Wednesday, July 05, 2006

Mid week business

The Scangroup IPO has been officially announced, but with a rather short window for investors to prepare (opens July 17 closes July 28).

While advertising is a fickle industry, the company seems to be a good bet since it controls over half of the media buying market and had revenue and profits of 2.3 billion and 200 million respectively last year.

It should not be as euphoric as Kengen, the hangover of which is still being felt by the investment community – and one lesson learnt is that an allocation criterion has been set to secure the interest of institutional investors who were all locked out of Kengen. They and corporations will get 45%, individuals 50% and 5% of the floated shares will go to staff.

Bonus share
Express (K) announced a share bonus at a rate of 1: 10 to shareholders of record as at 13th July.

Uchumi update
A suppliers group being coordinated by the Kenya Association of Manufacturers (KAM) has been informed that identification of an impeccable management team has been the main delay in the reopening of the company stores. (franchise uchumi's stores remained open). Suppliers have been asked to secure their interests by registering with the "Uchumi action” group and pay 10,000 towards lawyer and other movement expenses.

Miss the bus?
There are virtually no buses of the struggling KBS/Bustrack company on the road this month (anyone seen one?).

Telkom Kenya launches Kenstream broadband wireless today.

- Also the Minister of Finance has granted a special tax waiver for the about-to-be-retrenched employees at Telkom – one condition of which is that they can’t resume work/or consult for the company for a period of 3 years.

The Tropical Institute of Community Health in Kisumu will convert into a new private university to be known as the Great Lakes University.

A new housing project known as Neema Estate, comprising 450 1 to 3 bedroom bungalows in Lukenya (located on the Nairobi - Kangundo road).

- Meanwhile a recent tribunal decision has given Jamii Bora Trust the go-ahead to continue with a slum resettlement project. Jamii Bora had sought to construct 2,000 low cost homes at about 150,000 shillings each to settle 2,000 families (i.e. about 10,000 people) from the Nairobi slums of Kibera Mathare and Soweto in a new town to be called Kaputiei on 293 acres in Isinya, Kajiado. The town will be located 60km south of Nairobi, bordered to north by Nairobi national park and to the south by the Magadi-Mombasa railway

The Trust sued the National Environment Management Authority (NEMA) who had blocked the project saying it would adversely affect the environment and community. NEMA received objections to the Jamii project from Masai communities & area residents (who welcomed the town development but not slum dwellers), the Kenya Wildlife Services (KWS) & other wildlife bodies who argues that the land was part of the wildfire migratory corridor into the park. The land was currently sustained by lease agreement where the KWS paid Masai communities $4 per acre or about $400 – 800 per household per year as accomodation for wildlife.

The Tribunal found that the residents who opposed were not representative of the entire community and that the project had support of church groups, AMFI, and had also received approval from other government sectors. The tribunal also deemed the area as no longer viable for wildlife owing to nearby human development.

One troubling verdict of the decision noted by the tribunal is that the influx of residents is likely to alter voting patterns and create hostilities, something the tribunal feels would be alleviated by voter education. Also it will be tough for workers who settle here to commute to their jobs in Nairobi.

- A new Tourist lodge in Buffalo Springs reserve in Samburu with 52 bedrooms and 12 luxury tents.

- Baobab Beach Resort in Ukunda will add 84 rooms to its 188 existing ones.

- Oltome Mara Campat Koyaki ranch, a semi permanent tented camp will be set up in the Mara for Christian tourists visiting Kenya on religious missions.


Shiroh said...

I have seen a few of the KBS but they have been disappearing kidogo kidogo. I hope no one blames City Hoppa for the fall of KBS because it is not.

KBS was simply mismanaged.

Anonymous said...

I have just gone through your blog (past issues)and learnt alot. There is an article you have done on Zimele Cooperative. Since it is not regulated by CMA like the other funds (African Alliance, Old Mutual,etc)is it safe to put ones savings in? I have checked their site and the returns are great but I wonder how safe it is....

bankelele said...

Shiroh: I have looked & searched, but I have not seen one this week.

Anonymous: It's real and they are licensed by the CMA ( and have different funds to go with the level of risk/return you want. I don't use the now but have been considering for a while and am happier now that they have moved their office into town.

Ken said...

The info on Scanad is interesting. on another note,have you any idea which stocks comprise the nse 20share index now that Uchumi and BOC are suspended ?

coldtusker said...

How does the tribunal "know" that the migratory corridor is no longer used just coz the area around Isinya is urbanised?

It should be a matter of pride (& future generations will thank us) to have a WILDLIFE PARK next to our city!

This green space has been encroached on by multiple entities (including politically connected persons during moi's time).

It provides many Nairobi residents with a place to go esp with the other parks being too pricey or far away!

The idiots at the tribunal are thinking short-term!

There are no easy answers but if we destroy this heritage we will regret it for eternity!

acolyte said...

KBS has been a feature of Kenyan life for such a long time.It will be sad to see it go down,let's hope enterprising minds fill in the vacuum.

Jaime said...

I think the Scangroup IPO is interesting.Am dangerously optimistic but i need to see the financial statements of the company.Does anyone know where i can access them?

Ig-know-rant said...

Scan Group IPO: At 10.45 a share (minimum of 500), plus the fact that they only want to raise less than 800m (about one-twentieth of the KenGen returned to investors), this should be an interesting one. I'm dangerously optimistic but will have to see their books first once they are out this coming monday (that's what the brokers are saying).

KBS: I saw one recently, on Arwings Kodhek Road but it had hopelessly broken down.

Jamii Bora and moving Kibera to elsewhere: The question is, yes the people from Kibera may be moved elsewhere but who says that more people won't move into Kibera to fill the voids left? The idea is good but I see a vicious cycle evolving. The best way to eradicate slums/shanties is to build better houses and provide better infrastructure right on the spot where the slums/shanties exist.

My two cents........

aJamaa said...

I share anonymous security concerns on the lack of clarity over Zimele's compliance to regulations. While Zimele Asset Management is licensed as an Investment Adviser by CMA their funds are not really funds in CMA terms the refer to them as co-operative societies. Zimele has been around since 1997 when CMA did not provide for collective investments schemes so Zimele had to come up with some way of setting up shop. However, CMA introduced regulations governing collective investments schemes 3 or 4 years ago and the fact that Zimele have not normalised their operations makes me suspicious.

As a cooperative society they are required to hold AGM's every year where a committee is to be elected and accounts tabled. As far as I know they have never done this. Since we do not get their audited financial statements how do we really know they have adequate assets to meet the members liabilities? The unit price they disclose on their website means nothing if it is not supported by real assets. How do we even know that number is real?

However, they have been in operation for for 7 years and their returns have consitently between 2 or 3 times more than those of Old Mutual and African Alliance. So the higher risk associated with them may actually yield comensurate returns.

Housing estates
It appears like quite a number of housing estates are going to be coming up in the Athi River area in the next few years. In my mind these presents an opportunity. Can you imagine a place that was previously sparsely inhabited all over sudden getting around 2-3K residential houses. It will present all sorts of business opportunities including barber shops, petrol stations, car washs, super markets, video shops, cyber cafes, pubs, churches, creche's, laundry's e.t.c A guy should actually consider getting some property in the shopping centers that are going to be put up

DMX said...

The collapse of Uchumi has clearly made us all very wary of the stock market or should I say more caitious and we should be:

Advertising is a fickle business and it does not take much to get knocked off one's perch. That is how it is in the creative world. My verdict is essentially this should be held only as part of your speculative quota.

As for Zimele the rule as simple: High returns and high risk go together. But Always ask youself how they do it and why they have not 'regularised' themselves as ajamma commented.

bankelele said...

Ken: There will be a new 20share index in a few weeks with Kenegn and minus Uchumi

coldtusker: It get's worse - there are strong sentiments to do away with the Nairobi Park entirely and build housing estates there

acolyte: It's sad, but we have beome matatu country

Jaime: Propsectus should be out on Monday

Ig-know-rant: Also looking forward to Sarova afterwards. Rural urban migration is a big reason for slums. The government is addressing this by reviving agriculure to provided rural livelihoods and thus discourage people from moving to over-populated town for work.

aJamaa: You have more info on Zimele that me - I need to catch up. As for Athi River, they need to have by-pass roads, dual carriageways, and water access issues sorted out soon.

DREAMWEAVER: Shares have always been risky, which is why people should not borrow money to buy them


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