Friday, August 01, 2008

Old Mutual Toboa

Old Mutual Loosens Up Part II (Corrected, thanks Joyce)

A few years ago Old Mutual unit trusts in Kenya had a minimum entry amount of Kshs. 500,000 ($7,462). Last September, they dropped this to Kshs. 200,000 and now they have gone even lower.

Old Mutual Kenya has launched the Toboa Investment Plan which costs just Kshs. 7,500 ($112) per month to start other funds in the family are money market and balanced fund. Speakers at the launch included Deputy Prime Minister Musalia Mudavadi, NSE CEO Chris Mwebesa, CMA CEO Stella Kilonzo, the new boss of Old Mutual Kenya, and Laura Chakava head of Old Mutual Assets in Kenya – who all spoke of the need for affordable collective investment schemes in the country

- Mudavadi said that while local government act mandated that the town councils should have savings and capital funds to cater for unexpected expenses, these are largely ignored – with only 40 of the 175 councils able to comfortably pay their salaries. Also high savings are a part of Vision 2030, but Kenyan savings rates which were already below the average of other African countries, were dropping
- Mwebesa lamented the 1.5 to 1.8 million CDS account holders in the country; the number is un-serviceable (mailing budget for statements of the CDSC costs almost $1m per year – and this compared unfavorably to account holder level in South Africa (100,000) and Brazil (500,000). He said more people should access the market through collective investment schemes such as unit trusts but whose entry levels had been high (elitist) until now
- Kilonzo and Mwebesa both alluded to a recent survey on investors (June 2008) that showed the level of investor education in teh country was not good. Most people relied on the media for share investment information, and were ignorant of the risks of investing in shares.
- Chakava said Kenyans have appetite for investment as shown in the IPO queues and pyramid schemes. OM now gives them an affordable, professionally managed vehicle for investment beyond the unpredictable buy low, sell high mantra that most investors try and follow.

Toboa will invest in fixed income, equities and off shore. OM, which pioneered unit trusts in Kenya, manages about Kshs. 10 billion, but CIS only control about 2% of the NSE. Other OM trusts have an initial fee of about 3 – 7% and annual fee of 2%, the Toboa will probably be slightly higher than this and will use Posta (post office) outlets to collect payments.

Edit: Interesting discussion on Old Mutual investment plans from the Stockskenya forum


Unknown said...

hi, your title
Old Mutual losses Up Part II
had me worried. It looks like the new Toboa product is full of losses.

coldtusker said...

What is mwebesa worried about?

Introduce new ways of accessing the info e.g. the internet... much cheaper... and for those who want paper statements... charge a fee...

As is the CMA and NSE get an overly large chunk of the fees paid by investors...

Anonymous said...

check this link

Hope it works out this time around.

Anonymous said...

Thanks banks, but who trusts Old Mutual in Kenya? They are worse than a pyramid scheme. I was affected and looks likes there are more. See below link. Lets help get information to others so they are not victims.

Frugal African said...

Interesting read but scary - I'm having problems login in to my a/c at OM but equally concerned that some people are having real issues (the 2 annon comments)

Fingers crossed that it is the exception rather than the rule on the issues OM has to address.

Anonymous said...

Is this Mwebesa dude for real? He is complaining about postage? His answer to postage is Kenyans need to get into groups so I can save on postage??? That's just about the dumbest thing ever said. And as for account holders in Brazil, common sense tells you that there is now way there can be only 500,000 account holders in Brazil. Dude needs to stop whining and start generating some revenue or else...go fishing


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