Kenyan M&A

Compared to one year ago

On-Going Deals

Auto’s: - This week Al-Futtaim held a press conference to reaffirm their commitment to African market that is being spearheaded by their takeover of CMC  in Kenya.  More than anything the event was meant to showcase that the group founded in 1930,  but which few in Kenya had heard of before the deal, is a serious legitimate company (unlike shadowy China Road & Bridge that has a $3.8  billion contract to construct a standard gauge railway in Kenya.)

 

They have several car franchises 65 years of Toyota in UAE, Volvo, Honda vehicle assembly parts & service, used car business  and is also in engineering, financials services and the retail mall development business in the Middle East  and Asia

 

Al Futtaim  are long term investors will retain the CMC brand as it has a 65 year good history that will overcome the last two bad years . But they will de-list the company as they believe that being a private company will give them the flexibility to move faster and reclaim customers and brands that have been lost such as Land Rover. 

Interestingly, the opportinuity to buy CMC was presented to them by one of their banks who knew of their interest in Africa. The company then had to work very hard to meet and bring the feuding key shareholders on board to back the buyout.

EDIT Kenya’s competition authority has now approved the acquisition of 100% of CMC Holdings by Al Futtaim Auto

- Scania East Africa Limited  have taken over the purchasing, importing, assembling, fitting out, selling, servicing  of trucks, buses and chassis in Kenya that was previously carried out by Kenya Grange Vehicle Industries.

- EDIT Actis buys 36% of AutoXpress, East Africa’s leading tyre distributor, with 20 stores in Kenya and Rwanda.
- EDIT  Merali and Sameer complete buyout of 14.9% of Firestone's stake in Sameer Africa.

Banking

 

- CBA returns to Uganda after 47 years
- Fina Bank has changed over its operations in Kenya, Uganda and Rwanda to GTBank East Africa after Guaranty Trust Bank concluded the acquisition of a 70% stake in Fina Bank Group for $100 million through combination of a capital injection and acquisition of shares from Fina Bank shareholders.  

- Pakistan’s MCB Bank to acquire Kenya’s Middle East Bank (via the Standard)

- EDIT Kenya’s  competition authority  has approved the acquisition of 73.35% of Genesis Kenya by Centum Investments

- EDIT Letshego Holdings  of Botswana has acquired Micro Uganda, a year after acquiring Micro Africa Ltd of Rwanda.

Food &  Beverage

- Art Caffe acquired Dormans increasing their outlets from 4 to to 11 and giving them a presence in more shopping malls like Yaya, Karen and City Mall in Mombasa where Dormans had shops.

 

However the Art Caffe were rankled by a quite in a local newspaper referring to their customers as being upmarket compared to Dorman's ones. 

  

EDIT: Kenya’s  competition authority  has now approved the acquisition of 7 coffee shops of Dormans by Art-Caffè.

- Pearl Capital partners have invested $1.5 million in KK Fresh Produce. 

EDIT Kenya’s  competition authority  has approved  the acquisition of Rafiki Millers  by Tiger Brands.

EDIT Kenya’s  competition authority  has approved the acquisition of Magic Oven Limited by Tiger Brands.

Beauty: A Netherlands-based private equity fund, TBL Mirror Fund, has bought a minority stake in a high-end Nairobi salon chain that is seeking capital to expand across East Africa.

 

EDIT 

Advertising: Kenya’s  competition authority  has approved the acquisition of additional 16.48% shareholding in Scangroup Limited by Cavendish Square Holdings BV.

Health: Kenya’s  competition authority has excluded the acquisition of 100% of Adcock Ingram Holdings Limited by CFR Inversiones SPA from the Act

Hotels: South Africa’s City Lodge acquires Kenya’s Fairview Hotel  afterFairview Hotel firm agreed to sell the outstanding 50% of the joint venture 

Insurance: Kenya’s  competition authority has approved the  acquisition of 66.38% of Phoenix of East Africa Assurance Company Limited by Mauritius Union Assurance
- EDIT  Britism American (BritAM) completes buyout of 99% of Real Insurance

Oil

- Kenya’s  competition authority  has excluded the acquisition of a 55% participating interest in Block 11A from ERHC Energy by CEPSA Kenya

- Kenya’s  competition authority  has excluded the acquisition of a 55% interest in Block 2B in Kenya from Lion Petroleum by Premier Oil 

Transport
EDIT - Precision Air  of Tanzania seeks a bailout from Kenya Airways?
EDIT - Transcentury to reduce stake in Rift Valley Railways (RVR)?

Other

India  Exits

- Ambani reports a Kshs 2 billion profit from Kenya real estate.. Ambani’s Reliance Industries in 2007 entered into a joint venture with Delta Corporation, which has developed high-end office blocks and a mid-to-low cost residential estate in Nairobi. Delta Corporation now says it plans to exit its real estate investments to venture into hospitality and gaming businesses. 

- Essar to finalise sale of its Kshs 8.5 billion Yu stake in March ..the firm says it needs the Sh8.54 billion immediately and more cash in the short term to widen its footprint in Kenya and upgrade its network from 2G to 3G.

- Essar also faces a Kshs 430 million hit in its Kenya oil refinery exit ..the government and Essar Energy Overseas are engaged in compensation talks following the Indian firm’s decision to exit the refinery.

New Deals

Agriculture: At Rea Vipingo, Bid Investments withdrew their offer and have signed up with Vania Investments who are offering a new Kshs 55 per share  bid - worth Kshs 3.3 billion ($39 million) -  for the company that will leave it listed at the NSE

 

E-Biz: 

- There's a potential change in ownership, at MyStrawberryStore 

- EDIT-  Kenya’s  competition authority  has excluded the  acquisition of 999 Ordinary shares 

of My Kenyan Network Limited by African Jobs as the two have a combined turnover of Kshs 12.6 million

Regulator Issues

Pepsi came to Kenya and took on Coke but have not made much impact. They are now saying that has Coke been unfair ..PepsiCo says that rival bottle has been curtailing its marketing campaigns geared at gaining a larger share of Kenya’s soda market in the complaint to the Competition Authority of Kenya (CAK).

Synovate directors risk jail, hefty fines..Competition watchdog asks Tobiko to prosecute Ipsos-Synovate's chiefs for failure to seek regulatory approval of the firm’s acquisition of its predecessor Synovate.

In South Africa The Competition Commission plans to address anti-competitiveness between retailers despite concluding its exclusive lease agreements probe.

The investigation established that the respondents (3 supermarket chains)  were dominant in certain local markets and that they would often compel landlords not to deal with competitors (by entering into exclusive lease agreements with landlords in return for agreeing to ‘anchor’ the centre).

Jobs: Rwanda's Agaciro Development Fund is seeking an investment office. Deadline is Feb 14.

Blogging in 2013

Top blog posts in 2013

1. Consumer Guide on Solar for Homes
2. Kenya Bank Rankings 2012 (Part I) 
3. Kenyan M&A
4. Private Equity Moment
5. Subway (Restaurants) to Kenya
6. Why Unit Trusts are better than Bank Savings Accounts
7. Chama Management 101  (a book review) 
8. Paypal in Kenya
9. Base Titanium aims to be a model for the Kenya mining sector
10 Buyouts, Vultures, Divestments

So lot's of interest in reading up merger and investment activity in Kenya this year, but, overall, the top posts visited were Safaricom/CBA launch M-Shwari and Who Created M-Pesa  both published in 2012.

Private Equity Moment

Following the January  post on M&A deals, here are some recent events. 

The Private Equity Confidence Survey was published by Africa Assets and Deloitte and it showed that, in 2012, private equity firms invested $1.13 billion towards 58 deals in Sub-Saharan Africa. This was a a slight decline from 2011, and that Kenya, Nigeria and South Africa accounted for 45% of the deals in 2012.  Also in the survey; 

- Despite the enormous hype surrounding Kenya’s growing IT sector, dubbed the “Silicon Savannah”, no IT or venture capital deals were reported in eastern Africa in 2012. This clearly reflects that both the IT sector and VC industry in eastern Africa, and indeed Africa more broadly, remain quite young and underdeveloped. Interestingly, IT-Tech deals were done in 2012 in South Africa, Ghana, Nigeria and the DRC.

-  One conference speaker on VC deal structuring said the problem is ‘Kenyan entrepreneurs believe they each have a fantastic proprietary idea, and they want lots of money up front to develop it, regardless of the lack of business model planning done by many of them. 

- The dominant exit route across Africa is a sale to a strategic investor..and most investors expect the average investment lifecycle to be between two to five years.

Recent M&A deals approved by the Kenya Competition Authority include:

Agri-Business & Food

- The acquisition by Almasi Beverages of Kisii Bottlers, Rift Valley Bottlers and Mount Kenya Bottlers 

- The acquisition of Lord Erroll Limited by Koita International Kenya.

- The acquisition of Ocean Agriculture (EA) by JH Verwiel.

- The acquisition of Siret Tea Company by Siret Outgrowers Empowerment & Produce Company. 

- The acquisition by the Rai Family of shares of Sukari Industries.

Banking, Insurance & Finance

- The acquisition of I&M Bank by City Trust Limited.

- The acquisition of PSJ & Associates by PKF Kenya.

- The acquisition of 66.66% of Mercantile Insurance by Colina Holdings

Building, Energy & Real Estate

- The acquisition of shares in Cemtech (who were to put up a cement factory in Pokot) by Rock Field Corporation. 

- The acquisition of Economic Housing by Mali Rasili Group. 

- The acquisition of all assets of Mutonga Mutuandaju Small Hydro Power  (a hydro-power project in South Imenti, Meru) by Intrepid Energy. 

Health & Beauty

- The purchase of shares in Alexander Forbes Healthcare by Zanele Investments Holding Company

- The acquisition of the health and beauty business (cosmetic & hair brands) of Interconsumer Products by L’Oreal East Africa 

- The acquisition of certain assets & liabilities of RTT Health Services by Imperial Group 

- The acquisition of Lyntons Pharmacy by Luwada Management

- The acquisition of Star Biotech Lab & Diagnostics (a pathology lab) by Metropolis Health Healthcare

- The acquisition of an indirect interest in the assets of Strategic Industries Limited.

Media & Communications

- The acquisition of Alldean Networks Limited by ISAT Africa Limited FZC and Richard W. Bell.

- The acquisition by EMC Acquisition, LLC and Emerging Markets Communication, LLC of EMC, LLC.

- The acquisition of shares in Dodhia Packaging Limited by Corpak Africa and Corpark Kenya

- The acquisition of  the investment in Rodwell Press held in Interlabels Africa by Interlabels Industries Private Limited.

Oil & Mining 

- The acquisition of Aviva Mining Kenya by Africa Barrick Gold (from Aviva Corporation)

- The acquisition of 87.25% of Pacific Seaboard Investments Limited by Tardigrade International Inc.

Tourism

- The acquisition of East Africa Safari Ventures by Natural Habitat Safaris.

- The acquisition of 80% of Nairobi Tented Camp  by Porini Limited.

- The acquisition of Leleshwa Safari Company  by Natural Habitat Safaris 

- The acquisition of Vittoria Limited and subscription of shares in Olarro Conservancy Limited by Arabian Ranchers Property Investments 

Transport, Engineering & Logistics 

- The acquisition Swift Global Logistics by DSV Air & Sea Holdings

- The purchase of 55% of Tradewinds Aviation by NAS Africa Aviation 

- The acquisition of 60% of Treadsetters Tyres by Bharat Doshi, Aashit Shah and Carlet Overseas Corporation.

- The acquisition of 40% of Tredcore Kenya by Magister Limited

- The acquisition of Vtechnologies (Kenya) Limited by UHT SAS.

EDIT
More deals approves in May 2013
- The acquisition of the remaining shares in Cable Television Network by Wananchi Group
- The acquisition of 99% of Microensure Advisory Services by Microensure Holdings
- The acquisition of Brightermonday.com by Cheki Africa Media.

- The acquisition of 1,680 steers and 792 cows from Delamere Estates by Ngombe Ltd 

- The acquisition of 80% of Altech Kenya Data Networks and 100% of Altech Swift Global Limited by Liquid Telecommunications Holdings

-  The acquisition of the business of Daru Shifa Centre by Viva Afya

- The acquisition of Endebess Estates (Kilifi Holdings)  by Ballobhai Chhotabhai Patel.

Other recent deals in the News

- Jacana Partners and InReturn Capital announced a merger, and plans for a $75 million SME Fund

- 88mph and the eVentures Africa (eVA) Fund announced a partnership to improve investment opportunities

- Does Tuskys Supermarket want to buy Ukwala  a rival supermarket chain?

- 90% of I&M Bank shareholders have accepted the takeover by City Trust Ltd and the deal makers have been granted a 2 week extension to reach out to the remaining shareholders. Next steps include a share split.  mandatory acquision of the balance of shares, and a possible NSE-listing on June 12. 

-  Airtel signed an agreement to fully acquire Warid Uganda – the combined entity will remain the number two carrier in Uganda with 7.4 million customers  and a market share of 39%. 

- Fastjet and the CEO of Fly540 agreed to cease their court battles and work towards an acquisition of Fly540  - freeing FastJet to commence Kenyan operations. 

- A summary of China investments around the world in the year 2011.

-  In the US, M&A of VC-backed startups are at a four year low. 

-  Venture capital merger and acquisition activity in the US dropped in the first quarter of this year, ending with the fewest exits since the first quarter of 2009, according to the just-released venture report from Dow Jones VentureSource.

- Some 86 M&A transactions were done for a total amount of $4.3 billion, down 44% in deal activity and a decline of 24% in capital. In the final three months of last year, 113 deals brought in $7.6 billion to the VC-backed startups.

- Companies raised $6.36 billion in the first quarter of 2013, the lowest amount raised since the third quarter of 2010, when $6.1 billion was raised. In the first three months of the year, 752 companies were funded, which is similar to the 732 companies that got funded just over two years ago. Healthcare deals accounted for almost a third of the invested capital.

EDIT Jambo Biscuits food processing business is being transferred Kilimanjaro Foods.

Shares Portfolio February 2013

Comparing the portfolio to three months and about five years back which was just before the last Kenyan general election.

The Stable

Barclays ↑

Bralirwa (Rwanda) ↑

Diamond Trust Bank ↑

East African Breweries (EABL) ↑

Equity Bank ↑

Kenya Commercial Bank (KCB) ↑

Kenya Oil Company (Kenol) ↓

Safaricom ↑

Scangroup ↑

Stanbic (Uganda) ↑

Unga ↑

What's changed?

In: None

Out: Kenya Airways

Increase: EABL, Equity, KCB

Decrease: None

Dividends: None yet 

Best performer: Bralirwa's (up 31% in 3 months) then Stanbic (UG) and KCB

Worst Performer: Kenol down 5% 

Unexpected gains/losses: Sold Kenya Airways, which despite troubles at rivals [Jetlink (suspended flights in November) and Fly540/FastJet (shareholder wrangles)], still has major clouds ahead with uncertainties over the delayed Boeing 787, hedging, staff, and serving routes in Europe and Asia. 

Performance Summary: The NSE 20 share index is up 10% in the last three months, while this portfolio is up 11%. But, at 4,500, the NSE 20 Index is below what it was in November 2007 (~5,100) before the election. 

Other Developments: 

Mining Sector: A media session took place this week with a goal to demystify the mining sector. The announcement in 2012 that oil had been found in Kenya raised some unrealistic expectations about sudden wealth that will be available to Kenyan communities including a recent notice by the Minister for Environment requiring that mining ventures should have 35% local ownership and another this week by the Kenya Revenue Authority on payment of withholding tax on the transfer of oil and mining assets (10% from payments to locals, and 20% for foreigners).

Kwale Mineral Sands

Discoveries this week at the session included: 

  

(1) A Kenyan investor can buy shares in the Kwale Mineral Sands project as Base Resources (who are developing it and who will build a local processing plant) are listed at the Australian and London (AIM) Exchanges.  

(2) Mining companies are always on the lookout for local partners & investors who are sophisticated and wealthy enough to understand the risks of mining.

(3) The sector comprises prospectors, explorers, and large mining companies each of who invest increasing amounts of capital from $50 000 at the prospecting stage to $1 million at the exploration stage to over $100 million at the mining stage and all assume varying degrees of capital, risk, and longer payback periods. Typical mining investors are interested in bullish markets, and stable countries with established policies on mining while conflicts over land use vs. mining rights remain perennial challenges (also affected this particular project).

Also see Can Kenya Avoid the Resource Curse?

GEMS:  The Nairobi Securities Exchange launched a Growth Enterprise Market Segment (GEMS) a few weeks ago to promote the listing of small and medium enterprises. The  basic criteria for a company to qualify include being in operation for at least one year, have audited accounts of at least one year (but no profit requirement),  have sound management and board consisting of at least 5 directors, commit to have at least 25 (non-employee) shareholders own at least 15% of the shares within 3 months of listing, and appoint an NSE-nominated advisor to help them with governance. 

At the launch, the NSE Chairman noted that GEMS provides an opportunity for firms participating in Kenya’s natural resources and mining sector to raise capital and also comply with the 35% local equity component. 

Online Commerce:  In the last week, South African-based Private Property Holdings and Kenyan-based Cheki Africa Media merged their businesses to form One Africa Media, possibly Africa's largest classifieds portal‏, even as Naspers shut down Mocality in Kenya and Nigeria.

Kenyan M&A

The Kenya Competition Authority recently approved for several corporate deals to be completed. Some of them were mere rubber stamping formalities, as the deals originated far away or had little in the way of local competition that would compel the authority to intervene. 

They covered a variety of sectors including: 

Agro-Processing

- (The acquisition of) The flower growing business of Finlay's Horticulture Kenya by Lamorna

- (The acquisition of the) Residual business  of Agrifresh Kenya by Finlays

- (The acquisition of)  Sarkish Flora Ltd by Africa Blooms Limited.

Oil & Mining

- Acquisition of 100% of Cove Energy Plc by Shell Exploration & Production (Thailand) 

- Acquisition of  100% of Dominion Petroleum by Ophir Energy Plc.

- Pacific Wildcat Resources Corporation acquiring 100% of Stirling Capital  (UK) and Cortec Pty (UK)

- Elsewhere, there are new (and controversial) that have been proposed that mandate for local shareholders to own 25% of petroleum companies and 35% of mining companies (read more) 

Money & Finance

- Acquisition of 100% of Aureos Capital by Abraaj Capital

-  Acquisition of Grant Thornton Kenya by PKF & Associates (which continues to be in an expansion mode even after taking over DCDM)

- (The acquisition of) Additional shares in Pan Africa Insurance Holdings by Hubris Holdings

- Acquisition of Credit Reference Bureau (Holdings) Limited by Transunion Netherlands (part of the credit giant Transunion

- 62.52% of Micro Africa  by Letshego Holdings (of Botswana)

Tourism

- (100%) of  Ol-Seki Ltd by Hemingways Holdings

Manufacturing & Engineering

-  The acquisition of selected assets of Raffia Bags Kenya by Polycem Bags

 -  The acquisition of 62% of Civicon Ltd by Transcentury Engineering & Contracting

  

Service

- The acquisition 75% of Nairobi Java House by Emerging Capital Partners Africa Fund III. The deal won the AI  deal of the year  award and last weekend was featured on the Citizen TV piece called Who owns Kenya  (video)

Others

- Shoden Data Systems (Proprietary) by Hitachi Data Systems Europe (a sub-Saharan territory deal)

-  Kingfisher Properties  by Mahesh Sanghrajka & Aasheet Sanghrajka.

- Centro Suburb Ltd by  Westlands Triangle Properties

On-Going

Following on three earlier deals: 

- Barclays & Absa are back in the news, six years later

- The shareholders of three bottling companies in Kenya have agreed with a Coca Cola  plan to merge them under a single company Almasi, with one board of directors and CEO and cut other costly production redundancies

- No word on Kenol. 

In the News

Other ongoing deals, yet to be concluded include: 

Money & Finance

- Deloitte East Africa merging with Haile Solomon & Tekeste (Ethiopia)

-  The I&M Bank and City Trust deal

-  I&M Bank Limited buying 55% of Banque Commerciale du Rwanda

- EcoBank Kenya pursuing an undisclosed local investment bank

- UAP Holdings pursuing an undisclosed Tanzanian insurance company

Other

- Australian firm Aviva Corporation (Australia) selling stakes of Kenyan subsidiary to Africa Barrick Gold (ABG)

-  Copy Cat buying 51% stake of Seal Africa

- Low cost airline, FastJet which took over the routes of Fly540 in Kenya and Tanzania, also plans to take over the collapsed operations of South Africa's 1-time airline for $0.12

- The Woolworth - Deacons deal    

Arranged Corporate Marriages

Some local merger activity of note

 

Barclays of UK and South Africa’s Absa Group are in talks to merge their African operations - but this is not really new as the plan was set in motion six years ago. 

There’s no certainty the talks will lead to any deal, which wouldn’t be completed until 2013, the banks said in a statement. The combination would affect assets in Kenya, Botswana, Zambia, Tanzania and Ghana. 

Barclays, based in London, bought 54 percent of Absa in 2005 for $4.5 billion to expand in emerging markets. Absa dropped its original plan to buy the Barclays assets in 2008 after commodity-driven economic growth in Africa sent their earnings surging, making the businesses too expensive to acquire. Barclays revived the plan in April 2011, aiming to consolidate operations at Absa headquarters in Johannesburg and move other work to Dubai, but Barclays’ listed subsidiaries in Kenya and Botswana will be maintained.

Coca Cola have prepared the Information Memorandum (with D Capital Partners, UK) to persuade local coca cola shareholders to buy into the deal that will see their shareholding in three local bottlers - Mount Kenya Bottlers, Rift Valley Bottlers and Kisii Bottlers merged into a new holding company called Almasi.

Coca Cola dominates the non alcoholic beverage in Kenya with a 78% market share, leaving EABL, Kevian, Del Monte, Excel with 2-4% each. The global giant  has 6 bottling licensing agreements in Kenya with Coastal, Equator, Rift Valley, Mount Kenya, Kisii and Nairobi - which itself was boosted by earlier partnership deals ( with Flamingo Bottlers and East Kenya Bottlers Limited).  The three bottlers each which each sell about 9% of cokes cases, will become Coke's second largest after Nairobi with about 28% of sales. 

Peeling back Almasi

The boards of the three have approved it and now have to sell the deal to their shareholders as a potential value addition through increased revenue and cost savings of Kshs 2.5 billion ($29 million) derived from  lower management costs (single management, single board of directors) shared purchasing, and the IM noted none of the three can afford to invest in new bottling line, or plastic packing lines for soda, juices and water

Mt Kenya has 2011 sales of about $29 million, Rift Valley $21 million and Kisii $18 million, with Mt. Kenya and Rift both having after tax profits of ~$1.3 million. A nominal shareholding of 20,000 (1,000 shares of par 20)  in each, will be worth Kshs 80,000 (11,400 new shares) for Kisii Bottler shareholders, Kshs 526,000 (75,000 shares) for Mount Kenya Bottler and Kshs 112,000 (16,000 shares) for Rift Valley Bottler shareholders. The IM also dangles a carrot that, Almasi could one day be a listed company.

Haco boost?  - Tiger Brands which own 51% of Kenya's Haco are now buying 63% of Dangote Flour Mills in Nigeria. Will Haco get a boost in the food business, exporting to Nigeria?

Kenol  Reassures - Kenol made a surprising (to many)  half year loss  due to foreign exchange hedging contracts. They subsequently issued a statement of reassurance that a planned majority sale to  Puma Energy was sill on, with the due diligence process yet to be completed. Unfortunately, it is likely that, once the deal is done, Puma will also buy out the other minority shareholders and de-list the company - which is a shame, as it was one of the most pro-active companies in shareholder communications

Bank waters

In the pool

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

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

Had enough swimming?: 

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

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

Share Portfolio November 2008

Last review in August 2008

The Stable
Diamond Trust ↓
KCB ↓
Safaricom ↓
Scangroup ↓
Stanbic (Uganda) ↓

Review
Best performer: Scangroup -8%
Worst performer Stanbic – 36%, Safaricom -28%
In: none
Out: none
Changes: None - Market down this last three months, no trades made (and no commission generated for stocbroker).
Performance: Down 12% in the last three months while the NSE Index is down 16%
Looking forward to: Possibly picking up some Kenya Airways, Kengen, and Safaricom if their shares continue to get cheaper, but sitting out the Co-Op IPO.

Mark Mobius on Emerging Markets

Dr. Mark Mobius, the executive Chairman of Franklin Templeton Investments,is in Nairobi this week. He gave a talk this morning on his investment perspectives. It is especially timely considering the bear market being experience the world over and at the Nairobi Stock Exchange this year.

Some notes
- They are bargain hunters, they love cheap stocks and thus love bear markets
- Emerging markets look good for long term investors for several reasons: they are growing faster than developed countries, they have less debt, they have more reserves, inflation is coming down, they are taking up a lager share of world trade and also trading more with each other
- Bull markets are followed by bear markets which are followed by bull markets then bear......
- Bull markets last longer than bear markets, and values appreciate more during bear markets than they depreciate during bear markets. he said by their measures over the last 20 years bull markets last on average 22 months and values appreciate by 113% while bear markets on average last 6 months and values depreciate 32%
- Various FT funds are concentrated in mainly energy stocks, then banks, raw materials, communications etc.

My take: This is a time to buy Nairobi Stock Exchange Shares (NSE) , if you have the money and a long term investment perspective