Nairobi Securities Exchange IPO

The Nairobi Securities Exchange (NSE) launched its IPO on July 23. It runs up to August 12, 2014 and they are selling 66 million shares at Kshs 9.50 per share (with a minimum investment of 500 shares costing Kshs 4,750) and the NSE plans to raise Kshs. 627 million (~$7.3 million).

Excerpts from the prospectus and other sources. 

• The NSE borrowed Kshs 300 million from Kenya Commercial Bank to part finance the purchase of the Westlands building that now houses the exchange. (The interest rate is minus 2 the bank’s base rate). Part of the funds raised from the IPO will be used to repay the Exchange's mortgage debt.
• The Dar es Salaam Securities Exchange has completely divested from the NSE and CDSC.
• The NSE has about Kshs 1 billion assets and an EPS of 10.70. They had earnings of 622 million and a profit of Kshs 262 million in 2013. The NSE owns Kshs 20 million worth of  Safaricom bonds and Kshs 15 million of Housing Finance ones
• The IPO is budgeted to cost Kshs 40.8M
• Ahead of the IPO in which 194 million (M) shares are being listed, the Kenya Government and the Investor Compensation Fund each own 6.56 million shares and 22 stockbrokers each own 4.08M shares - for a total of 128.6M shares. 2.5 million shares are reserved for employees of the exchange (The NSE  has 38 employees and 5 senior managers). 
• KRA assessed and charged them Kshs 19m for 4 years of back taxes, of which Kshs 15m has been paid
• One of the options the Exchange is contemplating is to establish regional exchanges in Somalia, the Democratic Republic of Congo (DRC), South Sudan and Burundi 
• The NSE expects to introduce the REITs and ETFs, and there are also plans to introduce the a Derivatives Market this year. The NSE also plans to upgrade of the Automated Trading System (ATS) and the Bonds Trade Reporting System with some of the proceeds from the IPO.

BritAm and Swala Investments

Last week saw the announcement of two new regional investment opportunities – one a new bond offer in Kenya and the other – an IPO in Tanzania – that both close on July 4.

BritAm Bond: Kenyan financial group Britam announced a Kshs 6 billion ($69 million) bond  which will be two tranches starting with an initial target of Kshs 3 billion.

Some excerpts from the bond prospectus 

• There is green shoe option of Kshs 1 billion in the first tranche.
• Funds raised will be utilized in private equity, ICT development and local and regional expansion projects.
• The minimum investment is Kshs 100,000 (~$1,150) with multiples after of Kshs 50,000.
• The 5 year bond (maturing in July 2019) pays 13% a year (6.5% every six months). So if you invest Kshs 100,000, you will get an interest  payment of ($) Kshs. 6,500 twice a year.
• The bonds will be listed at the NSE for easy trading.
• At the end of 2013 BritAm had Kshs 47 billion of assets, revenue of Kshs 15 billion and pre tax profit of Kshs 3.1b. They had Kshs 3.7 billion in investment property and Kshs 6.1 billion in listed companies. They own 21% of Housing Finance, 10% of Equity Bank and 25% of Acorn group. They are acquiring Real Insurance for Kshs 1.3 billion (825m cash and shares  for the balance).
• The bond issuance will cost Kshs 57m shillings - and Dyer & Blair get about Kshs 36M of this as the arranger gets (27M) and for the Placement (9M).

Swala Energy: Swala Oil & Gas (Tanzania) aim to raise between TZS 1.6 billion ($969,000) if they sells 3.2 billion shares and TZS4.8b ($4.8 million) if they sell 9.6 billion shares at TZS 500 each. The Offer is conditional on the Company achieving a minimum subscription of 3,200,000 Shares under this Prospectus, to raise TZS 1,600,000,000 (before expenses of the Offer). The Company may decide not to allot any shares and repay all application monies or seek a no objection to proceed with the allotment, in case the minimum subscription is not attained.

• The minimum subscription is TZS 50,000 ($30) for 100 Shares. You can apply online, but a physical application form must be received at the brokers by 4^th July.
• Swala has total assets of $1.8 million in 2013 (up from $75,000 in 2012) . revenue in 2013 was $285,000 (up from $62k)  and loss was $5.5 million for the year (down from $1.26m the year before).

• They are fundraising as they plan to spend $3.5M next year and $6M the year after.
• A London broker values the company at $52.3 million based on 50% interest in Pangani (an area of 8578 sq. km worth $25.1m) and 50% in Kilosa Kilombero (an area of 8838 sq. km worth $36.3m). Otto Energy is a 50% partner in both of these ventures. 
• The Costs of filing will be between TZS 210M and TZS 248M ($150,000) with printing costing 32M, accountants 40m (~25,000 to BDO), technical specialist (Risc Pty) 40M legal (Asyla) 16m, nominated advisors 27M (~$16,000 to Arch Financial if $3m is raised) and the Dar es Salaam Exchange gets 27M.
• The Swala Energy prospectus gives insights on Kenya oil deals that are rarely public and which are used as a basis for valuation of these shares and for comparison as they are all in the East Africa Rift System E.g. Recent Kenya transactions (EARS ) include Marathon Oil bought aBlock 12A license from Africa Oil for $78.5M and a Block 9 license, Africa Oil bought a  Block 12A license from Tullow for $3.86M ($1,265 per sq. KM and Adamantine sold a Block 11B license to Bowleven for $10M ($1,429 per sq. KM).
• In Tanzania, profits from oil are shared out as 45% government and 55% to the contractor when production is less than 12,500 barrels per day and when barrels are over 100,000 per day, the government gets 70% and the contractor 30%.
• Swala has applied for approval to list on the Enterprise growth Market section of the Dar es Salaam stock exchange (they need 100 shareholders so list).
• Swala will go from holding 74% to 61%  and new shareholders all have 10% with convertible note holders with 7%.
• Tanzanian Applicants will be allocated Offer Shares in priority to all other Applicants. Any Offer Shares remaining thereafter will be allocated to East African Applicants. Offer Shares will only be allocated to Foreign Applicants if they have not all been acquired by Tanzanian Applicants and East African Applicants.

EABL & Serengeti

East African Breweries is seeking shareholder endorsement of their decision to purchase 51% of Serengeti Breweries of Tanzania. They have sent out a shareholder circular produced by Merrill in London that outlines the nature of their investment.

Partnership: Serengeti will distribute EABL brands exclusively in Tanzania (except duty free shops). Also Serengeti will brew EABL beers but this has not yet started
- EABL will distribute Serengeti products worldwide (the include Premium Serengeti Lager (PSL), The Kick and Uhuru Peak beers, as well as the non-alcoholic Vitamalt Plus)

(image from Christian site writing about beer)

- The deal is contingent on EABL selling its 20% stake in Tanzania Breweries (presumably to Tanzanians), not closing any Serengeti plants while continuing to produce certain Serengeti beer brands for the next five years. (SABMiller still have a 20% stake in Kenya Breweries)

Payment: The EABL Board estimates that it will make cash payment of US$61 million (equivalent to Kshs 4.95 billion) to acquire its 51% stake using reserves or bank facilities (no recourse to shareholders). They will retain $10 million to deal with any shortcomings or deviations in concluding the deal.
- Diageo (EABL’s largest shareholder) has the option to in four years time purchase the remaining stake 49% in Serengeti (not held by EABL) for not more than $600 million. The price is higher but the reasoning is that EABL is investing at an early stag while Diageo will be investing at a latter stage when capacity and synergy gains will have been achieved at Serengeti

Partner: Serengeti is the second largest brewer in the country with a 15% share behind Tanzania breweries (EABL’s previous partner) who have a 72% share of the branded brew market. however unbranded beers command a significant majority of the alcohol consumed in Tanzania – and these include fermented drinks and local beers like Kimpumu (millet beer, is that Tz busaa?), cassava beer, Tekawima (maize beer, is that Tz changaa?) which are highly popular. Serengeti has plants in Dar es Salaam and Mwanza and is developing one in Moshi.
- Serengeti ‘s balance shaeet has assets of about Kshs 4.4 billion (compared to EABL Kshs 38 billion). Their accounts summarized in the circular show drastic changes when produced under Tanzania GAAP generally accepted accounting principles) and international financial reporting standards (IFRS) mainly from change to treatment of bottles and crates (&their deprecation), and revaluation on land & buildings resulting in larger assets and smaller profits under IFRS compared to Tz GAAP
- Current shareholders of Serengeti are Union Brewery holdings, Negus holdings (exiting), Napster group, and V. Mehta (exiting), CMG investment, Mark Bomani and Henry Mosha.

National Microfinance Bank AGM

guest post in Swahili, submitted by Uchumi Wetu of NMB - a Tanzanian Bank

WANAHISA wa Benki ya NMB watapata gawio la jumla ya Shilingi 15.7 bilioni kwa mwaka 2009 (dividend payout of ~$11 million), ikiwa ni ongezeko la asilimia 4.7 ikilinganishwa na mwaka uliotangulia.

Mwenyekiti wa Bodi ya Wakurugenzi ya NMB, Misheck Ngatunga, amesema mgawo wa kila hisa kwa mwaka utakuwa Shilingi 31.40 (DPS of $0.02), ikilinganishwa na Shilingi 30 kwa mwaka 2008. Alikuwa anawasilisha ripoti ya mwaka 2009 kwenye mkutano mkuu wa mwaka wa NMB uliofanyika jijini Dar es Salaam mwishoni mwa wiki.

Ngatunga alisema mwaka 2009 ulikuwa wa changamoto nyingi kutokana na kuongezeza kwa ushindani katika sekta za benki pamoja na mtikisiko wa uchumi duniani, ambao ulikuwa na madhara makubwa katika uchumi wa Tanzania kama kwingineko duniani. Aliisifu serikali kwa kuandaa mkakati wa kukabiliana na mtikisiko wa uchumi kwa kuendeleza mfuko wa kuokoa na kusaidia sekta na taasisi zilizoathirika na mtikisiko huo. “Sekta ya fedha ya Tanzania kwa ujumla haikuathirika na mtikisiko huo, na iliendelea kuwa na mtaji wa kutosha na yenye faida. Ingawa athari hizo zilikuwa tofauti kwa kila benki.”Hata hivyo, alisema hali ya uchumi na kushuka kwa viwango vya riba vilichangia kushuka kidogo kwa mapato na faida mwaka 2009, ambapo benki hiyo ilipata faida ya Shilingi 68.04 bilioni (kabla ya kodi) (pre tax profit of $47 million), ikilinganishwa na Shilingi 70.94 bilioni mwaka uliotangulia. Upungufu huo wa faida ni kwa asilimia nne. Wakati huo huo, NMB imedhamiria kuboresha huduma zake na kupunguza msongamo wa wateja katika matawi yake nchini na kuwafikia Watanzania wengi zaidi wanaoshi vijijini.

Katika taarifa yake ya mwaka 2009, benki hiyo yenye mtandao mkubwa nchini imesisitiza kuwa itazingatia zaidi kupunguza muda wa wateja kusubiri katika matawi na ATM, pamoja na kuboresha mikopo. Mwenyekiti wa bodi ya wakurugenzi alisema pamoja na mafanikio mengi yaliyopatikana katika kipindi kipindi cha mwaka uliopita, ikiwa ni pamoja na kuongezeka kwa matawi na mtandao wa ATM kutoka 167 mwaka 2008 hadi 281 (now have 281 ATM machines) mwishoni mwa mwaka 2009, bado wanakabiliwa na changa moto nyingi, ikiwemo tatizo la msongamano wa wateja. “Nina uhakika kwamba uongozi na wafanyakazi wa NMB watafanikiwa kukabiliana na changamoto hizo,” alisema Ngatunga. Alisema NMB inakusudia kupanua zaidi mtandao wa matawi nchini ili kuweza kujikita zaidi katika msukumo wa ‘Kilimo Kwanza’, mpango wa kuboresha uzalishaji wa kilimo na sekta ya mabadiliko kwa nia ya mapinduzi ya kilimo.

Akizungumza katika mkutano huo, Mtendaji Mkuu wa NMB, Bern Christiaanse, alisema mtandao wa matawi ya NMB uliongezeka kufikia 133 mwaka 2009 (133 branches), huku matawi mapya nane yakifunguliwa mwaka huo. Alisema ongezeko hilo ni matokeo ya mkakati wa benki hiyo wa kutoa huduma za kifedha kwa watanzania wengi iwezekanavyo.Kwa mujibu wa taarifa ya mwaka 2009, jumla ya raslimali za benki hiyo zilikua kwa asilimia 20.6 kutoka Shilingi 1,384.3 bilioni hadi 1,669.3 bilioni, wakati ambapo mtaji wa benki ulikua kwa asilimia 20.4 kutoka Shilingi 159,689 milioni hadi Shilingi 192,239 milioni.

Taarifa hiyo iliyowasilishwa kwenye mkutano mkuu wa mwaka wa NMB ni ya pili tangu benki hiyo iwe kampuni ya umma baada ya kuorodheshwa kwenye soka la hisa la Dar es Salaam.

IM The Bank!

Kenya’s I&M Bank has made two bold moves in recent days:

1. The second was the purchase of a stake in a Tanznian Bank, after their venture last year into Mauritius. It will probably be similar to the bank buy by NIC in Tanzania that they (NIC) revealed to their shareholders. But expert analyst @coldtusker points out that it has taken six years for I&M’s foray to bear fruit in Tanzania.

Also, Ratio Magazine just published a timely Tanzania Country Brief which has this comment on the banking sector;

…Tanzania is already home to 25 banks – none of which have managed to bring down the country’s high interest rates (many banks charge up to 25%). There is much opportunity to court new customers, as only 10% of Tanzania’s 40 million people have access to formal banking services. But scarce human resources that have plagued other foreign entrants will also be a challenge…


From ABN Digital: On 27/01/10 CNBC Africa's Alishia Seckam spoke to Suprio Sengupta from I & M Bank

2. The first was the was the partnership with partnership with VISA that may place I&M at the forefront of the e-commerce banking in Kenya, which though it still has a small debit and credit card base, these consumers now have the access and a platform to make online payments as well as for local merchants to sell their goods, and receive payments, online.

Serena Copes with Kenya Tourism Dip

TPSEA (Serena) the only listed Kenya tourism chain had sales of Kshs. 3.2 billion ($40 million) and profit of 223 million (~$3 million) for the year ended September 2008 both down 12% and 54% respectively from 3.7 billion and 416 million in 2007.

2008 was listed as one of the worst years for Kenya tourism with some smaller hotels going under receivership, laying off staff and shutting for prolonged periods

Saved by Tanzania?: Serena was a beneficiary of diversification as the group integrated its east Africa operations in 2006. For comparison, in 2007 Kenya accounted for 2/3 of sales and profit, but in 2008, Kenya provided 59% of revenue and just 25% of profit, while Tanzania had 41% of sales (1.34 billion) and 75% of profit (167m)

Unfortunately there’s no breakdown of income of properties they manage in Mozambique, Rwanda or Uganda. Serena owns or manages 8 properties in Kenya, 6 in Tanzania, 2 in Rwanda (Kigali serena, lake kivu serena), 1 each in Uganda (kampala serena), zanibar (serena inn) and mozambique (polana serena)

Invest in tough times: At a time when some banks have sworn off new tourism projects, Serena is using the downtime in the sector to expand. Serena will invest 400 million in Jaja Limited a to develop properties in Nanyuki and Elementaita once it gets shareholder approval. Shareholders will also get the same 1.25 shilling dividend as for the year 2007

Mt. Kenya seen from Nanyuki

No beef: The Farmer’s Choice chain, a related company, supplied 26 million shillings worth of meats & sausages to Serena in 2008, down from 33 million in 2007

Centum seeks Carbacid

and other Bank Twits

Twitter is a micro-blogging tool that is relly nifty for doing mini-posts, forwards and other remarks that (are on any subject) and are maybe not worthy of a full blog post. Here’s a summary of my week on Twitter:

- @louizah Zain Vuka has ended? Please confirm
- @NTV showing IFC-funded docu on women entreprenurs - meaning manu-arsenal will be on tape delay - WHY? next @NTV ditched a static-filled channel & skipped their 'half time' piece to present second half live, on a much clearer signal! Kudos
- Sports journo era over? Player asks for trade on blog team obliges on Twitter player thanks fans on Facebook http://tinyurl.com/d967eu
- blog post Why Safaricom should spin off MPesa http://bit.ly/gYZ86
- The Central Bank of Kenya reports have become incomprehensible B.S
- Upgraded Safaricom Investor relations page has media and CEO briefings http://bit.ly/VBZ2f
- Tanzania will now recognize Kenya manufacturers mark of quality http://bit.ly/USZHg
- Delta Air round-trip intro fares from Nairobi include (ex-tax) $650-NY/DC, $975-ATL/Chi/ Dallas, $1124-LA/SF and $1440-Detroit
- @kahenya @jamesmurua likes Riviera, which has good crowd and facilities, but beer is pricey and the place is a fire-trap
- So Joe Biden met Nairobi mayor Majiwa in chicago. There, thats the end of the joke
- Safaricom CEO says M-Pesa not yet profitable http://bit.ly/TDV8D
- @leofaya says Kenyan promoters are killing Facebook http://bit.ly/zBHXB
- Today's pavement uprooting is sponsored by access kenya - as the fibre optic railway is laid around Nairobi
- @Archermishale sports conspiracy goes that where a sport wants to sway a big game, they put in a low-quality ref, but didn't happen on Wednesday
- Safaricom partners with Kenyas' largest bank KCB http://bit.ly/J4l92
- Kenya budget saga ($115 million) blamed on a typo - Quote ODB "N___ please!" http://tinyurl.com/p5hoyo
- blog post: two bank shareholder meetings same day same building same time http://bit.ly/86lNq
- @pinkm so you can only use debit, but not credit card to buy amazon books from KE? Interesting
- Ethiopian Air applies to fly from Nairobi to Amsterdam and Nairobi –Liege (Belgiu
- Land spin: Could there be a link between migingo island and the kampala land kenya got from Uganda military?
- If MTN buy Yu or Access Kenya, they will have to negotiate with MTN matatu society for use of name
- blog post Its Our Turn to Eat (is credit card worthy) http://bit.ly/YnriQ
- NMG 2008 report gives prominent mention of new digital division, Making-Nation DVD and Zuqka portal http://tinyurl.com/qkcphc
- Centum applies to the CMA to buy Kshs.350m of Carbacid shares and be largest shareholder of the Nairobi listed (but suspended) company
- Senator cards advise customers to only upload to https, not http sites. It's rare to find credit company giving card advice
- From Mars Group: Parliament's Report on the Kenya Budget inconsistencies http://blog.marsgroupkenya....

NIC Bank 2009 AGM

The 2009 annual general meeting (AGM) of NIC Bank took place on Wednesday April 29 at the Kenyatta International Conference Centre Nairobi. (more on the background and recent performance of NIC)

The Chairman JPM Ndegwa (Chairman) led the meeting which began after the Company Secretary making some housekeeping announcements – mentioning lunch would be served afterwards but members should not litter the building as they eat, asked shareholders to switch off their mobile phone (a few still rang during the meeting) and that the bank had a marketing desk where their products would be on display for shareholders to ask questions and could open share accounts

Chairman Performs: The Chairman introduced the board and the management and representatives of S&F Bank of Tanzania who were seated at the side of the dais. He spoke throughout the day in a mix of English and fluent Kiswahili. He began by commenting that the 2008 AGM held at Safari Park Hotel had been quite crowded hence the move to a larger venue (bank has almost 25,000 shareholders)
Most important was how he controlled the tempo of the meeting, by stating upfront that only relevant questions should be asked and only as related to what was being discussed or voted on at each time. The result was one of the most constructive Q&A segments I have seen, with no frivolous questions asked during the session and the meeting progressing quite rapidly

Financial accounts 2008: the bank ended the year with a profit of Kshs. 1.48 pre-tax billion (~$18.5 million) and significant growth in assets deposit and loans. After the audit partner (Mr. Ndonye from Deloitte & Touche) read out their opinion, there were no questions and the accounts were approved!

Dividend: a final dividend of Kshs 0.25 for a total for the year of Kshs 0.5 was approved by shareholders. The voter elicited a couple of the shareolder to as usual ask for a higher dividend to be paid than the board had recommended. Another shareholder asked that, since the dividend was meager, could they be paid a bonus share?he clearly had not read or listened to the agenda

Directors fees – while you can’t compare the level of disclosure to shareholders at Stanbic (Uganda), the Chairman stated that the total sum paid to non-executive directors was Kshs 5.2 million ($65,000) – in sitting allowance for board & committee meetings. This was actually lower than the 5.36 million paid the year before last yearn and the results were plain to see. Vote was approved

Auditor Re-elections: the directors recommended that Deloitte continue in the accounting roles and asked shareholders to approve that; one shareholder asked if Deloitte was the only firm considered and if so why the Central Bank (CBK is bank regulator) also had to approve the appointment of the auditors – was there a problem with Deloitte? The chairman answered that they used other audit firms, and that there were provisions that firms could not consult and audit at one company and they were quire satisfied with the work Deloitte has done. He added that Central Bank , in looking out for depositors interest, also vetted audit firms employed by banks to see that they were competent (an aside is that the recent ‘enhanced rules’ for stockbrokers don’t specify their quality of their auditors or indicate that the CMA will even vet them)

Director Re-Elections: Isabella Ocholla Wilson and George Maina were re-elected as directors; so was lawyer Michael Somen who required was an extra vote since he is over the age of 70 years He’s the Chairman of Access Kenya, but it seems NIC have a habit of de-emphasizing their directors board positions on other companies

Bonus share : The next motion, for NIC shareholder s to receive 1 new bonus share for each 9 they own produced the first unscripted moment of the day and the hot button issue was again - rogue stockbrokers - three different shareholders asked the same question - i.e. NIC was giving them a bonus share, which they would be forced to take to a stockbroker who may sell this shares without their knowledge, or collapse with their shares/funds. The Chairman replied NIC Bank now had their own stockbrokerage firm NIC capital Securities where their shares would be safe. The war by banks against stockbrokers is still being waged in public – and a few days ago it was Equity Bank shareholders who were being given the same message –that their shares were safer with the strong commercial banks that they know and own, rather than with some small stockbroker

Purchase of 51% of S&F Bank: NIC is purchasing 51% of Savings & Finance, a Tanzanian Bank for a total cost of Kshs. 580 million (~$7.25 million). Continuing part of expansion and diversification since their 2007 rights issue that has seen them open branches in Kenya, an now make a cross-border investment ; the vote brought out the most questions of the day;

Q. exchange rate change since deal was announced; why is some payment in Tanzania shillings and some in US$?
- mix of currencies is s how the Tanzanian owners requested it be paid. - the shillings is weaker and they are now paying about 2.1x book value compared to 1.9x earlier. Also some S&F shareholders live outside Tanzania
Q. The owners seem to be family/private individuals:
- True most companies start with individual shareholders only - and the institutional shareholder is the East African Development Bank. S&F was started in the 1990's and it origins were in hire purchase business are similar to NIC. The shareholders with 49% are also going to be re-investing the NIC money in the banking, not taking it out.
Q. why is the bank attractive? Is it a leading bank in Tanzania – where does it rank?
- Tanzania has 28 banks and S&F would be between no 15 and 20. NIC felt they would get best value by acquiring a small bank and driving its growth. NIC directors did their due diligence, have observed S&F operations, got transaction advice and confidential banking reports from Tanzanian regulators confirming the bank was a good buy . It has 3 branches in Aruaha, Dar es Salaam and Mwanza which are all key trading points. MD added that - NIC was not the only suitor interested in S&F.
Q. How will it be run?
- S&F will have 7 board members – 4 nominated by NIC (including the MD’s post) and 3 by S&F (including the Chairman’s post - Abdulsultan Jamal). NIC have opted to retain the current Tanzanian MD – Suranjan Ghosh, Mark Bomani (former Tanzania attorney general) and Andrew Ndegwa (Kenyan NIC director) and James Macharia (Kenyan NIC managing director) as their four nominees.
Q. Other Kenyan banks have focused on Rwanda Uganda and Sudan- why Tanzanian (which has not been receptive to other Kenyan companies
-Chairman replied that Kenyans were the biggest investor in Tanzania (excluding the mining sector). Also in terms of diversification, the election violence of 2008 affected Kenya, Uganda and Rwanda equally - since countries were on same trade route! However Tanzania was a completely different market. A large untapped country with great agricultural and resource potential. Many NIC customers do business there already.
Q. Deal wrap up?
- Approval has been got from Central Banks of Kenya and Tanzania. After NIC shareholders voted to approve the deals, it is now expected to be wrapped up on Monday next week and S&F will become a subsidiary with their accounts consolidated in NIC’s from next month.

Goodies: a souvenir wall clock

- Smart NIC had a boxed lunch served to shareholders (much easier to manage than any buffet and needs fewer catering staff). each box had cold roast chicken piece, beef sandwich, juice, water bottle, cup cake, and an apple.

NIC Soars

The NIC bank AGM will be held of April 29. The company has 24,000 shareholders up from 20,000, and while the top 10 shareholders remain unchanged, they are in for the long haul in the bank which is diversifying its business strategy as a re-branded NIC that aims to be a regional giant.



- NIC is now into banc assurance – through NIC insurance agents which partners with two leading insurance companies and had a modest profit in 2008
- NIC acquired 58% of Solid Stockbrokers and has now upped its stake to 88.3% through new capital and buying out other shareholders. The cost so far is about Kshs. 423 million and it made a 2008 profit of Kshs. 5.2 million. The brokerage and investment firms are capitalized at 349 million and 219 million well above the 30 million and 50 million minimums set by the capital markets authority (CMA). Also, legal claims brought by customers of Solid and which NIC inherited in the deal are pegged at Kshs 84 million.
- NIC also plans to complete a deal to acquire 51% of a Tanzanian Bank - Savings & Finance Commercial Bank by 30 April 2009 at a cost of Kshs. 322 million. S&F has in 2007 the equivalent of of Kshs 2.37 billion in assets,with deposits of Kshs 2 billion and loans of Kshs 1.3 billion and pre-tax profit of Kshs. 77 million.

Event Blogging from Tanzania

2008 was still a great year for the blog exxcept for my low travel schedule - travel is invigorating, and is the my life blood of writing and I really hope to do more out of town corporate excursions this new year.

Almost a year ago I was fortunate to get a gig at for AllAfrica (thanks Mental) to cover and write about a factory opening in Arusha.

I had read the authoritative conference blogging guide by Ethan Zuckerman and gratefully hit the road with an interesting group of media types, on a brief escape from the post-election machinations going on in Nairobi

Here’s the two part report of the factory opening (see also the official factory site)

Old Mutual, Credit Reference, Insular TZ

Old mutual loosens up: Old Mutual , the pioneer of unit trusts in Kenya has made some radical changes to it contractual savings plans to cope with a changing market place with many unit trust choices from a competitive fund and insurance industry. Changes include;
- Plans will no longer lapse if premium payments are stopped. E.g. when people get retrenched
- Savings (in a lapsed plan) will remain invested until maturity or can be paid out early
- If your saving plan was terminated without a payout, consider it reinstated!

Credit reference rules: Former finance minister Amos Kimunya was able to gazette the rules for operations of credit reference bureaus in Kenya before he left office. Provisions include;
- Bureaus will be licensed by the central bank
- Signup costs are 100,000 shillings ($1,500), a bank guarantee for 1 million and another fee of 100,000 per year
- Bureaus may share info only with a customers’ permission (which happens when you sign for a loan)
- They may only share information for business decision making (evaluate credit prospects)
- Bureaus must keep track of all information they share
- Customers are entitled to one free report a year, and within 30 days of a negative referral
- if a customer complains, and bureau not able to complete an investigation of disputed information within a month, information will be deleted as request by customer

Undugu at work: More Tanzanian IPO news with the upcoming sale of 21% of the Tanzanian Government shares of the National Microfinance Bank (NMB) to raise 63 billion shillings ($54 million) and later to be listed on the Dar es Salaam Stock Exchange. But the offer is open to to individual Tanzanians and companies that are whole owned by Tanzanians - unlike Stanbic (Ug) and Safaricom (Ke) (which Tanzanians were also barred from subscribing to)

Regional IPO Tales

Undugu gani huu?: One of my favorite entertainment sites is Bossip with its catchy headlines, like Making it Rain on These ****, Jesus Take The Wheel, and ** sit down, all of which apply in this case, but the best way to answer this story is BROTHER PLEASE! - while Uganda and Rwanda have joined thousands of Kenyans embracing the investment vehicle that is the Safaricom IPO, it appears the Bank of Tanzania is preventing Tanzanians from buying shares in Safaricom through the Dar es Salaam Stock Exchange. (hat tip RO)

Africa investment resource: africanshareholder.com is a great site to keep up with investment happenings in Africa.

Celtel IPO On: Sadly, not in Kenya, but in Zambia starting at the end of April – with 20% of the local subsidiary on offer.

Executive privilege: one reason that ministerial seats/portfolios are in great demand in Kenya is the power that comes with then such as the authority to insert one’s buddys' names on state corporation (parastatal) boards and these become law once they run in the weekly Kenya gazette. Sometimes one can even create new boards such as the new Brand Kenya Board which has been formed to market Kenya in the fields of tourism, investment, creditworthiness and international relations.