Wednesday, April 23, 2008

IPO Guilt Part II: Rule of queues

As I looked for place to pay for the shares today, I found lines around the block, and remember there were also some at 8 PM last night.

On the way here I passed another (even longer) queue – the one outside Nation Center for customers of collapsed Nyaga Stockbrokers. I hope I’m wrong in my feeling that the NSE/CMA receivers will use their bounty raised from Safaricom IPO, to pay off these claims and let the manager/owners/directors keep their stolen funds – the same thing happened last year with Francis Thuo stockbrokers, only that the funds came from Renaissance Investment Bank who bough FT’s seat. And the crackdown on generous stockbrokers is a sideshow to distract from the Nyaga issue

- When one arrives at a stockbroker or any crowded office in Kenya such as a voting booth or the Kenya Revenue Authority (KRA), there is an unwritten and often ignored rule of queues which translates to make sure you’re in the right queue - and the broker office had several (all long) - for opening new CDS accounts, filling out IPO forms, applying for loans, for drawing bankers cheques, for paying by cash, paying by cheque etc. I am grateful that by applying online (IPO Guilt Part I), I effectively bypassed ¾ of these queues
- The best way to confirm you’re in the right queue is to ask someone who knows about them. It’s sad to say that it many banks and offices (even on ‘normal’ days), that person is the security guard - that lowly paid uniformed man/woman inside the halls, who has attained seniority after a few years on the outside of the buildings. Banks use/misuse them as their (unrewarded) customer service agents, and today they were handing out deposit slips, explaining to customers the rules of payment, pointing out the right queue etc. I hope they are paid extra for that, but I doubt it. Where the banks are own people? The lovely ladies who pounce on you in supermarket or movie halls hawking bank loans? They are here too, but the burden of contact is reversed – out there I am the one who avoids making eye contact and hurries past their strategically obstructing table; inside here, they are the ones avoiding eye contact, looking very busy and hurrying past the queues.
- There is a lot of misinformation, up and down the queue; did you hear that? You have to pay for that, you have to go back outside for that, haiya - you filled the wrong form, and they will refuse your application! Etc.
- IPO’s create jobs and I got one today! But only for the day, and without any pay at. The broker office had a complicated queue arrangement so that those at the front of the queue would, at some point, have to walk through those at the back of the queue. I was asked to deputize (for the watchman) and do crowd control at the intersection. Wearing a black suit and blue shirt (bank uniform in Kenya) bestows credibility and I suddenly looked like IPO official, and got to answer questions from other customers. When I could not answer, I’d check with the watchman! – such as when I was unable to explain to why people paying less than 20,000 shillings (~$315) would also have to buy bankers cheques for 200 shillings, while those paying more would be exempt. People also kept asking to cut the queue, pleading that they had just been told that they had come from the wrong queue or that they had been here for two hours – sorry lady I’ve been here for three hours already!
- complaints People kept complaining about the length of queues, and why the broker did not have more tellers and counters to process the applications. Some were even pleading for the IPO to be extended for another two days to Friday. Where were they (and where was I) for the last four weeks since March 26?
- No rules today apply – you can use the phone, drink their water; even eat in the bank halls. But they should also have let in one or two hawkers to sell airtime, serve biscuits/water/juice etc, but that would make customers nervous who by virtue of being in this line, must all have at eats 10,000 shillings each in cash. But it would also be unfortunate if someone fainted when she was waiting to pay 200,000 shillings ($3,000) alone and be far away from any First Aid.
- This is the second all day queuing session for me in four months, and hope that, unlike the last one (election on December 27), the result does not rock the country. Bt if almost 1 million people queued and bought shares in little-known/understood companies like Kengen and Scangroup, how many of the nine million people who use Safaricom everyday will have bought shares by the end of today? I may revise up my 2 million estimate. But fist they have to get to clear all eth queue hurdles. I predict future IPO’s from the little known private sector companies will have minimum subscription amounts of over 100,000 shillings to limit shareholder number


Paul Korir said...

It is quite sad that the very guards who are well-armed with the details of what's going on in the banking halls might not have the means to take advantage of them.

Unknown said...

These guards should be paid for customer service.

I first approach them to avoid queuing for a bank's Customer Service Agents - and 90% of the time I get what I want!

In any case security is now electronic and the guard's presence is purely symbolic to deter illiterate opportunists (has a bank guard ever stopped a bank robbery?).

Pay them for customer service!


J said...

I spent a total of 15 minutes applying online then later that week going to my brokers to deposit the cheque. I probably chose an opportune time.....

I hate lines :)

Anonymous said...

We may do well to remember the Keynes's admonition that:

“When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done … it is usually agreed that casinos should, in the public interest, be inaccessible and expensive. And perhaps the same is true of Stock Exchanges.”

I remain puzzled at the limited use to which substantial capital funds are being put to use in Kenya. But then again, maybe it's because I am outside looking in.

coldtusker said...

The phenomenon of 'last-minute' will prevail until EVERYONE is allowed to pay using DVP.

The CMA & NSE are full of non-visionaries. All the changes are being pushed by a few brokers but they get hampered by the CMA & NSE.

Paul Korir said...

Reality check: There is a great rush for the stock exchange because of a seemingly sacrosanct system. Anything managed by humans will always have flaws and sometimes those flaws lead to catastrophic events. ECK and KNEC failed Kenya recently. In the same way that everyone's rushing in they will rush out to save themselves. It's quite clear what that will result in. The stability of the stock market rests solidly on its reputation.

Unknown said...

The security guards performs more than just Customer Service, I do sometimes ask them for their pen (probably handed to them by the banks) for fill the deposit slips (in case all are being used by customers).

I glad I didn't have to use the online application nor queue either. Didn't want to take risks with the first time doing online application, this is Kenya man. Have any of you forgotten the blame by KNEC on computer error? Thanks to small stockbroker agents, and being away from the capital (Ugatuzi). They just sit and wait for investors to put up applications.

Unknown said...

If the government operated an online IPO appplication system I would not have dared touched it - even with a 10foot stick - until its tried and tested 3 times by at least 10 million people.

CITI Bank's operating the online system - they're pretty much a fully automated bank and am yet to hear of any issues.

I bet you if a KNEC official tripped and fell, he would blame it on a "Computer Error".

There is no such thing as computer error. All errors are Human. "Garbage In, Garbage Out."

Plus, if you trust CDS... operated by NSE... which is comprised of ROGUE STOCK BROKERS (Politically correct term for "Thieves"), then you better just trust the eIPO website coz its just an extension of the CDS.

Risks are plenty, so don't forget to pray tonight...


Unknown said...

Well said Maishinski. I guess I am just a goddamn pessimist. IT is my field but for some reason, Kenyans refuses to be efficient, and have perfected the skills of "garbaging in". I am not surprised that I didn't embrace CDS until after two years of its launch. I held on my paper cert cos of the fear of unknown especially with Kenyans handling things. I am proud to be a kenyan but you will agree with me that we lack the touch of professionalism as in other countries like the US.

I will remember to pray tonight ;)

bankelele said...

Paul: True most guards make around KES 5,000 p.m. – not enough for any of the IPO’s so far

Maishinski: True, Customer service is what they do (very well), since they are unarmed (and probably could never stop an armed robbery of the kind that takes place these days)

Josiah: You did the right thing, next time; people should be able to open CDS accounts online. Payment will be trickier for now

Coldtusker: I think it’s a Kenyan trait that will not go away no matter what. But you can understand people’s need to delay, as in this IPO, they won’t know the fate of their money (shares/refunds) for another 37 days

Inspectordanger: the online application went well, and I have my fingers crossed that it will work. I hope it was well tested, but needs some fine tuning (like the ability to amend/cancel orders placed). Applying online certainty saved a lot of time for those who tried it

Maishinski: I too believe in errors are human - "Garbage In, Garbage Out.” – The computer does as it is told at NSE, KNEC, and ECK etc.!

Unknown said...

LoL! Inspecta... You have a point but, in defence of Kenyans:

I've been to the US and Believe me, many of them (not all) are much, much, much worse at efficiency. Top that with uncanny levels of racial arrogance and you have the perfect recipe for madness. At least Kenyans are humble and open to criticism.

All that progress in the US resulted from the sweat and blood of expolited africans (slaves).

Their systems are operated by immigrants (modern day "slavery").

Who drives the subway train to get you there "on the dot" (immigrants)? Who flips the burgers (immigrants)? Who develops the computer systems(Immigrants)? who keeps the roads and streets clean (immigrants). etc.. etc..

Look at the western economy right now, everything is collapsing - they cannot do it on their own without the "help" they forcefully extracted from Africans.

Almost every US citizen is in debt... they are rich paupers, spending money they don't have.

Compare with the "poor" guy in Kibera living within his means, on $1 a day - WITHOUT DEBT.

So who's really the poor person?

One might argue that African governments are in debt - but we know what really goes on.

Media has reported many stories of the US and western countries secretely financing civil wars, destruction and violent regime changes in Africa, Middle east and Eastern Europe.

The same murderers offer reconstruction Aid after the destruction - of course with high interest, political strings and conditions that only products from the donor country must be purchased + the administrative team must be from the donor countries with hefty salaries taking a big chunk of the "AID" (see the trick?).

I know am straying from the topic but.. . Like someone said.. "the grass always looks greener on the other side."

I don't hate US. I just think Africans should realize that we are much better off.

It's time to hold our heads up high and erase the psychological brainwashing that has been unconsciously passed down African generations from the colonial/slavery era!

The second liberation of Africa shall be Mental. Only then can we release the powerful potential that is deep within us.


Anonymous said...


What is weird with your logic is this:

If these immigrants are so good at making the US so great, then why don't they replicate the same in their own countries?

Probably,the reason may be that they are good workers ("slaves", as you call it) needing instructions on what to do, but not good managers and big picture visionaries.

As for the US financing terror in the 3rd world, why don't the 3rd worlders wake up and smell the coffee and say no?

"The Strong rule over the weak",said the wiseman.

Anonymous said...

Toyoi.. you have illustrated brainwashing in action. Because of their circumstances, you believe the immigrants are not intelligent enough and have no vision.

Many of them probably believe it too. Thats how powerful brainwashing is! Once the seed is planted - it grows into a monster and, provided the negative environment remains constant, it reinforces itself.

Example: Look at black americans. Calling each other the N word to DISEMPOWER it - but still they feel offended when a white guy uses it - hence the white guy KEEPS the power. Result - back to square One. The N word still offensive. But should it be?

I know it sounds paradoxical but these immigrants do what they do because they come from poor backgrounds - not because they dont have vision.

Thats why I call it modern day slavery. Why are these people poor?

Most likely if you look back in history, some western exporers came into their country, looted, plundered and destroyed everything in sight including the people - then brainwashed the surviving natives and subsequently relegated them to protectorates (ask American Indians what happened to their land and their country).

Nothing about vision or bigger picture. It's just primitive viciousness and greed in action.

When a parasite/virus invades your body, and destroys it - does that make it a superior being?

Look at global warming.. Who is responsible?

Nuclear bombs, what are they for - if they will "never" be used? Why is the fate of the entire planet "on someone's finger"?

Surely visionaries would see farther than that? Parasites on the other hand dont understand that if the host goes down - so do they.

Who manages the banks that are collapsing globally? Where's the vision?

Who manages the Collapsing Real estate market? whare's the vision?

Who screwed up Iraq and made the world a more dangerous place to live in? Where's the vision?

Who introduced "divide and rule" in africa?

Who secretly finances dictators, terorists and rebels globally? Where's the vision?

"Strong rule the weak" is a primitive rule for animals in the jungle.

What happened to human values? Compassion, empathy, sharing, culture, forgiveness, love, respect for nature and environment? Arent these the qualities that differentiate us from animals?

Brainwashing is the worst kind of human right atrocity. It gets passed down from parents to children and destroys the potential of entire generations!

Fellow Africans, read your history. Learn the truth, then do what you can to FREE YOUR MINDS.

Banks - sorry for politicizing your blog. No more from me.

Anonymous said...


Hey, i am not 100% brainwashed. I just read you and see your anger (believe me i know the great injustice upon people's ), but would like you to also consider the evidence.

Why have "they" managed to do all those evils upon us? Why did they manage to devide and conquer our lands and those other people? Why does Neo-slavery succeed?

(a)they are stronger than we are
(--The brainwashing you mentioned, is a weapon we have been unable to defend ourself against, which boils to the same thing, they are Stronger)
(b)The Strong rule over the weak
(c) we are happy to be as we are and support our rulers in their follies
-E.g. you probably know safaricom is being "grabbed" but you also wanted a piece, and so you, like bankelele and the rest of us, "grabbed" a few shares too. By your actions, you have just helped transfer public funds into private hands; the great ill of Africa.

Banks, over and out kabisha, tut

coldtusker said...

Erm, Maishinski... are you in the US?

If yes, why are you there enriching the Americans?
Shouldn't you be here enriching Kenyans with your knowledge & skills?

If no, good for you. Let's grow Kenya!

BTW, there has been a huge influx of Africans (post-slavery) into the USA including Barack's mzee. They are doing quite well as a community.

Why is it critics like ali mazrui who jab at most things 'Western' live in the West & refuse to return?

BTW, mazrui pisses me off. Why? He justifies "arabian/islamic" slavery as being 'kinder'. A slave is a slave!

coldtusker said...


Like you say..


(but we do not, do we?)

We voted for kibz, kalonzo & raila. We could have voted for Nazlin Umar Rajput or the other candidates but no... we voted (heavily) in favour of the 3 who have formed a government for themselves NOT for the people.

Unknown said...

CT, I'll respond from an economic perspective as I've promised Banks not to "poilitic" too much on this blog.

Kenyans in Diaspora do not really enrich their host nations. Many have learned from Indians - who repatriate every cent they get back home to help grow their own country.

Why invest in NYSE for a paltry 5% annual return when NSE can give you almost guaranteed return of 30% pa? (just an illustration).

Why buy property in some shady US neighborhood (probably a measly apartment) for $200,000, when you can purchase a mansion or a holiday beach crib in a reasonably upscale neighborhood in Kenya?

The wannabe hip-hop generation finally woke up. It's no longer brain drain. People are "exporting" their services for better payment and remitting most of the funds back home to improve quality of life for other Kenyans!

Have you seen the CBK reports on Diaspora remittance figures lately? It won't be long before Africans are capable of giving "Aid" to their own country. Even the World bank was caught napping!

Europe will be opening up their green card soon (if not done already). I suggest all Kenyan graduates prepare themselves for this and take up any jobs that come up. Export your services - but don't export your brains. Your brain is exported when you dont remit funds back home and choose to invest in your host country.

The only exception to the above is essential services like Doctors - who I believe should be paid well enough to STAY IN KENYA.


Unknown said...

Maish... I totally agree with you, nicely explained. The only thing I differ with you is exportation of brain. By seeking jobs abroad, we are already exporting our brains.

We need those brains here to propel our industries. If one is getting paid $40,000 a year, one is probably recking in a whooping $800,000 a year for the company. Of the $40,000 after paying the hefty US bills, you are bound to send home a paltry $3,000. So mathematically, working home and helping produce just 10% of what one produces abroad p.a. is more beneficial than seeking offshore employment just to send home a measly $3,000 p.a.

The only thing I would encourage our professionals is to seek education and training abroad, then use such training to better ourselves educationally, socially (partly cos Western social life sucks sometimes) and economically.

Jobove - Reus said...

very good blog, congratulations
regard from Catalonia Spain
thank you

Unknown said...

eInspector lets compare the numbers..

On average a 26yr old graduate in Kenya in an entry level professional position would earn approx 80,000 per month or 54k Net after

taxes, pension deductions etc.

Typical Expenses:
Rent - say 12,000 (1b extension)
Food - say 8,000
Car loan () - say 15,000
Fuel - Say a conservative 6,000
Utilities (elec/water) - say 2,000
Credit card - say 2,000
Sacco loan (for safcom)- Say 3000
Sacco contribution - say 1000
Bank Charges (Move) - say 800
Entertainment (dates/outings)-3000
TOTAL: 52,800.

Hence Savings - 1,200 per month or approx 15,000 per annum.

Clearly this guy will be living paycheck-to-paycheck and would be really screwed up if he ever lost his job... 15k pa savings is a flimsy

financial coushion. He probably wont save anything as he has to go to the gym and handle occassional emergencies for his relaz.

For these guy the bank account balance is almost 0.00 by 5th of the month. But somehow he gets by without succumbing to debt. But


Now the kind of profession that our guy is in, has a value ABROAD of say $3,000 per month. Lets assume the guy chooses to work in

the Middle East where salos are tax free...

Then we have Expenses like:
Rent - expensive - say $1,000 (1b flat)
Food - cheap - say $300
Car loan - say $300
Fuel - Say $100 (! middle east remember?)
Utilities (elec/water) - say $100
Credit card - say $100
Bank loan (for safcom)- say $300
Bank Charges (Move) - say $10
Entertainment (dates/outings)-$100
TOTAL: $2,310
Savings: $690 less $20 remittance fee. $670

Monthly savings of $670 at ksh 56 = 37,520. or ksh 450,240 pa.

Both guys are living a similar modest lifestyle, doing similar jobs - but the guy abroad has higher chances of attaining some financial

independence by the time he hits 36yrs.

The guy in Kenya will probably rent for the rest of his life whereas the guy abroad has access to low interest loans and can buy property

in Kenya much more quicker and at less cost (interest/motgage). When he is 40, he can retire, come back home and establish a

business (and provide employment).

So, there are the numbers. what do you think?

Take advantage of the global village - but remember to export your SERVICES - not your BRAINS. Remit back home and build your country. Come back one day and teach people back home what you learnt out there o they too can be successful. Then Kenya gets even higher returns on your exported Services - because you IMPORT USEFUL KNOWLEDGE from other systems and cultures.

Anonymous said...


You are onto something but your logic is all wrong. Consider just this:

"Take advantage of the global village - but remember to export your SERVICES - not your BRAINS. Remit back home and build your country. Come back one day and teach people back home what you learnt out there o they too can be successful. Then Kenya gets even higher returns on your exported Services - because you IMPORT USEFUL KNOWLEDGE from other systems and cultures."

(i)My friend, by the time you are in the US, you have exported your brain. What you bring back ( $$), is never sufficient to cover up for the brain power used to produces the $800,000 (tusker's estimate) for the US.
(ii)In any case, surely you do not think the US planners are napping on the job when they encourage the highly educated to take up the green cards, do you? Why do you think the UK/AU/CA are all doing this sucking aggressively ( with programs such GreenCard, HSMP, GSM, etc) , if in effect the remittances from the immigrants were affecting their economy badly.
(iii) Is the ROI of $5000 pa( kamau's remittances from New York) that Kenya gets for educating kamau ( standard 1- MSc Electrical enginnering @UON) a good return? BTW, case in point is the Phillipines, which has been exporting people to US since 60s, and their country has not developed despite the billions of remittances annually. Compare with S. Koreans who stay home and think how to better themselves.

(iv)Consider also, that that $5000 kamaus sends back, much of it gets to buy manufactured goods (flat screen TV's, Nokias, Ipods, and Goods from nakumatt), which, guess what, are created abroad. How much of that does mama mboga get, given that kamau's family would rather now eat processed food from Dubai and RSA?

We could go on and on, but surely, it should be plain that the brain export biz and Globalization benefits...

Unknown said...

Hmmm... I don't mind if my host country benefits 10x from my services if I end up saving 10x what I would have saved back home.

It's gotta be Win/Win. If they didn't benefit - they would not need me.

Toyoi, it's easy to look for "flaws" in ideas - but even more constructive to propose workable alternatives after identifying the "flaws".

Reality is - companies in kenya don't pay globally competitive salaries and if they did, they would not survive or make sufficient profits for growth because their margins are low in the first place - which in turn is due to low pricing of goods and services due to low disposable income of consumers - hence chicken and egg problem.

What would you suggest as a practical "way forward" to quickly increase disposable income (hence quality of life, investment and job creation capability) in the pockets of as many kenyans as possible?

Please show us the numbers.


Unknown said...


What is the unemployment rate in Kenya. How many qualified and talented graduates actually get the jobs they deserve locally?

Are we gonna sit back and wait for the government to create 500,000 jobs per annum?

There is no excuse to be jobless nowadays - especially if you are a Kenyan graduate - or you have some talent or skill. The world is at your doorstep, someone out there can pay you well for what you know or what you can do.

Kenyan professionals have a global reputation for being hard workers, smart and reliable.

Opportunities abound.. all you gotta do is to find the opening, step up to the plate and get what's yours!

Anonymous said...


I did say you are omn to something, but that your logic was wrong.

Foremost, i do not say people should not move out if they have too ( i am out myself, in-fact, i participate in a project- that help provide information for those people who seek to find their way out ).

Two issues:

(i)Foremost, policy makers in africa are sleeping on their jobs and putting unnecessary vikwazo on the path of people who want to bring in new ideas (if not pushing down the whole nation, then those who do not belong to their preferred tribe). Case in point: i read that a new system was set up that lowered the cost for BPO type operatons in KE. But, only existing BPO( Nesbitt and Co) would pay the lower fees, and new operands would still pay the higher old cost? What a way to encourage new biz, Ndemo? I am surprised non of the KE tech?Biz bloggers picked this up.

(ii)The African people are contented to let their rulers think for them, even when they are being sent into oblivion, hence you should not feel sorry for them.

You want a suggestion? I already said it before. If we can have all these educated Africans working successfully in the west, it means they have what it takes to "make" it, so, they should replicate what they do in the west at home. Look at India, they woke up, and are taking advantage of the new system beautifully.

Unknown said...

Thank you toiyoi, I couldn't have explained it better.

Anonymous said...

u got twisted logic for real, but i will give u one thing to ponder. about The housing bubble here in the US had blown over millions have lost jobs and moved on to other jobs since the start of the year meanwhile we still have IDP's all ovber the country we still looking for a solution. alot of the soc alled remittances is money borrowed here in the US credit card debt and home equity debt. so either way someone is geting into debt not too mention that a whole lot of people
buying safaricom shares are getting into debt to buy this shares - someone will have a field day when this shares start trading

Unknown said...

Galileo's logic as "twisted" when he declared the world was round - and not flat.

Toyoi, you refer to Africans with such distaste and loathing - as if you are not one of them... Are you?

Why do we refer to ourselves with so much negativity, self hate / self deprecation?

I feel so sad when I read some of these posts.

We will always be slaves until we decolonize our minds.


.. meanwhile, the US seems to have realized that the best way to jump-start their economy is to boost the disposable income of their citizens. Not sure if the "cheque in the mail" approach is sustainable - but its the closest you can get to illustrating the effect of diaspora remittances on the economy.

I guess my twisted logic makes sense to US economists.


Anonymous said...


(i) I am african. I am kenya
(ii) I love being african
(iii) I can not stand glaring stupidity, especially when there is absolutely no reason to engage in such stupidity
(iv) I am mad at the self-inflicted woes of my country, and i will not be defensive and sing the song prescribed to me "i am proud to be kenyan/african" by our "rulers" who, with the right hand, are stealing money and shoving them in swiss accounts and with the left hand holding a begging bowl "give us money to resettle IDPs, blah blah" to those we told not long ago "leave us to solve our own internal problems".

Why waste bankelele's space? You know where to get me if you need to discuss, just bring your own brains along.


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