Toxic Brokers The US has toxic banks, Kenya has toxic stockbrokers
Discount stockbrokers was yesterday placed under statutory management. It has been technically insolvent since new managers were appointed six months ago, and given the cost and extent of their operations it’s unlikely to ever turn round.
Bob Mathews was also re-admitted at a stockbroker after injecting in new capital, but once labeled at a toxic broker no amount of rescue cash is enough to salvage an institution. Nyaga stockbrokers got a lifeline infusion of Kshs. 100 million rescue loan, which was largely paid to other brokers, but it was not enough and the firm went under too. smart investors should read the signs of a collapsing company
Capital Gains market turnaround
The Nairobi stock exchange had its best week in a long time, with a mini run led by Equity Bank up 31%, CMC up 25%, Kengen 22%, EA Cables 20%, National Bank 16%, EA Breweries 15% and Diamond Trust 12%. With no significant financial results, or economic & political news out last week, the rise remains a mystery; Was it in reaction to US markets having their best week, or realization that there was a new finance minister in charge or investors realizing that they had missed on the infrastructure bond (and the next one was not as lucrative), or was it stockbrokers making a last stand?
Pan Africa Life a relatively large company with assets of Kshs. 6 billion ($75 million) returned a pre-tax loss for 2008 of Kshs. 175 million down from a profit of 51 million in 2007, which they attribute to the unrealized loses in capital markets. If a large insurance company is in this state, what about the smaller other Kenyan insurance companies? Already standard assurance has gone under and it was not the main company in public transport sector (matatu’s) whos' claims are being blamed for its collapse.
Opportunities & Events
TED Global applications have opened for the 2009 TED Global 2009 conference. Deadline is April 3 for fellowship applications
Tujuane Mixer will be held on March 20. More details at Tujuane site and here’s a re-cap of the last mixer I attended. The event will be facilitated by Nyokabi Njuguna, Founder - Entrepreneurship and Leadership Foundation, and with a special appearance by R&B vocalist and Guitarist Harry Kimani.
Nairobi Wine Festival Get stylish and drunk is how Rafiki Kenya describes the event on Friday and Saturday (20/21 March)