Showing posts with label Bralirwa IPO. Show all posts
Showing posts with label Bralirwa IPO. Show all posts

Tuesday, November 10, 2015

Dividend Payments across East Africa - Redux

It’s been four years since this post and the signs are still not encouraging for cross-border dividend payments across East Africa.

Good - Safaricom: I get my dividends by M-Pesa - in fact one came last week, right on the 15th anniversary of the company. At Safaricom, M-Pesa is the preferred method of paying dividends which are below Kshs 70,000 to shareholders - and this would work for almost 99% of their individual shareholders who all own less than 100,000 shares each.

But for Ugandan shareholders of Safaricom, to receive the share of the largest dividend in Kenya’s history ($256 million), they get a cheque in the mailbox  that takes 4 days to clear. The next thing for M-Pesa dividends is to have them automatically reinvested into buying other shares; but for now you can instantly lock the funds away in an interest earning M-Pesa fixed deposit.

No change - Stanbic Uganda: Shareholders in Kenya get a cheque in the mail which takes one month to clear and costs $8-10 per cheque. No improvement, and not likely to change. 

Bad:  (a surprising step back this year is) Bralirwa: At last review, Bralirwa (the Rwanda brewery) dividend cheques were issued KCB Rwanda, and KCB Kenya was encasing cheques at their branches in Kenya provided Kenyan shareholders presented their cheques, and proved their identity - they could receive equivalent cash payments up to RWF50K (~$67). 

This year that option is not there as KCB Kenya is not encashing cheques! A shareholder has to deposit the dividend cheque into KCB or any other Kenyan bank to get they payment.  I tried that at my Barclays branch and they refused as they simply don't have Rwanda francs in their bank system. 

Monday, November 26, 2012

Thanksgiving Portfolio November 2012


Compared to last quarter  and four years back.

The Stable
Barclays ↑
Bralirwa (Rwanda) ↑
Diamond Trust Bank ↑
East African Breweries (EABL) ↑
Equity Bank ↑
Kenya Airways ↓
Kenya Commercial Bank (KCB) ↑
Kenya Oil Company (Kenol) ↓
Safaricom ↑
Scangroup ↑
Stanbic (Uganda) ↓
Unga ↔

What's changed?
In: Unga
Out: None
Increase: None
Decrease: None
Dividends: Safaricom, KCB, Barclays, EABL
Unexpected gains/losses: Bralirwa's share price appreciation and Safaricom's rebound (back up to the Kshs 5/+ IPO price) coupled against another shocking half years Kenya Airways forex loss
New listings not taken on: There are on-going rights issues for Family Bank, UAP Insurance, SMEP Trust, Uchumi and CFC Stanbic
Best performer: Bralirwa's (up 54% in 3 months) then Safaricom, Diamond Trust, KCB
Worst Performer: Stanbic Uganda (down 33%) 

Performance Summary: The NSE 20 share index is up 10% in the last three months, while this portfolio is up 22%. Compared to four years ago, the NSE Index is up just 6%, but the portfolio only had Diamond Trust↓KCB↓ Safaricom↓Scangroup↓ Stanbic (Uganda)↓ in 2008, is much larger.

Friday, July 27, 2012

Guide to Kigali

A guest post by Niti Bhan

Getting There is not difficult  as there are Kenya Airways flights and also Rwandair flights. Our experience with Kenya Airways was not the best however. Our flight (via Bujumbura, Burundi) was on time and comfortable but the luggage for ALL, but three, passengers was never loaded in Nairobi, (or so they told us). Though, we were traveling under the "Priority" luggage tag due to colleague's KLM frequent flyer card, the luggage arrived the following day, with the locks broken on the suitcases and the contents ransacked. 

In terms of  Visa and eGovernment, this aspect was very impressive, even before we left for Rwanda  We applied for visas online in the morning and though the response to the submission said it would take three (3) days for the visa, we received our PDF visa documents the very same day by email  (to be printed out and carried on the flight).  The payment for this cost US$ 30 at the airport and there is a little process of approaching the immigration counter before one is sent to pay at a cashier and then return  for a stamp.

The duty free at the airport is ridiculously cheap – with cigarettes cartons US$1 cheaper than in Nairobi and the Scottish single malt, Glenmorangie, cost just US$28 as compared to $40-50 for the same bottle in Singapore, Europe and the USA!
Getting around : The first thing to note in comparison to Nairobi is there is little traffic except for rush hour in morning and evening. The roads are wide, even, and clean and it was a pleasure to drive even during evening hours.

Kigali is a small town and reminds me of Bangalore in the late 1980s before the big boom – it has pleasant weather, mountainous vistas, hillsides with homes and a slower pace filled with mopeds – such as TVS 50 and ubiquitous  "motos" = boda bodas. All drivers have helmets, with spare for riders and they are marked with numbers and names. Taxis were less commonly seen.

Where to stay:
We stayed at the Hotel Chez Lando - close enough to the airport yet it felt central to the town. We paid US$ 60 per single room which were neat, clean and comfortable. Only soap is offered in the bathrooms though and such amenities were limited. On the other hand, guests have Wi-Fi internet  access (via password) throughout this garden style hotel.

There is breakfast included in the rooms, as well as a bar and restaurant . The hotel also has pleasant walkways with the heady scent of night blooming jasmine when walking through to the guest rooms.

Note: There was a theft in my room and the front desk was reluctant to act upon it in any way. We hear that police tend to say "It must be Kenyans" if thefts occur, and this had also happened to our colleague who had her house burgled by 4 armed men who took everything of value. Rwandans will claim Kigali is safer than Nairobi, but I leave that to your judgment.

Communications: Our Safaricom connection worked but even though Airtel advertising has seen around Kigali  the prepaid Airtel one did not, - & they say that it will be arriving soon.

The top two service operators here are MTN (see everywhere, discreetly) and Tigo. We also saw  internet cafes and  one assumes most businesses and hotels have broadband as that was widely advertised through RwandaTel. Is Rwanda working towards internet access (and thus provision of eGovernment services) for all? Yes, that I would agree with based on what I heard (though MTN money from the city to rural recipients, is not yet convenient for due to shortage of agents) and saw (our visa response rates)

Dining We ate at the Hotel Chez Lando that was reasonable with beer in an open air environment, food tends towards a European menu rather than more local offerings that seem available in Kenya;  one of the many Chinese restaurants  had good food, fast service and was affordable and there was also KhanaKhazana - a premium Indian restaurant  whose food (speaking as an Indian from India) was superb, some of the best I've eaten and the restaurant was packed with expats from all over the world.  The service was better, in my personal estimation, than in Kenya, although our Kenyan
colleagues feel the Rwandans to be slow. There is tradeoff made there for waiters here are empathetic, courteous, and willing to help you choose and navigate the menu.

Beer: Mutzig is the highly recommended local beer and its better than a Heineken and maybe (dare I say) than  Tusker! It comes in two sizes, extra large and regular and is the preferred beer over the more plebian Primus (considered the Budweiser of Rwanda). 

Our hotel's bar was packed with non resident diners (the front half is separated by a garden gate from the residential half) and had TV sets, a pool table and casual open air seating. On the other hand, with all its non smoking rules, and Rwanda is said to be stricter about smoking than Kenya.  However, this was not felt as a major constraint by our smoking colleague.

Shopping & Sightseeing: Not much of this happened due to our packed
work schedule but a  must-see in Rwanda is the Genocide Museum in Butare. The reverberations of this nations’ events of 1994  can still be sensed across the country (we went deep south close to the Burundi border as part of our
work, passing the Ethnographic Museum) and influences the country's patterns of behaviour. April is the national month of mourning and the country, effectively shuts down.

Rwanda cannot be understood without understanding this national event, and even our group (on a commercial trip) could not avoid the bullet holes in our local office, or the scars - both mental and physical – as some of our colleagues, narrated their stories of survival.

Business opportunities: MTN Money has been there for three years but rural agents are not as common as the local Bank Populaire de Rwanda – which has more rural outlets than MTN Money agents per local interviews on cash flow,  although for the city dwellers, it is more convenient. There is opportunity here, as the government moves towards eGovernment and providing internet access for all, for a wide variety of services and applications on the mobile platform.

One also did not see much activity such as jua kali metalworks, fabricators etc. and the rural market's household goods shop had only china made offerings and no local ware such as in Kenya. Only one tailor was seen on the 110 KM trip to upcountry locale. Biashara is not as obvious nor as common, and one has heard is much more regulated by local councils and regions. In Kigali, Indians were seen doing business as were the Chinese.

Biggest Surprise: Rural Rwanda barely noticed us mzungus and we did not feel we were foreigners like we had in other rural regions e.g.  in Kenya. Only in a rural market, was our Kenyan colleague teased for having a mzungu with her. Our second biggest surprise, (coming from Kenya,) was the minimal wall paintings seen  across rural Rwanda and how structured and regimented the buildings were - similar construction, similar colours and mostly natural earth walls in comparison to the bright series of walls  (with cheap corporate advertising) one sees in Kenya.

Overall, a peaceful, small, well managed nation was the impression left although one could see prisoners in their bright orange suits at work in the city as well in the rice fields in the rural areas. Prisoners do not escape when working the fields because, if they do, their families homestead will be confiscated in return by the government.
Summary: The sense was that Kagame would indeed reach his 2020 vision of becoming the Singapore of Africa, but I add the caveat of the obvious and unnecessary thefts from the hotel room as a caution.

Saturday, November 12, 2011

Shares Portfolio November 2011

Comparing changes to three months ago and a year ago, investor confidence has dipped further, and the Kenya shilling is even weaker, having fallen past the Kshs. 100/$ to the dollar before last week's drastic rate hike by the Central Bank brought the rate back to to 95, but which also pushed most commercial banks loan rates to 25%

The Stable
Barclays Bank ↓
Bralirwa Breweries (Rwanda) ↑
British-American Investments (Britak) ↓
Diamond Trust Bank ↓
East African Breweries (EABL) ↓
Kenya Airways (KQ) ↓
Kenya Commercial Bank (KCB) ↓
Kenya Oil Company (Kenol) ↓
Scangroup ↓
Stanbic (Uganda) ↔
Uchumi Supermarkets ↓

Review: The Portfolio is down 2% in the last three months as is the NSE 20 Share Index, which is also down 2%.
- Best performer: Bralirwa 24% (only share that has appreciated in this Qquarter)
- Worst performer: Britak -38%, Kenya Airways -25%
- In: Britak
- Out: None
- Increase: KCB, KQ
- Decrease: None

Other
Splits: None
Bonus: None
Dividends: Interim from Kenol, and Barclays, and it was pleasant to be able to encash a Bralirwa Rwanda dividend cheque over the counter at KCB in Nairobi - unlike with Stanbic (UG) Uganda, that takes about a month clearing and the bank charges can take a huge chunk out.

Events:
- Safaricom shocked with a 47% drop in half year profits to September 2011.
- Kenya Airways got shareholder approval for a rights issue to finance fleet expansion in the next few months (Said to be at Kshs 21/= which is about where the share is now.
- Tanzania has the Precision Air IPO and Tanzania Breweries sale but the mixed signals - welcoming/shutting out East Africans, and not getting proper approval from Kenya’s capital markets means there's likely to be little cross-border participation once results are announced.

Data: The NSE now has a shares app for Android mobile phones and signed a partnership creating two new FTSE NSE indices.

Thursday, August 18, 2011

Dividends Payments across East Africa

Having bought shares in recent East African IPO's (Uganda: Stanbic Bank and Rwanda: Bralirwa Brewers), there appears to be some progress in addressing one of long standing problems of buying such shares - and this is the bank charges associated with receiving and having to process dividend cheques that are paid in currencies that are fractionally weaker than the Kenya shilling

With Stanbic, the Kenyan arm of the African bank has shown little interest in facilitating this even though a significant number of Stanbic Uganda’s 25,000 shareholders are Kenyan. In fact, the staff pension funds of Kenya Airways and Central Bank are listed among the top 10 shareholders of the bank.

At Bralirwa, the dividends are issued by KCB Rwanda and via a late message, KCB Kenya state they are paying/cashing the cheques up to RWF50K (~Kshs 8,000) across the counter. ( If higher the cheques will be sent for to Rwanda).

While the next step should be for East Africans to receive cross-border dividend payments by mobile money such as mpesa dividends this is only available to Kenyan shareholders. For now, the facilitation of affordable across-the-counter dividends, and other cross border trade & investment payment options is something that banks, not just KCB, with a regional footprint like Equity, Stanbic, Diamond Trust, and NIC should also take up.


EDIT: New communications from the banks show new options for Kenyans who have invested shares across East Africa as follows:

Bralirwa: Any cheques of less than RWF 50,000 (~Kshs 7,750) can be cashed at the counter of any KCB Kenya branch at a fee of RWF 200 (Kshs 31) on production of an ID or a passport

Stanbic Uganda: no certificates will be issued for the 1:1 bonus, and no physical annual reports will be mailed. But shareholders can now elect to receive dividends by electronic funds transfer, or mobile money (airtel money or m-pesa) after confirming their details at Comprite (Uganda) Registrars whose Nairobi office is at Marakwet House, Elgeyo Marakwet Road.

Thursday, February 17, 2011

Shares Portfolio February 2011

A tale of Two Brewers – comparing shares to November 2010 and a year ago

The Stable

Bralirwa (Rwanda) ↑
Diamond Trust Bank ↑
East African Breweries (EABL)
Kenya Airways ↓
Kenya Commercial Bank (KCB) ↑
Kenya Oil Company (Kenol) ↓
Safaricom ↓
Scangroup ↓
Stanbic (Uganda) ↑
Uchumi ↔

Review:
- Best performer: Bralirwa up 31% since their 2010 IPO
- Worst performer: Scangroup (down 14%), then EABL
- In: Bralirwa
- Out: None
- Increase None
- Decrease: None
- Unexpected gains/losses: - Uchumi shares have not been re-listed despite the company’s exit from receivership a year ago

Events & Outlook: - Performance: The Portfolio is down 3% in the last three months while the NSE Index is down 6%
-Bralirwa Rwanda was a good buy as the Rwanda (virtual monopoly) beer company listed shares that were open to all East African nationals and many retail shareholders got full allocation (still waiting for a similar offer from Tanzania); However in Kenya EABL faces challenges from the so-called Mututho Law which appears to have curtailed sales of alcohol through reduced hours.
- Safaricom seem to be weathering the storm from Airtel Kenya and their battle has extended to political and regulatory circles. Airtel added only 2 million more customers in all Africa compared to a year ago (Dec '09)
- Kenol has gone quiet since the Kenya Government instituted price controls around the country and despite popular expectations, prices have steadily risen in the two months since the program started.

Looking forward to: - February brought news that Transcentury and Britak - British American insurance plan to list at the stock exchange this year. Britak, Kenya’s 4th largest insurance company looks more likely – it had a 2009 pre-tax profit of Kshs 500 million and assets of 15 billion ($185 million). Transcentury shares trade at an OTC market run by Dyer & Blair - and (this week) are at Kshs 35 per share compared to Kshs 48 in 2010 according to the East African.

CIC Insurance, CFC Life and Family Bank are silent, while government linked companies like New KCC, Consolidated Bank, and National bank, are also likely to go through more political hoops before they reach the market.

- Also on offer this month is a 30 year savings bond from the Central Bank of Kenya to promote savings in the country. It pays 12% per year and targets to raise Kshs 18 billion ($221 million) with a minimum investment of Kshs 50,000 ($615), and closes on. Exactly two years ago, there was a similar push for an infrastructure bond offered by the Kenya Government to raise 18.5 billion ($231 million) by offering investors 12.5% returns over 12 years.

Wednesday, December 15, 2010

Investor Choice: December 2010

December is traditionally a slow investment month in Kenya, but not so this year with so many investment offers from a variety of sectors

Recap

- Bralirwa IPO is ongoing for Rwanda’s largest beer company. Nairobi stockbrokers who are facilitating the cross-border deal include Dyer & Blair, Faida, African Alliance and CFC Stanbic

- Deacons set out to raise Kshs 800 million ($10 million) in November. They extended the deadline to early December, and came up slightly short at Kshs 700 million which is still commendable for a low marketed company in a competitive industry with no immediate listing plans

- I&M Bank had a private placement to raise about 2.4 billion ($30 million) and is said to be past the mark

- The Kenya Power & Lighting Company - KPLC Rights issue set out to raise almost Kshs 10 billion ($125 million) in a combination share split, tights issue, government shareholding restructuring. It runs till December 22, but for new shareholders deadline is December 15 and is 50% underwritten with Centum and Equity bank.

- A second tranche of the Kshs 12 billion Safaricom bond program which aimed to raise Kshs 4.5 billion ($56 million) closed yesterday, and announcement is to be done today - (PDF)

- Airline Investors – away from retail investors we have the rarefied world of institutional investors and buccaneers in the aviation space in Africa

- (Via Flight Africa Blog) Jetlink expanding flights to (Asmara) Eritrea while Fly540 is to soon launch operations in Angola and Ghana
- Kenya Airways resumes flights to (Rome) Italy on December 16 which is its fourth European destination
- Recently, Rwanda Air launched flights from Rwanda to Dubai via Mombasa.
- Yemenia resuming flights to Kenya.
- East African, (who may or may not be in business) are promoting flights from Nairobi to (Hargeisa) Somaliland for $620
- And helicopter leasing is getting popular in Kenya, even at rates of $2,000 per hour.

Friday, November 26, 2010

Reading the Bralirwa Tea Leaves

Brasseries et Limonaderies du Rwanda Limited – (Bralirwa) is Rwanda leading beer brewer and which is now offering shares to the public in an IPO. In the spirit of the East African Community, the shares are offered to residents of all member countries (Read that Tanzania).

In the past, cross border opportunities have been in the case of Safaricom (Kenya) and Stanbic (Uganda) IPO’s as well as with cross listing of a half-dozen Kenyan companies across the exchanges of Kenya, Uganda, Tanzania and soon Rwanda.

from reading the information memorandum (IM)

On Offer: - 25% of company is for sale; being 128.57 million shares at 136 RwF per share (~Kshs 18) and minimum shares are 100, with units of 100 thereafter
- IPO allocation will be 35% retail (Rwanda and EAC nationals), , 5% employees & distributors, 30% international investors, and 15% to Qualified Institutions (insurance, pensions firms) in Rwanda and in EAC – if oversubscribed Rwanda nationals will get 60% in retail pool
- Runs from 23 November to 17 December, and trading begins in February 2011

About Bralirwa: - Current shareholders are the Heineken group with 75% and state of Rwanda with 25%; the shares were split by 5000:1 ratio in November 2010 to facilitate this IPO
- The IPO represents a complete divestment by Rwanda government
-Heineken, the no. 2 brewer in Africa controls the group.
- The company is largest tax payer in Rwanda – accounting for 12% of domestic tax revenue
- Sales in 2009 were $60 million and with a net profit of $11 million
- Subsidiaries include Coglegas (62% of company exploiting methane in lake kivu) and Bramin (50% of a maize processing company)
- Bank borrowing is a fixed interest rate of 12.25% and Bralirwa has unsecured borrowing facilities from Bank of Kigali, Commercial Bank of Rwanda, Fina Bank, Kenya Commercial Bank and Access Bank which have a combined facility limit of Rwf 3.5 billion ($5.8 million)
- Staff benefits for 528 (45) staff listed in IPO include performance based bonus scheme insurance scheme, subsidized mortgages vehicle leases, medical treatment (free of charge), uniforms for school going kids of employees, school fees for orphans of staff killed in 194 and drinks for employees at special occasions
- The company's supply chain is via the the port of Mombasa for clearing and transportation of inputs, and a 1000 KM along the northern corridor through Uganda which takes 3-4 weeks and they use SDV Transami
- Regional competitors - EABL Kenya (Central Glass) and KIOO Tanzania - provide the company with bottles
- Competitive strengths include fact that importing beer from Kenya or Uganda is uncompetitive owing to freight, fuel and insurance costs however high energy costs of US cents 22/kkwh are a challenge.

Incentives: - While effective income tax in the country is 32% in 2011, it can drop to 8% (over 5 years) for companies that sell over 20% of their shares to the public
- 2009 divided was 5.1 billion RwF ($8.5 million) or approximately RwF 50 per share (Kshs 6.5)
- No capital gains tax
- Withholding tax is 5% for Rwanda and EAC residents (but elsewhere IM says all dividend subject to 15% withholding)

Market: - Bralirwa market share in Rwanda in 2010 is 94%
- Rwanda has a Population of 10.5 million people, but per capita beer consumption of 9 litres trails Kenya (11 litres) and Burundi (18 litres!!)

Kenya Links: Bralirwa will be Rwanda’s first listed company, joining Kenya’s KCB, which is the only equity, trading on the Rwanda Stock Exchange. Kenyan influence is strong in the form of KCB (collecting agents), Dyer & Blair (transaction advisors), Faida Securities, Renaissance Capital, Muriu Mungai advocates (legal advisors), and the Central Depository & Settlement Corporation - CDSC (registrars). However Kenyan investors may be currently pre-occupied with their own KPLC rights issue and Deacons private placement

Governance & Registry: - Votes at annual general meeting shall by poll and articles explicitly state not by show of hands
- Company may buy its own shares
- All directors signed the IM document
- IM declares none of the directors are involved in bankruptcy proceedings, or been convicted under criminal proceedings or been judged by a court to have been fraudulent or dishonest (Ethics Kenyan corporates can learn )
- Articles also state – if a shareholder dies, their survivor, executor and administrators only persons recognized to have an interest in the shares

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