Nairobi New Media Stocks, 5 Years Later

It's been over five years, since a wave of new media stocks appeared at the Nairobi Stock Exchange  (NSE) including Access Kenya Safaricom, and Scangroup. They are all in the news this month, but for different reasons.

For Access Kenya, the deadline for shareholders to vote on a takeover by Dimension Data was extended by a day due to a national Holiday last week, However, Dimension Data just announced that they have received acceptances from 75% of shareholders and approval the Competition Authority of Kenya and will now proceed with the takeover which will leading to a de-listing of Access Kenya at the NSE.

Safaricom shares seem to have stabilized in the Kshs 7-8 price range  after spending quite a bit of time at Kshs 3/=, well blow the IPO price of Kshs 5/= in 2008. This disillusioned a lot of retail shareholders who bought their shares hoping to quadruple them when they listed, but then had to sell them at a loss. The company has since weathered many changes, but remains the market leader in Kenya, thanks largely to M-Pesa and the floundering of their rivals (Orange, Airtel and Essar). 

Scangroup got an investment from the WPP, in 2008 who gained a controlling interest for about $18 million. The shares traded at about Kshs 72, and while they have lagged other shares this year, this is still a tremendous gain from the IPO price from Kshs 10.45. 

This week, WPP announced, that they would seek to increase their stake to just over 50% in a deal worth about $95 million. This will be done through a combination of cash, new shares and exchange of partnerships in joint companies (Ogilvy & Mather, Ogilvy Africa, Ogilvy (in Kenya, Tanzania, Mauritius) Millard Brown (East Africa, and Mauritius), and Hill & Knowlton (East Africa and Africa) which will become full subsidiaries of Scangroup over the next one year.

Shares Portfolio May 2010

A rising tide lifts all boats

Tracking changes from three months and a year ago

The Stable

Diamond Trust ↑
Kenya Airways ↑
KCB ↓
Scangroup ↑
Stanbic (Uganda) ↑
Uchumi ↔
Performance: Portfolio is down 2% in value from February after exit from Safaricom which was about 10% of Portfolio, while the NSE is up 18% since February 2010
In/Out: Exited Safaricom completely, after accumulating shares since the 2008 IPO. One of the most liquid stock at the NSE, with lot of foreigner interest, and one I will buy back later
Increase/decrease: None
Best performer Diamond Trust and Scangroup, each up 23%
Worst performer: KCB down 6%

Events
Unexpected Gains/Losses
- Uchumi lifting itself out of receivership and applying for re-listing at the Nairobi Stock Exchange
- The communication spat pitting Safaricom versus the three other mobile companies, and another Scangroup buyout deal, both featured in this post here.

Other events
- The Housing Finance merger dance with Equity Bank here
- Another share split announced by Kenol Kobil (2nd time in six years)

Looking forward to
- Dividend payments expected from Diamond Trust, KCB, Scangroup, Stanbic (Uganda)
- @coldtusker says to watch kapchorua Tea at 140, Kenol at 93.5, Kenya Airways 56, and KPLC 185 and compare 6 months from now while Riba Capital is watching tea stocks, KPLC and Housing Finance.

This time around: Kenya Stockbroker collapse, Report leaks, Credit Reference Live

Time for another this time around post which looks at stories that recur in the business environment

Mars Group Kenya: The an anti-corruption watchdog group is the wikileaks for Kenya, re-publishing hitherto top-secret government reports at their website.

Mars Group research and produce their own reports, but their archives contain a growing list of reports of corruption in Kenya that is worth checking out. This week they have reports done by PricewaterhouseCoopers for the government of Kenya on the collapse of Triton Oil Company and on the misuse of funds for Maize famine relief in 2008. Last month they also released the report on the sale of the Grand Regency hotel. The Triton report shows that:
- At Kenya pipeline company (KPC) the oil collateral agreement was poorly drafted and ambiguous. Also managers had great discretion, procedures were lax /there was inter-departmental conflict (oil was released without verification) and documentation was poor (since documents would get lost at KPC, financers would exchange documents then present them all to KPC at once)
- Triton was aggressive with financing and would arrange for shipment before they got financing. They were stuck at some point and KCB entered into a finance agreement for goods when the ship was already in Kenya
- Bad banking Ecobank have no claim against KPC, while the Fortis claim against Triton is suspect. Also Glencore had stopped financing Triton in June 2008 as they were suspicious about KPC fuel stock claims
- KCB and other financiers did not cooperate with the PWC investigators
- The debt owed to KCB may be substantially lower than KCB claims and they have provided little information to assist in verification of the Triton debt.
- Kenya anti-corruption commission should investigate further staff named in the report

GoK Bond The Government of Kenya is going to raise Kshs 14.5 billion for infrastructure via a third infrastructure bond. How does that compare to a similar bond a year ago?
2009: Kshs 18 billion ($240 million), interest rate 12.5%, minimum bid Kshs 100,000 (~$1,250), maturity 8 years, principal repaid in 2015, 2017, 2021. Funds used for road, geothermal, water projects
2010: Kshs 14.5 billion ($188 million), interest rate 9.75% tax exempt, minimum Kshs 100,000, maturity 8 years, principal repaid in 2016, 2018. Funds used for water, sewer, irrigation, road, and geothermal projects
The 2009 bond was over-subscribed and the only notable difference in 2010 is the lower interest rate offered. The CBK has decided the high cost of loans offered by commercial banks and perhaps by offering the same banks a lower return on government bonds; they will offer more competitive borrowing rates to the public

Credit Reference: February has also seen the licensing of Kenya’s first credit reference bureau – CRB Africa by the bank regulator, the Central Bank of Kenya. Following this, commercial banks have apparently commenced sharing information with the agency. Some of the rules governing sharing of data were highlighted when the credit reference rules were gazetted almost two years ago. These include
- Bureaus may share info only with a customers’ permission (which happens when you sign for a loan)
- They may only share information for business decision making (evaluate credit prospects) and must keep track of all information they share
- Customers are entitled to one free report a year, and within 30 days of a negative referral.
- If a customer complains, and bureau not able to complete an investigation of disputed information within a month, information will be deleted as request by customer
So what information will they compile?
- For individuals: Name Citizenship ID / PIN Postal/ Telephone Credit history (as reported) Court judgments (as reported) Referees
- For companies: Company registration details postal/physical/telephone Credit history (as reported), Court judgments (as reported), Guarantees
Shareholdings/directorships

Stockbroker collapse: This month saw the placing of another stockbroker under statutory management – this time its Ngenye Kariuki Stockbrokers [Last year in March it was Discount stockbrokers that was placed under statutory management]

Despite strong defense from the Kenya Association of Stockbrokers & Investments Banks - KASIB who say the brokers problems were manageable and did not warrant the intervention of the authorities the broker was in a weak financial position.
A summary by Faida Investment Bank, based on the published un-audited results of Ngenye Kariuki showed this
Half year June 2008 versus 2009
June 08 income 35m, expenses, 21 million, pre-tax profit of 10 million
June 09 income 3 million, expenses 10, pre-tax loss of 11 million
Share capital of 50 million, capital reserves of 251 million (which many brokers draw from the sale price in 2006 of Francis Thuo stockbrokers) [and the same amount appears as an intangible asset) at June 2009, the broker had an overdraft position of 63 million and receivable of 127 million which KASIB is laying at the feet of Citibank for withholding funds from the 2008 Safaricom IPO that are owed to several stockbrokers.

NSE Portfolio May 2009

hit bottom? Time to buy?

Last quarterly check of the Nairobi share portfolio was in February 2009 and a year ago
The Stable

Diamond Trust ↓
Kenya Airways
KCB ↑
Safaricom ↓
Scangroup ↓
Stanbic (Uganda) ↓

Review:
- Best performer: KCB up 2%
- Worst performer Stanbic down 30% (combination of share drop and weaker Uganda shilling), and Safaricom down 10%
- In: Kenya Airways
- Out: none
- Increase none
- Decerease none
- Unexpected gains/losses: none

Events & Outlook:
- Performance: Portfolio is up 1% in the last three months while the NSE Index is down 3.5%
- Bought KQ, tried to buy illiquid Kenol at 30

Looking forward to
- Dividend payments expected from Diamond Trust, KCB, Scangroup, Stanbic (UG)
- Privatization commission has lined up several companies that may be availed later in 2009

M-Pesa IPO?

Mobile transfer solution M-Pesa from Safaricom was on Monday inaugurated as loan repayment tool for microfinance.

SMEP using M-Pesa for loan repayment is now the latest M-Pesa partner joining satellite TV, medical cover, investment funds, spare part utility provides and insurance companies that now enable their customers to remit monthly or periodic solutions via M-Pesa.

This phenomenon is not unseen, it addresses gaps in the banking sector; and now M-Pesa solutions are coming from the customers, not Safaricom - which is the way it should be.

M-Pesa Flaws: M-Pesa with it's 5 million customers is not perfect and it may have reached the zenith for now; it is pricey, it requires business owners to put up substantial credit (float) to access the system, it's statements are crude etc. Electricity bills can now be paid by M-Pesa, but accounts take 48 hours to be credited, while with rival transfer product Zap (from Zain) they take 24 hours. The fault probably lies with Kenya power, which has forged closer links with the less established Zap and Standard Chartered Bank.

Loan potential: M-Pesa, a Vodafone solution is now goes into the area, that no one can contain credit growth. The SMEP (micro-finance loan) repayments are just a start. Banks and savings & credit societies (SACCO’s) can easily utilize M-Pesa for loan repayments under the current 35,000 shilling ($440) daily transfer limit. e.g. a 400,000 shilling ($5,000) SACCO loan at 12%, repaid over one year will have installments of 35,932 per month, or a car loan of 800,000 shillings ($10,000) repaid over 3 years at 21% interest would have repayment of 30,140 per month.

New markets: M-Pesa has been built on the back of Safaricom, operating informal relationships with subscribers who submit a bare minimum of information. That relationship requirement with customers requires a lot less than with a bank and international know your customer guidelines (KYC). Already, all the mobile companies have aspirations of moving on to international transfers and merchant banking which will also bring them more into collision with banks, western union and debit/credit card giants.

New regulations: M-Pesa's already fractious relationships with banks is likely to get worse; and with (soon) three mobile companies offering money transfers, and all eating into bank ledger and interest income, there will be calls to rein them in. Soon it is likely that the government of Kenya will create an e-commerce regulatory body (another parastatal) since neither the communications commission or the central bank has absolute authority.

Second Safaricom IPO: Vodafone should spin off M-Pesa into a separate company. M-Pesa is now able to stand on its own, and handle its own competition, regulatory, and licensing issues. Safaricom should let it go, focus on other voice and data services, while continuing to enjoy the revenue M-Pesa spins, by subscribing for shares in it. By freeing it from Safaricom, M-Pesa will move from being an 'unregulated’ but licensed solution owned and managed by Vodafone (UK) to a local-listed company, owned and operated in Kenya.

Bank waters

In the pool

Diving in: Another West African bank giant UBA follows Ecobank after apparently having secured a banking license to operate in Kenya. 

Treading in the shallow end: Still finding their ground are the new Islamic Banks - Gulf African and First Community that started business last year. They are likely to be the only banks that will record losses of at least Kshs. 200 million each as their new branches and staff continue to reach out and educate customers on a new way to bank. 

Had enough swimming?: 

(i) Morgan Stanley who were supposed to introduce long-term foreign investors to Kenya with a five-year window or longer, but instead brought in short term investors at the expense of the Government and othre investors who took out their profits in a week. Another lesson learnt a long way back from the IPO.

(ii) The Kenyan unit of Citi is on track to rake in profits of $50 million this year on the back of aggresive trading, but will it be enough, or will it be bled off by the parent unit? And who would buy it and its lucrative American interest-linked business portfolio?

Safaricom 2s

Three weeks after Safaricom’s share price dipped into the 3 shilling range the share is on the verge of tumbling into the 2/'s [$0.025] - down from the IPO of 5/= and brief high of 8/=.

what are others saying?

Coldtusker points to some deals that can be cut cheaply with NSE shares.

KCIG states that a bear market should be no big deal for serious investors.

Analysts are still producing reports on NSE shares to buy (Access Kenya). What about when to sell?

Everyone’s doing it, so throw more stones at D&B - Dyer & Bair who structured the Safaricom IPO.

Shut down the NSE?: Closing the shares market to salvage what’s left was proposed in Nigeria and now a stockskenya thread has taken it up here as well.

Could be worse: Liquid Trader gives insights on the SA economy that are not easy to decipher by watching CNBC.

Another IPO you say? Co-Op Bank opens tomorrow. No prospectus out yet, but here’s another PDF from the Bank MD.

Looking for work? here’s a great new local Kenya job blog.

Safaricom 3s

Tracking the storm at 7, 6, 5, 4 and now Safaricom at Kshs. 3.70

Mobile notes
- Communications is perhaps the only significant sector that has gotten cheaper this year. Oh yeah also NSE shares are much cheaper this year
- Safaricom is fundamentally sound and performance on the stock market should not translate to the business side
- But Safaricom now has new competition from Zain, Orange and Econet with new offers that may cannibalize each other. Safaricom can’t possibly respond to each marketing overture from the newbies
- Competition will drive increase of (cheap) phone sales as subscribers add second and third phones e.g. Safcom for M-Pesa and Internet, Zain for cheap calls, and Orange for cheap SMS and even cheaper calls
- Safaricom ironically got nominated by Africa Investor Investment Awards for Privatization Deal of the Year ; other Kenyan companies nominated include Alliance for a Green Revolution in Africa (AGRA), the Ministry of Finance Kenya (for Credit Reference Bureau Regulations – relay? Are they original?) Kenya Commercial Bank, PricewaterhouseCoopers, Dyer & Blair, Morgan Stanley (for Safaricom IPO?), East African Development Bank (actually Uganda based), East African Breweries Kenya (for Best Employer), Evelyn Mungai (for Businesswoman, not TI Kenya), Mumias Sugar Company and KenGen (for Carbon Finance)

Take Crash Positions

The Nairobi Stock Exchange (NSE) halted trading today for 15 minutes after the index fell by over 5%. (damn: just as I'm ready to sell some shares)

Elsewhere:

Safaricom: AKS says that pre-IPO shareholders lockout window has ended - so now can Vodafone start buying up some Safaricom shares and stem our losses?

Equihealth while other banks are sleeping, Equity Bank leads the way again this time venturing into health insurance. They have four plans starting as low as 6,700 (~$100 a year that include pre-existing conditions, HIV/AIDS, maternity, dental, eye-disease. (wow, medical insurance is a minefield, but Equity can sets its own terms in the industry and change the rules in the medical insurance industry)

The EDIT plans are;
- Mango @ cost Kshs. 6,700 per person per family for inpatient (Kshs. 13,300 per person for in & out patient), covers up to Kshs. 75,000
- Passion @ Kshs. 8,500 per family (Kshs. 15,100 per person for in & out patient), covers up to Kshs. 150,000
- Melon @ Kshs. 16,000 per family Kshs. 27,600 per person for in & out patient), covers up to Kshs. 500,000
- Apple @ Kshs. per family (Kshs. 35,700 per person for in & out patient), covers up to Kshs. 1 million

Scangroup: (Bharat Bank) As part of the sellout employee shareholders are seeking shareholder approval to sell up to 25% of their shares during the lockup period which is supposed to end in August 2009

To Coop or Not?

The big debate now is if the Co-Op Bank IPO should go ahead this month or if it should be postponed. The Chairman of the Nairobi Stock Exchange has issues conflicting statements on the matter but appears to have bowed to the arrangers and the stockbroking community line that it should go ahead.

IPO’s in London and New York are beign deferred as they are unlikely to be warmly taken up, and here, the dearth of IPO's in the pre-Kengen was guided by the sentiment that they would not perform well in the then deflated markets. Even the giant IPO of Safaricom – was postponed till after the 2007 elections.

The timing is just not right, with two collapsed stockbrokers still being sorted out, Safaricom refunds not fully reconciled, and the Diaspora who were so enthusiastic about Safaricom still (i) worried about repercussions of the US financial markets turmoil (ii) real estate and (iii) feeling suckered by Safaricom's post-IPO performance which they heavily invested in.

Though the funds raised are targeted towards, mortgage finance, ICT and branch expansion, the Co-Op IPO should be postponed to at least next year. It withstood the 1998 Nairobi bomb blast and has turned round a Kshs. 3 billion loss to a similar profit in 6 years and a few more months won't make a difference. But as a fall guy of Safcom, I’ll revert to my IPO bypass plan when the Co-op IPO arrives.

Need for Capital; Co-op is a fast growing bank with a retail and branch base like KCB and Equity that requires capital to be shored up. The two banks that were most in need of regulatory capital - KCB and Housing Finance have already had rights issues in 2008, and other shareholders should prepare for the same at CFCStanbic, Prime, CBA, among other smaller banks.

NSE/CMA to note; In the wake of Crown Berger and Portland Cement share collapses, it should be noted that irregular share trades happen - even to Google - but the prices were re-adjusted and trades made at erroneous prices were then canceled.

Opportunities

Barclays graduate program: The Barclays Graduate Emerging Managers (GEM) is open

US Visa The DV 2010 diversity visa (US green card) lottery kicks off today and runs till December 1

TED Global 2009: Registration for TED Global 2009 at Oxford is open.

Facing South and West

With the NSE underwater, even lower than the post-election period, it may be time to look West and South for investment ideas. Not too far West, where the US where the financial tsunami is still warming up (threatening to take down Lehman and AIG today), or too far south where it will take some adjusting to Zuma time.

Here, there’s some previously unthinkable debate about postponing the Coop Bank IPO and how low the fundamentaly sound (PDF) Safaricom (could) be by the December holiday period.

What’s in store in the rest of Africa?

Kenya: Unilever shareholders have till October 6 to decide if they want to get paid de-list the company. 

Togo: According to the Business daily Kenyans may be able to invest in Ecobanks’ rights issue to raise $1 billion. 5 new shares can be bought for every 9 held at $0.29 (~Kshs. 20) per share, minimum 500 shares, and closes October 3

Malawi: The Real Insurance Company of Malawi offering of 77.5 million shares at kwacha 2.30 (~Kshs. 1.15) per share, closes on September 19

Botswana: The Funeral Services Group offering of 36 million shares at P1.00 (~Kshs. 10) per share. Closes September 22

Insular Tanzania continues to lock out foreign, deliberately including East African, investors from their market, so no thanks!

More at africanshareholder.com

Plane truth 

[image: KQ 777]

Embattled Kenya Airways who are facing local strike threat and customer service issues were ranked No. 93 in Top 100 Airline survey; how did they fare against their regional peers in terms of passengers carried and revenue (euros)?

Airline, passengers carried, revenue in millions of euros

12. Emirates, 21.2 million passengers, EUR 6,801 million

27. Virgin Atlantic --

41. South African, 7.5 million pax, EUR 2,184 million

73. Egyptair 5.7 million pax, EUR 1,166 million

90. Ethiopian 2.29 million pax, EUR 583 million

93. Kenya Airways 2.8 million passengers, EUR 611 million

Online Nairobi Stockbrokers

Continuing the popular Where to buy shares series, my long-time stockbroker CFC (actually CFCFS) have finally unveiled an online trading and account/portfolio platform. It’s quite good so far, quick registration, easy navigation, and hopefully a secure one. I hope they add share reports, and other useful tips which they can e-mail to users.

My portfolio is correctly displayed and I will make my next trades online (previously I used to e-mail my orders, and get confirmations and statements back by e-mail)

Other brokers with online features (can’t vouch for their quality) include Afrika Discount Drummond Dyer & Blair, Faida and Sterling

Questions
1. What are you online experiences like with your Kenyan stockbrokers?
2. Have any Kenyans in the Diaspora got their Safaricom IPO refunds, or been able to apply them to buy other shares? Have you seen your refund cheques, or know where they are?

Safaricom 4s

Safaricom@NSE Day 47: Safaricom dips below the IPO price, touching 4.95 before settling at 5.15 on almost 17 million shares traded

Share Portfolio: August 2008

Drowning in Safaricom juice

8-8-08 is supposed to be a good luck date or something. 2008 has been a rough year for most companies since January. The Safaricom IPO was supposed to be the savior for investors, but has instead become an albatross on the Nairobi Stock Exchange

Heres’ my portfolio that has changed May 2008

The stable
Diamond Trust ↓
KCB ↓
Scangroup ↓
Stanbic (UG)↔
Safaricom ↓

What’s changed?
In: Safaricom
Out: Express, Sameer, Total
Increase: KCB, Safaricom
Decrease: --
Dividends Paid: KCB, Stanbic, Diamond Trust, Total, Scangroup
Unexpected gains (none) /loses everything else
Outlook: Shifted focus to banking and communications, and got out of manufacturing related stocks as the political and oil shocks continue to be felt through the economy. No foreseeable changes till next quarter, but will look at Kenya Airways if it dips lower.

Kutwa Tuesday: Reverse Safaricom IPO and other such tales

Safaricom needs a reverse stock split to get rid of their unhappy shareholders.
- Anyone who has less than 10,000 shares by December should be paid off by the Government or Vodafone at the IPO price of 5 shillings or market price, whichever is lower at the end of the year. Investors will not sell their shares at a loss and the least they can do is recoup their money from this mess (excluding their loans)

Kenol tweak: 36.67 million shares change hands worth 3.3 billion shillings on Friday. Meanwhile kenol/kobil stations have the most expensive fuel in Nairobi. Diesel has hit 101 shilling per litre ($1.55), while petrol is at 108, that’s about 6 shillings more than my station of choice.

Cola tweak: After enduring a difficult first quarter, coca cola is having a bit of a tumble in the second quarter due to to EABL’s Alvaro – at least in urban areas where it has become the non-alcoholic drink of choice for many previous soda (and juice) sippers. Coke has unleashed another multi-million shilling giveaway promotion to win back customers


alvaro cases at Nakumatt

Celtel tweak - More celtel confusion; The ink is not dry on posters for their newest promotion and already the terms have changed (for the better) [for customers to get free calls will now cost 65/= ($1) a day down from 99/=].

August will be a significant month for the mobile sector as Celtel switches to the Zain brand, Safaricom release their first quarterly results after the IPO, and Econet should finaly/hopefuly roll out operations.

Media tweaks: All journalists and correspondents practicing in Kenya must be registered with the Media Council of Kenya – and to do so they must each pay Kshs. 2,000, while foreign journalists will have to pay 10,000 ($154) per year [those on short term assignment of up to 3 months pay 5,000]. Amounts due by 30/9. Television radio and newspaper organizations also have to pay a quarterly fee depending on the number of media outlets

- Standard tweaks Two weeks after the launch of the new Standard, their strap line of the standard has changed;


new standard at launch


standard yesterday

Sunday Nation tweaks now has the best of best of Whispers - favorite columns of the late humorist Wahome Mutahi and some articles of the New York Times

From the blogs
- Pointer for Access Kenya shareholders to read
- There are only 60 lions (adult) in the Mara – but that's an improvement by 50% from year 2001
- How bad are things for those who took IPO loans for Safaricom? Ssembonge shows that small investors are hurting more than bigger borrowers.
- Cautionary tales on life insurance from Tujuane
- Peer pressure: tales of GDP growth of rates of 8% in Ghana and
21% in Angola
- Link to a puff piece in memory of the former finance minister
-US Airways to remove all in-seat movies from their planes, while Emirates is targeting to remove all paper (in-flight magazines and publications) to save a ton of weight on the new A380 (to compensate for a ton of water for showers in first class (from airliners.net)

Opportunities

African Banker Awards. deadline for nominations if 31 July in the following categories: African Banker of the Year, African Bank of the Year, African Investment Bank, Best Development Bank in Africa, African Microfinance Bank, Best Issuing House, Most Innovative Bank, Deal of the Year, Socially Responsible Bank of the Year, Best Global Bank in Africa, Award for Gender Sensitivity

Jobs
from the daily papers last week
- Aircraft Leasing Services: captains, first officers for Embarer 135. als@als.co.ke
- HR director at Housing Finance. Apply through deloitte esd@deloitte.co.ke by 1/8
- MD of KCB Rwanda. Apply to recruitement@kcb.co.ke by 8/8
- KPMG Uganda: Internal Audit Services manager, Senior Internal Auditor, Internal auditor, forensic auditors. Apply to talentrecruit@kpmg.co.ke by 1/8
- Corporate affairs manager of Nation media group.
- Independent sales agents at Standard Chartered Bank. Apply to Susan.Ombati@ke.standardchartered.com by 31/7

Others vacancies at Kencall, Kenya Airways, and Family Bank [Credit officer, Procurement Officer, Works Officer, Accountant, Accounts Assistant, Administrative Assistant, Assistant Manager, Audit Manager, Branch Accountant]

Beach plots too good to be true? Lots of land available in Mombasa for real estate investment from Datkit agents including 3 acres creek in new Nyali with 120m sea frontage, 1.3 acres over looking Nyali golf club, 5 acre lots in kikambala, 14 acre beach plot next to Neptune beach, 25 acre beach plot next to kaskazi hotel with 168m beach front, 1/3 acre residential plots in shanzu (2nd row from beach)

Safaricom 5s

Safaricom IPO Day 30: Deals 1,297, Turnover Kshs. 257.9 million [$3.9 million] Average 6.23 High 6.60 Low 5.95 Last 6.20 Volume 41.4 million shares. Feels and smells like a bear raid. [Commentary and data from Rich.co.ke - NSE data vendor, with Free real time prices between 0930 -1500]

- What is the role of Morgan Stanley in the price of Safaricom?

- How about a reverse stock split of Safaricom to weed out 2/3 of the unhappy 800,000 shareholders and get a manageable share register?

End of day update - Turnover Kshs. 450.4 million ($6.92 m), Average 6.20 High 6.60 Low 5.95 Volume 72.5 million shares. Rich.co.ke commentary; A very weak session. The article in Business Daily, a large trade on the prompt board at 6.20 all pushed this market over. It was all so fortuitous and coincidental to be quite remarkable. The price is undervalued here by a wide margin.

SMS Solutions

CDSC: The Central Depository System Corporation (CDSC) has now rolled out their SMS alert service to inform investors of trades within their accounts, and hopefully alert investors of unauthorized trades by rogue brokers

Investors can check their CDSC (amazingly, they still have no website as yet) balances by registering through either (i) in person at 10th floor Nation Center or (ii) sending an SMS formatted “REG*CDS A/C No.*ID No.” to 2372 - to receive an alias and Pin No.

Investors can then use the service to access (i) portfolio balance, (ii) view a mini statement (of last 5 trades) (iii) receive alerts of each trade [by sending an “alerts on” message to 2372] or (iv) change PIN. (each CDSC SMS costs 10 shillings - ~$0.15) [more from helpdesk@cdsckenya]

NCWSC: The Nairobi City Water & Sewerage Company have followed in the footsteps of the KPLC to introduce an SMS facility where customers can check their water bills by phone SMS. Simply send a message with account number to the number 5571, and receipt of a balance message costs 15 shillings. While The company is not as aggressive in cutting off subscribers with arrears as KPLC, their bills through the regular mail are rare and infrequenet, and so SMS is a good way to know your balance and due date.

For electricity bills from KPLC, queries cost 10 shillings by SMS, but are free by e-mail.

Mobile XL: report on a value addition SMS and chat application.

A couple of Banks offer SMS banking facilities, but the value addition is questionable given the cost [30/= per query]. Online banking for corporations seems a more viable option

And finally, most dear to every investor now is the use of SMS to trace Safaricom IPO refunds and allocation:
- For IPO allocation; message is “CDS.no#ID.no#A” to 4009
- For refund cheque location; message is “CDS.no#ID.no#R” to 4009
each SMS costs 15/=
- if no message, chances are your (rogue) broker did not buy shares for you

Safaricom 7s

Safaricom IPO Day 24: Commentary - Strong market rebound. Someone is buying everything up below 7.00. We have based out. Deals 3,070 Turnover 305.67 million [$4.63 m] Average 6.94 High 7.00 Low 6.80 Last7.00 Volume 44 million shares Commentary and data from Rich.co.ke - NSE data vendor [with Free real time prices between 0930 -1500]

End of day : 64.65 million Shares, closing at 6.95 (up 2.2%)

Celtel Kenya gets a new CEO (7th?) [Rene Meza from Paraguay] as Celtel wins an award for best telecoms operator in Africa at the 2008 Business in Africa Awards held in London.

Rift Valley Railways gets two new shareholders [Prime Fuels and Mirambo Holdings]. Meanwhile both Kenya and Uganda governments are getting impatient and workers went on strike [they have now just got their June salaries]

The Vision 2030 Delivery Secretariat is seeking - director general, directors [social & political pillars, enablers & macro, economic pillar, and Strategy, marketing, empowerment and communication] chief officer [monitoring and evaluation] officer [project finance] project accountant, executive secretary. apply to psplanning@planning.go.ke by 31/7

The trouble with Celtel

are free calls enough?

[I am not a customer, but I have probably bought and discarded three of their SIM cards to coincide with some ongoing promotions. Too many people I call are on Safaricom, and until number portability comes along, (carrying my number to another networks) I am stuck with Safaricom]

Beside number portability, there are other things they need to sort out; Celtel has been losing customers (23% down from a year ago), executive staff (compared to the ‘stable' team at Safaricom and direction. The change of brand from Kencel to celtel to Zain only benefits paint and marketing companies (but there’s already a 'Z' brand in Tanzania and a couple of other African countries)

My biggest peeve with them is there are too many products; these are never promoted long enough to mature or register with subscribers and potential customers.

This week
- For internet/data users - they have Uhurunet - unlimited internet service, whose equipment is a USB modem costing 6,000 shillings [$95] and 3,000 [$48] per month for unlimited internet which is not bad [and this compares well against Safaricom]

- For callers: Earlier this week they launched a six-month tariff with free airtime for people who purchase cheap phones (targeted at rural subscribers). And now from the skunkworks group we learn that they have another new tariff with Free calls from 6 a.m. to 6 p.m. every day (top up with 100 shillings to take advantage) - will this be the one that gives them an edge over Safaricom? That's the problem with Celtel - great products, big marketing budget, but jumbled messages that confuse subscribers. In the last year they have advertised their lowest rate at 6 shillings (Mambo 6), 4 shillings (to 3 preferred numbers) and now 3/= ($0.05)per minute. That is three times cheaper than Safaricom, but who has the masses and who has the right message?

Other tales

- Opportunity: Nominate a worthy Kenyan to the Generation Kenya program

- From Uganda and GTV comes pre-paid premium TV - subscribers can pay for their GTV pay TV packages using scratch cards

Experian Kenya: joining the Kenyan credit reference pool is Experian in partnership with Quest Holdings.

- Day 19 of the Safaricom IPO has 4,121 deals, worth 342 million ($5.42 million) Closing 7.20 High 7.40 Low 7.00 Last 7.20 and volume of 47.5 million shares. It’s well supported and Buyers must be sniffing out a conclusion to the de-leveraging process. Commentary and data from Rich.co.ke - NSE data vendor [with Free real time prices between 0930 -1500]

Grand Debate

[EDIT – at the end of the session, members of parliament passed a motion of censure against the Minister for Finance – Amos Kimunya, MP for Kipipiri]

Live on TV - all stations

Is the debate to censure Finance Minister Amos Kimunya for his role in the controversial sale of the Grand Regency Hotel.

Before a rather hostile opposition side, He’s just given a statement where he:

- Outlined his long history as an accountant and a crusader for reforms, revenue gains and tax savings for the Kenyan people numerous times such as with De La Rue, pending contractor bills, Safaricom, Telkom Kenya
- On Safaricom. Mobietelea was there long before he was in government or parliament
- On Alcazar - reputed owner of 11% in Safaricom – he says after Vodafone (K) and the Kenya government, no one else owns more than 1% of the company (after the IPO)
- On the Grand Regency Hotel: it was sold for $45 million {~ billion shillings} in May 2008
- The central bank made the sale and was not under duress.
- The ministry of lands, attorney generals office, prime ministers’ office have all received various reports
- More info forthcoming tomorrow

Safaricom IPO
Day 18 - Deals 5,266 Turnover 439, million ($6.86) million Ave 7.29 Closing 7.25 High 7.50 Low 7.20 Last 7.30 Volume 60.3 million shares - Market still absorbing supply but its very well supported at these levels. The move higher depends on how much more de-leveraging has to be done.

Day 17 - Deals 4,671 Turnover 302 million ($4.7 million) 7.35 High 7.50 Low 7.25 Last volume of 41 million shares - orderly and some sellers came off 7.50 to sell lower. Strong demand at 7.25. Remains constructive. 6.65-8.15 range.
commentary and data courtesy of Rich.co.ke - N.S.E Data Vendor