Tuesday, March 10, 2009

Kutwa Tuesday: From Stanchart to LPG

stories found this week

Stanchart Bank:

Smaller profit - Standard Chartered is being much maligned for being the first bank to report a profit drop in 2008 of 4% to 4.7 billion shillings. ($59 million) (Increased 29% in 07). The bank which adopted a conservative approach compared to Barclays, KCB and Equity. Stanchart had asset growth of 9% to 99 billion (13% in 07), deposits up 4% to 77 billion and loans up 10% to 43 billion in 2008. Still their shareholders will get the highest dividend of any listed bank in 2008.

Here are some other performance comparisons of the main banks that have so far reported their 2008 results.

Goes for smaller customers - In a slight about turn, Stanchart has also launched a new low cost transactional account called Hifadhi, costs 2,000 to open, no ledger fees, or ‘cash handling fees’ with e-statements you only pay for transactions you incur, though its’ not as affordable as other 'cheap' bank accounts for small earners. Going for smaller customer has been a recurrent theme in 2008 with banks, insurance and investment companies lowering the minimum subscription amount. Examples are pepea from Barclays, Toboa from Old Mutual and even the Government of Kenya which lowered the minimum investment for GoK treasury bonds to just Kshs. 50,000 (~$625)

Bank briefs
- Stanchart get back to what they are good at – big corporate deals this one for Kengen
- Gulf African launches a shariah compliant mortgage scheme
- New bank branches: First Community bank now in Malindi, Ecobank in Kisii, while Family Bank re-opened in Githurai
- Another SMS sends Equity customers into bank panic withdrawals this time in Machakos.

From the blogs

Siasa mbaya, maisha mbaya: Global economic slump aside, Nairobi’s Stock Exchange will not see a bull run until the country’s political problems are sorted out according to MainaT

The Sunday Nation broke a story of the old Embakasi airport been handed over to an unlicensed new airline, but airport analysis comes from one Coldtusker

Following in the success of the infrastructure bond (over-subscribed by 45%), the Kenya Government is offering another bond to supplement its budget deficit; this one is for 8.5 billion ($106 million). More details from Conceptadvisoryservices and the minimum investment is just 50,000 ($625).

Kenya Rugby Effects: Kenya had a wonderful run at the IRB World Cup in Dubai, and knocked out defending champions Fiji in the quarter finals. Here’s some rugby loss reactionfrom Fiji.


Employees lose & lose - it’s been a bad week for employees as the Employment Act was set aside and the government shifted more of the pension burden to civil servants to contribute towards their own retirement funds.

Madaraka finalized - Madaraka Estate houses were finally sold, apparently ending a long long running saga between homeowners, the City Council and the National Housing Corporation who should really update their website.

Laptop mania - so many offers for laptops these days, new this week were
- Safaricom selling Macbook with broadband modem for 100,000 ($1,250)
- Acer A110 laptop on sale with open office for $230 - great for Kenyans new to mini laptop market
- Even my bank/broker (CFC) hawks Acer Aspire 4710 and has loans that work out to 5,500 ($70) per month

Is Grad School a Con? - Half the Sunday Nation advertisements were for colleges aiming at the recent high school graduates whose results were announced last week. Also growing are the numbers of universities and master programs, but this article argues against going to grad school to avoid the recession with the author pointing out that;

- Grad school pointlessly delays adulthood.
- PhD programs are pyramid schemes
- Business school is not going to help 90% of the people who go.
- Most jobs are better than they seem: You can learn from any job.
- Graduate school forces you to overinvest: It’s too high risk.
(found at chris blattman)

LPG Shocker - when to buy cooking gas last night. Found the cylinder, however it appears that there is now a valve that will be mandatory on all cylinders from April 2009 - it is a universal valve, that will enable consumers to buy LPG /cooking gas from any supplier e.g. Kenol., Total, NOCK - replacing cylinders from any of them, since they will now have a common head/valve. The move is supposed to break the monopoly of established companies e.g. if you had a Kenol gas cylinder, you could only replace it at Kenol when buying new gas, whereas if you wanted to switch to Shell gas, you’d have to buy a brand new cylinder.

new gas cap

The problem was that many Total stations did not have the valve. (I checked at three stations) and they all sent me to the place that has everything in Kenya - Nakumatt. Nakumatt also say they stock valves for all companies, but only had the generic caps to sell. It’s scary to use a generic caps, since there are many fires in Kenya caused by exploding/leaking cooking gas cylinders. Hope this turns out ok when April comes around and more consumers realize they have to buy caps which cost anywhere from 500 ($6.25) to 900 shillings each, another cost to the burdened urban consumer. It would also be nice if oil companies and/or the Government conducted some consumer awareness about this matter, not leaving it to Nakumatt and untrained Petrol attendants.


coldtusker said...

1) The coldtusker link is not working. Please re-link.

2) Is SCBK's dividend yield the highest? Yield is more important than absolute dividend. KCB might be a better dividend yielding stock.

3) Lose... one 'o'

4) Laptop Acer 110. Where can I see it?

5) 'Standard' Gas regulators - Oil Marketers against it. Good reasons & not-so-good. Gov't introduced the regulation but lethargy on their end. OMs are protesting?

maina said...
This comment has been removed by the author.
MainaT said...

Btw-about the gas thingy, I read somewhere that like all the Energy Ministers that preceded him (you know Total Man (why would he promote his rival muppet) and his Kenol; RAO and his gas distribution; Kiraitu has set himself up a with cushy gas distribution buzi. Coincident? I ain't saying nothing...

PKW said...

Banks you're so cool- for keeping me up to date! Have had to get gas at Total as the rest are comparably more expensive. Glad will now have choice. MainaT, sometimes when two, in this case more, elephants (or was it buffaloes?) fight, it's the grass that benefits. See, even the banks are fighting for the bottom of the pramid. I'm one happy consumer.

nesta said...

This issue of universal valves, won't it make it easier for crooks to fill up the cylinder with something that smells like gas? What about the safety?

Anonymous said...

Thanks for a good update Banks.

It is a pity about the run on Equity especially as it was caused by a rumour. More's the pity as it means few will take any action when the real reason to panic comes up later. As before, I uphold my 12 to 24 month outlook on a crisis happening for this institution.

coldtusker said...

MainaT: Kenol got into LPG big-time AFTER 2002. See their older annual reports. kiraitu is either corrupt or inept. Probably both. Every ministry he heads is mired in scandals.

LPG distributors are worried that standard valves will allow crooks to 'fill' (or underfill) LPG tanks. You think you are buying 13kgs but you get 10kgs.

I only buy LPG from Nakumatt or Uchumi.

Peter Njenga said...

Banks, nice and quite informative post. Keep it up!
And yes, I am back.

My blogging hiatus is now over, I have eventually VUKAD to WordPress with two new blogs: 'Peter's Walkabout' and 'Green Kenya'.
Check these out at http://www.peternjenga.com/blogs/

inspectordanger said...

Stanchart have realized that they segregated against the low income earners. Now, they have open Hifadhi account, and have attracted more customers ( I am one of them) and they are processing unsecured loans much easier than KCB. KCB watch out because your loan books are going to decline.

The only question is, will they handle the massive loan application? If KCB has a huge fund to give loans than Stanchart, then why isn't stanchart cautious?

PKW said...

But coldtusker, what's there to prove that the cylinders at Nakumatt/Uchumi are fuller than those at the gas station? I suspect the same dudes who fill theirs fill mine??

MainaT said...

Anon-I'll make a little bet with you. If Equity doesn't hit Ksh7.8bn in after tax profit in 24 months time, I'll give you my Equity shares.
How is that? If interested, contact me.

Anonymous said...

@ MainaT - Betting on Equity, pretty bold. On an unrelated issue kindly do a mortgage analysis post on your blog (or link me to it if you have done one)

(It is a different Anon.)

MainaT said...

Annon2- its either Annon 1 is a rumourmonger or he is an insider who knows a great deal about some fraudulent accounting or acts
Or I am either a brash optimist with no clothes on (i.e. clueless) or a share investor who thinks that if a firm has as its principal shareholder, its chairman, ceo and his friends, he should invest and sleep soundly at night knowing that no amount of humongous shares will go through the normal board without his noticing and 2ndly, his worth will go up with that of the principal shareholders or go down at the same route. OR we are both wrong, in which case no deal.

Anonymous said...

Just tried one of the valves of ESSO/Oil Libya. & WHOA!!! it fits perfectly well on the new cylinders.
Hope there is some awareness and right information passed on to the Kenyan consumer during this trying times!!


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