VWAP (on the NSE pricelist) - Please help me!

I had posted this earlier... I have not received a satisfactory answer, yet.

Please help!

VWAP (Click on the link)

Olympia Capital Holdings Rights Offer - Queries Part 1

Since I posted the earlier blog entry, I have been approached by various readers to explain more about OCHL & its Rights Offer. Due to time constraints, I will address 1-2 issues/topics/questions at a time. Leave the questions in the comments section rather than e-mailing them to me so others may answer/comment on your queries.

The information below is derived from the Information Memorandum. Please download the IM & read it for additional details/information. This is a document the CMA requires firms to produce & should be read by any investor who wants to participate in OCHL's Rights Offer. My comments are in RED.

PURPOSE OF THE RIGHTS ISSUE

The purpose of the Rights Issue is to raise long term funds totaling to an amount of Kshs. 420,000,000 for the following:-

1.To increase OCHL shareholding in OCCL, an associate company listed on the Botswana Stock Exchange.
OCHL used to own 53% of OCCL(Botswana) until April 2007 when OCHL did not participate in OCCL(B)'s Rights Offer. This reduced the ownership to 26%. The reason for the non-participation was the unavailability of funds to buy OCC(B) Rights. OCHL wants to buy 27% of OCCL(B) to equal a shareholding of 50%+ of OCC(B) in order to consolidate the financials.

ii. To fund potential business acquisitions in Kenya. OCHL is already in preliminary discussions with two Kenyan manufacturing companies. This is a strategic move that is going to bring a strong presence of the company in the local manufacturing market to compliment that of local subsidiary.
It should be complement (not compliment) but that aside, OCHL is looking at expanding its footprint in Kenya but acquiring firms in the building industry. Most Kenyan firms in this sector are importers not manufacturers.

OCHL will also undertake marketing of 'Window Accessories" (products of Plush-Yokota) in Kenya through Dunlop Industries Limited.

iii. To fund acquisitions and mergers in South Africa, where the current value chain in the retail housing sector is not complete and the company is forced to partner with others in order to market and sell its products. Therefore to reduce the cost of business and increase trading margins, the company is looking to acquire/merge with companies that can complement the current businesses in both Botswana and South Africa.
OCHL's management has consistently declared their preference for the S.African market which is much larger than Kenya's market. S.Africa & Botswana are part of SADDC that allows for preferential treatment of goods & services within SADDC.

OCC(B)'s involvement is through a PVC tile manufacturing plant (Kalahari Floor Tiles) & window accessories manufacturing & sales (Plush-Yokota). These firms also have "side" businesses including chemicals, uPVC windows & shower doors.

Expansion is likely to be in similar industries i.e home improvement & building materials.

Olympia Capital Holdings - Rights Offer

Olympia Capital Holdings Ltd launched their Rights Offer on 3 September 2007. The following link is courtesy of www.mystocks.co.ke

First a plug for MyStocks (no, they do not pay me...)

www.mystocks.co.ke

They have the BEST site out there if you are looking for information & tools on Kenyan stocks. I have used stockskenya, hisanet, etc but mystocks has information & tools I have not found elsewhere.

Mystocks has a relationship with mediacorp who supplied free access to the live stream. I think the "free" days are coming to an end soon. Apparently, the NSE charges the data vendors $2,500/month & it will rise to $5,000/month from 1 Jan 2008.

Anyway, try out the graphing tools which also account for splits & bonuses.

Olympia Capital Holdings Ltd website

Olympia Capital Holdings Limited Memorandum of Information for the Rights Offer in 2007

Basic Info on OCHL:

• Rights Offer of 30mn shares at 14/- each = KShs 420mn
• Owns 26% of Olympia Capital (Botswana)
• OCC(B) owns 76% of Plush-Yokota (S.Africa)
• Year-end is 28 Feb 2008

The current P/E is 13 (Based on 2006 EPS, 10mn shares, 4 Sep 2007 pricelist)

Actually their website and memorandum has far more details than what I can reproduce here.

Why are we afraid of Egypt?

Egypt has denied us (E.Africans) the use of water from Lake Victoria for decades.
Egypt builds a huge dam (which allows for loss of water by evaporation) but denies dams around rivers feeding Lake Victoria.
Egypt - mainly a desert country - has a jungle infantry battalion.
Egypt has "cheap" electricity & water by denying us the right to build hydroelectric dams & power plants. Uganda is allowed a dam because the water feeds the Nile.
Using COMESA, Egypt imports then re-exports sugar to Kenya at preferential tariffs.
Using COMESA, Egypt uses subsidies to export to E.African countries.

Screw the Egyptians. Let us do what is best for us.

What's the worst?

• They stop buying Kenyan tea. There are other markets besides Egypt. As is, Kenyan tea is used for blending by India & Sri Lanka thus the Egyptians will still buy it!
• Stop KQ flying to Cairo. Well, more Kenyans visit Egypt as tourists than the other way round.
  
• They invade Kenya. Let them try! I have faith that Kenyans, Tanzanians & Ugandans will kick their arses back to the Red Sea.

Comesa warns Egypt on subsidies

---

By Brian Adero

The Common Market for Eastern and Southern Africa (Comesa) secretariat has threatened legal action against Egypt over claims that it was unfairly subsidising its industries.

Secretary General, Mr Erastus Mwencha, says if accusations made by Kenyan industries are true, his office would take stern measures.

"We will act on the evidence brought," he said. "The issue of Egypt and the subsidy in today’s global talk are the core issues which need to be talked about. Comesa will take action against any member state found to be going against laid down rules. Under the World Trade Organisation, Kenya is at liberty to institute legal action in the event that there is proper evidence on the subsidies," he said.

He was responding to allegations by a director of Synresins Limited, Mr David Hutchison that Egypt was giving subsidies to a tune of $6 million a year to the energy sector to keep down costs of doing business.

Hutchison called upon the Comesa secretariat to put a tax on goods originating from Egypt.

"This issue of Egypt must be tackled by the Kenyan Government. The effect is gradually being felt by all industries in Kenya," he said.

"We have evidence to show that the Egyptian Government is subsidizing its energy and fuel sector by a factor of seven. Whilst kerosene is Sh55 per a litre in Nairobi, it is only the equivalent of Sh7 in Egypt."

Healthcare (or lack thereof) in Kenya!

A regular mwananchi dies due to the lack of basic drugs.

MPs & ministers in Kenya go abroad (& I am not talking of India) for taxpayer-funded treatment!

Nyachae in London for check-up

---

By Beauttah Omanga

Cabinet minister Mr Simeon Nyachae has flown to London for medical check-up.

A family member said the Roads minister left at the weekend, accompanied by close family members, for a routine check-up for injuries he sustained three years ago while exercising at his Nairobi home. When reached for comments by The Standard, the minister’s personal assistant, Mr Charles Birundu, confirmed the reports but did not divulge further information.

Nyachae was early this year quoted as saying that his doctors would determine his life in active politics. "I will go back to London in September for a final health checkup.

On whether I will be seeking to defend my Nyaribari Chache seat this year, depends on my doctors’ advice," he told a rally in Kisii last month.

One of the leading politicians in Nyanza Province, Nyachae is touted as a key player in President’s Kibaki re-election bid.

Already, there is anxiety among his supporters over his medical status.

"It is our prayer that Mzee is given a clean bill of health," said Kitutu Chache MP, Mr Jimmy Angwenyi.

Olympia Capital Holdings Rights Offer

Hey! Olympia Capital has a website! This is a recent but welcome development. Better late then never. I hope they keep it up-to-date.
All listed companies should have at least a basic website where we can get information on them.

Olympia Capital Holdings (Kenya) Website
Plush-Yokota Website
(Plush-Yokota is the S.African firm Olympia Capital Corp (Botswana) acquired in November 2006).

Since the Olympia shares are trading Ex-Rights which means buying the shares does not entitle you to receiving Rights. Nevertheless, you do own part of the company. And one can sell these shares at any time during the Rights Offer as well as before the "new" shares are issued.

More details later!

Kenya's triumphs at the IAAF World Athletics Championship

Spectacular!

Kenya placed 2nd in the recently concluded 2007 IAAF World Championship in Osaka.

Kudos to our athletes! Kenya could have bagged more medals if you count the guys & gals we "lost" to other countries. Kenya ended up with 13 medals (5G, 3S, 5B). Russia had 4G medals. Kenya could have had 16 medals if you include Kenyans running for other countries.

GOLD
Yego - 800m (M)
Jepkosgei - 800 m (W)
Luke Kibet - Marathon (W)
Catherine Ndereba - Marathon (W)

SILVER
Vivian Cheruiyot - 5000m (W)
Eliud Kipchoge - 5000m (M)

BRONZE
Priscah Cherono - 5000m (W)
Eunice Jepkorir - 3000m Steeplechase (W)

Bernard Lagat won a gold in the 1500m & 5000m for the USA (at least the USA doesn't force you to change your name & religion like the Qataris & Bahrainis!). Those were 2 Golds "lost" for Kenya!

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
KCIG Blog
Wikileaks
Mars Group

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!

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

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. 30-August-2007: 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????