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- KPLC - Concerns...
- Official Safaricom Prospectus is out...
- Mugabe plans a 'Kenya' on Zimbabweans...
- Lean vs Clean
- Kenyan Politicians...
- Business Daily Online goofs...
- Grand Coalition showing major cracks...
- Is Reliable Stockbrokers reliable?
- Safaricom Prospectus Available here...
- Do you trust alfie 'goebbels' mutua?
- Corruption Unlimited...
- Has Kenya's Capital Market shaken off the post-ele...
- Is the NSE a good buy?
- Safaricom sucking the blood of the NSE...???
- Kenya - Corruption or Incompetence?
- When business trumps politics...
- Political bickering starts...
- Africa is hot...
- Nyaga Stockbrokers bites the dust...
- Raila - please show the way...
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Monday, March 31, 2008
KPLC & its sharehodlers suffered immensely when samuel gichuru was MD coz he spent more time negotiating kickbacks, marrying (or not) 3 wives & making political hay instead of running KPLC.
Manitoba brought professionalism, reduced corruption, improved infrastructure & increased profits. We can now pay KPLC bills at ATMs, Posta Pay (Post Office), by post & banks (Co-op Bank). The customer service is far better & connections are increasing annually.
My fear is that 'political' appointments will be the powers-that be at KPLC and it will be downhill all over again. We saw this happening during dan 'the thief' moi's era. Some of the currently active politicians were 'suppliers' to KPLC. They want back in.
Some will argue that we do not need expats, my argument is that the transition should be 'natural' i.e. someone trains under the expats. The expats' mandate should include succession. Firms like KPLC that have significant government control tend to play to the politicians' & not the shareholders' or customers' tune.
Paying Manitoba KShs 80-100 million over 2 years is a far better deal than the BILLIONS that KPLC will lose going forward.
The need for efficiency, quick decisions & technical knowledge is needed more than ever since Kenya faces an electricity shortfall. Kenya needs to negotiate complex new power agreements immediately & start building interconnections with various countries including Ethiopia.
Corrupt or inept managers will not do. Period.
BTW, MJ - who I thought was S.African - is a US citizen...
Since most banks will provide shares financing, I expect a substantial over-subscription. Most banks will accept the (expected) refunds & alloted shares as security. Many banks want the interest pre-paid for 45-60 days when you take the loan.
Sampling of banks offering loans:
- Equity - one of the receiving banks has a sweet deal. They lend money that gets back to them immediately with the application. They can re-lend the funds...
- CFC Bank - 75% LTV.
- I&M - 75% LTV (max loan is KShs 5mn). They are flexible & great to work with but they do not want 'smaller' loans since they don't have the capacity to handle too many clients.
There are many more out there... I haven't checked... The banks are limiting the total loans they give for Safaricom to manage risk & liquidity, so apply early... or you will not be able to borrow...
The 'claw-back' from the foreign pool is unlikely since it would require a 200% over-subscription from the domestic pool. This means an extra KShs 65bn has to be applied for before the clawback clause kicks in. Unlikely. Furthrmore, the clawback is proportional meaning its only to the extent the 200% level is maintained.
Sunday, March 30, 2008
Story by RASNA WARAH
Publication Date: 3/31/2008
Thursday, March 27, 2008
Wednesday, March 26, 2008
Apparently PNU wants the inconsequential ministries given to ODM. In addition, PNU wants 44 ministries to accommodate its allies including KANU & ODM-K. Even I have to agree with Anyang Nyongo about the "Ministry of Nairobi Metropolitan Development and Implementation of Vision 2030"... Even the Harry Potter books can't come up with such names... yes, truth is stranger than fiction!!!
kibz also has to deal with the deputy premier post... does he favour karua over KANU's uhuru kenyatta?
KANU delivered the 2nd highest number of seats to PNU - more than ODM-K.
In the meantime the Nairobi City Council is facing a strike... in addition to the problems with public transport. Perhaps the potential Minister for Nairobi Metropolitan Development and Implementation of Vision 2030 could help? BTW, all this could be under a pretext to rid John Gakuo...
Crime soars... and is affecting the lifeline of Kenya. The irony is that the Coast Provincial Criminal Investigation Officer, Mr Benard Mate, calls the crimes "normal cases of thuggery"... is he serious? Since when was thuggery normal?
I do support ODM's position on revealing who is behind mobitelea but some comments by ODMers make no sense. There is definitely crooked dealing with the reluctance shown by PNU in dealing with Safaricom's silent owners. My feelings are well documented on this subject.
Tuesday, March 25, 2008
Monday, March 24, 2008
denying the truth to protect his paycheck... So do you trust The Standard or alfie?
My money is on The Standard...
Confusion reigns in the city as the idiots at City Hall & Ministry of Local Government implemented traffic plans without thinking them through. BTW, the traffic police are at odds with City Hall... Idiots I say...
So much for anti-corruption in the new gov't... I am not the only one who knows (ordinary) Kenyans are going to be raped...
Saturday, March 22, 2008
Of course, with the all-powerful presidency no wonder jomo "the land grabber" kenyatta & dan "the idiot" moi were able to f**k Kenyans... for all those years...
Growing up, jomo kenyatta was portrayed as a 'demi-god' and it turned out he was nothing than a thieving, lying false god. Luminaries such as Pio Gama Pinto, Tom Mboya & JM Kariuki were killed... possibly under orders from state house... Then the constitutional amendments that entrenched corruption in Kenya. Sidelined were leaders like oginga odinga & Joseph Murumbi.
Wednesday, March 19, 2008
P.S. I do not smoke. I think it is a nasty habit. But as an investment... sigh... I struggle... should buy shares I or not?
Co-op Bank plans an IPO in 3Q 2008... yes, the bank that went through a rough patch after the US Embassy bombings in Nairobi is now immensely profitable as agricultural fortunes improve for farmers. My gut feeling is that Co-op Bank needs to clean up their books before the IPO. There are many co-ops & saccos who are in poor shape. The government guarantees & write-offs promised to coffee farmers, etc has definitely bolstered Co-op Bank's balance sheet quality.
They want to raise KShs 5bn to bolster the balance sheet. I like the focus of growth of branches & ATMs. Co-op banks expects PBT to hit KShs 3.5bn during 2008. Not bad!
KCB plans a Rights Issue to raise KShs 5bn in 2Q 2008. It will probably be after the SafCon OFS is completed. No-one wants to go head to head with SafCon... Expansion into E.Africa is on the books.
Olympia Capital is back in the news after a lengthy period of silence after raising KShs 420mn (gross) during its Rights Issue in 3Q 2007. OCC (its 51% subsidiary based in Botswana) is back in the acquisitions game. The SA acquisition of a complementary player in the building sector is expected to close in 2-3 weeks. OCC's largest division is Plush of SA.
OCHL's results are expected by 31 may 2008. The recent fall in price to 11.50 makes it rather attractive considering the Rights were at 14/- just 6 months ago.
Chase Bank owns a broker. Smart purchase back in the day. Suddenly, the bank itself is in play! BTW, Gachui of TransCentury owns shares in the bank. Well... that means, TC could wind up owning a bank & a broker...
BIDCO wants more farmers to grow sunflowers for their Oil plant in Eldoret. I hope Kenyan farmers take up the challenge to reduce dependence on imported cooking oils. There is also demand for cotton seeds for their oil. I think BIDCO will be the next huge firm to go public by 2010.
Essar is making big bets in Kenya. One of them is through Econet & there is the refinery. They are not easy pickings with the Kenyan government hamstringing Econet & the refinery deal. Good luck to them. I do hope Econet can lower the costs of calling in Kenya.
Sasini's coffee shops seem to doing well. Sasini raised 600mn last year to fund expansion. Well,,, good luck to them! I am not a huge fan of Merali firms since they generally perform poorly but Sasini may buck the trend with high coffee prices.
Well... the above is certainly a break from the gloomy stuff of the past few weeks...
Since the OFS has been hyped for so long, there is a huge local - and foreign - pent-up demand for the shares. The 'unchallenging' price of 5/- will push the OFS to all reaches of Kenya.
As discussed earlier, 10,000/- is affordable for many Kenyan households.
I have been asked what other shares look 'good' since prices have dropped as retail investors sell off other shares to apply for SafCon.
Olympia - Yesterday, it dropped 9.5% to 11.55 which makes no sense. OCHL's main business units are in the S.African region. The year end was 29 Feb 2008 and the results should be released by 31 May 2008. OCHL had a successful Rights Issue in 2H of last year.
Kenya Airways - It has been flirting with the low-50s. It is challenging to be an airline but KQ remains dominant in profitable E & C Africa. As incomes rise so do passengers. I hope the Kenya Airport Authority will expand the airport to cope with KQ's forecasts of 4mn passengers by 2010.
Equity - It just keeps on growing. I think it needs to drop further. Definitely worth buying at the rate of growth!
Barclays - They have expanded rapidly in 2007 and I expect further growth in 2008 with the new branches & aggressive expansion into alternative methods of sale/promotions.
Kenol - Aggressive growth in E & C Africa. Buying Kobil with mostly Kenya assets will be a drag. The gains from lower corporate costs as well single brand identity will benefit Kenol.
KCB - Get ready for the Rights. Regional growth is being ramped up in Uganda, S. Sudan & Tanzania.
Monday, March 17, 2008
Well... as Safaricom's OFS comes closer, other shares are being sold to fund the purchase of SafCon... BTW, Bankelele reckons its better to buy SafCon after the shares start trading...
Let's look at the numbers... 10bn shares @ 5/-. Please note that 3.5bn shares will be sold to 'foreigners' thus reducing the shares available to Kenyans to 6.5bn. I assume the 3.5bn will be picked up by the various foriegn funds & overseas Kenyans.
Ugandans & Tanzanians are considered locals thus we will have over 1mn CDS accounts. The minimum application is 10,000/- (2,000 shares @ 5/-).
6.5bn x 5 = KShs 32.5bn
So all we need are 3.25mn applications for 2,000 shares & the OFS is over-subscribed.
- There are at least 800,000 CDS accounts = minimum applications for KShs 8bn.
- Another 200,000 accounts are expected to be opened by E.Africans = minimum applications for KShs 2bn.
- At least 100 unit trusts, pension funds & other QIIs in Kenya that can buy at least 10,000,000 shares each = minimum KShs 5bn
- SafCon dealers & employees will get preferential - higher - allocations. I expect a full subscription. an estimated 5% = 500mn shares = KShs 5bn
- There must be at least 10,000 Kenyans who can apply for KShs 1mn. Many of these in Nairobi. Add an additional KShs 10bn.
- There must be 100,000 Kenyans who can apply for Kshs 100,000. Pick your towns like Eldoret, Nakuru, etc. Add an additional KShs 10bn
- There must be at least 10,000 diasporans (USA, UK, Dubai, S.Africa) who can apply for 100,000/- thus an additional KShs 1bn.
I am already at KShs 51bn. So... of course, there will be an oversubscription....
It makes sense to temper the purchase/application for SafCon and buy other shares falling in price...
When the refunds come in... there will be a scramble for the other shares. Many investors will repay the loans BUT others will keep the loans. I expect banks e.g. Equity will see an upsurge in their loan books.
So be prepared... not necessarily for SafCon...
Friday, March 14, 2008
Massive land grabbing by those politically connected to jomo "the land grabber" kenyatta was the order of the day. The kenyatta family still 'owns' 1000s of hectares of stolen land at the Coast & Central provinces while needy families have nothing.
During kenyatta's reign, paul ngei - kenyatta's friend & lousy businessman - was 'forgiven' - by amending Kenya's constitution - for stealing/diverting goverment supplies for ngei's own use.
The theft & corruption during dan "the idiot" moi's days as president is mind-boggling but he is still a free man dispensing unwanted advice. Goldenberg remains a scandal that cost Kenya 10 years of development.
We have all read about anglo-fleecing during mwai kibaki's first 5 years. amos wako who was the legal brain behind the approval of these deals is still AG. I am troubled by the following stories barely into kibz' second 5 years. Is there no resolve to stop the vice?
Untaxed & illegal sugar imports provide unfair competition to local sugar producers who pay heavy taxes - income taxes, VAT & sugar levies. Definitely corruption.
The delayed sale of the refinery seems to be due to some lopsided deal/promise the Kenya government made with the Libyans. This delay will hurt Kenya's economy as Uganda & Sudan will ship their oil elsewhere for refining. Incompetence? Or did the Libyans grease the wheels?
Kenyans will die while the top dogs make merry. Corruption means deadly chemicals are dumped in Kenya because corrupt heads at the KPA - & KRA - are not paying attention. Or were bribed.
I don't get these idiots at the CMA. Was someone paid off or is it just sheer incompetence? We have 2 brokers down & in each case the situation was allowed to degenerate to horrendous levels. A point to remember is that edward ntalami was in charge of the CMA when the crap started hitting the fan. ntalami was also behind a collapsed broker - Sterling Securities. Hmmm?
Just as oil prices hit a new high & our forests are being decimated, government agencies are bickering over a new LPG terminal that is badly needed. The stink of entrenched interests & corruption is definitely here. Or is it mere incompetence?
The political clashes are not over. Mt Elgon remains volatile. What are the 1000's of police doing?
Tuesday, March 11, 2008
Here is the link to the Forbes List for 2008.
The list is an - somewhat skewed - indictation of what economic reforms can do for a country. Africa has a few billionaires - Dangote of Nigeria & some S.Africans - but the combined wealth of the top 4 Indian billionaires is far greater than most African countries' GDP.
Lakshmi Mittal - 57 - $45bn
Mukesh Ambani - 50 - $43bn
Anil Ambani - 48 - $42bn
KP Singh - 76 - $30bn
Combined wealth = $160bn
Unlike many Kenyans - and Africans - who continue harping about 'colonialism'... India has moved on... look at the list below and you will notice that many of them were born post-1947 (51 years or younger)... I would say the cut-off age should be 56 years since kids start nursery at around 5 years thus anyone born after 1942 in India was a post-independence child.
Using the same metric as above, Kenya is far behind the curve. Well, at least officially. There may be one or two. Any suggestions on who? Can the wealth be verified?
With the weakening US$ & 8% economic growth in India, I would not be surprised to see the Indian fortunes in US$ rise even higher by end of 2008.
I have said that Kenya (and Africa) needs to look at India for development ideas. It remains a model for African countries.
- Democracy - albeit often flawed
- Diverse population, cultures & languages
- Wide economic base that was very low 20 years ago
- Agragian based economy until 5 years ago. Agriculture still remains the core mainstay for most Indians
- A former British colony - I don't think this is a handicap. I am just saying that Africans should quit moaning
- Huge educated diasporan in the Western world
- Huge entrepreneurial diasporan in the Western world
- Navigated tough shoals regarding sectarian violence e.g. Khalistan ('seccession' war), Hindu-Muslim riots, Wars with Pakistan, War with China, Caste (Tribal-style divisions) discriminations, etc
I had some problems with including the table here but please check this link out for the Forbes list.
Monday, March 10, 2008
Does anyone have Guy Fawkes' phone number?
The good news is that Kenyans are unlikely to return to a despotic presidency. The bad news is that the struggle continues to rid Kenya of one...
Kenya has goodwill... let's not lose it...
I say we should outsource Kenya's governance to Lee Kuan Yew... or there is always Obama - if he does not win the USA election - or ask Kenya's business leaders to form a junta. Pay for performance.
There has been a huge increase in positive investor sentiment as evidenced by the various investor conferences all over the world focused on Africa.
When a luminary like Mark Mobius attends one of these... erm, something is cooking...
So I managed to take a snap with MM... I will have to upload it one of these days... then there is Warren Buffet... yep, I will get him to pose with me as well... and perhaps get a stock tip or two?
Africans have a nasty habit of playing down what 'foreigners' can bring to the table. Yes, Africans are the masters of their own destinies BUT take all the help you can get!!! Why do we want to re-invent the wheel?
The potential is huge. We know the problems exist but an open society with less deference to ignorant elders or leaders is a step to overcoming obstacles. Father does not always know best.
I will blog on a firm that has an excellent product that every investor in Africa should use... more later...
RenCap is really piling on the big boys... Terry Davidson, Maina Mwangi, Amish Gupta & now Mutahi Kagwe.
Mauritius is off the starting blocks... will Kenya catch up? Mauritius has got a flat tax rate. Yes, easy to implement. Laffer had it right!!!
Mauritius is small. Yes, small but it attracts more FDI than Kenya does. Why? Smart policies. Kenyan politicians - most of whom care only about themselves & their wives, kids & misstresses - are dithering while other African countries are adopting progressive policies.
Of course, there is the typical government (corrupt or inept or both) bureaucrats... look at the roadblocks in the deal that would have Essar take over the inefficient Kenya Oil Refinery.
Why do African presidents think they are important? I can't believe a terminal is to be reserved for the so-called VVIPs... VVIPs my a**e.
BTW, I plan to visit Rwanda... any tips?
Anyway... Africa is hot... get in before the ship leaves...
Wednesday, March 05, 2008
I am not sure what the NSE hoped to achieve by pumping a mere KShs 100mn of investors' money into Nyaga but...
I expect the license to be auctioned but the amount will not be enough to cover Nyaga's losses - estimated at 800mn - and this will be interesting...
Solid Securities has sold 55% (or more) to NIC Bank...
Discount is hunting for a partner...
Tuesday, March 04, 2008
Shouldn't Raila move to a (nice) house in Kibera that would attract infrastructure, reliable electricity supply, security, etc to an area that needs it?
I think Raila should share the trappings of power & move into the Kibera area. I expect the presence of GSU will deter some criminals around Raila's house. The people power will protect Raila as well.
Sigh... Raila, please do the right thing.
On a positive note, Kisumu is likely to get a boost if the power-sharing agreement runs its course...