2006 Kenya banking review

still Barclays country

based on reported figures for September 2006

1. Barclays Bank of Kenya [assets worth 117.17 billion shillings ($1.67 billion)] In 2006 Barclays made a major policy about turn and announced expansion plans including reopening branches they had closed a few years ago. They also venture into Shariah compliant banking as did KCB, I&M, Dubai and K-Rep banks.

Compared to September 2005, assets were up 10%, deposits 12%, loans 14% but income was up only 6%. They also increased their investment in government securities to about 40% of the loan book. Still despite being Kenya’s largest bank, it also has the 2nd highest return on assets at 4.16% (second only to Equity Bank at 4.74%)Barclays shareholders had a very happy year, which saw them earn a bonus share and a share split in addition to their usual top dividend.

2. Kenya Commercial Bank [84.92 billion] KCB nudged passed Stanchart in assets while its share price zoomed passed though Stanchart still has a higher market cap and better returns. KCB’s expansive rural branch network was the envy of other banks such as Barclays and it also expanded into Sudan in 2006. KCB’s assets were up 18%, deposits 17%, loan 13% while income was up 26% from a year ago

3. Standard Chartered [84.09 billion] The bank launched several new products including accounts aimed as women (Diva) and children and adult savings (Safari) accounts. Stanchart also appointed a new MD – Mr. Etemesi. Assets up 18% deposits 16% loan s22% and income 10% while it also increased its investment in government securities

4. Cooperative Bank [55.17 billion] Co-op’s strong recovery continued and it remains a strong candidate for a listing in the next two years. One of their unique traditional products - kids’ savings accounts – was invaded by other banks this year. Compared to last September, assets were up 12%, deposits up 18%, income up 19%, but loans down by 16%. Also their total non performing assets (NPA’s) doubled to 17 billion while the bank also tripled its in investment in government securities during the year.

5. National Bank of Kenya [39.37 billion] NBK is yet to have its capital and debt restructuring done even though it is promised every year by the Government and despite reporting profits each quarter, it was not able to pay any dividends. The Bank launched a low fee (Taifa) account to counter the crowds flocking to Equity and Co-op banks. Assets and loan were up 10%, deposits and income up 16% and it tripled investment in government securities but NPA have also doubled to from a year ago.

6. Citibank Kenya [35.43 billion] Assets up 12% loans up 42% and income up 33%. Was a late entrant to the share craze providing advisory services to the Mumias rights issue in November.

7. Commercial Bank of Africa [35.12 billion] CBA opened a new headquarters and is expected to venture into stockbroking. Assets, deposits, loans, and income were all up 21% but NPA also up 45% from a year ago.

8. CFC [25.04 billion] Had a successful rights issue to raise capital and also continued to roll out new insurance products. Its stockbroking unit is the largest in the country and was reported to have processed Eveready applications amounts that exceeded the shares being offered. CFC doubled its investment in government securities, assets were up 35%, deposits and loans up 20%, income up 61% but NPA were also up by 74% from the year before.

9. NIC [23.55] Still the leader in asset finance while their flat fee (MOVE) was imitated by other banks. Assets and deposits were up 18%, loans 15%, and income 33%, but NPA’s doubled from a year ago also. Shareholders finally enjoyed some significant price appreciation after being stuck at 50 /= forever.

10. Standard Bank (Stanbic) [23.29 billion] Many Kenyans bought shares in their Ugandan subsidiary while the Bank has expressed an interest in investing in NBK once it is restructured. Stanbic which has the lowest NPA (followed by Citibank and D-Trust) had assets up 54% deposits and loans up 44% and income was up 49%.

11 Investment & Mortgages [21.79 billion] I&M had assets up 25% deposits 27% loans 36% and income up 33% as the bank made a push into the credit card sector.

12 Diamond Trust [19.14 billion] Raised capital in an over-subscribed rights issue in December and is rumored to consolidate with a sister bank next year. Assets were up 27% deposits 29% loans 25% while income was up 33% from a year ago.

13 Equity [16.33 billion] Kenya’s s fastest growing bank had assets up 63% deposits 81% loans 105% and income 90% however expenses in Q3 grew faster than income and NPA’s are up 165%. It has the highest returns (assets 5% and equity 46%) and successfully listed all their shares on the NSE in 2006

14 Bank of Baroda [11.43 billion] Assets and deposits up 29%, loans up 27%, income up 22% and profit could double this year.

15 Housing Finance [9.8 billion] Has a new MD while its share price appreciated beyond expectation leaving it with the highest P/E on the NSE. Assets, deposits, loans, income, and expenses remained basically unchanged from a year ago while the bank has converted cash into government securities. The lack of new loan growth resulted in NPA’s forming a greater portion (72%) of loan book.

16 Prime Bank [9.26 billion] Assets and income up 40%, deposits 43% loan 29% and profits are up 69% from a year ago.

17 EABS Bank [8.55 billion] Teething pains continue as assets shrunk by 4% but with a positive outlook as income increased twice as fast as operating expenses this year, but still NPA’s are at 72%.

18 Imperial [8.47 billion] Assets up 5% loan 146% and securities up 60% as the bank had redeployed about 1 billion in placements. Income is up 13% and Imperial has among the top 5 returns (even better than Citibank)

19 Bank of India [8.15 billion] Assets and deposits up 20%, loans up 56%, income up 46% but NPA up 43% - still the bank is on track for a huge profit this year.

20 Bank of Africa [6.23 billion] Expects to open another Nairobi branch and but into a bank in Uganda to go with the one it invested into in Tanzania. Assets up 17% deposits 35% loans 16% and income up 31% and despite increase expansion costs remains on track to achieve a profit this year.

21 Fina [6.15 billion] One of the banks that has championed SME financing and also has an extensive operation in Rwanda. Assets unchanged from a year ago while loans up 17% profits will be 41% higher, but NPA also up 59%.

22 Habib AG Zurich [5.07 billion] Asset up 9%, loans 16% and income up 11% at this bank which invests primarily in government securities.

23 ABC [4.95 billion] Assets up 7% with loans up 4%, and income up 20% from a year ago however NPA’s also up 46%.

24 Giro [4.93 billion] Nothing much heard from partnership with SBI (India) and
Assets were up 3%, income up 9%, but loans down 13% and profit will be less than 2005.

25 Guardian [4.66 billion] Assets up 2%, and bank has upped its investment in government securities by 61% compared to 2% growth in loans – however NPA up 216% .

26 K-Rep [4.52 billion] One of the banks that pioneered the micro-finance sector now finds itself being crowded out by new entrants advertising all manner of SME packages. It will administer an ADB guaranteed line of credit for women entrepreneurs (along with CFC and CBA). Assets up 31,% deposits 59& and income up 50% proving that micro finance is low risk niche with only 4% NPA’s even as loans by K-Rep increased by 40%.

28 Southern Credit [4.27 billion] Assets up 1% deposits up 6% and loans 9% but with NPA’s up 52% from a year ago at the bank with a major credit card arm.

29 Victoria [4.19 billion] Assets and deposits up 8% and the bank has reduced its NPA’s by 49% and now has the lowest NPA in the country at 1% with 1 billion shilling in the bank.

30 Charterhouse [3.94 billion] The bank was placed under statutory management following money laundering and tax evasion allegations and has fought back through the courts and the press (& with some questionable tactics). Even as depositors are locked out, assets up 19% but profits down 33% and the CBK manager increased investments in government securities - up by 332% (as directed by the law)

31 Equatorial [3.67 billion] A Sameer bank had assets up 1% but reduced government securities by 72% to increase loans by 22% but NPA also up 75%.

32 Middle East [3.45 billion] Assets up 1%, loans up 45%, but deposits down 10% yet bank may increase its profit as a result of an improved NPA positions.

33 Consolidated [3.45 billion] Assets up 29%, deposits & loans up 33% and despite high NPA it may achieve a profit in 2006. The Deposit protection fund is expected to sell its 50% stake in the bank, but without a profitable track record it will remain private.

34 Chase [3.29 billion] Assets up 33%, deposit 53%, loans & income up 43% but NPA also up 42%.

35 Development Bank of Kenya [3.05 billion] Assets up 20%, deposits & loans are up 50% but NPA up 52%.

36 Habib Bank [3.02 billion] Assets, deposit, and loans, all up 4% this year at Habib which is rumored to consolidate with sister bank in 2007. Has the highest ratio of investment in government securities.

37 Credit [2.77 billion] Assets down 6% and NPA up 125% as the bank drops 3 places in rankings.

38 Transnational [2.44 billion] Assets up 12%, while deposits & loans up 20% from a year ago but NPA also up 73%.

39 Fidelity [2.11 billion] Income up 50% while deposits & loans both up 35% from a year ago.

40 Paramount Universal [2.05 billion] Assets up 55%, deposits up 72% but income is flat and NPA's are significantly up.

41 Oriental (formerly Delphis) [1.37 billion] Losses continue to eat into assets. Growth in income finally faster than growth in expenses but not enough to reverse wipe out of gains in the 1st half of the year as the bank moves further away from profitability and drops behind Paramount in size.

42 Dubai [1.22 billion] One of the first banks to recognize the potential of having a branch in the Eastleigh area now finds itself fighting with new entrants (giants Barclays and KCB) invading the area. Assets up 5%, loans up 12%, deposits up 15%, but NPA up 130% from a year ago.

43 City Finance [0.53 billion] Smallest bank with deposits up 34% (to 130 million), but income down 31% and NPA up 40% from a year ago.

Other institutions
Would be ranked 27 - Family Finance [4.47 billion in assets] Almost as fast growing as Equity with a similarly ambitious expansion plan, but was not able to become a bank since their planned conversion was put on hold by Central Bank. A share capital share of 390 million is more than other existing banks, but new banks are expected to be stronger and so the society went for a controversial private placement which was under-subscribed in November 2006. Assets and profits are up 40% from a year ago while deposits are up 50%.

new bank - Gulf African Will be the first 100% Shariah bank in Kenya

Number’s don’t lie

People do

Whether it's - Kenya to receive 5.8 billion in military aid, government creates 500,000 jobs, NGO plans to plant 1 million trees, ILO says 352 million children are economically active, SACCO’s contribute 45% to GDP, or 30 per cent of teenagers in some Kenyan coastal areas are involved in casual sex for cash - numbers are thrown at us everyday and we absorb the numbers and take them as gospel truth. We - blogs, the media, and the public - then re-broadcast them to others as fact and they are repeated around the world.

The numbers can come from government departments, ministers, NGO’s, donors, and other leaders who use them to justify arguments, increased funding, or positions taken. One thing I remember from statistics class is that numbers can be made up to say whatever the author wants, if they are slanted in a certain way.

So, I am not saying all the numbers from a study or report are false or some opinions polls are poisoned, but in the spirit of Coldtusker’s financial gaffes we should take time and question the accuracy, motive, reason, purpose, feel good factor, or any other underlying story to the numbers.

Land Rent Crackdown

Defaulted land rents due to the Ministry of Lands will now be collected by the Kenya Revenue Authority . Previously KRA has dabbled in collections of local rates for the Nairobi and Mombasa cities but will now collect defaulted annual ground rents/rates due with penalties, for defaulters after each January 31, clearly spelt out as follows:

- July 2005 to date: 12% p.a. or 1% p.m.
- Jan 2001 to Jun 2005: 24% p.a. of the outstanding rent
- Jan 1996 to June 2000: 12% of annual rent
- Prior to 1995: 50% of annual rent

Payment can be made through KCB NBK and Co-op bank branches.

Missing Mount Kenya

Last month I caught a glimpse of Mt Kenya all the way from Nairobi when it was briefly visible for an hour in the morning. Then I got a chance to visit the area and see the whole thing from up close, I thought.

the drive
Nanyuki is marked as being about 190km from Nairobi. The drive up is pleasant except for some bad stretches of road. The dual carriageway from Nairobi to Thika turnoff is quite bad, indicating the volume/level of commuter traffic between the towns. It’s much better off till the end of the dual carriageway and on to Makuyu, passing Kakuzi, and the Tana River power station. There’s a “no trespassing” sign there which is a shame because Kengen could make some money from visitors to its power sites like Turkwell, Olkaria, and along the Tana River.

Drive non stop through Sagana, Karatina, and finally the turnoff before Nyeri town and off through Kiganjo which has the famous police training school where the climate starts getting cooler. The road is smooth and fast now but like many roads in western Kenya, it is a good thing to slow down when you see a town because there are unmarked bumps – for residents demand that you admire their town and buy their vegetable or animal produce when you slow down.

Naro Moru is the first of the six police road blocks we have passed to stop us, but only for a moment. When I last made this trip in 2002 there were about 20 road blocks between Nairobi and Nanyuki. Next trip I will take a lorry and see what the cops on this route ask for. Anytime you drive a pick up (even empty) you are stopped and can be asked anything for anything from "give me a cigarette," to "why are you not wearing a seatbelt?" No time to stop for fish today though.

Get to Nanyuki town and look for a place to stay. When you have Safari Club money, you can stay at the Mr. Kenya Safari Club - but this is a budget trip so you have to stay at budget places. Travel lesson learnt;- When you get to a new town, esp. one with that gets many tourists, find out where the tour van drivers stay. These guys always know where the best budget packages are with clean rooms, hot water, safe parking, and good food.

Nanyuki had two hotels that meet their definition - Ibis Hotel and Simba Lodge and they were just about right. But the hotels can get full, if there are many vans of tourists in town so get a booking done before you go looking for dinner.

Camp George massacre

The place to eat nyama is a small banda called Camp George about a kilometre from the Sportsman Arms hotel along a twisty route. It look, looks like Nerkwo but the meat is to dies for. Order meat, and unlike Buffet Park, you’ll get what you ordered and in record time.

One problem with eating nyama choma is one never knows when to stop. If you eat a burger, it gets finished, you wipe your mouth and say that was a good burger. But with nyama choma, you eat until you’re full and there's only fat and bones left on the table. Afterwards you feel like a lion who has no interest in gazelles grazing nearby as your belly is too full.

The Watchman at the hotel assures that you’ll see the mountain if you wake up at six. It's much colder now after 8 pm but you don’t feel it, because you're full of doba and Tusker, so you drink lots of water and go to sleep.

Up at six up and sure enough there's the peak of the mountain visible in the morning.
music video shoot

Eat breakfast, watch a music video being shot outside hotel, and go off to cyber café. I have been to some towns where the internet is a rare thing – some cybers only open for a few hours and remain closed on Sunday and Holidays. They are also very expensive. But right in Nanyuki there’s the Marina, a pleasant roof top bar & restaurant that has a very fast cyber, with new machines and costs 1/= per minute.

By the time, I leave the cyber face, Houdini has performed and Mt. Kenya has once again disappeared behind the clouds and weather patterns it creates.

The journey continues - and maybe the leeward (dry) other side of the mountain will have a clearer view.

other side
On to Meru, which is 80km away on the other side of the mountain. The road is under repair and the weather remains cool, with low clouds obscuring the mountain.

Pass thought Meru town which is a large and busy town. Do a bit of business and get moving – as it is almost noon and Nairobi is almost 300km away.

The road from Meru, Chogoria, Chuka and into Embu is quite tiring. It is very twisty, which means you can’t sustain speeds. Quite a bit of it is under repair. There are roads crews ripping up patches of it and laying new carpet. There are also groups of boys who scoop heaps of soil onto the road and demand a token from passing motorists.

The scenery is beautiful with forests, farmland and more banana trees than I have ever seen do the landscape. Still no sign of the mountain, but its presence is felt as we pass dozens of bridges, each full of roaring brown waters from the mountain flowing to the lowlands. I have no idea what a miraa bush looks like, which is a major cash crop in the area for export to Somalia.

Get to Embu, tired, sweaty and hungry. We make the mistake of stopping to eat at a sleepy restaurant. The Waitress literally had her head on table and no customers in sight. When we asked her where to wash hands, she directed us to the Shell petrol station next door. Coming out of bathroom we notice several cars parked and the smell of fresh food and we decided to eat at Shell's Kirimari restaurant. Another travel lesson learnt - when in a new town, (for the first time) eat at a restaurant at a petrol station on the highway. There are no standard restaurants like McDonalds, but these highway points are frequented by many travellers (even the police were having a late lunch there) and have standard menu – in this case rice and beef stew made a great lunch that made us all feel better and energized.

saved by Kirimari lunch

From Embu on down to Mwea the climate gets warmer as we descend now. Stop in Mwea to buy the obligatory sack of rice. It’s high quality grain that’s only available in Nairobi at much higher prices. Next time I’m here, I may take a detour to stay at Masinga Dam. After Mwea, it's back to the main road and Naiorbi - and still no sign of the mountain, despite going round it in a day.

Where in Kenya?



air force buzz

Eveready Mea Culpa

Mea culpa Eveready
I was wrong in estimating diminished interest in the Eveready IPO. 200,000 Kenyans applied for shares in the company and will each receive about 20% of the shares they applied for.

“Corporates” will only receive, at best, 17% of the shares they applied for, but are assured of much better allocation in the about-to-end Mumias offer which closes on Monday.

Bad loans for shares
I was also wrong that no banks will advance loans for Eveready shares.

This still happens, but with less fanfare/advertising than was seen with the Kengen IPO in March. IPO loans are not that attractive to banks since most offers are over-subscribed leaving borrowers with much fewer shares than they applied for – about 20% allocation on average. Also since Kengen has stuck at about 3X its IPO price and Scangroup (2X IPO price), banks are taking on some risk in undertaking such lending. E.g. Say I took out an unsecured personal loan of 120,000 shillings to buy Kengen shares (for 36 months at 19% interest). After the IPO I’d get 2,000 shares whose value of the past few months has been between 60,000 and 72,000 shillings. Meanwhile I have to pay back 150,000 shillings to the bank over the next three years.

Banks need hawkers
This week my bank ATM confiscated my card since it did not recognize my PIN number. I have not forgotten my PIN but the bank has a new IT system that for some reason only recognizes the original PIN, and not the PIN I had changed to as soon as I got the card months ago.

Anyway, I had to do something I dread doing today – visit/queue in the banking hall. It was a time wasting hour, 10 minutes of which I spent in the wrong line. Some banks have empty halls while others have crowded halls of customers who line up to deposit over the counter money. I got to thinking that maybe the bank should allow hawkers in to do some business and share the profits with the bank. They could sell newspapers, fruit, and airtime. Better yet, banks should stop their ridiculous no mobile calls rule for banking halls. If I have to spend a 1/5 of a working day in the bank, I should be able to do some other business over the phone.

Anyway I will be back in two weeks to collect a copy of my original PIN and resume using the ATM for normal banking

Where can you trade shares?
A rough estimate of the access to stockbroking services reveals that Nairobi (and other urban centers) have an undue advantage over rural folk in terms of stockbroking services. While IPO shares are sold at banks throughout the country e.g. KCB, for normal share trading one has to issue a stockbroker.

Like with urban bank customers (who are net borrowers) compared to rural customers (who are net savers) the rural shareholders are at a disadvantage in their access to stockbroking services. On the other hand, they trade much less (earn less commissions) than urban shareholders – preferring to buy and hold shares for dividends, bonuses and AGM goodies.

All brokers have office in Nairobi (including 3 for CFC and 2 for Suntra) while the rest of the country has brokers spread out as follows: Mombasa (Apex Africa, CFC, Dyer & Blair), Naivasha (CFC), Nakuru (Apex Africa,
CFC, Nyaga), Eldoret (CFC), Kirieni (Apex Africa), Kisumu (CFC), Nyeri (Nyaga), Thika (Nyaga), Machakos (Nyaga).

Recent trend Over the last month, Discount stockbrokers have opened offices in Kisumu, Mumias and Bungoma to facilitate the Mumias share offer.

Wishful thinking about oil
Reading this NY Times story about oil smuggling from Venezuela where oil costs $0.17 a gallon to Brazil where it cost $5 a gallon makes me wish that when if Kenya strikes oil, the price of petrol will drop from the current $5 a gallon (Kshs. 77/litre) to $0.17 (Kshs. 3/litre)

Opportunities

jobs

anon new bank backed by prominent middle east and other corporate investors is hiring human resource manager, IT manager, head of operations, head of corporate banking, head of retail banking, head of risk management head of treasury, head of investment banking, head of finance, head of trade finance, relationship managers, security manager, PR manager, branch managers, tellers,
Apply through Manpower services (K) by 23/12

Executive director at East African business council (Arusha) apply through manpower at manpower@africaonline.co.tz by Jan 5

Country manager - S. Sudan at family health international. Apply to hr@fhi.or.ke by 29/12

FSD Kenya SACCO-CAP (SACCO capacity building project) credit specialist marketing specialist financially analysts, IT specialist
Apply to sacco-cap@woccu.org by 27/12

Haco
- planning manager
- Financial accountant
jobs@haco.co.ke by 19/12

I&M Bank
- Liability Manager
- Relationship Manager - Assets
- Relationship Manager - Liabilities
- Marketing Relationship Officer (Mombasa)
Details and applications online

Manager procurement at the Kenya civil aviation authority - KCAA
jobs@kcaa.or.ke by 29/12

Kenya revenue authority
- Senior deputy commissioner: research & corporate planning
- Senior deputy commissioner: legal services
Apply through deloitte at esd@deloitte.co.ke by 5/1

Ministry of foreign affairs principal counselor (4) first counselor (11) second counselor (22) first secretary (28) third secretary (64)
Details will online and apply by 12/1

Nuturn bates
- Account director
- Account manager.
Apply to sam@nuturnbates.co.ke

Ogilvy
- Finance director: apply through KPMG at esd@kpmg.co.ke by 29/12
- Accountant D/L is 19/12
- Credit manager D/L is 19/12
Account managers (3) D/L is 21/12
Apply to info@ogilvy.co.ke

Safaricom
- Site Optimization Supervisor
- VAS Propositions Manager
- Business Analyst – Strategy Implementation– BASI_Nov06_CSP
Details at this site

Shelter Afrique
- Investment officer (directorate of operations)
- Internal auditor (bilingual)
- Translator (English/French) at the corporate secretary department
Apply to recruit@shelterafrique.org by 15/1

Travel insurance marketer at UAP insurance. Apply to recruit@adeptsystems.co.ke by 29/12

Finance director at the world wildlife fund (EARPO – Nairobi). Apply to HResource@wwfearpo.org by 31/12

learning/possible employment
Opportunity at the Steadman Group for some participants who enroll in an applied research training program at Strathmore business school . Fees are 75,000 shillings and applications can be found at www.steadman-group.com/scrt or www.sbs.ac.ke/scrt. Application deadline is 31/12 and classes begin on 27/1 for the two month program which also includes 2 week research at Steadman

Hospitality
- Kenya Wildlife Services is seeking partners to lease develop and manage tented camps in Western Kenya - at Kisumu impala sanctuary, Ndere island national park and Ruma national park. D/L is 19/1

Earn $17 a day (per bed) by hosting delegates World Social Forum and provide them with bed & breakfast, running water & electricity from January 20 – 25.

travel
Buy a ticket at East African to Mombasa directly from the airline get a second one free (up to 6 January)

Tiomin Delay

Tiomin has sent notice that it will “delay construction of the
Kwale Project until the Government of Kenya resolves all land related issues” – i.e. some farmers have objected to the price they are being forced to give up their land to the project.

I think it is okay to ask it Tiomin will add value to Kenya: Are mining companies the right kind of investors for Africa anymore? Their legacy in most countries is not good and the Tiomin parent group has a history in South Africa. And when you look at the Fluorspar mines and companies like Magadi Soda that have been in Kenya for a hundred years, what is their contribution to the employment, the economy, citizens, and the government in form of taxes compared to five year old Safaricom and Celtel?

Al Jazeera in Kenya

Today is Jamhuri Day and for the firt time in many weeks, I was home watching morning TV. There was an interesting piece called “global voices” on NTV with stories about citizen media issues and tolerance in Lebanon and Iran. At first I thought it was a special documentary on CNNI or BBC then I realised I was watching Al Jazeera TV which the Nation Media Group had said it would start broadcasting had announced it would start broadcasting.

The screen graphics have the deep red of BBC and the presenters were a multi-cultural mix of black, Caucasian and Indian which I noticed when they mentioned all their correspondents and bureaus in Kenya, SA, Zimbabwe, Ivory Coast etc. The only familiar face was Riz Khan who used to be on CNN years ago.

It’s refreshing to see some new media from another country’s perspective now. CNN started in 1990/91 and was later joined by BBC and SKY which local networks run their feeds in the morning.

I hope it is understood as an alternative to the ever present (US/UK) news view and that NTV does not run a risk by rubbing viewers and advertisers the wrong way. There's an undercurrent streak of anti-Islam or anti-Arab (without distinguishing which) views among common Kenyans which may be fanned by indiscriminate terrorists acts and some of out own religious leaders.

Whenever anything is done to accommodate Moslems such as Kadhi’s courts or Sharia banking services many Naiorbians ask - why are they so special? whey can’t they conform like the rest? why are they imposing their relirion on us? This is a myopic view of a religion that numbers almost 1/4 of the planet.

NTV which was recently added to DSTV now give their satellite viewers an early morning peek of Al Jazeera on their feeds.

Ecofade II

Part I

Econet Wireless fired off another long letter to the Minister for Information and Communications this week in addition to printing it (2 pages long, badly worded, with typos) in the Nation to explain why they have not rolled out almost two years since they were awarded the third mobile license.

The company which has a history of big talk blames red tape and invisible forces who have continued to manipulate the license process.

Econet's MD writes that they want (then) Minister Raphael Tuju to retract his unauthorised statement cancelling Econet's license and also wants the CCK to issue them with network codes. They claim CCK and various officers have been pushing them to renegotiate with KNFC (an entity who could not pay for 5% of their purpoted 82% ownership), and also lend money to KNFC to enable them to pay for their $12m portion of the license fee.

Econet claims to have already spent $40m on the process (also what happened to applied for jobs at Econet?

Air news

- Early Bird offer from Kenya Airways has round-trip flights to Mombasa at 5,000/= if you take the 6:45 a.m. flights.

- Kisumu Airport should reopen next week when repairs should be done.

- Qatar Air Cargo to serve Nairobi and Eldoret from next year.

December 9 Opportunities

Jobs

Corporate affairs group leaders (2) at Celtel. apply to hr@ke.celtel.com by 15/12

Internal audit manager at East African Portland cement. D/L is 22/12

East African tea trade association
- finance/investment analyst
- project management office director
Apply by 22/12 to eatta.tea@gmail.com

Power economist at the Electricity regulatory board. D/L is 29/12

Multi-lingual flight attendants at Kenya Airways - (both male and female) – fluent in Hindi, Arabic, Spanish, Italian, German, French and Portuguese aged 21 – 30 (in addition to the other similar flight crew requirements). D/L is 20/12 for applications to the group human resource director.

Director treasury at Kenya commercial bank. Apply through Hawkins associates

Oracle
- education sales consultant
- middleware pre-sales consultant
More details their site and apply to mearecruit_ae@oracle.com by 15/12

Retail, sales & marketing - area business managers (2) at Shell. Apply to hr@ksl.shell.com by 11/12

Urgent cargo
- chief operating officer
- general manager - freight
Apply to hr@urgentcargo.com by 18/12

Internships

Aga khan foundation young development professional (YDP) program a 1 year leadership and management development program – accepting two streams this year (i) development management (ii) arts, media, or culture management web link here and deadline to akf.kenya@akdn.org is 20/12

Kenya Oil Company (Kenol) management trainees preferably who are fluent in Portuguese or Spanish. apply by 18/12 to the human resource manager.

Stanbic IPO

This week I made a my first foray into international investments (since a short lived stint with T. Rowe price mutual fund) by signing up to buy shares in the Stanbic IPO(Uganda).

Earlier this year a cement company had an IPO in Tanzania but that was not available to Kenyans while the Stanbic offer is. Though earlier marketed as being exclusive to Dyer & Blair (D&B) customers, other brokers have forged links with Ugandan financial institutions to enable more Kenyan’s to participate.

I paid 3/= per share at CFC (plus a 750/= processing fee) while a certain wealthy investor/dentist informs me that D&B has them at 2.85 each as does African Alliance at the same price.

Still there are some risks of investments mentioned in a D&B analysis including limited trading days at the USE, no CDS system (we'll get paper share certificates), power rationing could negatively impact company loan repayments, and the Uganda shilling may depreciate against the Kenyan one. Also dividends will be paid in Uganda shillings (1 KES = 26 Ush) but at least they can be repatriated in full as movement of capital is free.

Stanbic is Uganda’s largest bank and is rated as the highest quality stock ever offered on their stock exchange.

Diamond Trust EGM

Diamond Trust Bank will have an extraordinary general meeting (EGM) on December 21. The company has not amended its articles of association since 1982 and want to update them to reflect new capital structures, governance, CDS and the electronic age, among others.

Jubilee Insurance will have an EGM on December 18

The various proposed amendments will have outcomes including:

- New capital: Creation of preference shares and also clears way for a share split
- Shareholders who don’t approve of company actions can have their shares forfeited. E.g. minority Serena shareholders who did not approve the conversion to TPSEA
- Modern technology: Allows notices and other documents to be e-mailed to shareholders. (This can save costs; i.e. the company has 10,000 shareholders and budgeted Kshs. 7 million for printing and postage of the ongoing rights document). . Also allows board meetings to be held by teleconference or video conference, allows dividends to be paid by electronic means (e.g. bank transfer, direct debit) not just by cheque and notices can be sent to shareholders outside Kenya
- Super shareholders? New articles recognize that 10 members constitute a meeting and allows any director or any 2 members to convene an EGM. The company’s top 10 shareholders own 48% of the company while the next 50 own another 10%
- Governance: recognizes that directors not disallowed from doing business with company provided they disclose this to fellow directors and also don’t vote on such issues. Also fellow directors may remove a director who misses 3 meetings.
- Cap on underwriting commissions at 10%. (Another cost saving measure since the on-going rights issue has budgeted placing commissions estimated at 28%.) . Also stockbrokers may be paid in the form of shares.
- Makes provisions that stem from the 2006 budget speech where the Finance Minister proposed that any dividends unclaimed after 7 years be returned to the CMA’s investor compensation fund from where individuals can claim when they resurface.
- Bankrupt person may vote by proxy

Charterhouse depositors cry foul
Charterhouse Bank and depositors are asking (in a full page newspaper notice last week) why was their bank, with no liquidity problems, shut down without sufficient explanation and why they are still denied access to their funds almost six months later even after a court had lifted the order? The accounts of the bank remain intact and they are still earning interest on the almost Kshs. 3.1 billion in deposits there as the statutory manager has invested surplus funds in government securities. Only staff costs have shot up reflecting the additional managers deployed from the central bank.

Bank eX Files

I remember watching the X-files when it was the show to watch. The agents would enter a dark warehouse or factory. They would whip out their flashlights and find their way through an abandoned building, tearing down huge cobwebs, wiping away dust, and peering under covers in search of a deformed skeleton or alien foetus.

That’s one the last unpleasant tasks of a bank hangman which is what I was doing today - minus the gun, courage, cute co-worker, and aliens of course.

Today we did the same thing, starting with opening many padlocks at the entrance, covering our noses with handkerchiefs, removing any light-colored clothes and stuffing our socks into our trousers before we entered this warehouse. My handy Nokia phone comes with a torch which proved to be useful as the place is dark inside even at noon.

We have heard gallant tales and applaud the efforts to revive companies like Kenya Meat Commission. But this is how the revival all starts - with bank workers breaking down locks they had put up years before as we take yet another round of prospective buyers to visit/inspect the abandoned property before they submit any bids.

The skeleton these agents are looking for is not hidden. Even as we move through the dusty place with torches and noses covered to keep out the dust we are looking at the skeleton of someone’s dreams - the building which they put up, the new machines they imported from South Africa & India (state of the art then, outdated scrap today), the managers suite they decorated, faded door signs around the well laid out premises marking rooms like productions, manager, bathroom, sales office where people would busily work towards realizing the full potential of the owner's dream.

Today it’s just a skeleton. But if the buyer likes the skeleton enough to put some money down, someone else's dream & vision will rise again over the skeleton of someone else's.

Mlolongo: As we drove past mlolongo yesterday there was a bulldozer knocking down a controversial petrol station built on the road reserve. Further down the road other buildings marked for demolition were beehives of activity with work men doing more demolition work. The owners' of these building have heeded the government’s directive and are removing their buildings at their own cost, and with a chance to salvage their stone and material.

But many are not abandoning their dream projects; – they are instead only shaving off about 10 ft of each building that they deem to have encroached on the road reserve, and hoping the rest of the structures will stand on their own. I hope they will be proved right in their assessment because when the bulldozers are done, there won't be any ex-file's for the bank to revive.

December 1 opportunities

Telkom dealership: resellers for Telkom’s 3G wireless service (fax, voice, internet) in Mombasa, Kisumu, Eldoret, Nyeri, Nakuru, Meru, Muranga, Kakamega, Voi, Kisii, Kericho, Thika, Embu, Malindi, Nanyuki, Garissa and Machakos. D/L is 5/12.

Water distributors for Ha Ha drinking water, nationwide.

housing: Satellite City - a low cost hosing estate compositing 265 units will be built in mlolongo athi river

Jobs

Various jobs at abbott site

Chief executive (& secretary to the board) of the Association of Micro Finance Institutions (AMFI) . Apply to info.amfikenya@africaonline.co.ke by 8/12

Legal officer at Del Monte. Apply to nanasi@delmonte.co.ke 13/12


Public affairs officer at the Canadian high commission. Apply to nairobi-competions-concours@international.gc.ca by 8/12

energy company involved in hydropower and geothermal development: petroleum geologist petroleum drilling engineer, exploration geophysicist, financial analyst, financial auditor. Apply thru PWC at ess.ke@ke.pwc.com by 15/12

I&M Bank: apply online for cashier & teller positions.

Brand & communications manager at java. Apply to hr@nairobijavahouse.com by 13/12

Kenya Wine Agencies Ltd: trade marketing representatives, information & communications technology manager. D/L is 13/12

Ministry of State for Youth Affairs
- Section officer II (500 posts)
- Technical instructors (61 posts)
Apply to the PS P O Box 34303 Nairobi by 8/12

Postbank: senior manager marketing & business development, database administrator, legal officer, internal auditor, inspectorate officer. D/L is 18/12

Safaricom: retail centre manager (Nairobi), retail centre agent (Nakuru, Eldoret, Mombasa, and Kisumu). Apply to hr@safaricom.co.ke by 8/12

Senior economist at the World Bank - Sudan. D/L is 11/12

New Nation

Friday December 1 marks the launch of a revamped Daily Nation. Hope it streches to other papers the rest of the week, not just Friday's - Monday and Wednesday could also do with a bump.

KQ goes regional

As expected Kenya Airways will get some regional jets, the Embraer 170 which can be expected to serve Kisumu (once fixed) and other regional routes. The Kisumu route showed the preference passengers have for jets versus turbo- props.

An earlier post & debate

More investment news
- Diamond Trust rights are trading on the NSE
- Stanbic Uganda IPO open to Kenyans
- Mumias opens this month
- Is the Family Finance capital raising legal? They say yes, other banks say no, CMA says nothing

Housekeeping
+ve In the last year, Hotmail (which I was about to abandon) has increased mailbox sizes from 2MB to 25 MB and now to 1 GB.

Anonymous comments are allowed again, but are likely to be ignored.

-ve my hotmail address has come to the attention of some of our West African brothers such as Ibrahim, Isaaic More, Idris Musa, Adamu Abubakar, Bala Mohammed, Zuma Amed, Ken Ono, Kaburo Abu, George Watara who have all sent me multi-million-dollar business proposals of which I am yet to decide on.

Opportunities on the horizon

Yesterday, for about an hour, Mt. Kenya was clearly visible from Nairobi, high in the horizon with its snow peaks. It's occasionally visible, usually early in the morning and it was a sight to see until some clouds moved in.


looked like this

Anyway, also on the horizon is:

Cheap Flights:
East African Safari Air has introduced a buy one, get one free ticket to Mombasa up to December 12.

also Coldtusker & Kenya Airways were correct about Kisumu - today EASA has also canceled flights to Kisumu citing the poor state of the runway

VIA Uganda has introduced one way fares of $69 from Nairobi to Entebbe starting on Monday.

Hotel revival :
At the Coast new hotels are springing up to capture the increasing number of tourists and visitors at the coast. Sarova are adding a hotel at the South Coast, Neptune may add two facilities more while 2007 could also see a return of Intercontinental hotels to the Kenya coast.

Marital lawyers:
Yesterday also had a nice chat with a group at which it was unanimously agreed that, in light of the Samuel Gichuru divorce & property fight, there is a growth market for lawyers who specialize in divorce cases, investigators to trace assets, and lawyers to draft creative prenuptial agreements.

Green cards: Just over a week left in the US 2008 diversity visa lotter as applications must be submitted online by Sunday December 3.

Women directors at state corporations of the Republic of Kenya: Following President Kibaki’s recent directive that 30% of the posts in public service be allocated to women, the government now invites qualified Kenyan women invited to submit their CV's to join the boards of state corporations – they must be university graduates with proven track records in senior management experience and be individuals of high integrity. Submit CV’s to the Secretary, state corporation advisory committee, Office of president, P O Box 62345-00200 or KICC 9th floor Nairobi.

Other Jobs

East African breweries:
- Head of human resources – EABL Kenya demand
- Human resource manager – EABL Kenya supply
Apply to hr.recruitment@eabl.com by 8/12

Country sales representative (Tanzania) at Haco. Apply to jobs@haco.co.ke by 1/12

Head of marketing at Housing Finance. Apply to human.reosurces@housing.co.ke by 4/12

Project administrator at ICRAF (world Agroforestry centre)/CIMMYT. Apply to icrafhru@cgiar.com by 8/12

ICT strategy consultants at Kenya airports authority. Apply through Hawkins.associates@khigroup.com

Kenya commercial bank (Tanzania)
- Head of corporate banking
- Head of retail banking
Apply to the divisional director HR KCB 48400-00100 by 30/11

Public relations officer at Pan Africa Insurance. Apply to hr@pan-africa.com by 29/11

Safaricom careers: senior manager reporting, optimization engineer, senior optimization engineer, senior CRM systems developer, credit controller, senior manager – organization development & change management.

Tiomin :
- Chief accountant
- Internal auditor
- Human resource officer
apply to apply@tiomingkenya.com by 30/11

But
There’s more madness from the City Council of Nairobi whose strong arm tactics continue to frighten businesses out of downtown Nairobi. From knocking over restaurant sidewalk flower pots even as they plant their own at roundabouts, to charging exorbitant amounts for businesses to put up signboards (i.e. advertising) or any promotion. Yesterday Kenya airways staff were handing out flyers promoting the “2,500 to Mombasa fares” and they all bore “city council planning department/urban design/development section” stamps at the back - I wonder how much that cost or how long it took someone to rubber stamp each flyer.

Now, barely a month we laughed at the mayor’s ludicrous suggestion to double parking charges (i.e. 70 shillings in the morning 70 in afternoon), the council has informed motorists that from December 1, parking off-street will costs 100 shillings per entry - previously it was 100 per day. Also the new fee applies to motorists who bought and paid for quarterly monthly permits. So in addition the almost 4,000 shillings they paid in October, they will have to fork over another 500 per week.

Thanksgiving Portfolio

Shares I own
Crown Berger
Diamond Trust
Express Kenya
Kenya Airways
Kenya Commercial Bank
Kenya Electricity Generation Company
Sameer Africa
Scangroup
* Uchumi (suspended)

Verdict: Surprisingly little change from six months ago

Performance: The Motley Fool advises that investors should beat the share index to consider their returns a success. The NSE 20 share index is up 30% in six months while my portfolio is up about 35% from May. *(The NSE index still lists Uchumi and if I zero it from my calculations my portfolio is up only about 30% in six months)

What’s changed?
In: Scangroup
Out: Housing Finance
Reduced: KCB, Kengen
In-n-Out: Sold Sameer Africa high bought it back low
Dividends: Payments from Kenya Airways KCB, D-Trust, Crown and Kengen (not factored into my performance return)
Bonus share: Express
Best performers: Scangroup, HFCK, D-Trust
Worst: Uchumi
Risk vs. Return: Some Nyramids give 30% a month returns, but I can’t afford to take those risks
Looking forward to: Kenya Re, Diamond Trust (rights), and Safaricom

No drugs at NSE

The Nairobi Stock Exchange (NSE) through a paid statement by its chairman, Mr. Jimnah Mbaru, has responded to recent allegations that the growth of funds invested at the NSE had come from drugs or other illegal sources.

He says it's mainly from a basic shift among institutions and individuals who previouly used to invest in land and real estate but have now moved to more liquid invstements such as to equities and government securities

The increased funds come from, among others sources:
- many Kenyan parents don’t have to pay primary school fees anymore since the advent of free primary education
- better management & compliance of pension funds who before had too much real estate investments including the NSSF
- increased insurance premium collections and increased corporate retained earnings
- substantial remittances by Kenyans in the Diaspora – estimated at $750 million to $1 billion annually
- international investors
- & first time investors in stock market including over 200,000 who bought into the Kengen IPO

22 November 1963

It happened long before I was born but this one event has fascinated me for as long as I can remember. It set the stage for the greatest web of conspiracy theories, signaled the end of an era, and plunged the world to new depths of the human horror. Before 9/11 it was, and arguably still is, captured by and became the most watched video tape in history. You can’t help but watch it again and again, second by second, this tragic moment in human history, the tape is silent but conveys cruelty, hope, horror - and screams many other emotions as a life ended while condemning others and altering millions more who questioned what they saw and what they were told

I have seen that tape in different formats, read dozens of books, seen hundred of photographs, and postulated many more what-if and why-was, who-did-it variations in my mind. It goes on and on. Somehow this mystery may never get solved until the day the world stops and we can rewind to that moment of that dark day and watch it from multiple angles and have the answers revealed.

Mombasa: so near, yet so far

Despite my earlier rant about being a dumbestic tourist who can’t' picture a holiday that doesn’t involve Mombasa
[beach/swimming/historic/ferry/boating/seafood/lazing/meditating/madafu]
of the edge of the world] the craving to visit the coast is back again. In my life I have seen the big five animals, and will do so again, but I am in no rush to go to the territory of a rogue buffalo or elephant armed only with a camera and a laptop.

The coast is a different story, a must see place even though it rarely changes. But December is not the best time to go to the coast – I was there last Christmas and the place was too crowded.

Reasons to go
Air fare deals: It's gotten a lot easier to get to the coast since fly540 has announced that they will fly to Mombasa for a round-trip fare of 5,440 shillings (about $75)
- This comes about six months after East African Safari Air launched Mombasa flights at a round-trip fare of 8,900 shillings.
- Now Kenya Airways has responded with rock bottom Kshs. 2,500 fares – but for flights the opposite way. i.e. from Mombasa to Nairobi from December 24 to 31 and from Nairobi to Mombasa from December 31 to January 6 2007.
- I hear that the road repairs are progressing well on the bad stretch near Mombasa.
- No water: Another reason to escape Nairobi is the water shortage. Even as the Nairobi water company is reporting increased profitability and collections there's a biting water shortage/rationing plan that is going on amid heavy rains. I have been reduced to a beggar going round to relatives & friends houses with 20 litre drums begging for water. I hope their neighbors don't think I am smuggling changaa to these houses.

Reasons against
- Bad timing because the Mombasa business community is not happy with how the Mombasa city council is managing the town
- Also at the tourism expo held at the Sarit centre at the beginning of November, most Mombasa hotel were reporting that they were fully booked for the December/Holiday period. Hence KQ having to have extra flights and having cheap tickets to fly the opposite way.
- Mombasa is flooded after some heavy rains
==
Madaraka update
The sale process of 600 houses by the Nairobi City Council and National Housing Corporation commenced in March 2006. However 359 tenants sued halting sale of 291 of the houses. The NHC and NCC are however proceeding with the sale of the other 309 houses whose tenants paid 10% deposit and are now expected to pay the balance by 22 January 2007 while a judge will issue a ruling on the 291 houses on December 4.

November Investments

The middle of November brings a choice of three new investment options to look at:

Eveready OFS
At 9.50 shillings per share this is the cheapest to buy. Others have gone through the prospectus. prospectus

This is a company that will largely depend on rural areas to remain in the dark i.e. anti KPLC. But the company needs top get into new products such as batteries for solar gadgets and laptop’s batteries- things that will provide future customers. But when asked about R&D on Capital FM this week, the MD mentioned that this is something they rely on Eveready US to do. So the views of an African country will not rank up there. Also watch to see if ICDCI retains it stake or takes advantage of the euphoria of retail investors buying in at the front to walk out of the back door (like Uchumi).

The shares are likely to be over-subscribed and I still maintain that the hassle of time spent visiting stockbrokers coupled with the inevitable refund of most of your money in a month’s time is not an enticing option. So I’ll wait till December, or opt for the bare minimum (500 1,000 shares at 9,500 shillings). Going by other offers this year (Kengen, Scangroup), the shares may double or triple in price in the first week and then stabilize after a month.

Diamond Trust rights issue
Priced at 50/=, good outlook for a bank looking to expand regionally and possibly absorb another bank next year. I have had the shares for over a year bought at 27/= now trading at about 76=. With the rights being sold at 50, that means one can get an immediate 50% return by flipping them immediately. I’ll probably buy my rights, and more, and hold.

Family Finance Building Society (FFBS)
This fast rising building society that intends to become a bank next year. Shares are priced at 60/= and are open to account holders, but anyone can open an account and buy the shares.

Like Equity: In preparing to become a bank, they have dutifully being publishing their quarterly accounts. Equity grew by 20% while FFBS grew its assets by 18% by June 2006 and both achieved their entire 2005 profits in the first half year of 06. FFBS is about 3.5X smaller than Equity, less efficient (operating costs are about 25% higher), and mobilises deposits similarly, but their fast growing loan book, like Equity’s, also comes with growing NPA’s.

Equity raised capital to become a bank in a private placement at 136/=. Thereafter the shares went to the OTC where I had a chance to buy, but passed on, the shares at 75/=. They were listed in 2006 at 90/= shillings and have settled in the 100 – 130 range.

Difficult to judge, but I’d rate it as a buy even though they have been very slow to provide information for new investors e.g. on who others shareholders are, when we’ll know about allocations, refunds, listing etc.

Pot Pourri

Biz news

Airlines
- Want to start an airline? Boeing has created a site to guide your operations into this very risky business. (From Randy’s Journal - a Boeing VP's blog!)
- Kenya Airways now offers flight status information via phone to passengers at 20/= per SMS.
- There was a small story on the KTN news indicating that Five forty aviation (Lonrho air) which will launch air services to Mombasa this month will be priced as a low cost no frills airline.
- Pan Africa airways (which is hiring crews for F27 and B737aircraft) has also been licensed to operate from Nairobi to Mombasa, the coast and Loki.
- Jet Airways of India plans to launch flights to Nairobi next year

Banking: Kenwsitch and Pesa Point are collaborating to enable ATM customers to access each other’s networks.

Opportunities

Jobs
from the daily papers

Financial accountant - Nairobi at the Institute of security studies. Apply to jobs@issafrica.org by 24/11

Internal audit manager at Oserian flowers. Apply to jobs@oserian.com by 22/11

Pricewaterhousecoopers: (i) Financial effectiveness [senior consultants and consultant](ii) IT effectiveness [senior consultants and consultant] (iii) governance, risk & compliance/financial management in the public sector [senior consultants and consultant] (iv) governance, risk & compliance/internal audit services [senior consultants and consultant] (v) manager, human resource consultancy (vi) Human resource consultant [senior consultants and consultant]. Apply to the human capital manager at recruitment.ke@ke.pwc.com by 30/11

Asian languages
Last year a Confucius Institute opened at the University of Nairobi teaching Chinese languages. Now Kenyatta University if offering a diploma course in Japanese languages as a 2 year program beginning in January 2007 (application deadline is 24 /11)

Tender
- the Kenya anti corruption authority (KACA) has advertised to procure an interview recording system (that works). KACA also plans to open an office in Mombasa.

IPO fizzle

No disrespect to the Eveready IPO which opens today, but there appears to be less enthusiasm for what it now the 3rd IPO this year after Kengen and Scangroup. There are lines outside stockbrokers today, and will be around for the next two weeks but nowhere near Kengen size.

Most of the fatigue comes from the over-subscription and resultant fractional allocations of shares to investors – each requiring several trips, phone calls and hours spent pursuing IPO shares.

Likewise to buy Eveready, I’d have to sell something or if I wrote a cheque i'd have to make several trips to my broker - who's normally super efficient. But at IPO time, things get hectic with the long queues and harried staff - payments/orders get misplaced or have to be corrected, and a second trip would likely be in order, followed by a third in a month's time, after the IPO results are known (11/12), to collect the inevitable refund cheque (after 15/12).

I may be better off just waiting to the shares to list (on 18/12) then simply send my broker an e-mail to buy the shares. Price volatility can be expected on day one, but with Christmas around teh corner, there won’t be much activity on the exchange and the price should hold steady (I hope) till January.

Careful banks: Unlike before when several banks lined up to offer loans to buy Kengen shares, they are still available, but there’s no marketing or fanfare announcing them. Also, while Kengen was sold on almost every street corner, this time KCB is the only commercial bank selling Evereyady shares.

Still I must commend some brokers who have opened satellite offices to process IPO applications, thus easing the crowds at their main offices.

BARS free
Barclays shareholders will endorse the sale of their BARS to CAPSEC of South Africa - in addition to a share capital increase, bonus, and share split at an EGM in Nairobi on December 8. Register closes Nov 29

No parking
The latest ludicrous proposal by city council is to double the daily parking fee from 70 to 140 shillings ($2) in order to finance the construction of parking garages. What the council should do is have a bond or enter an arrangement with a bank that will finance construction of the parking in record time and the council can repay the bank over the long term. The council would be ill-advised to finance construction using daily collections of which it has little control. The proposal also has no end date which means we could be paying double for the next 10 years, long after the project is over, or without any new parking garages ever being built.

Posta booster
There's a story in the East African today about how the Postal corporation will reap over 16 million shillings ($226,000) from Kengen mailing annual accounts and notices for their AGM on November 30. Kengen had to pay for tens of thousands of stamps and has budgted 80 million shillings ($1m) for the day.

Nyramid update
A prominent city Church led by a charismatic preacher is behind one of the newest Nyramids.

Tesco’s here
Tesco, a former partner of Uchumi has opened its own Nairobi supermarket.

Cadillac’s to Kenya?
Cadillac returns to Africa via South Africa with right hand drive cars which will then be sold to other Sub-Saharan African countries -with BLS, SRX and STS models arriving early next year. Geenral Motors has a significant presence in the Nairobi through isuzu truck and minibus sales.

Yoweri musings

advice from a neighbour

President Yoweri Museveni gave some history, leadership, business, and investment insights in a speech when he opened the new Serena hotel in Uganda.

Some of the things he mentioned touch on the future prospects of Tiomin, Kengen, Sasini, Serena, coffee marketing, and relations with China & and other foreign donors. I welcome any recent Ugandan visitors to comment, since I am yet to visit the Pearl of Africa beyond Malaba (trip planned for 2007).

Corporate Blog?

This afternoon I had an interview with a company about a website - and my concept was for the company to incorporate a blog to generate interest in the website and market the company better to its diverse customers, many of who accesses its products over the internet.

I mentioned that other corporations were doing this now and it gave a human face to their communications from CEO’s to customer service people.

I don’t know if my idea went over well, and I hope that I was wrong in my feeling afterwards that some of the panel appeared to have that we already have a website, blogu kitu gani? face.

After such a session, you are always every critical of yourself. During question time, I wanted to instead rush back to one or two points I had just remembered. And even taking the stairs down afterwards, I wanted to go back to the conference room and give them another 3 or 4 points that I had forgotten to mention that would strengthen my case.

Oh well, see how it goes. It was a very nice company, good to work with, and appears to have a nice work culture, and a very laid back (low bureaucracy) atmosphere.

Opportunities

from the daily papers this week

Manager at the Carnivore restaurant Nairobi. Apply to carnivore@carnivore.co.ke

Classic Camps: chief accountant, senior accountant(s), sales & marketing manager sales executive(s), executive assistant. Apply to classiccamps@accesskenya.com by 15/11

Commercial Bank of Africa: (i) internal audit manager [Ref: AM-BR] (ii) internal auditor [IA-BR] (iii) account relationship manager, corporate banking [ARM-CB] (iv) account relationship manager, business banking unit [ARM-BBU]. Apply to jobs@cba.co.ke by 21/11

Communications commission of Kenya: Supply, deliver, install and maintain solar energy solutions st CCK sites in Taiita Taveta, Isilolo, Suba and Thika districts. Submissions to solar@cck.go.ke by 13/12

Communications professional at DFID. Request an application form from dfid@adeptsystems.co.ke and reply to recruit@adeptsystems.co.ke by 1/12

Property valuer at Housing Finance. Apply to human.resources@housing.co.ke by 20/11

ILRI aka international livestock research institute. (i) Internal audit manager (ii) resource mobilization officer (iii) help desk administrator. Apply to recruit-ilri@cgiar.org by 24/11

Law Society of Kenya: advocates to consult on current professional development of lawyers, review the conduct process (standards & ethics) in place and make proposals on the same. Apply to lsk@lsk.or.ke by 24/11

McCann Erickson: (i) general manager (ii) account director. Apply to Emily.Mutua@scangroup.biz

National Museums of Kenya: (i) director, development & corporate affairs (ii) director, institute of primate research (iii) director, administration & HR (iv) director(s) (3) museum sites & monuments – for central, western and coast regions of Kenya. Apply to dgnmk@museums.or.ke by 30/11

Internal audit manager at Oserian.a apply to jobs@oserian.com by 22/11

Logistics manager at Oxfam. Apply to kenyajobs@oxfam.org.uk by 22/11

Practical Action aka intermediate technology development group: (i) program officer [technical support] (ii) program officer [financial support]. Apply to recruitment@practicalaction.or.ke by 24/11

Royal Media Services (i) ICT assistant (ii) ICT technician. Apply to hr@royalmedia.co.ke by 24/11

Sotik Tea (i) engineering manager (ii) field assistants/management trainees. Apply to info@sotikteas.co.ke by 24/11

Informing the NSE public

Read an article from the Washington Post where the Chairman on the US Securities & Exchange Commission, Christopher Cox, is intrigued by the idea of using blogs to disseminate important corporate information.

"A 2000 rule known as fair disclosure ended a long-standing practice of companies providing significant information to stock analysts and other Wall Street insiders ahead of the public."

Monday’s naked insider manipulation of Citi Trust shares should have been a wake up call for NSE on information and rules for prices and trades. Watch to see if there’s any recall or punishment stemming from the ill-fated trade.

This is very important because currently pension funds, Kenyans in the Diaspora, farmers and other new investors are all stepping into the market and things like the Citi Trust fiasco tend to undermine our confidence in shares. The share splits of EA Cables and ICDCI were self-fulfilling prophecies – share price shoots up about 6X in a few months, leading directors to announce splits to make them more affordable.

”when you attract foreign investors, you also attract criminals who specialise in economic crimes” – Tommy Prins of Deloitte

Related NSE needs EDGAR

New age for investors
The Nation’s Weekly Advertiser interviews the brains behind Eight.co.ke, Jijini Marketsand Stock Detective who offer financial information on activities at the Nairobi Stock Exchange. Pick up this weeks' free copy of the newspaper around town in Nairobi and hopefully the story will appear soon on their website. (ed: none are affiliated with the NSE)

Upcoming @ NSE

- Barclays Rumour: The Bank will announce a 5 for 1 share split and a 1 for 38 bonus. Note: I don’t own any Barclays shares

- Riba Capital tips on the next Mumias offer.

- Family Finance Building Society will offer 15 million new shares to account holders at 60 shillings each (minimum placement is 30,000 shillings). The ongoing offer runs to the end of the month and may overshadow the, rather low key, Eveready IPO (which starts next Monday) in the same way Equity Bank’s listing stole the limelight (and perhaps investor cash) from Uchumi’s re-capitalizations earlier this year.

Family Finance mimics Equity which also raised 500 million shillings in capital in August 2005. FFBS was expected to be a licensed as commercial bank by June 2006 but that has likely been delayed by the Central Bank until they shore up more share capital.

November 7 Opportunities

Jobs

Africa Trade Insurance Agency: (i) assistant accountant (ii) administration officer. Apply to Recruitment@Africa-ECA.com

Auditors (8) at Constituency Development Fund national management committee secretariat of the Government of Kenya. Apply to cdf@wananchi.com by 4/12

General Manager at Dyer & Blair (Uganda). Apply to hcapjobs@wananchi.com by 17/11

Investigator (broadcast piracy) at Multichoice Kenya (DStv) . Apply to nkariuki@kenya.multichoice.co.za by 20/11

Pan African Airways: captains for (B737 and F27), first officers for (B737 and F27) and training captains (B737 and F27). Apply to the chief pilot at orcom@worldline.co.za

USAID (i) Senior regional conflict management & governance advisor (ii) project development specialist. Apply to hrnairobi@usaid.gov by 17/11

Real Estate

KCB Houses: Simba Villas, Embakasi. Maisonettes at 4.6 million and Flats at 3.45 million shillings each.

Factory Complex: Industrial plot with 50 acres (out of which are occupied by 20 by factory) on a complex in Nanyuki – with all utilities connected, 5 godowns, and administration block.

Property Listings: New website of property listings. I’m still a big fan of Nyumbanet.

News

Econet are yet to pay for a mobile license ($27 million)

Safaricom: Network rollout equipment suppliers are invited to submit bids to the company. However no new dealers are being added – so stop bothering them!

KQ gets some competition on its popular and profitable Nigeria - Dubai and also Nairobi to China routes from new entrant China Southern which will fly from Beijing to Lagos, via Dubai from next year. From African Flyer - great airline blog.

McCann Erickson Kenya wound up – now a part of Scangroup

No more KR: Kenya Railways ceased passenger & freight operations on October 31.

Tea company to be taken over?

Maid Sabotage

I went home one day this week and found that the maid had sold my entire stack of precious newspapers that I have meticulously collected over the last 5 years.

It’s partly my fault because I had separated and tied several stacks to be sold with instructions that the others not sorted /tied up were not to be sold. However when the newspaper buyers came round, she sold the entire lot – tied & untied newspapers and away went historic articles from the nation, standard, people, weekly citizen, financial post, defunct tabloids like Kenya confidential, Patriot and some foreign newspapers - pages & pages of business articles, company & executive profiles, election & referendum stories, career guides, strategic & other business ideas, bar-fighting, sexcapades and corrupt deals of politicians etc. - vital sources of information and references for bankelele - all gone to be recycled or to wrap/pack pieces of meat at the supermarket.

The last time I sold my newspapers was after the referendum and 60 kilos of newspapers netted about 855 shillings.

The gain this time was much less (about 500/= to go towards groceries) but the loss was priceless

Related: More maid drama.

Bridgestone Exit?

One theory for the massive volumes of Sanmeer Africa (formerly Firestone) shares traded at the is that Bridgestone is finally disposing of its 14.9% (41 million shares) it still holds in company almost two years after the partnership break-up.

November 3 Jobs

Most are from the daily papers this week

Afri Afya: (i) Health knowledge management officer (ii) Project administrator (iii) Project officer.
Apply to info@afriafya.org by 15/11

Akili Africa: (i) Programs & implementation consultant, (ii) Technical sales people. Apply to jobs@akiliafrica.com by 10/11

Bamburi Cement: (i) Quarry manager (ii) Plant manager (iii) Project engineer (iv) Legal officer.
Apply to lo@careerconnections.co.ke by 15/11

Celtel : (i) Financial directors (ii) Financial controllers. Apply to finance_vacancies@celtel.com by 8/11

Gap marketing (i) Team leader (3) (ii) Retail representatives (32) (iii) HR & financial assistant. Apply to jobs@gap-marketing.com by 10/11

Leasing advisor at IFC in (Kigali Rwanda). D/L is 10/11

Magadi Soda: (i) Plant operators (ii) Shift analysts (iii) technicians in (a) Mechanical maintenance (b) Electrical maintenance (c) Welding & fabrication. Apply to recruit@magadisoda.co.ke by 17/11

Accountant at Pricewaterhousecoopers. Apply to recruitment.ke@ke.pwc.com by 17/11

Brand manager at Reckitt Benckiser EA. Apply to HR.RBEA@reckittbenckiser.com by 17/11

Sameer Agriculture & Livestock (Uganda): (i) Senior milk procurement managers (2) (ii) plant operators (6) (iii) general manager sales & marketing (iv) business development manager (v) sales executives (6) and other vacancies. Apply to dairy@creambell.co.ug by 30/11

Key Account manager at Tetra Pak. Apply to recruit.ke@tetrapak.com by 24/11

Chief Technical Advisor (CTA) Decentralisation at UNDP in Nairobi (with frequent travel in Somalia). Apply to registry.so@undp.org by 10/11

East African Breweries AGM

The 2006 EABL AGM was held at Safari Park Hotel in November 2 at 11:00 a.m. Registration was a breeze – with almost as many proxies as shareholders and it was a very quick AGM thereafter with the agenda– approval of accounts, dividend, directors’ election & remuneration and auditors – all done within a half hour. With a full board le by Chairman Jeremiah Kierieni and MD Gerald Mahinda, all directors except for Evans Mwaniki (KQ chairman)

New finance director C. Caldwell was added to the board while Wanjiku Mugane was also re-elected. However, two directors, the Chairman and Richard Kemoli, who are both over 70 years, have to be endorsed each year to continue as directors.

I had thought of putting a shareholders vote over the matter in the interests of opening up the board to younger people and women but I felt that I would have been lynched. Needless to say, no shareholders objected on account of their age.

AOB
The Chairman had urged shareholders, many of whom who – in addition to proposing or second agenda items – also congratulated the board, made speeches or tried to ask questions, to refrain till after the agenda was done. One of the first was on the race with Safaricom and the Chairman assured shareholders that the company would strive to wrest back the top earnings crown from Safaricom. Early on it appeared that there would be very few questions, but here are some of them:

- Increase dividend and bonus shares: is a recurring them at all AGM’s and EABL also had its share. There were many variations of the same question, some shareholders talking of previous board who had been more generous. Chairman explained that they can’t increase dividend for a few small shareholders as everyone get an increase. It was also troubling to see a graphic in the annual reports that showed shareholders receiving 20% of payments from the company earnings while 70% goes out as taxes to the government.
- Minority interest: There’s a huge payment of profits for minority interest that doesn’t compute in the list of shareholders. MD explained that South African Breweries owned 20% of Kenya Breweries and Diageo owns 54% of UDV. KBL and UDV pay dividends to these two companies and whatever is left now goes to EABL shareholders.
- CSR: are you meeting your commitment to devote 1% of profit to corporate social responsibility? MD said CSR last year was allocated about 45m and this year will get about 80m. However, like at the Standard Chartered meeting, CSR is not a popular topic at AGM’s. One shareholder, while commending EABL and Nation media group for helping with famine relief and other disasters, they should put shareholders first - and he went on to lament how the company has never acceded to repeated shareholder wishes for more dividends or bonus shares.
- Are all shares fully issued re: ESOP? MD explained that shares for the ESOP are acquired from the market
- Why have sports sponsorships declined? Chairman replied is that they still sponsor a lot of sports such as soccer and horse racing – but the funds are disbursed from HQ for better control and monitoring.
- Missing or discontinued beer brands; MD replied that they discontinue slow moving brands like pilsner ice and senator special to put more effort into others like white cap light and citizen. He also said they would announce such decisions to the public in future.
- Hot Button: Barclays Bank It started with a misunderstood question from one shareholder who wanted dividends to paid as cash in rural areas for those who don’t have bank accounts. Chairman answered that the company had a program with Barclays bank where dividend cheques were banked without commission. One manager was there from Barclays who unsuccessfully tried to explain the issue. More questions were shouted out leading the Chairman to ask that they talk to the Barclays man after the meeting had ended. I went through this problem a few years ago – many shareholders want to cash their dividend cheques immediately - and while this is free for Barclays account holders, there’s a fee of a few hundred shillings if you don’t have a Barclays account. (also bank’s also make some easy money when new investors choose to cash their IPO refund checks immediately – for a fee of course)
- Goodies cap (pilsner), t-shirt (sengenge), lunch box (chicken, sandwich, juice, yoghurt, water, cake, apple, orange, egg)

Bank Briefs

Barclays has sweetened its’ mortgage terms

Consolidated: The deposit protection fund (DPF) will sell it’s 50% stake in Consolidated Bank back to the government –who are likely to hold on to the stake until the Bank has a profitable streak that will enable a public listing (e.g. Kenya Re) in a few years. The DPF, which guarantees funds of Kenyan bank account holders (up to 100,000 shillings), is now only allowed to invest in government securities.

Equity: As usual, is the first bank to report their September results and Kenya's fastest growing bank has doubled in almost all measures since a year ago. With assets up 42% and profits up 54% (already exceeded 2005’s) the bank is on track to reach the 1 billion shillings in pre-tax profit mark – a feat the established Nation media group only achieved this year. (See other Bank rankings)

HFCK now offers 20 year mortgage plans.

KCB has four buildings up for sale this month: Hamburg house (Tom Mboya St) for 60 million shillings, Lakhani place (Moi Ave.) 40m, Diamond Building (Moi Ave.) 30m and Loncom Building (Kenyatta Ave - Nakuru) also for 30m. deadline 10 November.

Safaricom: Is this the future of money transfers and micro finance?. Safaricom will roll out M-pesa in 2007 which was developed with CBA and Faulu Kenya. Some rough numbers from the trials: Average transaction (1,000 shilling or $14), 0.6 transactions per day, average cash deposit and transfers - 1,500 ($20), and average transfers and withdrawals were 300 shillings each.

Stanchart
- Has a new CEO: Richard Etemesi replaces Mike Hart
- To get new software: CR2's BankWorld integrated channel banking solution (source: Factiva)

Guaranteed Rent

One Kibera landslum lord has a novel way of ensuring that tenants are up to date on their payments. If you default on your rent, he sends a crew out and they remove the door of your house. Needless to say, you’ll be out looking for you landlord to pay up/settle the matter and retain possession of your household assets .

Mbagathi (No) Way

Construction of the new all-cement Mbagathi Way road is proceeding at a strange start-stop pace. Some weeks, the contractor works as fast as possible, puts down a kilometre of cement, other days there’s no work or with just a few pieces of stone moved around – and it now appears the company is reluctant to complete the road or will take as long as possible.

The road is now dangerous, especially at night, and accidents are more frequent – as some days the road is one-way, others its two-way traffic, with new routes being opened up by matatu’s as they escape the traffic jam which can stretch from Langata road to Ngong road.

Stamp Relic

Today, for the first time in 2006, with ⅞ of the year gone, I bought and used a stamp to mail a personal letter.


relic

q1: Do you know how much is costs to send a letter anymore?

The stamp is a relic today to many like me. I send out maybe 10 text messages a day, and make a similar number of phone calls, and e-mails as well – not to mention blog comments and internet chats. Everyone I know has a cell phone, or can reach me by phone or e-mail – and only secondarily by post.

q2: When was the last time you gave anyone a P O Box address?

Hope for the post office
I also send out official letters from the office – but this is still not good for the post office because messenger companies (who we use) work with physical/office addresses not postal box numbers and take our letters from office to office – that way clients are assured of timely and reliable deliveries which they can track.

I still rely on a mailbox though ro receive electricity, water & telephone bills (fixed & mobile), postcards, corporate annual reports & dividends, Kenya gazette, bank statements, magazines arrive every week and this I guess provides enough revenue for the post office.

a1: 25 shillings
a2: Can’t remember no more steamy letters in high school, but I should be sending out some success cards in November to relatives once I get their school addresses.

Shortages Part II

See Part I

We have been taught time & again that shortages are opportunities to be taken advantage of.

Aircraft
Kenya Airways half-year results were released on Friday and the airline's management mentioned plans to replace their Saab turboprops with jet aircraft.

The airline appears to be stretched, as their smallest 737 jets are used for routes such as South Africa, Dubai, India and Turkey, while filled-up 777s to Mombasa are not a rare occurrence. Meanwhile frequent travellers on the Kisumu route, opt for the Fokker 50s of East African Safari Air, which make the flight in 25 minutes compared to the Saab’s of KQ, which do it in about 45 minutes. So regional jet to serve local and short hop regional overland routes would be welcome for KQ.

Cement
(i) When you drive past Athi River, there’s a long line trucks outside Bamburi Cement Company waiting to collect cement from teh company
(ii) EAPC has just advertised for a huge clinker tender
(iii) Floods in Mombasa have washed away two bridges, cutting off the clinker plant of Athi River Mining Company
(iv) Regional problem now as Tororo Cement plans to open a plant next to parent Bamburi (at Athi River) to sevre the Ugandan market where power rationing/shortages have hit the energy intensive cement production industry

Investor information

Total reassures
Total Oil held a cocktail for all shareholders at the Hilton on Friday to review and explain their 9-month performance to September 2006 which they had published earlier in the week.

Management were keen to explain the dip in profits in line with various industry issues and reassure investors that the company was strong. The event immediately made one wish that Uchumi, board and management had done more in terms of informing shareholders when the company’s quarterly results were released after the rights issue.

The company profits dipped about 9% while its inventory and accounts receivable were both up about 80% from a year before. Chairman Nguer of Total mentioned the overall world oil price rise, competitor Kenol’s half year performance (30% down), entry of Tamoil (Libya) into the Kenyan market, government threats to regulate fuel prices, inefficiencies at at Kenya pipeline company and Kenya oil refineries and the new large Kengen contract whose costs were being felt but benefits would accrue later among other issues as he sought to reassure shareholders that Total was a great long term investment.

We need EDGAR
He also mentioned a 100 million shilling court award to be paid to the company by oil marketers, after conferring with his company secretary that the same information would be immediately released to the Nairobi stock exchange (NSE) for other investors not present.

One problem is that corporations like Kenya Airways, EABL and other NSE-listed companies hold briefings for select corporate investors, and the media, the news of which is occasionally posted on their websites (if they exist/are ever updated) and bits of which may appear in the newspapers or on TV news.

What Kenyan investors needs is an EDGAR where all company information sent to the Nairobi Stock Exchange is instantly published, compiled, archived and available for all investors to read/access free so we can understand better how/why shares like Barclays and Sasini both rose 25% in three days this week.

Stockbrokers
Riba Capital has a great review of stockbroker services.

18 stockbroker firms were enough to serve a market a few years ago, but today they are woefully unable to cope,with the flood of new shareholders brought in by Kengen Scangroup and anticipation of Kenya Re, Mumias and Safaricom IPO's.

Nairobi land
Driving through Mlolongo which has been a rapidly growing town, its amazing that it all started with a road block i.e. weigh bridge, where all Nairobi and up-country bound trucks would stop for weight checks.

But, many significant buildings from houses to hotels, schools, nyama choma joints, churches, petrol stations and kiosks now spot distinctive painted X signs indicating that they are marked for demolition by ministry of roads as it seeks to expand the road into a dual carriageway.

The town falls in Mavoko where the county council issued letters of allocation for many years that enabled these settlements near the road that fuelled the towns’ growth. The cost of land appreciated over the years owing to demand, and many of the original allootees sold their land to new owners even though they never got title deeds – which were never issued by the Land ministry since the lots were still marked as road reserve.

The demolition process is likely to be delayed in court as business owners will challenge the outright demolition of their buildings on genuinely, if improperly, allocated land through the courts. The government should do the humane thing and compensate these building owners, using their formula for land buying. That way the politics of the demolitions will be removed.

Next: A popular idea circulating, first mentioned by Karanja Kabage, is that the Nairobi National Park be reduced in size or eliminated, by having the animals relocated to other parks, to increase the land available for Nairobi’s growth.

Water
Water rationing will be effected in various residential estates/zones (typically for ½ a week) of Nairobi and according to the Nairobi water company it is due to unexpected demand for water from unplanned developments. This is expected to continue until the next rains begin (probably November)