labour on Labour Day
Sometimes I wonder if we are ever going to reform & develop, or if by being profitable and making money we see no need for some reforms - corporate, land, ICT, political or other.
Rwanda is on the fast path to being an ICT powerhouse. They may get there, but we have the beach, undersea cable etc. - all we have to do is wait to benefit from them. Uganda and Sudan have oil – but so what? It will have to pass through here.
Stanbic Uganda [Pre tax profit of 69 billion ($41 million) [up 37%] and a dividend of Ug. 6.64 shillings per share (up 10%)] is able to e-mail to shareholders their annual reports, AGM notices, and proxies; meanwhile many Kenyan companies talk about it, have amended their by-laws to enable it, but I'm yet to see it done (any examples? - but maybe having 1 million expensive shareholders will entice them to take the next step forward).
In Uganda, empty plots display their legal numbers and have some sequential order by street; here in Kenya L.R. no’s (the official designation of parcels of land) only appear in court documents/mentioned in scandals and are only understood by estate agents.
In Uganda the Central Bank publishes all bank charges in the newspapers for customers to compare; here they give them to some private agency (FSD Kenya) to interpret for customers.
While the Kenyan audit bodies (FIRE, ICPAK) fault our companies for not disclosing the director compensation which they ask their shareholders to dutifully approve at each AGM, Stanbic Uganda shareholder can see that their chairman earns $10,400 and what each board member earns ($1,700 to $4,250) for them to approve.
Lastly, I don’t know any Ugandan stockbrokers but I’m sure it’s easier to ascertain their performance (and avoid rogue brokers) than it is here.
Wednesday, April 30, 2008
Tuesday, April 29, 2008
Kutwa Tuesday
Revelations Chapter 11, verse 1 and 2: Hats off to the business daily for their exposes of the downfall of Francis Thuo stockbrokers. It is an anomaly that brokers don’t have to publish their accounts, oversee each others lapses and gallantly bail each other out, and that white collar crime is something only the faint hearted fail at (they even raided the stockbroker after the company died. I guess the customers of Nyaga stockbrokers will be paid off now that the investor compensation fund is padded with millions from the Safaricom IPO
Thai is good: Kenya Airways will double its service from Nairobi to Bangkok to six flights a week to cope with growing demand – and four will connect to Hong Kong and two to Guangzhou, China. Also msafiri reports that they will get a replacement 737-800 in October, to replace the one which crashed last May a- and another two 737-800 this year. I think they should reduced European flights and focus on Asia and Africa
Kenyan snub: There's no Kenyan presence in the final list of sustainable banking award nominees of the FT/IFC. Earlier, only Equity Bank and Vodafone/Safaricom forBanking at the Bottom of the Pyramid were in but they probably canceled each other out.
ICT watchdog: an initiative formulated at skunkworks forum in March forum has come to fruition with news that the members will form a website to monitor the quality of ICT service in Kenya.
love your sponsors: Mama Mikes have a new venture - Channel Safari to market tourism in Kenya and were featured in the featured in the business daily
Thai is good: Kenya Airways will double its service from Nairobi to Bangkok to six flights a week to cope with growing demand – and four will connect to Hong Kong and two to Guangzhou, China. Also msafiri reports that they will get a replacement 737-800 in October, to replace the one which crashed last May a- and another two 737-800 this year. I think they should reduced European flights and focus on Asia and Africa
Kenyan snub: There's no Kenyan presence in the final list of sustainable banking award nominees of the FT/IFC. Earlier, only Equity Bank and Vodafone/Safaricom forBanking at the Bottom of the Pyramid were in but they probably canceled each other out.
ICT watchdog: an initiative formulated at skunkworks forum in March forum has come to fruition with news that the members will form a website to monitor the quality of ICT service in Kenya.
love your sponsors: Mama Mikes have a new venture - Channel Safari to market tourism in Kenya and were featured in the featured in the business daily
Saturday, April 26, 2008
Saturday Reading
ranks & references
References: Looking for the latest fiction, biographies, financial or other reference books at the Book Villa? The Nairobi bookshop has moved to Norwich Union House 8th Floor (building houses Galitos/Chicken Inn on ground) Moi Avenue. New location is bigger and more spacious than the cramped old location and will soon have refreshments in a reading area with a great view of the city
Ranks: Trying to figure out why Alexa has stalled and why Technorati has refused to refresh for the last three weeks.
References: Looking for the latest fiction, biographies, financial or other reference books at the Book Villa? The Nairobi bookshop has moved to Norwich Union House 8th Floor (building houses Galitos/Chicken Inn on ground) Moi Avenue. New location is bigger and more spacious than the cramped old location and will soon have refreshments in a reading area with a great view of the city
Ranks: Trying to figure out why Alexa has stalled and why Technorati has refused to refresh for the last three weeks.
Friday, April 25, 2008
CMA 2008 Licensees
not much change from last year (PDF)
New stockbroker is Chartered Capital joining African alliance, Crossfield, Discount, Ngenye kariuki, Solid being taken over by NIC, Reliable, and Bob Matthews - missing is Nyaga stockbrokers
Investment banks : African alliance, Apex Africa, Barclays Financial (dormant?) , CBA Capital, CFC financial, Dyer & Blair, Kestrel capital, Standard investment, Suntra, Drummond, NIC, Renaissance, Equatorial capital services (Sameer dormant) , Sterling Afrika Investment (formerly Ashbhu), Faida, and Juanco (who?)
Unit trust 10 providers offering a variety of funds: African alliance (3) , old mutual (3) , British American (5) stanbic(3), CBA (2), Zimele (2) Suntra(3), ICEA (3), Standard investment bank (3) and Dyer & Blair (4) and CFC (6).
ESOP’s EABL, Kenol, Athi River, Access Kenya, Scangroup, and Safaricom – but where KCB, Equity and Housing Finance – banks who have sounded out ESOP’s to shareholders?
big changes is 20 investment advisers, up from 13.
New stockbroker is Chartered Capital joining African alliance, Crossfield, Discount, Ngenye kariuki, Solid being taken over by NIC, Reliable, and Bob Matthews - missing is Nyaga stockbrokers
Investment banks : African alliance, Apex Africa, Barclays Financial (dormant?) , CBA Capital, CFC financial, Dyer & Blair, Kestrel capital, Standard investment, Suntra, Drummond, NIC, Renaissance, Equatorial capital services (Sameer dormant) , Sterling Afrika Investment (formerly Ashbhu), Faida, and Juanco (who?)
Unit trust 10 providers offering a variety of funds: African alliance (3) , old mutual (3) , British American (5) stanbic(3), CBA (2), Zimele (2) Suntra(3), ICEA (3), Standard investment bank (3) and Dyer & Blair (4) and CFC (6).
ESOP’s EABL, Kenol, Athi River, Access Kenya, Scangroup, and Safaricom – but where KCB, Equity and Housing Finance – banks who have sounded out ESOP’s to shareholders?
big changes is 20 investment advisers, up from 13.
Wednesday, April 23, 2008
IPO Guilt Part II: Rule of queues
As I looked for place to pay for the shares today, I found lines around the block, and remember there were also some at 8 PM last night.
On the way here I passed another (even longer) queue – the one outside Nation Center for customers of collapsed Nyaga Stockbrokers. I hope I’m wrong in my feeling that the NSE/CMA receivers will use their bounty raised from Safaricom IPO, to pay off these claims and let the manager/owners/directors keep their stolen funds – the same thing happened last year with Francis Thuo stockbrokers, only that the funds came from Renaissance Investment Bank who bough FT’s seat. And the crackdown on generous stockbrokers is a sideshow to distract from the Nyaga issue
- When one arrives at a stockbroker or any crowded office in Kenya such as a voting booth or the Kenya Revenue Authority (KRA), there is an unwritten and often ignored rule of queues which translates to make sure you’re in the right queue - and the broker office had several (all long) - for opening new CDS accounts, filling out IPO forms, applying for loans, for drawing bankers cheques, for paying by cash, paying by cheque etc. I am grateful that by applying online (IPO Guilt Part I), I effectively bypassed ¾ of these queues
- The best way to confirm you’re in the right queue is to ask someone who knows about them. It’s sad to say that it many banks and offices (even on ‘normal’ days), that person is the security guard - that lowly paid uniformed man/woman inside the halls, who has attained seniority after a few years on the outside of the buildings. Banks use/misuse them as their (unrewarded) customer service agents, and today they were handing out deposit slips, explaining to customers the rules of payment, pointing out the right queue etc. I hope they are paid extra for that, but I doubt it. Where the banks are own people? The lovely ladies who pounce on you in supermarket or movie halls hawking bank loans? They are here too, but the burden of contact is reversed – out there I am the one who avoids making eye contact and hurries past their strategically obstructing table; inside here, they are the ones avoiding eye contact, looking very busy and hurrying past the queues.
- There is a lot of misinformation, up and down the queue; did you hear that? You have to pay for that, you have to go back outside for that, haiya - you filled the wrong form, and they will refuse your application! Etc.
- IPO’s create jobs and I got one today! But only for the day, and without any pay at. The broker office had a complicated queue arrangement so that those at the front of the queue would, at some point, have to walk through those at the back of the queue. I was asked to deputize (for the watchman) and do crowd control at the intersection. Wearing a black suit and blue shirt (bank uniform in Kenya) bestows credibility and I suddenly looked like IPO official, and got to answer questions from other customers. When I could not answer, I’d check with the watchman! – such as when I was unable to explain to why people paying less than 20,000 shillings (~$315) would also have to buy bankers cheques for 200 shillings, while those paying more would be exempt. People also kept asking to cut the queue, pleading that they had just been told that they had come from the wrong queue or that they had been here for two hours – sorry lady I’ve been here for three hours already!
- complaints People kept complaining about the length of queues, and why the broker did not have more tellers and counters to process the applications. Some were even pleading for the IPO to be extended for another two days to Friday. Where were they (and where was I) for the last four weeks since March 26?
- No rules today apply – you can use the phone, drink their water; even eat in the bank halls. But they should also have let in one or two hawkers to sell airtime, serve biscuits/water/juice etc, but that would make customers nervous who by virtue of being in this line, must all have at eats 10,000 shillings each in cash. But it would also be unfortunate if someone fainted when she was waiting to pay 200,000 shillings ($3,000) alone and be far away from any First Aid.
- This is the second all day queuing session for me in four months, and hope that, unlike the last one (election on December 27), the result does not rock the country. Bt if almost 1 million people queued and bought shares in little-known/understood companies like Kengen and Scangroup, how many of the nine million people who use Safaricom everyday will have bought shares by the end of today? I may revise up my 2 million estimate. But fist they have to get to clear all eth queue hurdles. I predict future IPO’s from the little known private sector companies will have minimum subscription amounts of over 100,000 shillings to limit shareholder number
On the way here I passed another (even longer) queue – the one outside Nation Center for customers of collapsed Nyaga Stockbrokers. I hope I’m wrong in my feeling that the NSE/CMA receivers will use their bounty raised from Safaricom IPO, to pay off these claims and let the manager/owners/directors keep their stolen funds – the same thing happened last year with Francis Thuo stockbrokers, only that the funds came from Renaissance Investment Bank who bough FT’s seat. And the crackdown on generous stockbrokers is a sideshow to distract from the Nyaga issue
- When one arrives at a stockbroker or any crowded office in Kenya such as a voting booth or the Kenya Revenue Authority (KRA), there is an unwritten and often ignored rule of queues which translates to make sure you’re in the right queue - and the broker office had several (all long) - for opening new CDS accounts, filling out IPO forms, applying for loans, for drawing bankers cheques, for paying by cash, paying by cheque etc. I am grateful that by applying online (IPO Guilt Part I), I effectively bypassed ¾ of these queues
- The best way to confirm you’re in the right queue is to ask someone who knows about them. It’s sad to say that it many banks and offices (even on ‘normal’ days), that person is the security guard - that lowly paid uniformed man/woman inside the halls, who has attained seniority after a few years on the outside of the buildings. Banks use/misuse them as their (unrewarded) customer service agents, and today they were handing out deposit slips, explaining to customers the rules of payment, pointing out the right queue etc. I hope they are paid extra for that, but I doubt it. Where the banks are own people? The lovely ladies who pounce on you in supermarket or movie halls hawking bank loans? They are here too, but the burden of contact is reversed – out there I am the one who avoids making eye contact and hurries past their strategically obstructing table; inside here, they are the ones avoiding eye contact, looking very busy and hurrying past the queues.
- There is a lot of misinformation, up and down the queue; did you hear that? You have to pay for that, you have to go back outside for that, haiya - you filled the wrong form, and they will refuse your application! Etc.
- IPO’s create jobs and I got one today! But only for the day, and without any pay at. The broker office had a complicated queue arrangement so that those at the front of the queue would, at some point, have to walk through those at the back of the queue. I was asked to deputize (for the watchman) and do crowd control at the intersection. Wearing a black suit and blue shirt (bank uniform in Kenya) bestows credibility and I suddenly looked like IPO official, and got to answer questions from other customers. When I could not answer, I’d check with the watchman! – such as when I was unable to explain to why people paying less than 20,000 shillings (~$315) would also have to buy bankers cheques for 200 shillings, while those paying more would be exempt. People also kept asking to cut the queue, pleading that they had just been told that they had come from the wrong queue or that they had been here for two hours – sorry lady I’ve been here for three hours already!
- complaints People kept complaining about the length of queues, and why the broker did not have more tellers and counters to process the applications. Some were even pleading for the IPO to be extended for another two days to Friday. Where were they (and where was I) for the last four weeks since March 26?
- No rules today apply – you can use the phone, drink their water; even eat in the bank halls. But they should also have let in one or two hawkers to sell airtime, serve biscuits/water/juice etc, but that would make customers nervous who by virtue of being in this line, must all have at eats 10,000 shillings each in cash. But it would also be unfortunate if someone fainted when she was waiting to pay 200,000 shillings ($3,000) alone and be far away from any First Aid.
- This is the second all day queuing session for me in four months, and hope that, unlike the last one (election on December 27), the result does not rock the country. Bt if almost 1 million people queued and bought shares in little-known/understood companies like Kengen and Scangroup, how many of the nine million people who use Safaricom everyday will have bought shares by the end of today? I may revise up my 2 million estimate. But fist they have to get to clear all eth queue hurdles. I predict future IPO’s from the little known private sector companies will have minimum subscription amounts of over 100,000 shillings to limit shareholder number
Tuesday, April 22, 2008
IPO Guilt
I am
- Guilty of having to get into an IPO queue after signaling a wavering of my IPO strategy (its political season)
- Guilty of waiting till the last minute; procrastination is a Kenyan habit, and the queues of Safaricom are very long in the last 24 hours, despite the IPO having run for almost a month. What were we waiting for? (and does Obama carry this gene?)
- Party guilty of not fully embracing technology: it’s actually possible to buy the shares without having to join a stockbroker queue if (i) you apply online at the official IPO site (which I did) but I did not (ii) attempt to pay via ATM for the same shares. IPO’s tend to run on a different cycle and I didn’t want to be time barred for a delay in funds
More on the official IPO site; it calls for a leap of faith like buying an air ticket online with boarding pass and successfully completing the flight. But the site does not seem to allow for any amendments (buy more or less shares or even cancel an order after you have applied.
And then I received this ominous e-mail from whoever runs the official site
Safaricom IPO"
To: ___________________
Subject: SAFARICOM IPO APPLICATION: PENDING PAYMENT
Date: Thu, 17 Apr 2008
Dear Sir or Madam,
Thank you for your online application for Safaricom IPO shares dated 4/__/2008 reference _______, in the name of ______.
Please note that the next stage of the application process is to make payment for your application at the receiving bank or broker that you selected, by the close of the IPO offer period on Wednesday April 23rd 2008.
If you have already made payment for your application, kindly disregard this email.
In the event of any queries, contact us via email at safaricomipo@swiftkenya.com or call us on +254 20 2754300.
Warm regards
Customer Service Team
Safaricom IPO at Citi
So let’s see how it goes in the last day of the IPO as I pay for the shares.
across the border: Stanbic Uganda, another over-subscribed IPO from 2007 performed even better than expected with a nice dividend of Ug. Shillings 6.64 shillings per share. Maybe I should try the Zambia Celtel IPO too
- Guilty of having to get into an IPO queue after signaling a wavering of my IPO strategy (its political season)
- Guilty of waiting till the last minute; procrastination is a Kenyan habit, and the queues of Safaricom are very long in the last 24 hours, despite the IPO having run for almost a month. What were we waiting for? (and does Obama carry this gene?)
- Party guilty of not fully embracing technology: it’s actually possible to buy the shares without having to join a stockbroker queue if (i) you apply online at the official IPO site (which I did) but I did not (ii) attempt to pay via ATM for the same shares. IPO’s tend to run on a different cycle and I didn’t want to be time barred for a delay in funds
More on the official IPO site; it calls for a leap of faith like buying an air ticket online with boarding pass and successfully completing the flight. But the site does not seem to allow for any amendments (buy more or less shares or even cancel an order after you have applied.
And then I received this ominous e-mail from whoever runs the official site
To: ___________________
Subject: SAFARICOM IPO APPLICATION: PENDING PAYMENT
Date: Thu, 17 Apr 2008
Dear Sir or Madam,
Thank you for your online application for Safaricom IPO shares dated 4/__/2008 reference _______, in the name of ______.
Please note that the next stage of the application process is to make payment for your application at the receiving bank or broker that you selected, by the close of the IPO offer period on Wednesday April 23rd 2008.
If you have already made payment for your application, kindly disregard this email.
In the event of any queries, contact us via email at safaricomipo@swiftkenya.com or call us on +254 20 2754300.
Warm regards
Customer Service Team
Safaricom IPO at Citi
So let’s see how it goes in the last day of the IPO as I pay for the shares.
across the border: Stanbic Uganda, another over-subscribed IPO from 2007 performed even better than expected with a nice dividend of Ug. Shillings 6.64 shillings per share. Maybe I should try the Zambia Celtel IPO too
Monday, April 21, 2008
Motoring Moment
- KQ Plane overshoots runway at Entebbe. No reported injuries
- The Nairobi Star has a story about the Kenya Government not wanting to buy new limousines for ministers and the Prime Minister. Meanwhile the Uganda Government is selling 20 post CHOGM BMW jeeps – why not swop?
Speaking of which, what happened to the stretch limos that former presidents Moi and Kenyatta used to use. They disappeared totally during the first term of President Kibaki – but like with the re-discovery of Harambee House office shouldn’t they make a comeback in 2008?
- Is it a rule that lady drivers in expensive cars must wear monster sunglasses?
- The seat of power in Kenya is no longer back left; but front left next to the driver, then you can have bodyguards or aides in the back
- The latest power accessory is a chase car. Made popular by ministers, but now judiciary, military and even MP's & civic leaders use them when visiting trouble spots. Saw a military general last month, who has gone the Uganda route - his chase car was a pick-up full of soldiers with rifles
- It is scary to be a Nissan B16 owner - a car can have latest license plates (few weeks old) like KBA111E and already be missing indicator lights.
- Nice to see cars back in the DT Dobie showroom – which had empty windows in January and February. Damage to an $80,000 car is not worth the drive-past display. Besides if you want a Mercedes, you know how to get one, you don’t have to see it.
- The Nairobi Star has a story about the Kenya Government not wanting to buy new limousines for ministers and the Prime Minister. Meanwhile the Uganda Government is selling 20 post CHOGM BMW jeeps – why not swop?
Speaking of which, what happened to the stretch limos that former presidents Moi and Kenyatta used to use. They disappeared totally during the first term of President Kibaki – but like with the re-discovery of Harambee House office shouldn’t they make a comeback in 2008?
- Is it a rule that lady drivers in expensive cars must wear monster sunglasses?
- The seat of power in Kenya is no longer back left; but front left next to the driver, then you can have bodyguards or aides in the back
- The latest power accessory is a chase car. Made popular by ministers, but now judiciary, military and even MP's & civic leaders use them when visiting trouble spots. Saw a military general last month, who has gone the Uganda route - his chase car was a pick-up full of soldiers with rifles
- It is scary to be a Nissan B16 owner - a car can have latest license plates (few weeks old) like KBA111E and already be missing indicator lights.
- Nice to see cars back in the DT Dobie showroom – which had empty windows in January and February. Damage to an $80,000 car is not worth the drive-past display. Besides if you want a Mercedes, you know how to get one, you don’t have to see it.
Friday, April 18, 2008
April 18: Mostly Equity Links
KCB goes payday: with a salary advance product, that mimics one popular, silent, product of Equity Bank – the salary advance loan. KCB’s is up to 100,000 shillings ($1,600) or 50% of salary with no hidden charges - read more on pay day loans
Equity niches: Equity has cut a niche for discovering new products – basically they see a gap and Kenyans with needs and they step forward and finance that need. Where there was no one there, now one can do pretty much anything. e.g Farmers crying about fertilizer costs, next thing, there are equity fertilizer loans for them!
Equity goes regional with the acquisition of Uganda Microfinance Limited: good luck creating a cross-border seamless bank that will enable account holders to transact regardless of countries. Even multi-nationals have hiccups with that.
KPLC extends credit : The KPLC (Kenya Power & Lighting Company) is looking for a bank/MFI to advance 400 million shillings (4 million euros) Electricity Connection Revolving Fund to allow their potential subscribers to pay electricity connection (setup costs) over several months. What are the odds that Equity will win the contract that requires that specifies that the award will go to a MFI/bank that is 10 years old with more than 30,000 active customers, a turnover of 100 million shillings, with 90% repayments and that has been rated by a recognized rating agency in the field of micro-financing/banking?
Equity niches: Equity has cut a niche for discovering new products – basically they see a gap and Kenyans with needs and they step forward and finance that need. Where there was no one there, now one can do pretty much anything. e.g Farmers crying about fertilizer costs, next thing, there are equity fertilizer loans for them!
Equity goes regional with the acquisition of Uganda Microfinance Limited: good luck creating a cross-border seamless bank that will enable account holders to transact regardless of countries. Even multi-nationals have hiccups with that.
KPLC extends credit : The KPLC (Kenya Power & Lighting Company) is looking for a bank/MFI to advance 400 million shillings (4 million euros) Electricity Connection Revolving Fund to allow their potential subscribers to pay electricity connection (setup costs) over several months. What are the odds that Equity will win the contract that requires that specifies that the award will go to a MFI/bank that is 10 years old with more than 30,000 active customers, a turnover of 100 million shillings, with 90% repayments and that has been rated by a recognized rating agency in the field of micro-financing/banking?
Wednesday, April 16, 2008
KCB goes upscale
Joining the exodus of banks leaving the Nairobi CBD will be KCB, who will shift their headquarters from Kencom House to a yet to be complete building in Upper Hill - aka the capital of vision 2030 . They join Victoria, CBA, NIC, the World Bank, and a dozen insurance companies with their own buildings in a great part of town, but with no room for road expansion.
NSE Briefs
Scangroup: It was a pleasant surprise to pick up the newspaper this morning and see results from Scangroup (company earnings usually break at theNSE site) for the year ended in December 2007.
Turnover was up from 3 billion to 4.7 shillings billion, and profit after tax was up from 279m to 353 million shillings (27%) as were EPS (1.48) and dividend per share of Kshs. 0.90 – which is not bad for a share that was oversubscribed 3X just 16 months ago.
KCB: Good and not so good news form the notice of their upcoming AGM (May 9). The company will be cross-listing it shares in Uganda and Tanzania but also proposes to carve out an employee share ownership scheme (ESOP) from the creation of new shares in a proposed rights issue (reserving 150 million of the 400 million new shares). ESOP shares are controversial unless they are bought from the pool of existing, issued, shares.
Turnover was up from 3 billion to 4.7 shillings billion, and profit after tax was up from 279m to 353 million shillings (27%) as were EPS (1.48) and dividend per share of Kshs. 0.90 – which is not bad for a share that was oversubscribed 3X just 16 months ago.
KCB: Good and not so good news form the notice of their upcoming AGM (May 9). The company will be cross-listing it shares in Uganda and Tanzania but also proposes to carve out an employee share ownership scheme (ESOP) from the creation of new shares in a proposed rights issue (reserving 150 million of the 400 million new shares). ESOP shares are controversial unless they are bought from the pool of existing, issued, shares.
Monday, April 14, 2008
Bank charges survey
The Central Bank and FSD Kenya released a report on bank charges – a summarized version of which is now available from the CBK site.
It is an interesting report based on a survey of several hundred bank customers. CBK used to publish bank charges every quarter in the newspapers from about 2003 to 2005, which were not clearly understood by the public then they appear to have decided to used FSD Kenya to do a more comprehensive analysis.
The report highlights a problem, which many bank customers face. They start a relationship with a bank for one reason, but without knowing all the charges for various others banks services. E.g. it shows that you may take a loan at one bank because of the low interest rates, but pay a lot more to service the loan, or you may open an account because of the low opening balance or free salary processing, but find it very expensive to do anything else.
Charges form an important part of bank income (the top 5 banks earnings based on commissions were Oriental, EABS, Baroda, Family Finance and Equity who all earned over 50% of their 2007 income from non-interest earnings). In terms of bank charges, Equity Bank has been very popular for two reasons
(i) They came on to the banking scenes four years ago without any legacy charges; while other banks used to adjust their charges, based on what other banks were charging, Equity were able to set their own charges
(ii) Many of their services (with low charges) are offered to customers and non-customers alike – like 50-shilling banker’s cheques.
I hope the report, and others from FSD Kenya will be republished in a daily newspaper for the millions of bank customers who don’t have Internet access to review (this is the case in Uganda)
It is an interesting report based on a survey of several hundred bank customers. CBK used to publish bank charges every quarter in the newspapers from about 2003 to 2005, which were not clearly understood by the public then they appear to have decided to used FSD Kenya to do a more comprehensive analysis.
The report highlights a problem, which many bank customers face. They start a relationship with a bank for one reason, but without knowing all the charges for various others banks services. E.g. it shows that you may take a loan at one bank because of the low interest rates, but pay a lot more to service the loan, or you may open an account because of the low opening balance or free salary processing, but find it very expensive to do anything else.
Charges form an important part of bank income (the top 5 banks earnings based on commissions were Oriental, EABS, Baroda, Family Finance and Equity who all earned over 50% of their 2007 income from non-interest earnings). In terms of bank charges, Equity Bank has been very popular for two reasons
(i) They came on to the banking scenes four years ago without any legacy charges; while other banks used to adjust their charges, based on what other banks were charging, Equity were able to set their own charges
(ii) Many of their services (with low charges) are offered to customers and non-customers alike – like 50-shilling banker’s cheques.
I hope the report, and others from FSD Kenya will be republished in a daily newspaper for the millions of bank customers who don’t have Internet access to review (this is the case in Uganda)
E-government and privacy
Online IPO Registrations I applied online for my Safaricom IPO shares.
There’s the offical site for the IPO registration that is very easy to use. Just type in your CDS number and ID number and ID/ passport number (that you used to open the CDS account) to get started ( it’s an indictment for investor education initiatives by the CMA that there are leaders and executives who still don’t know what a CDS account) - and you get all your information like contact information, select your stockbroker, how you want your refunds and dividends to be handled etc.
Some Kenyans, may find it unnerving to see their information in an online public database, like having Safaricom know where you are . The Electoral commission of Kenya (ECK) enabled online verification of vote registration (I checked and confirmed mine online, but it was missing from the voting day roll) in one of the many positive things they did before the election, and the Kenya Revenue Authority (KRA) which utilizes the internet for some clearing & forwarding processes ahs also promised to enable online tax filing and driver license.
Econet hiring Econet mobile has promised to launch services by August 2008, with new partners Essar. They even advertised for some jobs in the Friday paper, something they have done several times before. Hopefully the company will become operational and the jobs materialize
There’s the offical site for the IPO registration that is very easy to use. Just type in your CDS number and ID number and ID/ passport number (that you used to open the CDS account) to get started ( it’s an indictment for investor education initiatives by the CMA that there are leaders and executives who still don’t know what a CDS account) - and you get all your information like contact information, select your stockbroker, how you want your refunds and dividends to be handled etc.
Some Kenyans, may find it unnerving to see their information in an online public database, like having Safaricom know where you are . The Electoral commission of Kenya (ECK) enabled online verification of vote registration (I checked and confirmed mine online, but it was missing from the voting day roll) in one of the many positive things they did before the election, and the Kenya Revenue Authority (KRA) which utilizes the internet for some clearing & forwarding processes ahs also promised to enable online tax filing and driver license.
Econet hiring Econet mobile has promised to launch services by August 2008, with new partners Essar. They even advertised for some jobs in the Friday paper, something they have done several times before. Hopefully the company will become operational and the jobs materialize
2007 Kenya Bank Ranking Part III
winners
Asset growth 2006 – 2007
Equity 165%
Family 57%
DBK, City Finance 42%
Diamond Trust 40%
Fidelity 38%
Then K-rep, Barclays, Stanbic, Prime, I&M
Loan growth
Equity 100%
Stanbic 73%
Chase 61%
Family 59%
DBK, Baroda 57%
Then Diamond trust, Barclays, Fidelity, KCB, NIC
Deposit growth
City finance 131% yes but to 231m
Equity 93%
Diamond trust 45%
Transnational 42%
Fidelity 39%
Then Credit, k-rep, Chase, I&M, ABC, Baroda
Profit growth
Habib 1,600 %yes but to 107m
Bank of Africa 159%
EABS 149%
Equity 114%
Fidelity 88%
Then Co-op, Transnational, Bank of India, NBK, Prime, Consolidated, Chase
Losers
No profit City finance (-29m)
Declining profit: Guardian -47%, Giro & Dubai -30%, Fina & Equatorial -22%
Declining deposits: Middle East -19%, Victoria -6%
Declining loans: NBK -70%
Declining assets: Middle East -9%, Victoria -4%
Insider borrowing up 218% at Family, 189% at K-rep, 116% at Consolidated, Stanbic 74%, KCB 55%, while down by 90% at NBK
NPA’s : Up 233% at k-rep, 97% at chase, 59% Dubai, 51% at Equity and 48% at bank of Africa. And NPA’s were down 84% at NBK, 50% at Co-op, 40% at Barclays, 35% Southern credit and 34% at Housing Finance.
Asset growth 2006 – 2007
Equity 165%
Family 57%
DBK, City Finance 42%
Diamond Trust 40%
Fidelity 38%
Then K-rep, Barclays, Stanbic, Prime, I&M
Loan growth
Equity 100%
Stanbic 73%
Chase 61%
Family 59%
DBK, Baroda 57%
Then Diamond trust, Barclays, Fidelity, KCB, NIC
Deposit growth
City finance 131% yes but to 231m
Equity 93%
Diamond trust 45%
Transnational 42%
Fidelity 39%
Then Credit, k-rep, Chase, I&M, ABC, Baroda
Profit growth
Habib 1,600 %yes but to 107m
Bank of Africa 159%
EABS 149%
Equity 114%
Fidelity 88%
Then Co-op, Transnational, Bank of India, NBK, Prime, Consolidated, Chase
Losers
No profit City finance (-29m)
Declining profit: Guardian -47%, Giro & Dubai -30%, Fina & Equatorial -22%
Declining deposits: Middle East -19%, Victoria -6%
Declining loans: NBK -70%
Declining assets: Middle East -9%, Victoria -4%
Insider borrowing up 218% at Family, 189% at K-rep, 116% at Consolidated, Stanbic 74%, KCB 55%, while down by 90% at NBK
NPA’s : Up 233% at k-rep, 97% at chase, 59% Dubai, 51% at Equity and 48% at bank of Africa. And NPA’s were down 84% at NBK, 50% at Co-op, 40% at Barclays, 35% Southern credit and 34% at Housing Finance.
Thursday, April 10, 2008
Regional IPO Tales
Undugu gani huu?: One of my favorite entertainment sites is Bossip with its catchy headlines, like Making it Rain on These ****, Jesus Take The Wheel, and ** sit down, all of which apply in this case, but the best way to answer this story is BROTHER PLEASE! - while Uganda and Rwanda have joined thousands of Kenyans embracing the investment vehicle that is the Safaricom IPO, it appears the Bank of Tanzania is preventing Tanzanians from buying shares in Safaricom through the Dar es Salaam Stock Exchange. (hat tip RO)
Africa investment resource: africanshareholder.com is a great site to keep up with investment happenings in Africa.
Celtel IPO On: Sadly, not in Kenya, but in Zambia starting at the end of April – with 20% of the local subsidiary on offer.
Executive privilege: one reason that ministerial seats/portfolios are in great demand in Kenya is the power that comes with then such as the authority to insert one’s buddys' names on state corporation (parastatal) boards and these become law once they run in the weekly Kenya gazette. Sometimes one can even create new boards such as the new Brand Kenya Board which has been formed to market Kenya in the fields of tourism, investment, creditworthiness and international relations.
Africa investment resource: africanshareholder.com is a great site to keep up with investment happenings in Africa.
Celtel IPO On: Sadly, not in Kenya, but in Zambia starting at the end of April – with 20% of the local subsidiary on offer.
Executive privilege: one reason that ministerial seats/portfolios are in great demand in Kenya is the power that comes with then such as the authority to insert one’s buddys' names on state corporation (parastatal) boards and these become law once they run in the weekly Kenya gazette. Sometimes one can even create new boards such as the new Brand Kenya Board which has been formed to market Kenya in the fields of tourism, investment, creditworthiness and international relations.
IPO Tales: 13 days to go
- Oversubscription: If 9 million Kenyans voted last year it's possible a ¼ of them will buy shares. Or that ½ the people with bank accounts will apply for shares. On that, with two weeks to go, new banks with IPO loans include KCB (Uganda), CFC and even high street CBA.
Happy banks: Two banks may have crossed the 1 billion shilling mark for new IPO loans after just a week. They are also earning other fees such as placement/facilitation/arrangement of 1 – 2% of each loan, fees for bankers cheques, returned cheques, money transfer and other myriad charges from the IPO process.
And the fine print of many bank loans lack clauses that deal with some critical questions which borrowers should be asking before they take out 3 year loans, such as;
- If I don’t get a full allocation, can I pay back say 80% or entire loan of loan immediately?
- If shares rise to 10 shillings can I sell my shares in June and pay the bank?
- If price drops to 4 shillings and I want to cut my losses, can I sell the shares?
Multiple share accounts: CDS gets 30 shillings per application, and the transaction managers have warned retail investors not to open many accounts and apply for IPO shares in many names. I saw one I-bank report, which mentions that investors who do this will be charged a 1.5% consolidation fee, but that is not contained in the prospectus.
Happy banks: Two banks may have crossed the 1 billion shilling mark for new IPO loans after just a week. They are also earning other fees such as placement/facilitation/arrangement of 1 – 2% of each loan, fees for bankers cheques, returned cheques, money transfer and other myriad charges from the IPO process.
And the fine print of many bank loans lack clauses that deal with some critical questions which borrowers should be asking before they take out 3 year loans, such as;
- If I don’t get a full allocation, can I pay back say 80% or entire loan of loan immediately?
- If shares rise to 10 shillings can I sell my shares in June and pay the bank?
- If price drops to 4 shillings and I want to cut my losses, can I sell the shares?
Multiple share accounts: CDS gets 30 shillings per application, and the transaction managers have warned retail investors not to open many accounts and apply for IPO shares in many names. I saw one I-bank report, which mentions that investors who do this will be charged a 1.5% consolidation fee, but that is not contained in the prospectus.
KQ's 787 dreams
What seemed like a rough year for Kenya Airways year ended last week (March 31). Half year, pre tax profits were 2.8 billion shillings ($43 million) (down from 3.4 billion) the year before. They had lost a new 737-8 aircraft in a crash, had seen fuel reach record highs ($85 a barrel in September) and were being hammered by the strong shilling. Since then we had the dispted election and resultant violence, reduced traffic to Kenya, canceled tourist bookings & flights, while fuel continued to climb ($111) a barrel yesterday.
The start of the new year also off to an unfortunate start with a further delay in Boeing 787 dreamliner program which was the center of the future fleet of KQ - they had ordered nine of the new jets, with the first schedule to arrive in 2010. The 787 was supposed to be delivered to customers last year but is yet to fly and is not expected to be delivered to customers till late next year, meaning KQ as customer No. 28 will probably not get the planes that are critical to their long-term plans until around 2012.
No calls please: Zain (Celtel parent) has successfully tested mobile roaming service on aircraft and says it will soon be available in Nigeria and 10 other countries including Kenya. I hope not, flying should remain mobile free - maybe for text, data only.
Monday, April 07, 2008
IPO Hard Choices
It’s getting very hard to stick with my avowed IPO bypass plan with Safaricom. The market is so liquid now, and may dry up later, so why not take advantage of it now? Also I read one I-bank analysis of IPO’s in the last few years, that shows that all (except Eveready) have significantly out-performed their IPO price, and Safaricom is no Eveready. Still reading Maishinski comments here about paying a premium, and likely refunds, there’s still great upside for capital appreciation, in a company growing at 30% a year with a likely dividend of 0.15 this year.
just when I thought I was out, they pull me back in!
More IPO
- Banks versus Brokers Dyer & Blair have set up an IPO center on Loita St. that is open 7 days a week (weekdays 7am to 7pm). Brokers have to fight tooth and nail with commercial banks to get their IPO commissions since the banks have a much larger branch presence to earn a 1% commission on each application. That’s why stockbrokers can be found in super markets, cyber café’s and bank halls (latest is Drummond and Suntra brokers at Consolidated Bank) selling IPO’s to earn their 1.5% commissions. You are sometimes scared of making contact with a sales agent when you walk past a bank tent or broker desk in a movie hallway with a Safaricom brochures and forms waiting.
- What’s worse than taking an IPO loan? Paying for shares using a Barclays card (or debit card)
- Regional: the first confirmation of an over-subscription comes the East African with a report that NSSF Uganda will get 1/3 of the shares tehy applied for – or about $11 million worth (out of $34 million). [1.3% of the shares on offer]
- CFC takes the IPO to Rwanda via Fina Bank
- International : Wambia Capital offers US institutional investors and high net-worth individualsa chance to invest in Safaricom service only applicable to sophisticated investors for secondary market issues
- Boardroom dealing: Former LSK Chairman Former LSK chair makes a damning accusationabout Mobitelea and its cabinet allies.
More IPO
- Banks versus Brokers Dyer & Blair have set up an IPO center on Loita St. that is open 7 days a week (weekdays 7am to 7pm). Brokers have to fight tooth and nail with commercial banks to get their IPO commissions since the banks have a much larger branch presence to earn a 1% commission on each application. That’s why stockbrokers can be found in super markets, cyber café’s and bank halls (latest is Drummond and Suntra brokers at Consolidated Bank) selling IPO’s to earn their 1.5% commissions. You are sometimes scared of making contact with a sales agent when you walk past a bank tent or broker desk in a movie hallway with a Safaricom brochures and forms waiting.
- What’s worse than taking an IPO loan? Paying for shares using a Barclays card (or debit card)
- Regional: the first confirmation of an over-subscription comes the East African with a report that NSSF Uganda will get 1/3 of the shares tehy applied for – or about $11 million worth (out of $34 million). [1.3% of the shares on offer]
- CFC takes the IPO to Rwanda via Fina Bank
- International : Wambia Capital offers US institutional investors and high net-worth individuals
- Boardroom dealing: Former LSK Chairman Former LSK chair makes a damning accusationabout Mobitelea and its cabinet allies.
Saturday, April 05, 2008
Kenya 2007 Bank Ranking: Part II
Return on Assets pre-tax profits
Oriental 12.33%
StanChart 5.37%
Imperial 4.81%
Bank of India 4.58%
Barclays 4.48%
Then Equity (4.45%), I&M, NBK, Credit
Return on Equity
StanChart 53.23%
Bank of India 40.58%
Barclays 38.73%
CBA 38.71%
KCB 38.45%
Then Coop, Imperial, Stanbic, NBK, I&M
Loans to deposits ratio
DBK 153%
K-Rep 114%
Middle East 99%
Barclays 97%
NIC 90%
Then Housing Finance, Stanbic, Bank of Africa, Imperial, I&M
Ratio of government securities to customer loans Government-friendly
NBK 284%
Habib Bank 237%
Habib AG Zurich 188%
Bank of India 156%
Baroda 85%
Then City Finance, StanChart, Equity, Credit, DBK
NPA as % of Loans
City Finance 132%
Oriental 116%
Paramount Universal 82%
NBK 70%
EABS 67%
Then Consolidated, Guardian, Transnational, Housing Finance, Southern Credit
2007 Provisions to NPA ratio prudential banks
Stanbic 33%
I&M 30%
Giro 29%
Bank of India 22%
Diamond Trust 18%
Then CFC, Prime, ABC, K-Rep, Chase
Staff Expenses good employers?
Kenya Commercial 4,813 (4.8 billion shillings)
Barclays 4,562
StanChart 2,492
Coop 2,395
NBK 1,495
Then Equity, CBA, Citibank, NIC, CFC
Staff costs/assets even better (paying) employers?
K-Rep 6%
Consolidated 5%
Transnational 5%
KCB 4%
Family Finance 4%
Then Coop, NBK, Housing Finance, Imperial
(Non-interest)/commissions as a % of Total income charge you for breathing air in their branches
Oriental 87%
EABS 61%
Baroda 60%
Family Finance 53%
Equity 53%
Then Consolidated, Coop, Paramount Universal, Bank of Africa, KCB
Placements (short term cash in December 2007) to offer as IPO loans?
CBA 9.4 billion
Equity 6.9 billion
Stanbic 5 billion
NBK 3 .9 billion
Barclays 3.1 billion
Then Citibank, NIC, KCB, Imperial, Diamond Trust
Oriental 12.33%
StanChart 5.37%
Imperial 4.81%
Bank of India 4.58%
Barclays 4.48%
Then Equity (4.45%), I&M, NBK, Credit
Return on Equity
StanChart 53.23%
Bank of India 40.58%
Barclays 38.73%
CBA 38.71%
KCB 38.45%
Then Coop, Imperial, Stanbic, NBK, I&M
Loans to deposits ratio
DBK 153%
K-Rep 114%
Middle East 99%
Barclays 97%
NIC 90%
Then Housing Finance, Stanbic, Bank of Africa, Imperial, I&M
Ratio of government securities to customer loans Government-friendly
NBK 284%
Habib Bank 237%
Habib AG Zurich 188%
Bank of India 156%
Baroda 85%
Then City Finance, StanChart, Equity, Credit, DBK
NPA as % of Loans
City Finance 132%
Oriental 116%
Paramount Universal 82%
NBK 70%
EABS 67%
Then Consolidated, Guardian, Transnational, Housing Finance, Southern Credit
2007 Provisions to NPA ratio prudential banks
Stanbic 33%
I&M 30%
Giro 29%
Bank of India 22%
Diamond Trust 18%
Then CFC, Prime, ABC, K-Rep, Chase
Staff Expenses good employers?
Kenya Commercial 4,813 (4.8 billion shillings)
Barclays 4,562
StanChart 2,492
Coop 2,395
NBK 1,495
Then Equity, CBA, Citibank, NIC, CFC
Staff costs/assets even better (paying) employers?
K-Rep 6%
Consolidated 5%
Transnational 5%
KCB 4%
Family Finance 4%
Then Coop, NBK, Housing Finance, Imperial
(Non-interest)/commissions as a % of Total income charge you for breathing air in their branches
Oriental 87%
EABS 61%
Baroda 60%
Family Finance 53%
Equity 53%
Then Consolidated, Coop, Paramount Universal, Bank of Africa, KCB
Placements (short term cash in December 2007) to offer as IPO loans?
CBA 9.4 billion
Equity 6.9 billion
Stanbic 5 billion
NBK 3 .9 billion
Barclays 3.1 billion
Then Citibank, NIC, KCB, Imperial, Diamond Trust
Friday, April 04, 2008
One week gone
The Safaricom IPO is one week old today
IPO briefs
- Reason #1 to have government as a shareholder = tax breaks!: Not that Safaricom needs any, but the increase in share capital to Kshs. 6 billion has been exempted from stamp duty by the Finance Minister – saving the company about 6 million shillings ($94,000)
- Across the border: From Uganda we hear that Dyer & Blair is selling the shares at shopping malls, as is Uganda Telecom, while Standard Chartered Uganda is offering margin loans of up to Ushs. 50 million to buy IPO shares (~370,000 shares) what about Tanzania?
- More finance; Equity bank give the privileged Safaricom employees up to 100% finance, while even Barclays is hawking shares at it’s 112 branches. Also add Equatorial and K-Rep to the banks offering 100% finance
- Proactive MP : from an offline story in the Nation Nyeri Town MP Ms. Murugi Mathenge and the Nyeri South DC hosted an investors briefing on the Safaricom IPO. I hope other MP’s are as enterprenual and in touch with their constituents.
Opportunities
jobs on offer
from the papers
Top government vacancies
- Communications Commission of Kenya (CCK): director general & CEO who will regulate Safaricom and the telecommunications sector
- Director general at the Kenya civil aviation authority (KCAA)
Banking
- Equity Bank business growth & development managers, credit corporate relationship managers, credit managers
- KCB: business development manager, head, facilities & property management
- Gulf African bank: legal officer, corporate relationship managers, (Nairobi, Mombasa), manager structured finance recruitment@gulfafricanbank.com by 11/4
Others
- ICT Manager at Safari Park Hotel
- East African breweries: IS lead – great lakes region, logistic manager
- Telkom Kenya Chief HR Officer.
- Program assistant at the Open society institute for eastern Africa OSIEA
blog-exclusive!: Following the outcry over the announced large (bloated), a government committee has come up with an ideal ideal cabinet for Kenya of just 16 Ministers! fit in the names
IPO briefs
- Reason #1 to have government as a shareholder = tax breaks!: Not that Safaricom needs any, but the increase in share capital to Kshs. 6 billion has been exempted from stamp duty by the Finance Minister – saving the company about 6 million shillings ($94,000)
- Across the border: From Uganda we hear that Dyer & Blair is selling the shares at shopping malls, as is Uganda Telecom, while Standard Chartered Uganda is offering margin loans of up to Ushs. 50 million to buy IPO shares (~370,000 shares) what about Tanzania?
- More finance; Equity bank give the privileged Safaricom employees up to 100% finance, while even Barclays is hawking shares at it’s 112 branches. Also add Equatorial and K-Rep to the banks offering 100% finance
- Proactive MP : from an offline story in the Nation Nyeri Town MP Ms. Murugi Mathenge and the Nyeri South DC hosted an investors briefing on the Safaricom IPO. I hope other MP’s are as enterprenual and in touch with their constituents.
Opportunities
jobs on offer
from the papers
Top government vacancies
- Communications Commission of Kenya (CCK): director general & CEO who will regulate Safaricom and the telecommunications sector
- Director general at the Kenya civil aviation authority (KCAA)
Banking
- Equity Bank business growth & development managers, credit corporate relationship managers, credit managers
- KCB: business development manager, head, facilities & property management
- Gulf African bank: legal officer, corporate relationship managers, (Nairobi, Mombasa), manager structured finance recruitment@gulfafricanbank.com by 11/4
Others
- ICT Manager at Safari Park Hotel
- East African breweries: IS lead – great lakes region, logistic manager
- Telkom Kenya Chief HR Officer.
- Program assistant at the Open society institute for eastern Africa OSIEA
blog-exclusive!: Following the outcry over the announced large (bloated), a government committee has come up with an ideal ideal cabinet for Kenya of just 16 Ministers! fit in the names
Thursday, April 03, 2008
Kenya Bank Rankings for 2007
the basics
Assets
Barclays Kenya 157,928 [i.e. 158 billion shillings, ~ $2.43 billion]
Kenya Commercial 112,211
Standard Chartered 91,252
Cooperative 65,697
Equity 53,129
Citibank Kenya 47,301
National Bank of Kenya 41,414
Commercial Bank of Africa 39,509
Stanbic 34,464 *
NIC 31,396
Diamond Trust 30,313 [30.3 billion, ~$466 million]
Investment & Mortgages 29420
CFC 28,020 *
Baroda 14,709
Prime 13,862
Imperial 11,723
Housing Finance 10,414
Bank of India 10,344
EABS 9,452
Family Finance 8,569 [8.6 billion, ~$132 million]
Fina 8,089
Bank of Africa 7,657
K-Rep 7,039
Habib AG Zurich 6,206
ABC 6,143
Chase 5,754
Giro 5,611
Guardian 5,540
Southern Credit 5,306
Equatorial 4,879
Development Bank of Kenya 4,708 (4.7 billion shillings, $72 million)
Victoria 4,131
Consolidated 4,109
Habib Bank 3,845
Credit 3,358
Transnational 3,221
Fidelity 3,192
Middle East 3,097
Paramount Universal 2367
Oriental 1,695
edit Dubai 1,544
City Finance 744 million shillings (~$11 million)
Profit before tax
Barclays 7,079 million (i.e. 7 billion shillings, ~$109 million)
Standard Chartered 4,897
Kenya Commercial 3,863
Equity 2,364
Cooperative 2,287
Deposits
Barclays 109,097 million [i.e. 109 billion, ~$1.68 billion]
Kenya Commercial 85,638
Standard Chartered 73,841
Cooperative 54,775
National Bank of Kenya 34,722
Loans
Barclays 105,346 million [i.e. 105 billion, ~$1.62 billion]
Kenya Commercial 56,477
Standard Chartered 39,469
Cooperative 34,832
NIC 22,209
Source: from audited accounts for 2007
- * CFC and Stanbic merger not finalized
- Missing from the list are Gulf African, and First Family – which as Shariah Banks are treated differently, and Charterhouseand Dubaibanks
Assets
Barclays Kenya 157,928 [i.e. 158 billion shillings, ~ $2.43 billion]
Kenya Commercial 112,211
Standard Chartered 91,252
Cooperative 65,697
Equity 53,129
Citibank Kenya 47,301
National Bank of Kenya 41,414
Commercial Bank of Africa 39,509
Stanbic 34,464 *
NIC 31,396
Diamond Trust 30,313 [30.3 billion, ~$466 million]
Investment & Mortgages 29420
CFC 28,020 *
Baroda 14,709
Prime 13,862
Imperial 11,723
Housing Finance 10,414
Bank of India 10,344
EABS 9,452
Family Finance 8,569 [8.6 billion, ~$132 million]
Fina 8,089
Bank of Africa 7,657
K-Rep 7,039
Habib AG Zurich 6,206
ABC 6,143
Chase 5,754
Giro 5,611
Guardian 5,540
Southern Credit 5,306
Equatorial 4,879
Development Bank of Kenya 4,708 (4.7 billion shillings, $72 million)
Victoria 4,131
Consolidated 4,109
Habib Bank 3,845
Credit 3,358
Transnational 3,221
Fidelity 3,192
Middle East 3,097
Paramount Universal 2367
Oriental 1,695
edit Dubai 1,544
City Finance 744 million shillings (~$11 million)
Profit before tax
Barclays 7,079 million (i.e. 7 billion shillings, ~$109 million)
Standard Chartered 4,897
Kenya Commercial 3,863
Equity 2,364
Cooperative 2,287
Deposits
Barclays 109,097 million [i.e. 109 billion, ~$1.68 billion]
Kenya Commercial 85,638
Standard Chartered 73,841
Cooperative 54,775
National Bank of Kenya 34,722
Loans
Barclays 105,346 million [i.e. 105 billion, ~$1.62 billion]
Kenya Commercial 56,477
Standard Chartered 39,469
Cooperative 34,832
NIC 22,209
Source: from audited accounts for 2007
- * CFC and Stanbic merger not finalized
- Missing from the list are Gulf African, and First Family – which as Shariah Banks are treated differently, and Charterhouse
Tuesday, April 01, 2008
IPO Train: full on board
It’s now the fourth official day of the Safaricom IPO, with some banks and brokers working over 7 days processing applications. And, over the weekend, many of the negatives of the IPO turned into positives;
Politics align: The IPO was launched last Friday by President Mwai Kibaki, who placed a personal application for 1 million shares, worth 5 million shillings ((0.01% of the shares on offer) . Since then the ODM side have also changed tune of the IPO matter, as they realized that as leaders they have to guide their people – and one of the ways to do so is to enlighten them on opportunities of wealth building and methods of advancement beyond agricultural and real estate productivity. Why tell people not to buy shares, when other communities buy the shares? What do you want your people to do? In any case the public holds minority stakes in most NSE companies with over half the shareholding hidden behind other companies whose shareholders are not well known.
Competitive sisters: Kengen was a watershed IPO but that was 2 years ago. The last massive regional IPO was Stanbic Uganda – how do they compare?
Company; Stanbic : Safaricom
Target; (Ushs 70 billion) USS$ 38 million: (Kshs. 50 billion) US$ 770 million
Beneficiaries; Standard Bank (SA) & Government of Uganda ; Government of Kenya only
Shares on offer; 1 billion shares : 10 billion shares
Share price; (Kshs. 3) $0.04 : (Kshs. 5) $0.08
Oversubscription 3 X : (2X is a conservative estimate)
Applications: 37,000 ; (1 million expected)
Animal Metaphors: We now have CNBC Africa which has been live for about a month and it’s a great channel to watch especially late at night, when they are covering Asia or American markets. Last week, they were discussing the US banking crisis and one analyst used the Sherlock Holmes tale of the dog that did not bark in the night to reflect on the silence of Japanese banks that were heavy investors in US mortgage securities but have not declared any losses.
The animal metaphor with Safaricom - is the elephant in the room which everyone is ignoring and that is Vodafone (UK): Did they want the IPO? I doubt it – they are not making money from the IPO, and will go from having a cozy boardroom, to having a million shareholders (estimate) demanding phones and umbrella’s at AGM’s.
- They are reluctant partners in this who for the last three years (and long before Mobitelea became a Matatu name) they had tried to buy 9% or 11% of Safaricom from the Government of Kenya, for a figure far less than the Government will raise from the public. Vodafone will remain the largest shareholder with 40% (or 35%) to GoK’s 35% , and retain veto power over business plans, budget, and CEO & FC appointments. But most companies listed on the NSE have parent companies who find it prudent to retain at least 50% of the company’s ownership to control the strategic and management direction of a company – and could they be buying any floating shares out there after listing? They can own up to 60% of Safaricom.
- It has exposed the embarrassing practices that gave rise to Mobitelea
Will stockbrokers’ change?: The only smudge so far has been the past performance of stockbrokers. It is sad that the lines outside Nation Center (of Nyaga Stockbroker clients) is as long as that any broker/banker I have seen this week. Stockbrokers have put out their best clothes, advertised and got new staff to woo investors for the 1 billion plus shillings ($15 million) commissions from the IPO - but what happens after? Will they revert to their dark old ways of insider trading, and secret share dealing? An ominous story from the Nation goes that one of the most interesting but unconfirmed anecdotes at the bourse is that Nyaga Securities managing director Patrick Gakiavi actually attended (as a director) the NSE meeting that decided to pump Kshs. 100 million into his operation. - and that joins the NSE urban legend archive like the one of the CEO who was able to cash out his significant stake on the last day of Uchumi share trading
Modernization to eliminate rogue brokers: The central deposit settlement corporation (CDSC) is seeking an SMS solution (mobile phone messaging) to alert investors on their account share trades (theirs/by rogue brokers) and also respond to client requests. (Deadline is April 9) The laws have already been amended to allow them to collect 30 shillings from each Safaricom applicant for postage and this will probably continue for any statements thereafter – as investors will be eased into the cheaper option of SMS (maybe at 5 or 10 shillings per message)
Beyond Safaricom: Hisanet Africa recommend that investors look at some other shares of interest amidst the IPO: these include NIC Bank, Kengen, Barclays (who are now expanding into Rwanda), Access Kenya, and East African Cables.
Politics align: The IPO was launched last Friday by President Mwai Kibaki, who placed a personal application for 1 million shares, worth 5 million shillings ((0.01% of the shares on offer) . Since then the ODM side have also changed tune of the IPO matter, as they realized that as leaders they have to guide their people – and one of the ways to do so is to enlighten them on opportunities of wealth building and methods of advancement beyond agricultural and real estate productivity. Why tell people not to buy shares, when other communities buy the shares? What do you want your people to do? In any case the public holds minority stakes in most NSE companies with over half the shareholding hidden behind other companies whose shareholders are not well known.
Competitive sisters: Kengen was a watershed IPO but that was 2 years ago. The last massive regional IPO was Stanbic Uganda – how do they compare?
Company; Stanbic : Safaricom
Target; (Ushs 70 billion) USS$ 38 million: (Kshs. 50 billion) US$ 770 million
Beneficiaries; Standard Bank (SA) & Government of Uganda ; Government of Kenya only
Shares on offer; 1 billion shares : 10 billion shares
Share price; (Kshs. 3) $0.04 : (Kshs. 5) $0.08
Oversubscription 3 X : (2X is a conservative estimate)
Applications: 37,000 ; (1 million expected)
Animal Metaphors: We now have CNBC Africa which has been live for about a month and it’s a great channel to watch especially late at night, when they are covering Asia or American markets. Last week, they were discussing the US banking crisis and one analyst used the Sherlock Holmes tale of the dog that did not bark in the night to reflect on the silence of Japanese banks that were heavy investors in US mortgage securities but have not declared any losses.
The animal metaphor with Safaricom - is the elephant in the room which everyone is ignoring and that is Vodafone (UK): Did they want the IPO? I doubt it – they are not making money from the IPO, and will go from having a cozy boardroom, to having a million shareholders (estimate) demanding phones and umbrella’s at AGM’s.
- They are reluctant partners in this who for the last three years (and long before Mobitelea became a Matatu name) they had tried to buy 9% or 11% of Safaricom from the Government of Kenya, for a figure far less than the Government will raise from the public. Vodafone will remain the largest shareholder with 40% (or 35%) to GoK’s 35% , and retain veto power over business plans, budget, and CEO & FC appointments. But most companies listed on the NSE have parent companies who find it prudent to retain at least 50% of the company’s ownership to control the strategic and management direction of a company – and could they be buying any floating shares out there after listing? They can own up to 60% of Safaricom.
- It has exposed the embarrassing practices that gave rise to Mobitelea
Will stockbrokers’ change?: The only smudge so far has been the past performance of stockbrokers. It is sad that the lines outside Nation Center (of Nyaga Stockbroker clients) is as long as that any broker/banker I have seen this week. Stockbrokers have put out their best clothes, advertised and got new staff to woo investors for the 1 billion plus shillings ($15 million) commissions from the IPO - but what happens after? Will they revert to their dark old ways of insider trading, and secret share dealing? An ominous story from the Nation goes that one of the most interesting but unconfirmed anecdotes at the bourse is that Nyaga Securities managing director Patrick Gakiavi actually attended (as a director) the NSE meeting that decided to pump Kshs. 100 million into his operation. - and that joins the NSE urban legend archive like the one of the CEO who was able to cash out his significant stake on the last day of Uchumi share trading
Modernization to eliminate rogue brokers: The central deposit settlement corporation (CDSC) is seeking an SMS solution (mobile phone messaging) to alert investors on their account share trades (theirs/by rogue brokers) and also respond to client requests. (Deadline is April 9) The laws have already been amended to allow them to collect 30 shillings from each Safaricom applicant for postage and this will probably continue for any statements thereafter – as investors will be eased into the cheaper option of SMS (maybe at 5 or 10 shillings per message)
Beyond Safaricom: Hisanet Africa recommend that investors look at some other shares of interest amidst the IPO: these include NIC Bank, Kengen, Barclays (who are now expanding into Rwanda), Access Kenya, and East African Cables.
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