of practice and forgot to check in early – and arrived at the Hotel at 11.m. sharp only to find a very long queue outside. It would have been better to be a proxy today as that queue moved faster. But the company had only four computer stations to register any of its 40,000 shareholders who showed up – and I didn’t get processed till noon after spending an hour standing in the hot sun.

The meeting was almost over and I was able to catch a few comments by the MD and the Chairman of the company:

- On property: they sold two buildings in Nairobi, but are going to invest in the real estate sector again – and develop a building on a plot in downtown Nairobi
- On Eveready: it has not performed well (for shareholders) but by going public they are now able to liquidate part of their shareholding
- On Rift Valley Railways – its long term investment, but they hope to get return on the investment within 4 years
- On company’s sustainability in these tough political times- aim to diversify regionally, to minimize country specific risk
- one shareholder complained about late delivery of the meeting invitations & company accounts (through the post office) and the Chairman answered that they are concerned about the cost of printing and distribution of the company accounts – they may print abridged ones in future and e-mail others or put them on their web site

Hot Button issue was the proposed name change of the company from ICDCI to Centum Investments: almost all shareholders who spoke, on the matter opposed the name change of the company – some saying old is gold, new name is not African and can’t be translated, they don’t want to lose identity etc.

The Company Chairman was at pains to explain when one director Mrs. Pauline Muriuki stood up and exhorted shareholders to approve the name change. She said the company wanted to differentiate itself from (former parent) ICDC, and also Uchumi and the Government – saying negative stories/Matope that involved these companies affect the ICDCI share price. She also mentioned that the shares allow the company to go international (will be listed on the Uganda Stock Exchange. She said other companies had changed their names to reflect their new identities and had succeeded thereafter such as Unilever.

She was clearly worried as the company had already put in place a multi-million campaign for the new name which was yet to be revealed (a launch dinner to be held today but unfortunately coincided with the launch of CNBC Africa in Nairobi and was canceled) - also the company had already printed out shirts and gift items for shareholders with Centum to take home after the meeting

Is there shareholder democracy? : The Centum matter was eventually put to a vote on the floor, and passed, but the Chairman failed to ask if there were any opposers to the name change. The matter should actually have been put to a vote (with physical ballots). But would it have mattered anyway (since directors - businessman Chris Kirubi and ICDC (23%) combined own 50% of the company’s votes). Still it was a warning that companies should not take shareholders votes for granted

Goodies: Centum branded polo-shirt, tote bag and calendar. The Hotel had prepared a buffet lunch that was bland, and the company may have been better off handing out packed lunch boxes as the shareholders were unruly as they queued for the gifts and food ]]> http://bankelele.blogspot.com/2007/12/random-saturday-observations.html 2007-12-01T07:37:00-05:00 2007-12-01T07:37:00-05:00 Cement index: There was a Nation story today about new faces and other giant killers who knocked out several prominent members of parliament in party nominations last month. However some signs were on the wall for non-performing MP's; cement industry people could tell which MP’s are likely to survive/be thrown out on election day (December 27) based on how much cement a constituency CDF has bought – an indicator of how development minded an MP has been over the last five years.

– Nairobi City had been transformed hawkers everywhere, undoing all John Gakuo’s hard work. One group I’d not mind seeing are the fruit vendors at a time when Uchumi is selling imported tangerines at 350 shillings ($5.50) per kilo and oranges at 160 per kilo from South Africa.

– Pesa Point should relocate their kileleshwa ATM from the Kasusku center where it is not accessible after 6:30 PM – to the police station across the street where it is equally safe, but can be accessed 24/7 like all other pesa point ATM's.

– A stockbrokers office is up to no good again - messing around with clients funds & shares, and making unauthorized sales without informing investors. Diligent investors who discover the anomalies are told they are ‘errors‘ which will be corrected.

– Exam markers for KCPE essays say they can tell the difference between academy and public schools students - The differnce in quality is so stark with academy kids way ahead.

– It seems pretty woman liaisons that start on the beaches of Mombasa now end with afternoon shopping trips at Nakumatt Nyali for groceries.

- Local pubs watch out most Nairobi butcheries are are shortchanging buyers of roast meat. I always knew it - but how can you prove it without looking cheap? If you argue before cooking, your order is going to be messed up, but if you wait to complain after you see the roast meat on the table, you’re too hungry to refuse what's on offer.


Business briefs
– Allahabad Bank (of India) is looking to acquire a small to mid-sized bank in Kenya or Tanzania.

– Cooperative Insurance Company has extended its private placement from November 23 to December 31. The placement needs more publicity as every new investment officering this year has been over subscribed - from bank rights, to new bonds and IPO’s

– Standard investment bank partnered with the National bank of Kenya to offer stockbroking services through NBKL branches. Are insurance companies watching this – how their stockbroking siblings are using banks to penetrate into rural Kenya?

– The World Bank will seek to mobilize the African Diaspora towards partnerships to develop the continent. More than 1/3 of Africa’s highly qualified human resources are presently in the Diaspora and most are unlikely to return to the continent, but do remit $4-6 billion per year and a significant number of professionals from the continent are cu. One of the proposals is for the WB to work with the African Union to create a Diaspora Remittances Investment Fund.

- The Cheetah index business site has been launched by African Path

– Nakumatt Kisumu is now open 24 hours daily

- Safaricom and EABL had better hurry up with their Christmas promotion competitions

Local media

- Along comes K24, Kenya’s first 25 hour new channel. According to the People newspaper it is backed by Regional Reach mogul Rose Kimotho and it will use Kenya Broadcasting Corporation (KBC) to distribute its signal as part of a private/public partnership. K24 will also see the reemergence of Jeff Koinange last at CNN and other local media exiles.

Morning shows have been American broadcast network cash cows for years – and now they have come to Kenya. NTV started it off with NTV this morning which has been running for about two months, and last week Citizen started their own called power breakfast. They have to generate more content to fill up the 3 hours.

- Needs content; I was initially a fan and fell for the beautiful scenery of NTV’s Cobra Squad but now can’t stand the monotony and repetition - (5 min) car chase, cop blunders (5 min) foot chase, twist in story, (5 min) car chase, gun fight, (5 min) car chase....... ]]> http://bankelele.blogspot.com/2007/11/mea-culpa-more-stockbrokers.html 2007-11-22T03:22:00-05:00 2007-11-22T03:22:00-05:00 more stockbrokers in the country especially to served in the rural areas.

But, as narrated in real lean times, there is a serious shortage of investors, not brokers.

This is because most Kenyan shareholders are buy and hold investors not active traders or speculators. This seen where companies with huge numbers of shareholders have relatively small numbers of CDS accounts (many of which are ghost companies created to increase IPO allocations).

So for those stockbrokers such as Discount Securities and CFC who have built nationwide branches, the volumes of investors and trades at theses offices are relatively low. – As a trip to the Mombasa and Nairobi offices of these brokers showed quick services, sparse halls and low activity. Such places only become strained before and after IPO’s but otherwise return to a slow pace.

So who should bridge the gap – productively and profitably? Stock agents, and stockbrokers through partnerships (such as CFC through Postal Corporation), Suntra (through Postbank) and Ngenye Kariuki (through K-Rep bank) to handle the everyday action, but not by stockbrokers opening up nationwide branches.

Next time you see a crowds around the block will be the Safaricom IPO in December.

Other Thursday briefs’

NSE:
- Speaking of Safaricom, there was a story in the Wall Street Journal focusing on if it the $500 million IPO will be accessible to foreign investors. A co-listing in London is possible using GDR’s
- Best wishes to NSE Chairman Jimnah Mbaru who will be contesting the Starehe parliamentary seat and stockbroker Ngenye Kariuki in Kiharu.

Banking:
- The government will sell 2/3 of the 90% shareholding in Development Bank of Kenya.
- K-rep to raise 500 million through a bond
- Islamic banking spreads as both K-Rep (Halat) and National Bank (Al Mumin) add Shariah complaint banking products

Real estate:
- Is the property boom over? Apartments are going vacant while office spaces are full, and what impact will that have on banks holding mortgages and real estate investment portfolios? Hat tip Kamau
- Tororo cement of Uganda will construct a cement factory in Kitengela
- The Ministry of housing to construct 526 houses for civil servants in Ngara phase II

Awards & events:
- East Africa's most respected company crowned this weekend in Tanzania
- Bank awards by Thinkbusiness.co.ke to be awarded on 5th December
- Strathmore University hosts a microfinance seminar starting November 23
- An ICT outsourcing expo is being held at the safari park hotel from November 27.
Opportunities:
- Equity Bank: business growth & development managers, credit managers, archives & record manager. Details online. D/L is 30/11
- Ernst & young: managing director E&Y advisory services ltd (EYAS) details online. D/L is 7/12
- ICPAK: business & professional development officer. Apply to icpak@icpak.com by 30/11
- KTN TV onscreen positions - full & part time. Apply to screen@eastandard.net by 23/11
- KTDA; General manager trading, head of strategy & planning, Network administrator, treasury & trade finance officer, marketing executive. Apply to recruitment@ktdateas.com by 26/11 ]]> http://bankelele.blogspot.com/2007/11/diamond-trust-rights-reloaded.html 2007-11-07T01:11:00-05:00 2007-11-07T01:11:00-05:00 raise capital and Diamond Trust are back to ask their shareholders to chip in. In November 2006 they raised 735 million, and this time they are set to raise 1.6 billion ($24 million)

What has changed
Then ; Now
Nov ’06 ; Nov ‘07
New shares 15.5 million ; 23.3 million
Price 50/= ; 70/= (a 20% discount each time)
Ratio 1:8 ; 1:6 (1 new share for 6 owned)
Result: oversubscribed; ? (Likely to be the same)

cost of the offer
Budget:2006 offer - 41.6 million ; 2007 offer - 54.7 million

What costs more: :
Advertising - up 250% (2.5m)
CMA approval – up 104% (4m)
Placing commission – up 100% (24.5m)
Printing & postage - up 29% (9m)
Registrar & data - up 29% (3m)
Legal fees – up 16% (4m)

Costs less
NSE listing fees – down 436% (0.09m)
Reporting accountant fees – down 200% (2m)
Sponsoring stockbroker fee – down 50% (1.74m)

Unchanged
NSE listing fees (0.5m), PR activities (0.5m)

calendar
record date 16/10, rights start trading 2/11, last day trade rights 12/11, last date to pay for rights 27/11, new share trade 11/12, new share certificates 18/12. ]]> http://bankelele.blogspot.com/2007/10/kutwa-tuesday-death-of-cyber-caf.html 2007-10-02T09:20:00-04:00 2007-10-02T09:20:00-04:00
But even cyber cafes’ that are in town may be under threat.

Until three months ago I’d spend about an hour in a cyber cafe each Saturday and Sunday. I’d go there to my check my-email and then browse quite a bit when I was done.

But all that has stopped as I now check my email and browse for information I need to know instantly – from hotmail, gmail, sports scores, stock prices - using a plain old phone (not bambanet, or blackberry) as the Safaricom EDGE service is available on most of their phones even some of the cheaper ones. I get the information wherever I am and don't have to visit a cyber cafe unless it's to print a document or download a PDF report.

Oil slick
The sale of Somken petrol stations to the National Oil Corporation of Kenya (NOCK) has been put on hold ever since the previous NOCK MD resigned from the company. Haggles remain over the high price bid for the stations.

BAT smoke-out
BAT Ghana has voluntarily de-listed from the Ghana Stock Exchange.

Does that portend anything for BAT Kenya one of the blue chip stocks on the Nairobi stock exchange and one of the highest paying dividend stocks? Cigarette smokers have had their smoking freedom curtailed in Nairobi and other urban areas (Nairobi city has less than a half dozen outdoor smoking points) making them clandestine smokers who hide on staircases and bathrooms (but at least most bars retain a smoking section). What impact will that have on sales?

BAT Kenya manufactures cigarettes here and exports a significant amount to other regional countries (who have not curtailed smoking) which should cushion it slightly from the new laws.

Stockbroker still frozen
The statutory management of Francis Thuo stockbrokers (by the Nairobi Stock Exchange) has been extended for another six months.

the pyramids that collapsed
Much has changed in the one year since nyramid schemes were highlighted here. Since then they have come under increasing pressure from the government, SACCO’s and most important the banks who frozen account necessary for their operations (and who probably still hold the schemes ‘missing billions’ that investors are crying for).

The latest collapse was Amity and it was preceded by Sasanet investment co-op (suspended operations), Spell investments (suspended operations), Circuit investments (suspended operations), CLIP (suspended operations), DECI (suspended operations), and the Kenya business community savings & credit society (Kenya akiba) (suspended operations)

Kenya news on Youtube
Some people say they are tired of political news, while others can’t get enough of it. But the Nation Media Group has gone ahead and made their new clips available on Youtube

Pesa point wins
Two yard ago Pesapoint was launched and it began a battle with Kenswitch - another network of banks sharing ATM facilities. But today Pesa Point has signed up most mid-size banks and have a network of almost 200 ATM machines – and last month added corporate banking giant Standard Chartered to their network. ]]> http://bankelele.blogspot.com/2007/09/kutwa-monday.html 2007-09-03T02:54:00-04:00 2007-09-03T02:54:00-04:00 Francis Thuo stockbrokers stockbrokers (by the Nairobi Stock Exchange) for another 6 months (this is due to expire on September 6)

Are we ready for Basel II
Diamond cash again?: 1 ½ years ago the bank raised 735 million shillings, and now they're back for more cash as are NIC also with a rights issue (and bonus share). These fast growing mid-size banks want to comply with Basel II by 2010 which requires that they have adequate capital to cover not just credit risks, but also market and operational risks

Mumias glazing: Mumias dressed up some bad news glazed over reduced sales (-10%), profit (-9%), and cash with the promise of a dividend and a 2 bonus shares for each held – which apparently worked as the share closed 8% up on the previous week. . Still even the Business Daily was moved to decry insider trading in Mumias and EABL shares this past week

Opportunities

Road audits: from the Kenya Roads Board for engineering firms to team with financial audit firms to audit road construction work on behalf of the government by performing technical, performance and financial audits. D/l is 24/9

Strathmore finance seminar: on Friday September 7 at the Hilton on Kenya as an emerging capital market

Jobs

Celtel: revenue assurance & fraud manager, treasury & tax manager. D/l is 7/9

Director of information & public communications of the government of Kenya. details here and d/l is 7/9

Marketing managers (3) [branding, core network, wireless] at Huawei: apply to Kenya@Huawei.com by 14/9

Editorial staff at the Nation media group: they are looking for website editors, owners of popular blogs in east Africa, sub editor with niche publications - in their 20''s and 30's. apply for positions by picking any story in the nation or east African, rewrite it and send it back to editstaff@nation.co.ke by 10/9

Popote wireless: head of sales, IT account manager, sales engineers. Apply to hr@popotewireless.co.ke 14/9

Safaricom: principal credit controller, retail center agent, sales analyst, senior marketing & planning analyst. D/l is 7/9

Governance advisor - Kenya for the World Bank - d/l is 13/9 ]]> http://bankelele.blogspot.com/2007/08/kenya-re-opens-above-ft-ghost.html 2007-08-27T11:20:00-04:00 2007-08-27T11:20:00-04:00
Anyway;

lessons learnt from FT? The statutory manager of Francis Thuo Stockbrokers will begin paying off its clients (who had filed loss claims) from Monday 27th to September 7 – using money paid by new stockbroker Renaissance Capital.

This should not be the end of Francis Thuo and a comprehensive report and sanctions of the company's management needs to happen. More so because, illegal selling of shares by brokers without permission of some unfortunate shareholders is still going on. Francis Thuo was not a robot selling shares. It had managers and staff who wilfully robbed shareholders of their investment. Has no investor reported to KACC reported them to KACA (even anonymously)? What’s more shocking is that the NSE wants to reward/gift the collapsed stockbroker with more money!

Kenya Reaffirms the IPO dreams of investors by almost doubling to in price on Day 1 after the IPO. The share price reached 18 shillings before settling at 15 – but the allocation to retail investors was measly 12%

Nairobi Wifi II
One drawback to finding a great hotspot is that you have to lug around a $500 laptop to/from parked cars in an anonymous bag – which you then wrap around your chair leg so it does not disappear. But an even worse situation is to arrive there and find that for some reason the network is offline and they can’t fix it till the next day.

Still it’s better than paying $11 an hour for internet access at a hotel, which is even more expensive than before. Ultimately the goal is to have home internet access which is a whole other story.

Here’s Safaricom ISP - in form of their new Bamba net service. It’s a plug & play USB modem which costs 6,000 shillings to connect and 2,000 ($28) per month for unlimited net usage up to 700MB then 10 per MB thereafter – and is available throughout Kenya

Parliament to scrutinize privatization: the Finance Minister has been ordered to gazette a privatization law passed by parliament. This will bring such measure under scrutiny of parliament like the Safaricom IPO, and (witchin the banking sector) - moves to privatize Consolidated and National bank, or anytime the NSSF wants to divest in shares.

KCB back to UK
KCB to reopen London branch to serve Kenyans living abroad.
http://mjengakenya.blogspot.com/2007/08/kcb-back-in-london.html

KQ soars as Uchumi shrinks
Kenya Airways was ranked 99 among world airlines in terms of operations. And in the first quarter (April to June), the company results showed that with increased capacity (deployment of larger aircraft), they were able to carry 640,128 passengers (9% higher than 2006), but aircraft were less full owing to increased competition.

Meanwhile Uchumi has withdrawn franchise rights to Tesco who have closed their Uchumi branded branches (including the one at railways). from a KTN report

Recent grads can't be MP's.
Beacaus the higher education loans board (HELB) wants them to clear their loan dues before they can run for public office including Parliament.

Jobs on Offer
most from the daily papers last week

Anti-illicit trade intelligence analyst at British American Tobacco. D/L is 7/9

Central bank of Kenya: head of procurement, senior economist(s), manager forex bureaus, financial analyst, lawyer(s), executive director – Kenya school of monetary studies. Apply to the director of HR P O Box 60000-00200 Nairobi by 6/9

Constituency development fund: account managers for 41 constituencies including Makadara, Kamukunji, Starehe, Kasarani, Embakasi, Langata, Likoni, Mvita, Limuru, and Eldoret south . women encouraged to apply and the deadline for applications to cdf@wananchi.com is 21/9

East African Breweries: Buyer, Group Head compliance, indirect tax manager, group tax manager, direct tax manager, finance director, head of supply finance (Uganda) business performance implementation manager financial accountant(inter comp account), head of group procurement, procurement controller cost accountant advertising & promotion analyst service delivery manager

Principal legal officer at the east African development bank. d/l is 7/9

Branch managers at Family Bank. d/l is 5/9

HLB ashvir : audit manager, audit seniors (Mombasa). Apply to audit@hlbashvir.com by7/9

Private sector development specialist at the IFC. d/l is 10/9

Kenya airports authority: auditor operations, auditor finance, auditor information systems. Apply through Hawkins associates

Kenya commercial bank: manager in non-electronic fraud, and investigator - forensic services. Apply to recruitment@kcb.co.ke by 7/9

Macroeconomic and financial management institute of eastern and southern Africa (Zimbabwe): director debt management program, program officer – external markets & financial markets development, program officer – financial sector supervision. Apply to capacity@mefmi.org.

Chief executive officer at the Privatization Commission of Kenya to be created. apply through Deloitte at esd@deloitte.co.ke by 6/9

Website editor/content coordinator at UNDP Somalia (Westlands office). Apply to registry.so@undp.org by 7/9 ]]> http://bankelele.blogspot.com/2007/08/mid-week-mix.html 2007-08-22T10:18:00-04:00 2007-08-22T10:18:00-04:00 It appears retail investors will get about 12% of the share that they applied for – leaving a minimum refund of about almost Kshs 17,000 (of the Kshs 19,000) that they applied for. So on to step two of my plan my plan and wait for the shares to open within a reasonable mark up of their IPO price. This is also a reminder to do the same in case of a Safaricom IPO unless they offer a trillion shares

Salvation for investors
So customers of Francis Thuo will get paid from the windfall ($3.5 million) payment by new stockbroker Renaissance Capital. But this should in no way let other brokers and authorities off the hook as they had promised a comprehensive report on what went wrong at the company. And if no NSE investor has lost money since 1954, where are my Uchumi shares?

KCB elite
KCB launches Advantage banking, joining Barclays (with Prestige) and Standard Chartered (with Diva) as offering exclusive banking services for their high net worth customers.

Safaricom is not elite, but...
(i) It’s new in a million shilling promotion cuts of buyers of their low denomination Bamba 50 (50 shilling) airtime cards
(ii) Its EDGE service (internet access) has not been working for moist of this month. ]]> http://bankelele.blogspot.com/2007/08/pre-kq-agm.html 2007-08-11T05:38:00-04:00 2007-08-11T05:38:00-04:00
It's a shame because attending one was inspiration for this site and the company's AGM's have been among the most colorful to attend.

From backroom drama played out before the public, to who’s whos' appealing for votes to join the board - next to activists, to inane questions, KQ has had it all.

KQ has always had a large customer base and so has had to tweak their AGM model each year for improvement – and that has served as a model for all the recent (over-subscribed) IPO companies like Kengen, Scangroup, Eveready and now Kenya Re to emulate.

This year KQ has moved from Bomas of Kenya which seemed to be a natural home for the event with it’s ample parking, large screening area far from venue where KQ would hand out packed lunch boxes and t-shirt at entrance (some shareholders would turn back at that point having achieved their target for the day), large auditorium (where some would eat right away), huge TV screen and even had a second spillover hall for other shareholders if the main hall got full. This year's will be at Kasarani gym (not stadium)

Anyway in the buildup to the event, what is the company saying?

- It carried 2.6 million passengers last year, but profits were down 15% due to increased competition and reduced aircraft utilization
- Turnover was up in all four geographic segments (Kenya, Africa, Mid East & Asia, Europe), but operating profit down slightly on all four (also they canceled Turkey route last week). 69% growth in Asia, 17% in Africa
- Aeropolitics; They are appealing to the government of Kenya to grant visas denied to West African country nationals – warning that those countries could retaliate in granting KQ routes, or those passengers may choose other more hospitable airline/countries.
- Double taxation: They are also lamenting that they are paying income tax in most African and Asian (except china) countries – while they also have to pay income tax in Kenya (Other airlines were able to force Uganda to stop this taxation last month)
- KQ has 4,154 employees and all jobs will be applied for online from this year
- Buy & hold shareholders: of the company's 73,000 shareholders, only 23,000 (32%) have immobilized their shares (enabling them to trade).

Appeal for writers
Any reader here, going for the event can please send in a report? Here are other (2005, 2006) KQ AGM reports to prepare with.

Other happenings

- Free newspapers: According to the NYPost, the New York Times is going to end its Times Select (subscription only) model for it's star columnists/Op-Ed pages. And when you combine that with Rupert Murdoch’s plan to make WSJ site free, what does that portend for other subscription based online newspapers and sites?

Saving our roads: The government is cracking down to
remove overloaded lorries from the roads by reducing axle sizes from four to three (or requiring the last axles on a trailer to also be a steering one). The move will effectively limit cargo capacity to fewer than 30 tones, down from the current situation where some trailers with 4-axles have been carrying up to 60 tons of the road. Good start to get road survival back on on track. But this automatically forces fleet owners to double their fleet size (and increases traffic on the roads)

Broke law : The Nation had a great story this week about lawyers quitting private practice to take up jobs with the government or corporate sector. Meanwhile a prominent law partnership has broken up

Jobs
- Cartoonists at the Nation. Apply to quickdraw@nation.co.ke
- KCB: relationship managers - asset finance, relationship managers - SME’s. Apply by 24/8 to recruitment@kcb.co.ke. ]]> http://bankelele.blogspot.com/2007/07/idea-exchange-call-for-papers.html 2007-07-17T00:13:00-04:00 2007-07-17T00:13:00-04:00 Nairobist is a great investment site with reports and charts like those in the business daily.

There as an investment report put out on Dyer & Blair that I was able to pull up from their site to read.

- They are also looking for a full time blogger - details here

- Anyone with a copy of the actual Kenya re prospectus, please email it to me? (investment bank analysis also welcome)

- Aly Khan Satchu, who used to post comments here, now has an occasional stock tips column in the Nairobi star newspaper. (His Web site) ]]> http://bankelele.blogspot.com/2007/06/kenya-re-ipo.html 2007-06-30T03:05:00-04:00 2007-06-30T03:05:00-04:00 late than never, along comes the Kenya Re IPO shuffled to the top of the privatization deck . The ace card is still Safaricom, while Kenya Pipeline should be a joker in waiting.

It’s nice to venture back into the IPO game (after passing on the last two - Access Kenya, Eveready) and I should have my Kshs 19,000 ($288) ready to go after getting the prospectus(Minimum is 2,000 shares for individuals at 9.50 per share).

The IPO delay has not been explained, but the former managing director and financial controller of Kenya Re did not help matters by getting indicted for corruption related offenses just as the process was underway nor did a late attempt to absorb the run- down Kenya National Assurance (KNAC 2001) into Kenya Re.

Despite the 2,000 share minimum for individuals you can expect it to be over-subscribed going by the numbers who applied for Eveready and the amounts individuals applied for with Kengen. While recent IPO's (Access Kenya, Eveready) have not performed as well as earlier ones (Kengen, Scangroup, that could all change now .

Foreign and institutional investors got burnt in Kengen (the first IPO in years) after they applied for millions of dollars worth of shares only to end up with $1,000 each. Subsequent IPO's have defined specific allocation criteria – for individuals, employees, corporate investors, others and now even insurance companies. Corporates/institutions have also been given another incentive in that they unfairly won't have to pay until they know how many Kenya Re shares have been allocated to them.

The market is still down , as I and am sure many others have traded less this year. Most activity had revolved around new share issues and recently split shares and the reduced trading has meant less income for the brokers.
Some say it is because of the falling prices or shares are still too expensive/overvalued, others says it is because of stockbroker misdeeds.

Dividend by EFT
In another move to curtail rising shareholder costs Scangroup has twice tried to entice investors to get their IPO refunds and now dividends by signing up direct bank transfers (EFT's) to get money straight into their accounts. EFT's offer faster payments, by pass risky cheques (can get lost in post office and investors have take about two weeks to get funds), but while EFT’s are free are most bank’s it’s also a sly way of passing on the cost of dealing with shareholders to shareholders themselves.

The most expensive round of beer you'll ever buy

Archer has regaled us with some great bar tales of late. So here’s a nairumor to caution/silence all those big talkers and big spenders who take one tusker and suddenly become as generous as a politician tuning a stewardess by buying rounds of drinks and sharing their million shilling investment plans and income secrets.

It is said that someone with ulterior motives will cozy up to you to listen, and maybe get a free drink for listening. Usually such a person would be a sly thief eyeing one of the three fat nokia's you've laid out on the table. Now there's another fox that’ll befriend you and ask for your business card. That person could be tax agent who'll Google (check up on) your records at the Kenya revenue Authority the next day to see how your big bar talk measures against the small income tax returns you filed at the KRA. ]]> http://bankelele.blogspot.com/2007/06/kutwa-tuesday-june-12.html 2007-06-12T10:31:00-04:00 2007-06-12T10:31:00-04:00

To plug a hole in the budget

Kenya Pipeline is in the news again – this time suing the Kenya Times group. The company has an enviable profitable track record for a Parastatal which makes it a ripe prime candidate for an IPO but mostly gets saddled with bad news for all the wrong reasons and controversial. A dose of public shareholding will lead to greater transparency & accountability and less political football at the company which is more profitable than Kengen (It earned 3.9 billion (pre tax) in June 2006, up from 2.4 billion in June 2005 (Kengen reported 3.8 and 1.8 billion pre tax in those years)

Kenya Re earnings
Point brought out by MainaT’s comment - what was Kenya Re’s true profit in 2005?

Post TED: Kenyan wildlife
The Economist analyses hippos and cheetahs

opportunities

Jobs
- Director of internal audit at East African development bank. Apply through KPMG at esd@kpmg.co.ug by 20/6
- Investment Climate Facility for Africa: Finance Director, Director, Strategic Knowledge, Projects Director, Director, and Legal/Regulatory Affairs. Apply through PWC at recruit@tz.pwc.com by 15/6
- Project manager at inmobia. Apply to job@inmobia.com by 12/6
- Research assistants at kemri-wellcome. Apply online
- Management trainees at Kenya wildlife services. D/L is 22/6
- Chief internal auditor at Kenya women’s finance trust. (D/L is 18/6)
- Nielsen: IT system manager, research executives. Apply to hr@acnielsen.co.ke by 16/6
- Safaricom: senior manager financial systems & analysis, site acquisition officer, senior learning & development officer, senior buyers (communication, technology - 3 positions). Apply to hr@safaricom.co.ke by 15/6
- Group head of ICT at UAP insurance (D/L is 21/6)
- urgent cargo: credit controller, sales executives, HR & admin officer. Jobs@urgentcargo.com by 22/6
- wilderness lodges (owners of keekorok) head of marketing, internal auditor. Apply to recruit@adeptsystems.co.ke by 22/6

Awards
- Africa women entrepreneurs (from Ethiopia, Kenya, Rwanda, Tanzania Uganda) get voices heard and be recognized. Nominations to be submitted to the Cineartsafrika website by 29/6
- East African community students essay competition. D/L is 19/7

Partnerships
- Become a Citi hoppa franchisee. Cost at 50,000 per bus and get details at info@citihoppa.com
- Become a Keringet water distributor. Details at keringet@water.co.ke
- Get a mobile phone kiosk Sasanet. Details at sales@sasanet.co.ke

Vote The electoral commission of Kenya has reopened voter registration from June 11 to July 10 for Kenyans wishing to vote in the elections expected in December 2007.

Previous Kutwa Tuesday ]]> http://bankelele.blogspot.com/2007/06/kenya-re-2006.html 2007-06-01T02:23:00-04:00 2007-06-01T02:23:00-04:00
Kenya Re accounts are straight forward, but insurance reporting is tricky. Once a year, usually between March & May), insurance companies publish their year end results. But there is no rhyme, some report only total assets, some don't report profit/loss, or net asset positions while others have more/less detail – making it difficult to compare and see which companies are performing better. I wish their reporting could be harmonized. ]]> http://bankelele.blogspot.com/2007/04/new-investment-bank.html 2007-04-26T23:26:00-04:00 2007-04-26T23:26:00-04:00 NIC Bank will launch an investment bank under the banner of NIC Capital to offer financial advisory services.

Earlier: I&M - new custodian. ]]> http://bankelele.blogspot.com/2007/04/net-blamed-for-stock-speculation.html 2007-04-17T05:55:00-04:00 2007-04-17T05:55:00-04:00 forums or blogs) is being blamed for rumours that drove up the price of Sameer Africa shares to 40 shillings before it again dropped to half it's take off price.

But Sameer never confirmed, denied or commented on the rumors until now.

But would you buy shares because a stranger wrote something to a blog, or chat room? And it seems far fetched that the readers of Kenyan blogs and chat rooms have enough weight & financial muscle to drive up a share price so drastically. I'm inclined to place blame with others, perhaps brokers, who simply used the 'internet' as an extra forum to play around with the share price of Sameer Africa (and who probably cashed out at 40 shillings). ]]>