Savings accounts that save

New changes to banking act forbid banks' from imposing charges on savings account holders as long as they maintain the minimum balance. This will promote a culture of savings, which is important even as real savings rates are negative.

(Here's a snapshot (PDF) of some of these charges from 2 years ago

This week, I closed a savings account because, when I got my (half-yearly) statement, I realized that they had been charging me 200 shillings ($2.9) a month. Even as I opened a different savings account within the same bank, the account rep. said, despite my protests, that the new savings account would attract a 25-shilling per month fee. I also got dinged 300 shillings for transferring the account.

No bank has yet come out and declared how they would abide by the new rules, but it takes long to right a ship and it will probably take a few months to rework their savings products with new brochures, IT codes & account parameters.

Of the last few years savings accounts have become hybrid account that have ATM cards, visa cards, electronic banking & SMS access etc. - all of which banks could extract a fee for the extra services to account holders.

To comply with the changes, banks are likely to come out with plain, no frills savings accounts. They will adjust the minimum fee appropriately but have no more ATM cards or extras - just money sitting in the bank earning intrest, and not reduced by bank charges.

Technological graveyard

I'm looking to replace my current laptop which still works okay but looks to be an outdated dinosaur (Windows 98, Office 2000, 2 GB hard drive, 48 MB RAM, Intel-MMX, floppy disk and CD-ROM - which I used primarily for MS Encarta and MS Flight when I bought the laptop, has USB ports – but can’t read flash disks)

Now 6 years later, I am looking at much improved specs machine (40 GB 512MB DVDrw, 1.7GHz, no software). It's not state of the art, but that would be too expensive and computers have a short technological half-life.

I was thinking of all the gadgets I have used and discarded in my lifetime - communications (answering machines, pagers, cordless phones, car phones, modems), music (LP's, real player, cassettes, mini discs), entertainment (VHS, gold disks, camcorders, hand-held video games, still camera) etc.

Who knows which of the items we use today - laptops, DVD's, satellite dishes,- will be around in 6 years time. E.g. is dvb-h the future for TV's? - only time will tell.

New newspaper

A newspaper is the latest project by the team behind hit radio stations Kiss FM and and Classic 105.2.

Newspapers in Kenya are still doing ok, while in the developed world they are in a bit of a struggle and it has been predicted that newspapers in the developed world may cease publication around the year 2040.

The last new non-tabloid launched was the weekly Leader from Royal Media in 2005.

The new newspaper is currently hiring writers through advertisements on KISS FM.

Track your spending

I have Quicken on my PC but I have been on the look out for a web based free tool to track my expenses. I came across this timely post from lifehacker from which I discovered buxfer and clearcheckbook.

Both sites meet my expectations and are great tools for creating and tracking budgets & spending, though so far I prefer clearcheckbook because it is quite similar to quicken, while buxfer is more appropriate for group spending and shared resource tracking.

beauty of 2.0: Both sites added Kenya shillings within 12 hours of my emailing them this request and I am now able to see where most of my weekly money goes.

Another list of budgeting and financial resources.

Local Opportunities

Jobs

from the daily papers this week

Investment officer at Agence française de développement (AFD). Apply through PWC at ess.ke@ke.pwc.com by 9/3 (Ref ESS 409)

Amity software IT professional (.net, SAP, java, oracle DBA, data warehouse, QA) to work in USA. Apply online by 18/2

Financial advisors / financial planning manger at British American Asset Managers. Apply to BAAMHR@baam.co.ke by 28/2

Assistant manager sales & marketing at the carnivore. Apply to carnivore@carnivore.co.ke by 22/2

Associates at Deloitte consulting: (must have 10 years consulting and work experience). Apply to associates@deloitte.co.ke by 5/3

Regional communications officer at IUCN. Apply to earo@iucn.org by 7/3

Kencall: senior account managers, trainee managers, human resource manager, experienced recruiter, telesales representatives, customer care tele agents, and (IT) project coordinators. Apply online.

Kenya Airways: product & in-flight services manager, marketing services & advertising manager, catering & duty free manager, in flight product executive, corporate branding executive, corporate card executive, flying blue service centre manager, CRM product & service manager, customer care manager, corporate communications manager. Apply to the group HRD 19002 Nairobi by 27/2

- CRM & E-commerce data analyst, cargo capacity & revenue executive, systems administrator, project coordinator (civil engineer). Apply to the group HRD 19002 Nairobi by 2/23

Kenya wine agencies limited: Tax accountant, Internal audit assistant. Apply to HRM 40550-00100 by 28/2

lake Victoria regional authorities cooperation: information & communications officer, project assistant. Apply to secretarygeneral@lvrlac.net by 24/2

Business development & marketing specialist at Land O’Lakes. apply to lolkenya@landolakes by 23/2

chief financial officer at Must garment corporation. Apply to jobs.CFO@MustGarment.com

Property Manager at Safaricom. D/L 23/2

Simba colt motors: financial controller, senior accountant, internal auditor. Apply to jobs@simbacolt.com by 2/3

Suntra investment bank: Managers – investment banking, research & development manager. Apply through manpower associates p o box 50736-00200 Nairobi by 26/2

Sales professional at UAP insurance for Uganda Sudan and Kenya. Apply to uapinsurance@uapkenya.com

Unicef: Writers/editors on children’s issues, photographers, artist & illustrators on children’s issues. Apply to kenyahrvacancies@unicef.org by 9/3

Are unit trusts for you?

There was a story in the story in the Standard about unit trusts this week.

At the beginning of the year, I considered stepping away from the NSE, cashing in my gains and putting the money in a unit trust. But a conversation with a custody manager put me off this path. He said that with the management fees at unit trusts were too high for individuals, implying that individual investors not see significant gains unless the trust had exceptional returns.

Certainly any investor familiar with the myriad Kenyan and African investment blogs and sites such as Cold Tusker, First Global Select, Kenya Capital Investments, Mwasjad, Nairobist, Outfoxed, Pesa Tu, Riba Capital, Stockskenya, Odeglenyang, Investing In Africa, Kenyan Entrepreneur, Hisagal, Gathinga – could be more informed as any unit trust investor.

Unit trusts

Approved Collective Investment Schemes in Kenya are:

1. African Alliance Kenya Unit Trust Scheme: Kenya Shilling Fund, Kenya Fixed Income Fund, Kenya Managed Fund
2. Old Mutual Unit Trust Scheme : Equity Fund, Money Market Fund, Balanced Fund
3. British American Unit Trust Scheme : Money Market Fund, Income Fund, Balanced Fund, Managed Retirement Fund, Equity Fund
4. Stanbic Unit Trust Scheme: Money Market Fund, Flexible Income Fund, Managed Prudential Fund
5. Commercial Bank of Africa Unit Trust Scheme: Money Market Fund, Equity Fund

Death of a Stockbroker Part II

See Rogue broker alert and Death Part I

Francis Thuo (FT) stockbrokers have been suspended from the NSE for 14 days. Once this story is over, succession issues are likely to be blamed since the firm’s leader and visionary chairman passed away last year.

need more info: This month the Nairobi Stock Exchange launched a new site that is much improved with more news and features, but their sister regulators' CMA site appears not to have been updated in a year.

The FT story is one which the CMA should be on the forefront reassuring investors. We have seen reports on TV several times over the last year that insider and suspicious deals would be investigated, but no reports have been released or repercussions seen.

For shareholders, the process of transfering share accounts to other brokers was supposed to be seamless and shares should be safe if verified using CDS statements. It appears some FT clients were aware of FT liquidity problems and opted not to sell shares through the firm (and be issued with cheques which would bounce).

During the 14 day suspension, a deal is likely to be worked out to salvage the company, though after getting such a bad rep, customers are not likely to sign up unless FT relaunches under a new name, brand and service oreintation. One other brokerage was up for sale last year, but it would not attract any investors since its reputation was so poor.

Battle for Africa Online

Telkom (South Africa) looks to emerge the winner in the battle for Africa Online after the African Lakes board (parent company) have accepted Telkom (SA)’s bid of £9.72 million (£25 per share) beating out Africa Telecoms Company (ATC) [which comprised Wananchi Online, Schneider Media and East Africa Capital Partners] who had offered £5.04 million (£18.50 per share)

While ATC had commited to move the company headquarters to Naiorbi, Telkom have not indicated their intentions for Kenya, as the Ethiopian and Malawian operations will be disposed of.

Meanwhile ATC will go ahead with its plans for laying out consumer broadband infrastructure to Kenya and other pan-African markets.

Motoring moment

Chrysler 300 officially here


One prediction (or wishful thinking) from a year ago has come true and there was a Chrysler 300 sitting in the DT Dobie showroom on Sunday. The car which has won numerous awards, and featured in every other rap video since it was introduced, can now be bought by Kenyan motorists (w/right hand drive steering) at a price of 5 – 6 million shillings ($85,000 after our prohibitive taxes are added up) [Chrysler site prices them at $25 to $36,000]

Unfortunately it shares the DT Dobie showroom with its corporate sister – the world beating Mercedes Benz E-class which is just about every other Kenyan’s dream car. Also, as with most American cars, the engine size does not make its fuel consumption pocket friendly at our petrol prices (~$4.3/gallon) even though Chrysler states that the 300’s consumption is better than that of a Subaru Legacy GT (common on Kenyan roads).

Is coolant necessary?
Over the weekend I had to top up a car radiator and found myself having to choose between water and coolant. In my experience coolant (aka anti freeze) is designed primarily for winter weather driving where water (in sub-zero temperatures) will freeze and damage engine systems.

Yet, most cars are imported to Kenya from winter countries (arriving with coolant already in the radiator system) - and while Kenyan drivers have always used water in in their car engines (petrol & diesel), many vehicle owners insist on using coolant since that is what the car is accustomed to.

But is it really necessary? Coolant is sold at petrol stations at prices ranging from 250 shilling to 500 shillings ($7). This is as much as what many drivers pay for fuel at the station. I have always used water, and while have occasionally bought coolant, I have never noticed any difference.

In searching the web, the best answer I could find, implied some benefit to some cars from using coolant instead of water.

Many cars overheat because dirty water is poured in to the radiator (usualy by petrol stations attendant). If car owners were careful about ensuring that onlu clean water is used, they can save some money instead of buying unnecessary coolant.

bullet proof cars
There was a story in the Sunday Nation about a company (Radar Danminar) that would soon be selling bullet-proof Toyota land cruisers for 19 million shillings ($270,000) . Alternately they could make your current car bulletproof in a few weeks time for 10 million shillings.

The article rightly points out armored cars are not the answer/will not prevent car jacking of motorists as their cost is too high and you can only arm huge, powerful cars like Land cruisers, Mercs, or BMW’s, and not smaller 1600cc Toyotas that most Kenyans drive.

Bleak beef futures

Pass any restaurant today and everyone is ordering all variants of chicken or fish on the menu and skipping any thing that contains beef. Drive past many of the popular nyama choma (roast meat) eating places and there are more staff than customers and very few vehicles parked outside. Bulls that used to fetch 20,000 shillings ($285) at weekly auctions can now be bought for as little as 5,000 shillings. And the latest marketing gimmick is that you’ll get a free ¼ kilo if you buy a kilo of meat at some butcheries.

The cause of all this is rift valley fever, a mysetrious deadly disease, that has spread slowly from the remote parts of North Eastern Kenya but has now reached Nairobi and other urban areas despite several measures taken to combat it.

February 8 Pot Pourri

bounced bond: Celtel intends to retire its 4.5 million bond notes in February 2007. They were due to mature in 2009

standard goes main: The standard group moves to the main investor segment of the NSE from the alternative counter on February 13.

coast gets university: Kenyatta University will open a new campus in Mombasa

port expansion: Kenya ports authority will create 3 new container berths (terminals) by dredging port Reitz and reclaiming 100 hectares in west kipevu

Foreign investors take punches
- Even as Woodside oil packs up their equipment to return to Australia, the National oil corporation of Kenya has issued a new international tender for non- exclusive surveys offshore in Lamu

- Tiomin has stopped the Kwale sands project (citing delays and cost overruns) after the project lender had withdrawn a $15m facility.

Jobs

Regional managers (2) for East and West Africa (Ref: DN001) at African management services company (AMSCO) . Apply to recruitment@amscobv.com

Coffee development fund
credit & commercial manager, finance manager. Apply by 23/2 to the managing trustee 52714-00200 Nairobi

FSD Kenya
- Agriculture finance specialist (16/3)
- Challenger fund manager (28/2)
Apply to lydiah@fsdkenya.org

Relationship manager Mombasa at Housing Finance. Apply to human.resources@housing.co.ke

Kenya Airways
- Area manager Eastern Africa
- Head of in-flight services & standards
Apply to the Group HRD 19002 Nairobi by 16/2

Human resources manager at KPMG. Apply to esd@kpmg.co.ke by 9/3

Audit seniors at Manohar Lall & Rai . Apply to info@mlnr.net by 15/2

Public relations manager at the Nairobi stock exchange (NSE) . Apply through Deloitte at esd@deloitte.co.ke by 21/2

PKF: audit managers (PKF/AM/100) audit supervisors (PKF/AS1/101) audit seniors (PKF/AS2/102). Apply to pkfnbi@ke.pkfea.com by 23/2

Urban inflation index

Litre of fuel 74.29 shillings (+1.8%)
a year ago: 72.99

Maize meal (2 kg. unga) 50 shillings (-7.4%)
a year ago: 54

Sugar (2 kg. Mumias pack) 150 shillings (+30%)
a year ago: 115

Tusker beer: 100 shillings at local (-9%)
a year ago: 110

Safaricom promotion: Saasa - with 8 shillings per minute calls during off peak hours
a year ago: bamba 50 – low denomination airtime top up card costing 50 shillings

US Dollar exchange rate: 69.97 shillings (-2.4%)
a year ago: 71.69

CDS expands

The Government will implement a scriptless securities settlement and central depository system for private listed securities and government debt instruments through the FLSTAP program.

Bank shares in '06

Share performance of financial institutions listed at the Nairobi Stock Exchange in 2006.

Share prices as at: Dec 05 Dec 06 Change
Barclays Bank 263 77 (385) 46%
C.F.C Bank 75 89 19%
Diamond Trust 32.25 72.5 125%
Equity (listed in August '06) 70 139 99%
Housing Finance 13.95 48 244%
I.C.D.C Investments 72.5 325 348%
Jubilee Insurance ]83 323 289%
Kenya Commercial 113 241 113%
National Bank 28.75 58 102%
NIC Bank 51 102 100%
Pan Africa Insurance 40 91.5 129%
Standard Chartered 139 205 47%

Other share activity
- Barclays had a 5-for-1 share split and a bonus issue of 1 for 3 and still paid the highest dividend of about 14 sh. per share in 2006
- Standard Chartered paid a 7.5 sh per share dividend
- Jubilee paid 4.25 sh dividend
- KCB paid a much improved dividend of 4 sh per share
- NIC paid a 2.5 sh dividend
- Equity joined the NSE as the entire shareholding was listed in August 2006 at 70 shillings per share after earlier paying a dividend of 2 sh per share.
- ICDCI shares rocketed up into the stratosphere as the company announced a 10 for 1 share split
- Pan Africa Insurance paid a 1.2 sh dividend
- CFC paid a dividend of 0.84sh per share
- Diamond Trust paid a 0.7sh dividend
- National Bank and Housing Finance had improved earnings but no dividend.

Opportunities – February 3

from the daily papers this week

jobs

Principal consultant - corporate financial services at Deloitte Tanzania. Apply to dloitte@deloitte.co.tz by 16/3

East African Breweries: marketing manager (MM/MD/02.07), brand manager (BM/MD/02.06). apply to hr.recruitment@eabl.com by 14/2

East African Cables: marketing manager (MM/07), group procurement & logistics manager (GPLM/07) and other engineering positions. Apply to hr@eacables.com by 10/2

Family Finance: Apply online for company secretary, works officer, and executive secretary by 16/2

Hilton Hotel: Managers (operations, credit, Food & Beverage, Sales Account), Internal Auditor, Trainees (front office, F&B). send one page CV to nbohitwhrd@hilton.com

Government of Kenya: Account managers (210 positions) at the Constituency Development Fund national management committee secretariat to be based at constituency level. Applicants must be degree holders with accounting or project management experience, good computer skills, and be under 45 years of age. Those selected will undergo 3-month probation after which they will be awarded 3-year contracts. Apply to cdf@wananchi.com by 28/2

IFC (modern lighting program): senior program manager (Kenya or Ghana), program manager Kenya. details online D/L is 24/2

Head of forensics (HF/32/07) at KCB. Apply through KPMG at esd@kpmg.co.ke by 16/2

Simba technology limited: functional consultant - oracle e business suite (3
positions), functional consultants Orion enterprise/advantage (3), functional consultants - banking (2), functional consultants - insurance (3). Apply to jobs@simbanet.co.ke by 10/2 ( REF: 150106)

UNDP Kenya election assistance program: communications & education specialist, finance officer, procurement officer, and administrative associate. Apply to jobs.ke@undp.org by 7/2

scholarships
Aga Khan Foundation: for development -related overseas postgraduate apply by
(50% grant 50% loan payable 5 years after completion that covers tuition & living expenses only) . D/L for applications to the Nairobi office is 15/3

Ford foundation: Details at international fellowship program and D/L is 9/3

Banking law amended in 2007

The banking amendment act (2006) and finance act (2006) were gazetted in January 2007. Some changes that will affect the banking system in a busy year, in addition to possible merger activity, include;

- Ban on bank charges within savings accounts. In fact banks must pay interest as long as the account minimums are maintained
- Section 44A (in duplum rule) – banks can only recover principal amount lent, interest to an amount not exceeding principal, and recovery expenses from bad debts. (Fortunately for banks this will not be applied retroactively)
- CBK gets a deputy governor appointed by the president
- CBK also gets to vet the professional and moral suitability of owners (of more than 5%), directors, and senior managers of banks
- All banks must get permission from the finance minister to open branches or establish subsidiaries outside Kenya
- Banks are allowed to invest in real estate. They can also hold land for as long as it takes to realize/recover debt
- Allows sharing of non performing assets information with the Central bank, others banks and credit reference bureaus