Blog Archive

Friday, August 31, 2007

So how much moi and his cronies steal?

We may never know the answer to the above question since there have been no serious attempts to find out the extent of corruption in & by the moi government.

The kibaki government has not made any serious efforts to find out the extent of the rot. John Githongo put it aptly when he gave the example of finding a skunk & keeping it!

Edward Clay was right. Many well-meaning Kenyans were upset at his words but they were either true or prophetic.

Here are a few links:

Guardian Newspaper
Mars Group

Thursday, August 30, 2007

What is "Variable Weighted Average Price"

The NSE provides a VWAP on their price list. Click here to go to their website to download a pricelist. The link is located on the left side.

I was informed (right or wrong) that the "V" stands for "Variable"...
I know what a Weighted Average Price is but if WAP is variable then what good is the WAP????

Does anyone know for sure HOW the NSE calculates the VWAP?

Will a Math major... or anyone else please help me out! I googled the term but came up with nothing that included the "variable"...

Or is this Kenyan style math where:
Politician( aka pig/GOK/GOK employee/FOK/moi) receives 100/- but the mwananchi/project receives 10/- but the politician (& his cohorts) crow how the project received the full allocation.

To recap how Kenyan math works 100=10.

Back to "V"WAP... erm, please explain to me what it means!

Wednesday, August 29, 2007

NSE is unfair to Francis Thuo customers!

My primary source of information is from the Business Daily. I will revise the blog entry as as I receive more information. My comments are in RED.

Cash payment to Francis Thuo investors explained Print E-mail
Written by Geoffery Irungu
Photo by: Frederick Onyango
The Nairobi Stock Exchange blamed logistical issues for decisions to compensate investors of the collapsed Francis Thuo brokerage firm in cash rather than the equivalent value in shares.

The Nairobi Stock Exchange yesterday blamed logistic difficulties for its decisions to compensate investors of the collapsed Francis Thuo and Partners Stockbrokers in cash rather than the equivalent value in shares.

Oh, please educate us... What were these "logistic difficulties"?

During a meeting with majority investors whose business was transacted through the collapsed firm, the NSE was put on the spot over how it picked on a day when the market was generally down as the value date for the compensation.

The meeting, which took place on Tuesday, saw the NSE admit that fraud was apparent in some cases where shares were sold by the firm without valid orders from investors.

If there was fraud why have no arrests or prosecutions taken place?
Why are the crooks being protected?
Who is shielding these crooks?

The criteria used to pay investors in cash at face value — with no interest or regard to the losses made during the seven months that the firm has been in business — had raised eyebrows soon after NSE announced August 17 as the value date.

The value date, if any, should be the date Francis Thuo & Partners shut down.

Mr Chris Mwebesa, the NSE Chief Executive, said the date was picked upon because that is the day when Renaissance Capital —which bought the Francis Thuo business for Sh251 million —paid their dues.

Well, since the NSE/CMA waited till it received KShs 251mn from the sale of the license then it reasons that the customers/creditors should receive a share of the EXCESS funds!!! Basically, the creditors "own" a company in bankruptcy. So the license (& monies from its disposal belong to the creditors!!!).

It was also the date the cheques were being written after the reconciliation of accounts relating to the investors through the insolvent broker.

He said 850 investors were involved and the payments were going on as scheduled from Monday and are set to be completed by this Friday.

Misunderstandings had arisen mainly because there were investors whose shares were sold by the collapsed firm without them having given sale orders.

There is no misunderstanding. I call it FRAUD. Simple as that! If I had shares held there simply because I need a CDS account does not mean I wanted to sell the shares. Replace the shares for shares!

The NSE boss said it would have been logistically difficult to start buying the shares again on behalf of the investors.

Nonsense! The NSE should give the customers/investors the option of receiving cash or shares. The NSE has a process of "buying-in" shares if not delivered by brokers. The NSE can buy these shares from the market & transfer them to the investors.

Mr Chandulal Shah, an investor at the NSE and also a consultant on investment matters, said that investors should have received shares instead of cash in cases where such shares had been ordered and paid for by the broker.

Damn straight! Mr. Shah is an experienced shareholder activist & is RIGHT!!!

Mr Shah said that those who had sold the shares of investors without their prior approval should be charged in court with fraud.

I see the hand of FT & Partners' friends in this matter!!!

Some members of the NSE are protecting one of their own including a silly suggestion that FT gets a "golden handshake" for committing fraud... WTF?

This may set a precedent where a thief caught in the act gets compensated for his "troubles" coz he was caught stealing! WTF (again)!

Although the money owed to investors was initially thought to be around Sh90 million it has since turned out that it is about Sh150 million. Mr Mwebesa said the bourse also has to compensate the investors for dividends and bonuses that had been dispatched to them through the stock broker.

Of course, investors should be compensated for bonuses & dividends!!! In fact, investors should demand interest on the cash & dividends!!!

The claims paid for included money that had been in the accounts of the investors, funds received from the sale of shares without authority and for shares sold but for which money had not been received by investors.

What about interest on the money? And at T-Bill rates!!!

Mr Mwebesa said those who had ordered for shares with the brokers but which had not been bought would receive the exact amount of cash they had given the broker.

What about interest on the money? And at T-Bill rates!!!

Controversy had arisen as to the criteria used to determine the August 17 as the date of reference when compensating investors as the stock market 20-share index had on that date lost nearly 70 points compared to the previous week, depicting a less attractive week to invest in the bourse.

Mr Mwebesa said the NSE had during the meeting asked investors to bear with them especially in view of the fact that the bourse had done everything possible to ensure that they did not lose any money.

Oh, please! What did the NSE do to protect the investors? The NSE was aware of the bounced cheques from FT & Co. The NSE knew that investors were not getting paid for shares sold!

The NSE abetted the fraud. As is the investors should have been compensated for the losses through fraud but neither the NSE nor CMA raised a finger to help them during the tough times! The NSE had the option to repay the claims of the investors through raising funds from their members but they did not!

He said that investors would ordinarily have been entitled to Sh50,000 maximum if the money had to be drawn from NSE’s Investor Compensation Fund. “The payments to investors are expected to maintain confidence in the stock market,” he said.

So the NSE is saying that to protect oneself against FRAUD, an investor should have no more than 50,000/- in a broker's account?
How can I have confidence in such a scenario?
I have a good mind to recommend ALL investors should hold certificates!!!

The SIPC in the USA insures investors for a minimum of $500,000 (KShs 33,000,000).

Finally... where is the CMA in all this????

Tuesday, August 28, 2007

Safaricom - 10% (not 5%) was stolen!

Mobitelea, a subsidiary of Thieves, Inc

The crescendo over the, mobitelea stolen indirect 5% ownership in Safaricom, is rising. What many commentators are missing is that it was 10% (not 5%) that was stolen from every Kenyan Man, Woman & Child.

mobitelea - often referred to as moi biwott telecoms of east africa - had stolen 10% but sold 5% in 2002 to its partners in bribery, vodafone, when moi's proxy was going to lose the elections.

The way I figure it out is that Vodafone bought 40% of Safaricom from GOK but had to cough up 10% to mobitelea as "grease" money. A pity but vivendi had to cut a deal with naushad merali (the ty"con") for the 2nd license.

Suggested remedy for the Public & Vodafone?

Well, vodafone should return the 5% to the GOK (to be sold as part of the IPO) for what they paid & a "fair" return. I can't blame them for buying what seemed a bargain. As part of coming clean, they should sell the 5% back to GOK at a discounted price to current market value.

The monies paid by Vodafone to mobitelea should be recovered from mobitelea by the GOK & vodafone.

Thhe 5% that originally "belonged" to mobitelea but then sold by mobitelea to Vodafone.

What of the 5% that still "belongs" to mobitelea?

daniel moi & biwott will support kibaki in the 2007 elections as long as this thievery is kept under wraps!

We need to go after these crooks & retrieve the stolen 5%. As well as any dividends made to them! The 5% are stolen goods!


Sunday, August 26, 2007

More small cars coming our way from India...

Wow... it is amazing how far India has progressed since 1980 vs most African countries... But as usual I shall concentrate on Kenya...

This is a slideshow about Indian car manufacturers & "small" cars...

India used to be thought of as an over-populated backward country but the changes there are amazing. The problems are still there but the economic progress is outstanding.

I pick India, not China, as a model Kenya should emulate (the GOOD not the bad) since Kenya, like India, has a (flawed) democracy. China is a totalitarian state Kenyans will & should not embrace.
Furthermore, India faces many issues/problems that mirror those of African countries including a burgeoning population, poverty, corruption & a monolithic bureaucracy.

So, what can we learn from India (the GOOD not the bad!)?
  • Privatisation - India is moving from a socialist mindset to a capitalist mindset. Some may argue that India has alway been a dyed-in-the-wool capitalist nation. Well so was most of pre-colonial Africa. The largest Indian firms are PRIVATE enterprises/groups including Reliance, Tata, Birla, Wipro, etc. Many state owned firms are being privatised as competition sets in. (Kenya is doing well on this aspect esp after Kibaki came to power. I hope the trend continues).
  • Technocratic appointments - Manmohan Singh (PM) was a technocrat who was appointed as Finance Minister in the 1980s. And then give them a free hand. The "Dream Team" of the 1990s was a good idea but derailed when they did not kiss moi's ass. (Sigh... Kenya could do much better in this respect. Political appointments rule the day not merit. Then add underworked but overpaid assistant ministers to this mix!).
  • De-tribalisation - India has more issues/problems than Kenya regarding "tribes", religions & castes. Nevertheless, there has been a slow but steady growth in those who don't care about these matters. And it starts from the top. Rajiv Gandhi married Sonia (an Italian). Indira Gandhi (a Hindu) married a Feroz (a Parsi). There are many other examples that are not widely known. The CEO of BioCon is Kiran Mazumdar-Shaw. Kiran is India's richest woman & married to a Scot. (Kenya is doing poor in this regard especially when the populace is intent on electing their "own" regardless of merit. The good news is that the urban youth are not swayed as much but the rural - ethnic - vote exceeds the urban vote. Raila's son, Castro, is married to a Kikuyu girl! But will this turn into votes for him?)
  • Women empowerment - Even though women are often treated as second-class citizens, India's current president is a woman. India's kingmaker is also a woman (Sonia Gandhi). Indira Gandhi was the PM for many years. Many of the states have Chief Ministers who are women. (Kenya has women politicians (karua, ojiambo, ndungu, etc) but except for Wangari Mathaai, I do not see these politicians agitating for the common woman. Campaigning for another 40 "special" seats does not count. What about the 17,000,000 other girls & women? And why do women who constitute 50% of the population need special treatment? If the women ganged up, they could elect a woman president as well as the majority in parliament!)
  • Domestic Market - Indian firms export BUT the domestic market is important. Indians support local firms. Even Coke had a tough time when many Indian favoured the local "Thums Up" over "Coca-Cola". (I am embarrassed when I see imported butter & eggs in Kenyan supermarkets!!! Yet we have KCC among other firms exporting dairy products to the Middle East. We import canned "Heinz" beans & "Ceres" juices whereas we have local firms producing the same /similar goods! Kenyans' obsession with imports is pathetic!
  • Spread e-government - India has spread government's reach to embrace substantial portions of the population through technology. The kids are becoming the teachers in many villages. The trend is fueled by examples/idols ranging from billionaires like Azim Premji of Wipro among others. India's huge BPO industry is pushing technology into the villages. (Kenya has been talking the talk but not walking the walk regarding technology. We need to employ savvier professionals who can spearhead e-government. Credit to Kimunya among others who are driving the computerisation process. But we need to do more, sooner.)
  • India has embarked on connecting the corners of the country with expressways. The idea is to boost trade as well as encourage exports & efficiencies. The rail network has great coverage all over India. (Kenya does not have a decent highway across the country. The Nairobi-Mombasa highway is a veritable mess. Nairobi-Kisumu is even worse. Imagine the possibilities if we had a decent North-South highway from Namanga to Lokichoggio AND a 4-lane decent highway from Mombasa-Kisumu. Our cross-border trade with S. Sudan & Uganda would show strong gains as would Kenyan domestic tourism).

Friday, August 24, 2007

Housewife make Millions... trading stocks & forex!

I need stock tips from this Japanese housewife!

I think it makes sense for some investment bank or mutual fund to hire her as an analyst or trader... even if just for the publicity!

Japanese housewife makes MILLIONS...

I have a feeling that there are soma "Mamas" in Kenya who have made millions but you would never guess just looking at them!

That's why I cringe when some silly bureaucrat tries to impose rules/regulations ostensibly to protect someone against market risk!!!

Wednesday, August 22, 2007

Cheetahs vs Hippos

The Government of Kenya (or some idiots within it) were "insulted" when an article in The Economist referred to "new" Africans as Cheetahs vs the "old, corrupt, status-quo' Africans as Hippos.

So the IDIOTS canceled an important meeting/conference the Economist was going to hold in Nairobi in view of the Economist's article. It turns out it was an AFRICAN (George Ayittey) made a great speech on why he believes in Africa & referred to Cheetahs & Hippos!

He also argues that Capitalism was integral to ancient African communities. The marketplaces e.g. Timbuktu was a marketplace. What the "Hippos" introduced as "Socialism" (including African Socialism as attempted in Kenya or Tanzania) was a form of "Swiss-bank Socialism" for the Hippos.

Anyway, here is his definition paraphrased.

The Cheetah Generation - made up of the youth, specifically the TED Fellows present here, the saviors of Africa who are not going to wait for government and aid organizations to do things for them.
The Hippo Generation - the current political and business leaders who are happy to wallow in their water holes, complaining about colonialism and poverty, but doing nothing about it.

Here are some sources of information on George Ayittey's speech.

White African
Where are the Hippos?

Saturday, August 18, 2007

Her... She... is... Mine...

The New... Curve

Feeling my way around Her
No wonder She is the Curve.

Pressing Her buttons
will engage Her functions.

Brains & Beauty never come cheap
High maintenance is Her keep.

Her interest in my tongue
Has all forgiven & forgotten.

She sounds so sweet
being new & pristine.

She is the She for me.

The Ex
Felt sad to let her go. The sadness lasted but a moment.

Tuesday, August 14, 2007

Why JKIA needs a 2nd runway...

Sigh... I feel sorry for KQ among other airlines that suffer do to the stupidity reigning at JKIA...

Apparently, the JKIA management (what qualifications does muhohohoho have to be running the KAA???) believes one runway is enough... whereas for safety & efficiency there need to be be at least 2 runways!!!

Another plane burst its tires on the runway... I would like to know the cause (debris on the runway?)... and the airport was shut down. Again!!!

The other day the airport was closed down for 2 days since there were no landing lights!!!

A 2nd runway would allow flights to land & leave even if one runway is damaged or closed for maintenance or due to a crash/accident.
JKIA was built to handle 2mn passengers but handles over 4.4mn passengers. With the rapid growth of KQ & increased local airlines/flights as well as additional international airlines flying into nairobi, there is a need for increased capacity for the aircraft.

How to buy shares offered under a Rights Issue

I will use the example of Olympia Holdings Co. Ltd (OCHL). I do not have their timetable but I will clean/correct the dates/details when I can get my hands on one.

OCHL announced their intention to do a "Rights Issue" which means existing shareholders have the "Right" to buy more "newly issued" shares in the firm. The proceeds go to the firm for expansion, debt payoff, etc.

The increase in capital was passed at the AGM held in June 2007, thereafter an announcement was made to the number of shares to be offered in the Rights Issue on 26 June 2007. This was 3:1 meaning you could but 3 "new" shares for each 1 share owned.

OCHL made an application to the CMA. After CMA's approval, OCHL announced a price for the "new" shares i.e. 14/- on 10 August 2007. The shares will trade Cum Rights through 17 August 2007 after which they go Ex-Rights.

For some reason unknown to me, the shares are not reflected as Cum Rights on the price list dated 13 or 14 August 2007.

Anyone who buys the OCHL shares on or before 17 August 2007 is entitled to the Rights for "free". What this means is that each share has the "Right" to buy 3 more shares at 14/- each. The shareholders as of 17 August 2007 will receive a Memorandum of Information (MoI) that includes forms to apply/assign/transfer/sell these Rights.

The Rights will then trade separately from the underlying shares. (I do not have the timetable but I think the last day to apply for the shares is 3 September 2007). Anyone can buy the Rights at a "premium" then exercise them at 14/- in exchange for "new" shares. To buy Rights, an investor needs to contact their broker & ask them to buy Rights from the market.


Sunday, August 12, 2007

Olympia Capital Holdings announces Rights price...

OCHL has announced the Rights price at 14/- per share. I was expecting 10/- but the 14/- is a 30% discount to the current market price of 20/-.

The shares should trade Cum Rights for a few days until they trade Ex-rights but that need to be decided by the CMA, NSE & OCHL.

OCHL would raise a (gross) KShs 420mn if all the shares are taken up. The current "excess liquidity" on the NSE may bode well for them since the KenRe IPO was over-subscribed & the refunds should start flowing in soon.

Nakumatt eyes Ugandan chain?

Considering Nakumatt's expansion plans across E&C Africa as well as its intention of going public in 2009... this seems an ideal opportunity to expand & gain instant market share in Uganda .

Uchumi has one branch in Kampala but can ill-afford to expand further... After what seems to be another failed attempt to raise additional funds from existing shareholders, it may have to shut down OR find a strategic investor to turn it around.

And just 10 years ago, Uchumi Supermarkets was one of Kenya's most profitable firms, under the then MD - Suresh Shah, paying hefty dividends... but it went downhill fast after chris kirubi & company took over...

That opened the door for the rapid expansion of Nakumatt since many suppliers quit supplying Uchumi. Even though Uchumi has a branch in Kampala, the continuing inancial problems at home will affect them in Uganda... whereas Nakumatt is raring to expand in East Africa.

For the Obama fans... the Obama Girl...

I have to say... what a way to get folks to tune into Obama...
And now to Kenya, I wonder if we will see the Tinga Girls? The Kalonzo Honeys? And what will Julia Ojiambo think of?

Tuesday, August 07, 2007

Are all Telekoms or Telkoms the same the world over?

Telekom of Germany... and the model who wants to quit...

So Telkom (Kenya) & Telkom (S.Africa) are in good company regarding the (non)provision of services!

Friday, August 03, 2007

Business Process Outsourcing...

So Kenya wants to be a prime candidate for the BPO industry... Well, a lot needs to be done and only a concerted effort by the private sector aided by the public sector will do...

Other Bangalore Wannabes (from Business Week)

Mauritius has a leg up on Kenya with better communications, bilingual population, tie with Indian firms (Infosys has already set up in the country) & enlightened leadership.

Other Anglophone countries that are in the market for additional business are Sri Lanka & Pakistan. In addition, the proximity to India (#1 BPO centre) makes the transition easier. The Philippines is another country with a substantial BPO sector. All the countries above also have a decent base to recruit IT graduates.

Senegal restructured its telecom network to tap into the Francophone BPO sector.