Tuesday, March 17, 2009

Kutwa Tuesday: Toxic Brokers

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?

Insurance Losses

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)

14 comments:

ka-investor said...

we have toxic brokers and toxic insurers in Kenya. I've never heard even a single good story of an insurer who paid up without playing tricks or out rightly refusing to honor the policy.

Nothing fundamental has changed at the NSE yet some are already saying we've bottomed out. No institutional investor are taking positions in this market. My strategy is to wait and see.

Anonymous said...

What's with the colour change?

Anonymous said...

I have always said that very few brokers are clean. The only brokers I can trust is like CFC. They have a large portfolio and would not like a bad potato in their sack.

Faida Securities have been canvasing the problems they are going through to avoid closure. Theft by employees in the years 2007 to late last year can amount to about KES200,000,000. I trust none and until they reform and CMA puts in place stringent measures, we still screwed.

Faida come out and admit this

Anonymous said...

I dont even trust CFC. They seem to have integrity issues judging by the court ruling in favour of a client whose shares they sold.

I switched Insuruer to CIC and claims are like clock work. At least for me they have truly kept their word so far...

Anonymous said...

You went back to the 'old' look.(white on black) - I remember that time I had a bad monitor I used to highlight everything just to be able to read your blog! :) But great look.

KR

MainaT said...

I'll be back. let me get my torch.

Anonymous said...

The background change makes it harder to read. The previous look was best.

aMERUcan said...

You can add as part of your Opportunities & Events:
Event: BLANKETS & WINE V LIVE AT FORTY THIEVES BEACH BAR,DIANI
"THE PREMIER AFRO-BASED, PICNIC STYLE MUSIC FESTIVAL IN EAST AFRICA"
What: Concert
Host: MUTHONI
Start Time: Sunday, April 12 at 3:00pm
End Time: Monday, April 13 at 2:00am
Where: FORTY THIEVES BEACH BAR

bankelele said...

Ka-investor: scary times these. Regulator (for stockbrokers and insurance) are partly to blame for not controlling their sectors
- let’s see how the NSE looks in another fortnight

Anon 2: thanks for Faida tip.

Anon 3: CIC has a good rep

KR: so black or white - What’s your vote?

MainaT: please give your verdict, on the black/white theme, is it too difficult to use? Retro is in vogue and this was the original theme

aMERUcan: you’re sending me an invite to Diani?

Anonymous said...

My vote is black background - it has a nice 'deja vu' feel to it. (And I have a better monitor :))

KR

MainaT said...

You when you cover a light with a blanket? Well the effect is similar...
Lakini blog ni yako mzee.

SOLOMONSYDELLE said...

thanks for the headsup on TED. Hope all is well?

Gach said...

As far as insurance goes, CIC is at the top of the claims food chain. for those without good relationships wit insurers,eg the claims guy, beta route ur insurances thru a reputable agency. they hav more need for ur services n wil thus expedite ur claims to receive repeat busines as wel as referrals.

marvin said...

Hi...
Sorry for veering off topic but might you know where I can purchase the HP12C calculator. I am sitting for the CFA exams this june. I am currently using the software that I downloaded to study. Any help accorded will be highly appreciated.

Marvin.

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