Wednesday, March 22, 2006

Share certificates, banks, jobs

Share Certificates



One quirk about the Kengen IPO is that investors have the option of receiving actual (paper) share certificates. This goes against the spirit or the CDS system and the Central Depositories Act (2000) which in essence eliminated share certificates as cumbersome, slow to trade, could be lost/damaged etc. Earlier, officials had also said that IPO’s like Kengen would be offered only via the CDS system.

Who is a typical Kenyan investor?
However, this move enables traditional investors, from outside Nairobi who don’t have access to computers or who are unfamiliar with the CDS systems & probably haven’t immobilized their shares to take part in the Kengen IPO.

The typical Kenyan investor is still a buy and hold investor who does not trade/sell shares often and instead relies on dividend payments from shares to supplement their income. At the start of the IPO period, investors had opened just over 100,000 CDS accounts - yet some companies have many more owners. E.g. Kenya Airways alone has over 80,000 individual shareholders.

Bank muscle
Another group who has benefited from the option to issue share certificates is the banking sector. As of today Barclays, CFC, Consolidated, Diamond Trust, Equity, Family Finance, I&M, KCB, Postbank, Southern Credit banks and numerous other corporations (for employees) and cooperatives (for members) have all lined up to offer financing towards the purchase of Kengen shares. Most of them will hold the shares as security until the borrowers finish paying off these loans. This would be more difficult to enforce without actual share certificates.

The IPO will also bring banks a few million shilling in the form of banker’s cheques that must be obtained to pay for shares and can range from 100 to 1,500 shillings each. However some account holders at banks such as NIC (MOVE), Stanchart and Diamond Trust already enjoy the privilege of having a free banker’s cheque each month from their flat fee accounts.

What Else?
- Other IPO’s expected in 2006 include Suntra, Wananchi, Adopt-a-light, Equity Bank and Sarova Hotels.
- With thousands of Kenya’s beginning the process of opening CDS accounts this week, customer service for regular stock-broking customers is almost non-existent and likewise trading activities at the stock exchange will be at a reduced level.
- Barclays Bank registrars continue to experience delays in the immobilization of share delays immobilization of share e.g. KQ, EABL.

More 2005 Banks
National Bank of Kenya (bank No. 5 in asset size) both loans and customer deposits increased by 2 billion to 24b and 25.2b respectively. Commission & fee income increased from 840 million to 935m and the bank will present a pre-tax profit of 859m, but no dividends, to shareholders on May 19th at the Bomas of Kenya.

Commercial Bank of Africa (No. 7) bought 1/3 of AIG Kenya insurance.

Diamond Trust (No. 12) Will introduce visa cards, and by extension, will enable all visa card holders to access cash from pesa point ATM's.

Imperial Bank (No. 16) deposits increased from 4.4 billion to 5.7b. increased cash position from 618 million to 2,089m but fee & commission income was flat.

Habib (Bank no. 22) increased deposits in government securities by 600 million and customer deposits by 230m. Fee and commission income reduced slightly to 54 m.

Development Bank of Kenya (No. 34) loans increased from 647 million to 1,073m.

Transnational Bank (No. 36)pre-tax profit returned to a more conventional 59 million, down from their record 1.03 billion profit in 2004. Loans increased from 876m to 1,201m while deposits decreased from 1.2b to 900m.

City Finance (No. 41) Kenya’ smallest, is the only bank so far to record a loss in 2005. The bank went from a 2004 profit of 11 million to a loss of 47m last year, largely due to increased provision for bad debts.

Opportunities

Communications:
Telkom Kenya is seeking distributors for its wireless services. Applicants must have 5 million in working capital and already operate a distributorship or retail outlet in Nairobi. Apply by March 31

HousingThe Ministry of Housing will 50 flats at Jogoo Road (Phase II) and 16 flats in Kileleshwa. Apply by April 21

As part of the GJLOS program, provide an IP-based telephone system for the Kenya Anti Corruption Authority. Apply though KPMG by April 20.

Jobs
CEO at ICPAK. Apply to esd@kpmg.co.ke by March 31

Sales account managers at interactive media services. applicants must have at least 5 years, sales experience (2 in telecom sector), business degree and a marketing qualification. Apply to jobs@ims.co.ke by 24 March.

At the national oil corporation of kenya
- Credit Controller
- Geophysicist
- Programs, Logistics and Procurement Analyst
- IT Coordinator
- Chemical Engineer (Petrol-Chemistry)
Apply through their site by April 3.

At nitin pandya & company certified public accountants
- Practice manager (nairobi)
- Audit supervisors (nairobi and mombasa)
Apply to Milan@questkenya.com

Sub-editors at the Standard Group. Apply to hrd@eastandard.net by March 28

5 comments:

Anonymous said...

Thank you for your timely info/advise-i read ur blog everyday!As a plan B,other than shares are there other short/longterm investment options for middle class earners.

Jaba Boeku said...

Thx 4 timely advice & update on these issues, noteably KenGen.
Its still amazing how the one step forward and two steps backwards is so apparant in our Stock Exchange.

Albeit the paper Share Certs will allow the 'common wananchi' to buy some KenGen. Then what ... sit back in the village/town and wait.. waaiiitt.....waaiiit...

No wonder our Stock Exchange never grows!!!

bankelele said...

Jaba boeku: Kengen heading for massive over-subscription. I wish there had been a smaller IPO that came before Kengen to test the water for teh CDS system.

anonymous: unit trusts and funds e.g. from AIG, Africa Alliance and Old Mutual.

sassy said...

My take on the matter of issuing share certificate despite of having the CDS system is a good idea. This is because financial institutions are offering unsecured loans with the shares as a security.They cannot claim security of the said shares if they are in the CDS accounts.Thats my opinion whats yours B?
I read your blog everyday its always interesting......

Anonymous said...

is nitin pandya and co a big firm in kenya?

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