Sunday, October 29, 2006

Shortages Part II

See Part I

We have been taught time & again that shortages are opportunities to be taken advantage of.

Aircraft
Kenya Airways half-year results were released on Friday and the airline's management mentioned plans to replace their Saab turboprops with jet aircraft.

The airline appears to be stretched, as their smallest 737 jets are used for routes such as South Africa, Dubai, India and Turkey, while filled-up 777s to Mombasa are not a rare occurrence. Meanwhile frequent travellers on the Kisumu route, opt for the Fokker 50s of East African Safari Air, which make the flight in 25 minutes compared to the Saab’s of KQ, which do it in about 45 minutes. So regional jet to serve local and short hop regional overland routes would be welcome for KQ.

Cement
(i) When you drive past Athi River, there’s a long line trucks outside Bamburi Cement Company waiting to collect cement from teh company
(ii) EAPC has just advertised for a huge clinker tender
(iii) Floods in Mombasa have washed away two bridges, cutting off the clinker plant of Athi River Mining Company
(iv) Regional problem now as Tororo Cement plans to open a plant next to parent Bamburi (at Athi River) to sevre the Ugandan market where power rationing/shortages have hit the energy intensive cement production industry

Investor information

Total reassures
Total Oil held a cocktail for all shareholders at the Hilton on Friday to review and explain their 9-month performance to September 2006 which they had published earlier in the week.

Management were keen to explain the dip in profits in line with various industry issues and reassure investors that the company was strong. The event immediately made one wish that Uchumi, board and management had done more in terms of informing shareholders when the company’s quarterly results were released after the rights issue.

The company profits dipped about 9% while its inventory and accounts receivable were both up about 80% from a year before. Chairman Nguer of Total mentioned the overall world oil price rise, competitor Kenol’s half year performance (30% down), entry of Tamoil (Libya) into the Kenyan market, government threats to regulate fuel prices, inefficiencies at at Kenya pipeline company and Kenya oil refineries and the new large Kengen contract whose costs were being felt but benefits would accrue later among other issues as he sought to reassure shareholders that Total was a great long term investment.

We need EDGAR
He also mentioned a 100 million shilling court award to be paid to the company by oil marketers, after conferring with his company secretary that the same information would be immediately released to the Nairobi stock exchange (NSE) for other investors not present.

One problem is that corporations like Kenya Airways, EABL and other NSE-listed companies hold briefings for select corporate investors, and the media, the news of which is occasionally posted on their websites (if they exist/are ever updated) and bits of which may appear in the newspapers or on TV news.

What Kenyan investors needs is an EDGAR where all company information sent to the Nairobi Stock Exchange is instantly published, compiled, archived and available for all investors to read/access free so we can understand better how/why shares like Barclays and Sasini both rose 25% in three days this week.

Stockbrokers
Riba Capital has a great review of stockbroker services.

18 stockbroker firms were enough to serve a market a few years ago, but today they are woefully unable to cope,with the flood of new shareholders brought in by Kengen Scangroup and anticipation of Kenya Re, Mumias and Safaricom IPO's.

Nairobi land
Driving through Mlolongo which has been a rapidly growing town, its amazing that it all started with a road block i.e. weigh bridge, where all Nairobi and up-country bound trucks would stop for weight checks.

But, many significant buildings from houses to hotels, schools, nyama choma joints, churches, petrol stations and kiosks now spot distinctive painted X signs indicating that they are marked for demolition by ministry of roads as it seeks to expand the road into a dual carriageway.

The town falls in Mavoko where the county council issued letters of allocation for many years that enabled these settlements near the road that fuelled the towns’ growth. The cost of land appreciated over the years owing to demand, and many of the original allootees sold their land to new owners even though they never got title deeds – which were never issued by the Land ministry since the lots were still marked as road reserve.

The demolition process is likely to be delayed in court as business owners will challenge the outright demolition of their buildings on genuinely, if improperly, allocated land through the courts. The government should do the humane thing and compensate these building owners, using their formula for land buying. That way the politics of the demolitions will be removed.

Next: A popular idea circulating, first mentioned by Karanja Kabage, is that the Nairobi National Park be reduced in size or eliminated, by having the animals relocated to other parks, to increase the land available for Nairobi’s growth.

Water
Water rationing will be effected in various residential estates/zones (typically for ½ a week) of Nairobi and according to the Nairobi water company it is due to unexpected demand for water from unplanned developments. This is expected to continue until the next rains begin (probably November)

19 comments:

pesa tu said...

I agree we need an EDGAR.At least we can know whats happening.e.g. ABSA South Africa has stated it will take over BARCLAYS Africa operations(including Kenya)from 2007.But no news from BARCLAYS kenya about this.
On the TOTAL cocktail,was it for the 'significant' shareholders ONLY?

coldtusker said...

Total sent out letters to ALL shareholders about the cocktail.

NSE does poor job in disseminating information. The CMA - IMHO - could do much more!

Banks - Need ur comments on KQ on my entry...

Interesting tidbit on Total getting KShs 100M. How will it hit Kenol, I wonder?

coldtusker said...

We should leave Nairobi National Park alone. It is unique... other cities try to create wht we alreeady have...

xtra-cash said...

The use of Nairobi nationalpark for "city growth" is avery bad idea. Remember what they tried with karura forest? It's always a few people getting the prime land for free. I'd rather the zebras have it.

Skwota said...

Skwota>
About barclays read some report from D&B saying that there is going to be a split in barclays Botswana & that there is speculation of the same happening here...Sasini they say was due to proposed increase in number of issued shares (read bonus issue) that they had proposed some time ago some.

By the way Banks what is cutting with Dyer on the 3rd of November keep on seeing some add that runs during biz news.

bankelele said...

pesa tu: The Absa story has been there for a year. Total was for all

coldtusker: KQ coomments coming up. The 100m is due from other oil marketers who had resused to pay till the courts ruled in Total's favor (that's still no guarantee since they may appeal)

Nairobi Park is unique, but...

xtra-cash: very good point. That seems to happen a lot - see coast and farmlands

Skwota: Sasini is going to raise capital from shareholders next month - & i'll look out for Nov 3

Shiroh said...

Dont be lied to. Total is simply mismanaged.

The Alpha Quadrant said...

Nairobi National Park and Nairobi Expansion:

I think the park should remain untouched. Focus should be on decongestion. I have this rather radical idea of building another city from scratch. maybe around the Nanyuki area where there's loads of land (yes owned by people) lying unused. Something like the way Abuja in Nigeria was built from scratch.

Even if that can't be pulled off, at least having regional towns and the other 2 cities developed, will probably lead to less people relocating to Nairobi in search of oppurtunities..

Personally I'd rather not live in Nairobi if I could help it.

bankelele said...

Shiroh: hebu explain

The Alpha Quadrant: Nigeria tried that (new capital) with Abuja and am told the results were mixed. Nairobi is not a bad city per se, and it can be managed better and planned for better future use

coldtusker said...

Banks - The argument for "human" settlement is used to take over Karura, Ngong and now Nbi Natl Park...

Sure, we can take over all these spaces BUT that will only degrade the lifestyle.

New York has Central Park in the middle of the City. Anyone who even suggests "developing" it will be run out of town!

Remember when kanu wanted Uhuru Park???

Anonymous said...

Nbi national park should be left as is. We need a zoo for those too busy to go on safari, plus it makes the city unique (I'm not sure any other city in Africa has a wildlife park within it). Alpha's comment sounds more realistic though It looks like that is already happening. Parts of Thika, Kiambu and Athi River are now considered to be 'Greater Nairobi' plus Westlands will soon be swallowed into the CBD.

coldtusker said...

If we can do away with Nairobi National Park, then why not Karura Forest, Ngong Forest and Uhuru Park?

We should encourage the planting of trees in NNP as well as create a corridor for the animals to migrate.

69/\/\ said...

On the national park, I don't think we should touch it until every available square inch of the city is covered in highrise apartments and office buildings. Its is then we'll have good cause to get rid off it.

I'm not an animal lover or anything but I believe that making that land available would be just plain old laziness. We should first utilize what we have efficiently and that is the difficult task.

Then again, the council's planning department is basically a skeleton so why not?

coldtusker said...

69 - Even with the high-rises, no we should leave this beatiful park that the original City Fathers left.

All I can say is I am GLAD that kenyatta isn't alive or he might have appropriated it. His daughter was mayor at one time...

How many (major) cities can say, we have an Animal Park next to the City?

Other countries BUILD Animal Parks (Busch Gardens in Florida) while we have a NATURAL one!

Our kids will never forgive us if we lose this treasure to short-sightedness.

Ig-know-rant said...

I really wonder what Karanja Kabage was thinking. Who says that Nairobi is the only place to leave in Kenya! Next time you'll hear him saying that we should move Lake Nakuru, Lake Naivasha, or Mt. Elgon for human settlement. Or that we should build apartments in the park and stuff the aminals in them. Shame on him. The Nairobi National Park should be left alone.

Kudrinketh said...

I grew up close to Nairobi National Park and i have so much fond memories. i remember we'd go to the animal ophanage and witness the rangers feeding the caged lions and cheetahs.

I remember this one incident when this dude was holding the barbed wire when the lion lunged at him, manze the force threw him like 30 ft away.if it were not for the fence, he'd have been the lion's dinner that evenning.

I remember we'd go to ngong forest for scouts camping and then one day we ran into a cheetah(we thought it was a tiger). the legendary patrick shaw, the then stouts patron, then showed up with the game rangers who set a trap for it(even though we were instructed to stay away,we'd sneak over there to see if it got trapped).

These are experiences i'll always cherish and nobody should deny future generations the same.our's is still the only capital city in the world with a natural park within a hour's drive from city center,lets keep it that way.

bankelele said...

coldtusker, Ken, 69M, Ig-know-rant, Kudrinketh: I surrender - the park should stay, but I have no power to decide. Hopefully it won't be necessary to fight to defend the park from development in the near future.

Also rememeber in Richard Leakey's book he talked of having to fight an attempt to build a road or pipleine though the park - which he read as a deliberate attempt to grab a huge chunk of it by you know who

roughalmasis said...

Stockbrokers:
Agree demand for stockbrokers services is too high after KenGen. The situation worsens if there is an IPO etc.when everything peaks and they are unable to cope. However there are still lows when their staff are idle. What appalls me is the quality of service, particularly the quality of information they give.My stomach cringes when I hear(while waiting my turn)the information they dish to new investors which becomes the basis of their investing decisions. There is a yawning gap waiting to be filled.

Anonymous said...

Leave the NNP as is & 30 Million Kenyans (at least 3 Million Nairobians) will benefit.

Allow "development" and 1,000 "connected" will benefit!

Leakey was right. Didnt one of moi's kids encroach into NNP's boundaries?

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