Monday, March 06, 2006

Standard Raid: the Good, the Bad, and the Ugly

The ugly: Both the Sunday Nation and Sunday Standard reported that a second raid was planned for Friday night, but was aborted by the heavy rains and traffic jams that shut the city till late at night.
The Bad: The mzungu used the N word as he marshalled his troops around the Standard offices during the raid. Sounds like a bad parody of a mercenary or is it the real thing?
The Good: The sale of Kengen shares to the public was accelerated and made as democratic as possible – with minimum lots of 500 (at a cost of 5,950 shillings) and a guarantee that small investors will be assured of receiving their shares. Just as Anglo Leasing attention was diverted immediately by the release of the Goldenberg report, in a smart move, the Standard raid will be followed by the Kengen IPO, the largest in Kenya’s history. This is not the first time this has happened as additional KCB shares were sold to the public in 1990’s to as a way of deflecting political heat from the Government. Look for more advertisements from the office of public communications trumpeting that "this is the government that gave ordinary Kenyans a chance to buy shares in Kengen & Telkom".

Standard Chartered in 2005
Loan portfolio increased by 3b to 59.7 billions willing but fee & commission income dropped from 2.04 to 1.98 billion shillings. Of the top 3 banks (Standard Chartered, KCB and Barclays) only KCB recorded increased commission & fee income in 2005, which can likely be attributed to its new partnership with Western Union.

Net interest income increased from 2b to 3.3 billion while interest in government securities in which the Bank is heavily invested (24b shillings, equivalent to 70% of loan book) increased slightly from 1.84b to 1.99b.

Still, after tax profit increased from 1.83 to 2.44 b and the total dividend for the year will be 7.5 shillings per shares (out of EPS of 8.69), which is up from 6.5 in 2004. The final dividend of 3.10 per share will be paid after June 2 to shareholders (books close March 31) and the company’s AGM will be held at the Intercontinental Hotel on May 31. Long serving Chairman, Mr. H Awori will be retiring after the AGM. Pref. shareholders will also be paid a 6% dividend as well on April 3

Uchumi halved its six-month loss from a year ago but is still struggling. Half year sales of 1.8b were exceed by purchase costs of 1.4b and operating costs of 681 million shillings. The 6-month loss in December was 362 million, an improvement from 632m in December 2004.

Shareholder servicess
CFC Financial Services has announced that they will remain open on Saturday’s until the Kengen IPO period ends. The bank has also opened offices in Eldoret and Kisumu to serve shareholders in Rift Valley and Western Kenya.

There is a shortage of stockbrokers outside Nairobi and Mombasa and this could start a trend as the demand for such services has increased since CDS trading began and now with the Kengen IPO. It would be nice to see some partnerships between stockbrokers and banks that have huge branch networks. E.g. Dyer & Blair setting up part-time desks in branches of National Bank or Postbank on some days of the month to serve shareholders in rural areas.

The African Trade Insurance Agency (ATI/ACA) is hiring commercial & political risk underwriters. More details at and apply at by March 31.

Housing Finance Company of Kenya is hiring
- business development manager (Ref HF/401)
- information system auditor (HF/504)
- relationship officer (HF/610)
- legal assistant (HF/809)
Apply by March 17 to

East African Breweries is hiring
- sales information & administration manager
- trade marketing manager
Applicants must have university degree in business or sales and 5 years successful experience in trade marketing, sales or marketing at an FMGC. Apply by 15 March to

The Louis Berger Group is seeking infrastructure consultants to work in the Sudan. Current positions open are;
- chief of party
- senior engineer
- manager finance & administration
- manager acquisition/procurement
- other engineering professionals
Applicants must have bachelor’s degree and 5 years relevant experience. More details at and applications can be sent to

The Vagina Day monologues will be held at the Carnivore on Tuesday March 7 from 7 p.m., entry is 500/=. I saw it once, two years ago with a lot of beer, and I am told if you’ve seen it once, you’ve seen it all, since I’m told that local producers are not allowed to adapt/add new material to the event and must stay true to Eve Ensler’s book.


vituvingisana said...

I do condemn the raid on the offices but I would like to highlight an injustice by the Press.

The print media repeatedly described the raiders' "commander" as an Asian. This myth was perpetuated at every possible moment by the continued use of the term. This is inflammatory & prejudiced since none of the others were described by their ethnicity whether African, Kikuyu or any other ethnicity for that matter.

The media then attributed to the "commander" as having a heavy American accent.
Later the description was light-skinned & now it is implied the "commander" is from the Balkans.

Sources & References: Nation (4 Mar) Page 4 'Operation was carried out by special crime busters' refers to an ASIAN.

I have not listed all the sources but the online version of the Standard did the same.

WM said...

Thank you thank you thank you for this blog, without which I would be quite lost amongst the details of the connections between the workings of politics and the workings of the market. I am eternally grateful, really.

Anonymous said...

Just mulling over Kengen, wondering whether to
buy during IPO or post IPO. The issue is whether the
stock will go up or down after the IPO. I think it may
go down coz:

a. At 659m sares being offered, the float is extremely
big. One of the reasons commonly offered as to why KQ
and Mumias shares sagged post IPO is coz they were
oversupplied - KQ 461m and Mumias 510m TOTAL shares
issued, meaning the amount actually floated publicly
is even lower (e.g KLM owns 35% of KQ). Even if the
big instituitonal investors (pension funds, mutual
funds, insurance companies, NSSF) come in big time,
supply is likely to exceed demand.

b. At 11.90, the P/E ratio is around 11, not too low.
Most quoted stocks in kenya are between 10 and 20.
Meaning potential upside is limited - double at most.
Actually that's not bad - maybe i was spoiled by my
KQ return last year (triple).

c. Last years dividend was around 25 cents per share,
giving a dividend yield of 2.5%. This is fair, but a
number companies in the NSE have dividend yields of

d. I think i have been reading that the country is
likely to undergo power rationing some time soon - if
my memory serves me right, kengen had heavy losses the
last time the country had rationing.

Reason 1 above is the most powerful tho'.

bankelele said...

vituvingisana: I think the papers had to demonstrate that one of the raiders was different, not a usual cop, even though they are not sure oh his race.

WM: thanks

Anonymous: see this( & I intend to buy Kengen shares forteh long term

Kenyananalyst said...

The Standard Group is having a PR windfall. Michuki did them a favour big time. I attended the protests earlier today. Details at

vituvingisana said...

Bankelele: The issue is not about showing a cop that was different but a throwback to the Police Reservists days. Nevertheless, in such a situation, it creates unnecessary animosity. In any event what difference does it make what ethnicity the "commander" was...

The Kenyan media still engages in this racist behaviour... I do not support what michuki ordered... but the implications of such statements can be hurtful & cause further discomfort...

Mashatall said...

Do you guys realise that Michuki might have been engaging in what we call dis-information and diversionary tactics from all the brouhaha about corruption.kenyans forget so easily what was happening the other day and what they were clamouring for, and i cannot just stop chuckling at what was a genius at work, now nobody is even talking about Awori resigning.damn Michuki is better than i thought !!!!


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