KAINVESTOR

NSE & ‘The Envelop’

2009-07-14T17:39:00.002+03:00

(over night Ocampo has become a household name – with varied pronunciations)

Who knew that a securities exchange could be affected by a mere envelop? Only in Kenya. The NSE has been on a downwards trend has Kenyan politicians continue with their bickering on what Annan’s handing over of ‘the envelop’ to the ICC means.. And the envelop is not opened yet!

Analysts have it that this may affect the market marginally, probably just this week, as investor adopt a wait and see approach. Then again we’ve been with this envelop for over one and half years, why should it tense investors now?

Where Did the IPO’s Go?

2009-07-06T16:13:00.002+03:00

If my memory is not failing, there were several offer slated for the 1st half of 09 that have just disappeared into oblivion. Nothing is being mentioned of them in our Kenyan business media. Some that were slated for this year included DPL Festive Ltd, Telkom Kenya, K-rep and Nakumatt. The most recent announcement of intentions to list on the NSE has been Radio Africa (just launched KISS TV), Family Bank and Consolidated bank.

Others that also mentioned they’ll be seeking to list anytime were KenGen’s 2nd offer, Sarova Hotels, Wananchi Online, NSE (Demutualization) and Suntra Investment bank.

Also in line were several government of Kenya privatizations, with the likes of Kenya Wines Agencies, Kenya Ports Authority, Kenya Pipeline Company, Kenya Meat Commission and New-KCC being fronted. I think the government privatizations are still on course with the recent appointment of two transaction advisors.

BLUE Financial Services from down South Africa was also planning to cross list on the NSE but has since gone mum on when this will ever materialize. Similarly, with the finalization of the integrated East Africa bourse Ugandan Tanzanian and even Rwandan firms were set to cross list on NSE. But this will remain a pipe dream for a few years to come has the four countries sort out their ‘abusive’ relationships.

Sectors to invest in:

Regardless of the IPO’s dry spell I still consider Financials (especially banks), telecoms (Safaricom n Telkom Kenya on listing), construction (ARM’s, Bamburi, not Olympia), ICT (Accesskenya) and energy (KenGen, KPLC and KPC – despite the inefficiencies n desputes) as viable sectors to invest in at the NSE. Agriculture and Insuance are too risky for now.

1,000+ Tweets Later…

2009-07-04T13:53:00.006+03:00

This is yet another excuse for a real post. I guess I’ve been spending far too much time on twitter and neglecting kainvestor Blog. Six months of tweeting has seen me post over 1,000 tweets (not much compared to a few twitter gurus) ranging from simple links on business issues and other news to very personal tweets. And its proving to be addictive, that is if you find your self thinking in 140 characters constantly!

For those who have not yet discovered Twitter, it is a free social networking and micro-blogging service that enables users to send and read others' updates, simply known as tweets. Phenomenal if you ask me, but who am I to say.

Looking back at some of my tweets, I think I have loosened up a lot on the personal information front. Something that is not quite easy to do in a blog post here (Ask @PinkM with her new ‘serious’ blog). From following 251 tweeps, being followed by 330 of them (bless them all!) and 1,022 Updates, I’ve made great online friends.

I would highly recommend following @bankelele, @coldtusker, @kachwanya, @InvestingInAfrica @Alykhansachu and @moseskemibaro for some serious business insights. @Ayittey for a serious dose of Africa leadership reality. @kahenya @roomthinker, @ArcherMishale, @alfredmutua and @mwaikibaki for some funny tweets and my friends @michaelmusau and @teyie if you don’t mind not getting any updates from them.

Funny that no one really answers the one simple question, ‘what are you doing?' the guys at Twitter.com brain stormed and came up with.

Budget 09: Capital Markets Proposals

2009-06-18T10:59:00.005+03:00

Following Uhuru’s budget reading there has been a renewed investor interest in the NSE. The NSE 20 share index surpassed the 3,000 mark after a 14 days continuous rise. Analysts are predicting further improvement in the market activities in days to come. It seems the 09/10 budget reading brought some life into this market. Below are the proposal indicated there in:

- Increase in stockbrokers and investment banks minimum share capital from Ksh.5 million and Ksh.20 million to Ksh.50million and Ksh.250 million respectively by December 2010. This could see some mergers, acquisitions and entrance of foreign investors to achieve this new capital requirement.

- Industry players to publish half and full year (audited) financial statements in at least two national dailies (It’s about time we saw what this guys do)

- Monthly reporting to CMA and submission of quarterly portfolio reports

- Agents restricted to only one broker for easier scrutiny

- Approval from CMA before any change in the shareholders, Directors, CEO’s and other key personnel of a brokerage firm

- All brokers will be required to get an indemnity insurance of an amount not less than five times their daily average turnover to compensate investor losses due to irregularities. (the cover is a bit low and may not be able to cover all claims – from experience)

- As incentive to firms that list on the NSE, the listing fee will be halved to 0.15% from 0.3% of the value on issue. Similarly, withholding tax on long term bonds of 10 year or more maturity has been reduced to 10% from 15%. (this incentives are not good enough and no significant change in likely to be seen)

- Proposed amendments on the Retirement Benefit Act to limit investments by pension schemes (such as NSSF) to only invest in government securities and bonds from public institution could see reduced activity at the NSE.

You can also read the full budget speech here and a PWC-Kenya Budget Bulletins here.

Budget 09 - live

2009-06-11T14:35:00.000+03:00

&amp;amp;amp;amp;amp;amp;lt;a href="http://www.coveritlive.com/mobile.php?option=com_mobile&amp;amp;amp;amp;amp;amp;amp;task=viewaltcast&amp;amp;amp;amp;amp;amp;amp;altcast_code=2cae31a899" &amp;amp;amp;amp;amp;amp;gt;Kenya Budget Reading 2009&amp;amp;amp;amp;amp;amp;lt;/a&amp;amp;amp;amp;amp;amp;gt;

Sin Tax, Zain & KCB

2009-06-09T14:05:00.005+03:00

As usual, this year’s Kenya budget reading will not miss a dose of ‘sin tax’ for smokers and beer lovers. How effective these ‘sin taxes’ are is still a matter of contention, but this Mercatus Centre policy paper discourages them. In summary it says:

- Sin taxes are the result of anticompetitive behavior rather than true public-interest concerns. Most of them are used by industry leaders to fight back at their competitors (EABL, Keroche, tax stamps)
- Sin taxes are not used for their intended purpose and consumer of the taxes product don’t have control over the raised funds (which ends up funding political agendas anyway)
- The weight of sin taxes fall disproportionately on the poor
- Consumers of sin products are usually not responsive to increase in prices and may only substitute the product for a lethal alternative – defeating the objective
- Then there is the issue of same products from neighboring countries finding their way into the market albeit illegally.
- The effectiveness of ‘sin tax’ is thus trivial and a total failure (it even feeds immorality!)

No more Zain (Again!)

Zain Group is reported to be looking to sell its African unit, Celtel International. It’s said that Zain has been approached with a USD12 billion deal to sell Celtel to an unnamed French company. Zain has also received inquiries from firms in India and China. And still on Zain, its Zap money transfer service has been approved in Uganda and will be now be operational across East Africa.

Another first from KCB

KCB has announced a tender for an internet acquiring gateway, which according to @moseskemibaro is an indication that the bank would be offering an e-commece services platform locally. Following the passing of the ICT bill into law earlier this year e-commerce is now easier in Kenya and KCB may be the first to launch it. (ok let me not indulge more lest I become a ‘corporate cheerer’)

KCB: Big in the East

2009-06-05T08:56:00.003+03:00

Talk of going regional and KCB Group comes first to mind. The rate at which Mr. Martin Oduor is expanding the bank regionally can only be said to be phenomenal. Last week there were opening their fifth outlet in Southern Sudan and sealed a Ksh.38.4 billion ($452 million) mortgage deal with the Government of Southern Sudan. The S&L (KCB’s mortgage subsidiary) deal to finance construction of 1,750 houses for Southern Sudan civil servants is the biggest deal a Kenyan firm has ever got in any of its East Africa subsidiary.

Compared to other indigenous banks, KCB regional expansion strategy/ implementation eclipse them all. And it’s been paying off. KCB's businesses in Tanzania and Southern Sudan have already crossed the profitability threshold, while the one year-old Ugandan subsidiary is likely to break even this year.

A look at the Groups 2008 financials indicates that KCB Uganda assets grew to Ksh.2.4 billion after operating for a year, with its banks loan portfolio, reaching Ksh.660 million, while deposits grew to Ksh.1.48 billion. KCB Sudan returned a pre-tax profit of Ksh.530 million while KCB Tanzania, which reached a breakeven point last year, recorded a pre-tax profit of ksh.32 million.

In Kigali Rwanda, KCB is also the first to be cross-listed (listed) on the Rwanda's Stocks Exchange. This would see KCB’s stocks trade in four securities markets in East Africa; Nairobi, Kampala, Dar-es-Salam and Kigali.

The bank further plan to open 30 additional branches in Kenya and 20 more in Sudan, Tanzania and Uganda. Other Kenyan banks that have ventured into the larger Eastern Africa region include Equity (Uganda); NIC (Tanzania); and DTB (Kampala/ Dar)

Notice that most of these banks have shied away from Ethiopia and Somali (for security reasons: but isn’t the piracy money worth the risk). For Ethiopia I’m yet to understand why Kenyan banks don’t even mention their intentions to go there, probably due to the big government there. But I can bet KCB Group will be the first to set office there.

*Opinion*

From a personal experience with KCB’s below par service, my opinion is skewed towards investing in the banks stocks and not considering to be their client (unless you travel a lot across Kenya or East Africa)

Broken Integrity

2009-05-24T20:39:00.004+03:00

What would you do if you discover that your so much cherished investment that you’ve been thinking is safe with your ‘trusted’ broker is not actually there has the CDS statement has been indicating? You don’t have to imagine, because this is the exact nightmare that hundreds of NSE investor are going through. And it doesn’t matter if your stockbroker is one of the few investment banks or the many shaky brokers constantly under CMA’s red list.

Seeing shareholders turning the Barclays Bank AGM into a cry session against unscrupulous brokers was a really sad turn of events. It’s now clear that the NSE, once the symbol of renewed confidence in the Kenya’s investment markets and a darling of all, has been turned into a shell by shameless brokers (owners and employees) who lack any sense of integrity and professionalism in their duty.

I see Uganda Securities Exchange (USE) turn to the electronic shares system, with investor having CDS accounts instead of share certificates, and I shudder. The advent of the same system at the NSE was just but the beginning of the investors’ troubles. Unlike with the physical certificate system the CDS gives brokers a pass to trade in clients shares without their knowledge.

A CDS statement indicating a cash balance is a magnate for brokerage employees to forge documents and defraud clients. Even worse is a case where the statement is forged to indicate that an investor has shares in his account when in real sense the shares don’t exist. The shareholder never receives dividends from companies he’s purported to have invested in nor does he get invited to the firm’s AGM. This happened a lot with Nyaga clients before it went down.

Nothing could be worse to an investor than discovering your investment that has lost over 60% was further pinched by your ‘trusted’ broker/investment banker (after moving two brokers – one collapsing and another being bought out by a bank). Brokers’ integrity at the NSE at the moment is at its lowest and so is investors’ confidence.

Will the perpetrators of these scams ever be prosecuted? Or investors will continue to be given lip service from CMA and NSE on what measures are being taken to bring back sanity to this ‘ponzi’ market? Micah, you’ve been served.

Magazine Review: HOST Africa

2009-05-19T10:19:00.003+03:00

Yesterday I was privileged to receive the premiere issue of HOST Africa magazine from my good friend Ken (thanks). Went through it in the evening and thought a small review on it won’t hurt. The magazine focus is mainly on the hospitality and tourism industry and all its stories are skewed towards these. The magazine goes for Ksh.350 (≈US$.4.50) per copy.

The first issue cover story is on fibre optic and what it means for businesses in Africa, particularly Kenya with the landing of SEACOM at the Kenyan shore next month. The issue also features a story by Lee Simon, an award winning kitchen designer and the author of “The Restaurant Dream?” (a must read for food lovers) among other writers (both local and foreign).

Great topics such as hotel security, reinventing Kenyan tourism and brand changing in the hotel industry, have been discussed (even a review of my favorite traditional delicacies hotel – Amaica). For a start I think these guys at Mondeas ltd. have done a great work. I will be waiting for their follow up issues in the coming months.

To subscribe check their website at www.hostafricamagazine.com or email host@mondeas.com

Investing in Re-opened Bonds

2009-05-18T17:51:00.003+03:00

The demise of the NSE has seen Central Bank of Kenya (CBK) become the biggest beneficiary with bonds and bills being over subscribed every other week. Late last year government reduced the minimum initial investment amount in treasury bills to Ksh.100,000 from Ksh.1,000,000. CBK has now resorted to reopening of bonds issued in the previous years. Last moths CBK reissued a Ksh.7 billion 5-year bond that was successfully subscribed and is now planning to reopen a 15-year bind that was issued two years ago (07).

Reopening of securities is a common practice in the developed markets. This is done when seeking to eliminate bond market fragmentation (existence of too many but small outstanding bonds scattered everywhere in the secondary market). Fragmentation leads to unstable and uncertain bond prices and reduces free trading due to few investors (who buy and hold bonds reducing liquidity)

When a bond is reopened, an old bond is offered to the market on a date other than its original issue with a view to increasing its outstanding amounts and expanding the original amounts. On reopening investors are offered the same instrument (bearing the same features as the existing bond – same maturity date n coupon rate) except for offer date, offer price and yield.

Requirements to participate in a reopened bond are the same as those of any government securities auction i.e. you need to have opened a CDS account with CBK and complete the application form with all the details has specified in the prospectus.

Centum: A Close-up

2009-05-12T15:25:00.003+03:00

Centum Investment just impresses me with their over-optimism (if there is anything like that) when it comes to their dwindling performance and aggressive investment plans. Despite its Full-Year 2008 profits dropping 64% (to Ksh.313.2 million; investment income dropped by 33% to 392 million) and making some unwise investments in Uchumi and RVR (Rift Valley Railways), the investment firm is going forth with an aggressive 5 years plan (2009-2013) and has announced a Ksh.2 billion bond issue.

It has already appointed transaction advisors for the issue set to open in three months time and is seeking regulatory approval for the same. cash raised in the bond issue will be invested in regional securities (both public and private) taking advantage of the investment opportunities created by the global recession that has seen value of securities dropping significantly as foreign divested.

The firm had issued a profit warning earlier in April indicating that it expected its full year profit to fall by up to 80% mainly due to an 84% drop in the value of its holding in RVR. The bear run at the NSE further eroded gains realized by the firm from publicly listed shares. Its current portfolio is valued at about Ksh.6.4 Billion from Ksh.8.67 billion in at its peak in 2006.

Dividend Hunting at the NSE

2009-05-09T08:59:00.006+03:00

Over the recent weeks NSE firms have been releasing their full year results for 2008 and most of them have announced dividends for their shareholder. In this bear NSE the only thing we have now is dividends that we can take advantage of. In developed markets its called dividend investing, which focuses on identifying solid companies with a record of growing dividends each year and buying their stocks expecting that it will continue declaring dividends.

One thing that investors need to know when dividend investing is that it’s particularly different from normal value investing, where one invests in a stock considered undervalued with an expectation that it will rise to its true value or higher. And a combination of the two can yield some very good results:

Dividend Investing + Value Investing = Great Returns

Dividend investing focuses on identifying solid companies with a record of growing their dividends each year; and an expectation that it will continue into the future (almost speculative). This sounds so short sighted, but history has proved that stocks that pay constant/growing dividends have always out-performed those that don't.

Dividend investing is usually associated with the bear market since dividend yields are considered relative safe in down markets.

Signs of a Dividend Stock

There are several things to look out for in a stock before considering it a dividend counter:

Dividend yield doesn’t mean much. dividend yield (annual dividend divided by the current stock price) simply indicate if the stock price is low or high, which is based upon current stock price and historical dividends thus not capturing the actual facts at a particular time.
A company that has a history of paying a consistently growing dividend is better than one that pays a consistent, but steady dividend. And the consistent but flat dividend is better than a company who has had to cut its dividend.
Cash flow is King. When it comes to dividend investing net income does not mean much. Cash pays dividends so operating cash flow per share is more important. Consistency of the cash flow is also important. A company that generates a steady or growing operating cash flow is better able to fund a dividend than a company that cannot consistently generate cash. A company’s dividend coverage ratio (operating cashflow per share divided by the expected annual dividend). If this ratio is 1.0 or better, there can be a relatively high degree of confidence that dividends will be paid in the foreseeable future.
The stronger the balance sheet the better. Stronger here meaning less bank debt. A company with no bank debt has a stronger balance sheet because it can borrow if necessary to support operations and the dividend if need be.

Firms at the NSE that I consider to be dividend stocks include EABL, BAT, Standard Chartered and Total among others. If you're looking for something that pays you a steady income stream, just like fixed securities (bills and bonds) you might be better off with a stock that offers a high dividend.

Tweak Post

2009-05-06T17:57:00.002+03:00

After contemplating this for a while I finally decided to change my blog template and do away with too much junk the old one carried. I picked this new look from Btemplate, a free blogger templates resource (I’m Kenyan; we don’t pay for things we can get for free – ‘Sare’). Only problem with this great looking templates is that the back end sign-in bar disappears and you have to go through other normal blogger sites to get to your own back end (so if you get me trespassing, I’m just trying to get into my own house). Hope it will serve me well.

Suicidal Fan:
Just learnt that a die-hard Arsenal fan hanged himself after Man-U beat them to the UEFA final. Sad happenings indeed…but is it worth it?

More beer: SABMiller Plc, the world’s second- biggest brewer, plans to build its fourth factory in Tanzania at a cost of $55 million by November, boosting beer production by 22 percent. The firm, through Tanzania Breweries (owns 52.8% stake), is also spending about $24 million to upgrade its Arusha and Mwanza breweries.

Trump coming to Kenya: US property tycoon, Donald Trump, is one of the 44 parties interested to invest in the multi billion shilling Nairobi Golf City development located on a 73-acre land that currently belongs to Kenya Railways. Other interests are from Commercial Bank of Africa, Associated Motors, Spencon International, TPD Serena, Premiere Flour Mills and Actis.

Prepaid power: KPLC is set to commence the first phase of the prepaid metering project. This will see consumers shift from the current postpaid system, giving them control over power consumption and avoiding several inconveniencies from the electricity monopoly supplier (sigh)

The Real Jay Z

2009-04-25T20:25:00.005+03:00

*I’m write this while watching (on Aljazera) Zuma deliver a painfully slow speech at a press conference in Pretoria*

As greatly anticipated Jacob Zuma (or Jay-Z as he is nick-named down south) has easily cruised to victory and is now poised to becoming the next president for Sub-Sahara’s strongest country - South Africa. Now we wait to prove the divergent and controversial sentiments the man has elicited across the continent and the world at large.

Despite his popularity in SA, the man is known by the outside world for all the wrong reasons. Unabashed polygamist, uneducated freedom fighter and a canny politician with a way around justice are some of the few (cruel) words used by TIME and The Economist to describe him. Some consider his presidency a big gamble for SA that may back fire.

Power has a way with revealing the inside persona (we saw it with our own kibs in 2003). So now we wait and see who the real Jacob Zuma is.

Scangroup Peek

2009-04-16T19:10:00.009+03:00

Scangroup Ltd. has announced its FY08 results indicating that:

- PBT went up 24% to Ksh.437 mln;
- revenue rose 21% to Ksh.1.4 bln;
- Net asset/share increased by 60% courtesy of WPP investment;
- EPS grew by 20% to Ksh.1.79
- Free Cashflow up 98%

I had the honour to listen to Lowe Scanad (K) Ltd.(a Kenyan ScanGroup subsidiary) MD, Sameet Ambegaonkar, delivered an invigorating presentation yesterday on strategy and tactic at the British Council – leadership forum. The guy has vast experience and knowledge (29 years in strategic planning for major FMGC firms that has seen him work with Amu – India, Tata, Coca cola –India n Kenya, EABL, Safaricom) in advertising.

The Group, in a joint venture with Hill & Knowlton, has also launched a new public relations firm known as Hill & Knowlton East Africa. (51% Scangroup, 49% WPP – which still owns 27.5% in Scangroup)

More scanned info @Grains of Masala

e-book - It's Our Turn to Eat

2009-04-09T18:03:00.005+03:00

This email is on behalf of my friend who is a friend to Michela Wrong who is a friend to Githongo (So I'm a friend to Githongo!)

April 9, 2009

Dear All,

Harper Collins have finally come up with an e-book of "It's Our Turn to Eat", which has been widely circulating in pirate form on websites and mailing lists in the last few weeks because of a boycott by Kenyan bookshop owners nervous of being sued. So Kenyans can now buy and download a legitimate PDF file of the book, by clicking on (thanks steve for the link correction):

We've tried to keep the price as low as possible - you'll see that it is a lot cheaper than the hard copy. We're also hoping to make this something Kenyans who don't own credit cards can buy on M-Pesa, but at the moment that's proving a logistical nightmare.

Please spread the word. There’s no reason, now, to circulate or download bootleg copies of the book.

Michela Wrong

Consider this my Easter present. Happy Easter guys!

Equity Bank Suspended!!

2009-04-08T13:33:00.005+03:00

Kenya's Central Depository and Settlement Corporation (CDSC) has suspended Equity Bank as a stocks agent for two weeks, it said in a letter to stockbrokers dated Wednesday...read more

up-date: this was later in the day revised by CMA after Equity banks appealed. (Something does not sound right here)

Subaru Kenya: Courting Disaster

2009-04-05T11:00:00.004+03:00

Nairomour has it that Subaru Kenya (currently under the management of ECTA (K) Ltd.) may be going the Marshals E.A. way with the withdrawal of Subaru products from its chain of business. Toyota Kenya is fighting hard to get the Subaru dealership from ECTA, citing economies of scale as it general reason.

The rivalry between Toyota Kenya and Subaru Kenya is said to have stem when ECTA poarched a high level manager from Toyota. The Toyota manager in the eye of the rivalry is said to have been very instrumental in Toyota Kenya’s business development. In a bid to get back to ECTA, Toyota Kenya management, who are fellow country men (Japanese) with Subaru, decided to under cut their Kenyan competitors by convincing their bosses in Japan to cease the Toyota dealership with ECTA and sign up with them

As if that’s not enough, poor management decision has seen ECTA hire too many highly paid top managers since the passing on of the founder and neglecting the little small workers. Their Shock absorbers competitor, Robbs, has capitalized on this mistake and has launched an aggressive campaign to poarch some of the best, experienced workers from ECTA by offering them almost double their salaries and a better working condition. Right now things are looking really bad for ECTA.

March Tweeter

2009-04-03T22:28:00.005+03:00

Ok, I agree with you, I’ve not written anything coherent on this blog for a very long time. The recent few have been more of announcements than blogging, just to keep the blog alive. March was my tweeter month of the year (and one very hectic month). Tweeter is simply a micro-blogging platform that makes it easier communicate with other people (Tweeps, tweeples, tweeterers) over the internet. It’s sort of a chat room that goes beyond that and has more functionalities than simply chatting – tweetpic and so many other things I’m still learning more about.

My journey on tweeterville has led to meeting great people. some I never knew before like @kahenya – the fire tracker, @pinkm – the excel expert, @louizah, @kaboro, @paulakahumbu – the wildlife expert, @EdObie, @JustDes and others I knew before – some personally some just over the net like @bankelele, @RyanShenHoover, @Cho1 and @ConceptAdvisory. Despite the time its taken me from meeting some deadlines and neglecting Kainvestor blog, its a great experience that you can carry around in your mobile phone, keeping you busy in a boring situations (not in cars or matatu’s – it can be dangerous depending with type of phone and route taken)

My quest on tweeterville continues as I learn more tricks to answering one simple question, ‘What are you doing?' in only 140 words.

Global Bug Bites: 25% Lay Off @ Zain

2009-03-30T17:17:00.004+03:00

Thanks to @louizah tweets

I’m informed that Zain has announced a plan to lay off 141 workers in its Kenya subsidiary as it restructures to wedge off the expected effects of the global economic recession on the African continent. The firm also plans to outsource some of its functions including network building, operations and information technology systems, and make some strategic acquisitions on the continent. The Group has set aside USD1-2 billion for its Africa’s operation in 2009.

Despite Zain Kenya's growing subscriber base to 3.07 million (18% market share), the mobile service provide registered huge losses last year. its main competitor’s – Safaricom, has over 13.3 million subscribers or 77% of the market.

Enter the Kingdom

2009-03-25T21:23:00.005+03:00

Cooperative bank has finally sealed the coffin for Bob Mathews Stockbrokers by buying the troubled broker off (was the Ksh.20 million part of the deal or a song buy?). The bank has acquired 60% of the brokerage firm, taking with it the 12,000 accounts and the entire Bob's staff (excluding the owner). The bank now takes over full management control of the brokerage firm and has already rebranded it to ‘Kingdom Securities Limited’. The deal has not yet been approved by CMA and coop bank shareholders.

Mulika Mwizi: Pyramid Schemes Die Hard

2009-03-19T16:51:00.008+03:00

Thanks to Rafiki Kenya tweets

Even after several Kenyans lost millions of hard earned money to shoddy investment schemes such as Deci and Sasa, pyramid schemes seems not to be dying out. There is a new con artist in town (The Net Wealth) who even targets post-election violence victims as its model clients. Any one reading this should please keep off such schemes that promise heaven and earth. If its too good to be true….then it isn’t. Guess I’ve done my part in the mulika mwizi (spot a thieve) campaign.

Wikipedia has a detailed analysis why pyramid schemes don't work, but this illustration summarises it all:

Safaricom Robbery: Shape Up or Shape Out!

2009-03-17T14:48:00.005+03:00

I almost missed this mail from a reader who is so annoyed by Safaricom's service that he had to say something about it. Many of us may have fallen victim to this injustice but never noticed or blamed someone else. No wonder they make billions as their competitors make more losses.

Dear Editor

I am writing this on Wednesday March 11, 2009 at 11:30pm. I am worried because I have had a very strange occurrence which I have never imagined can be happening in this era of IT. In the course of the day I loaded my safaricom number with Kshs. 400 only. I made various calls to my friends, relatives and enemies. I used the same to browse the web for my mails and other information I wanted from the web, which I believe helped me keep in touch with my environment.

However towards the time at which I am writing this mail, I made a call which lasted 3 minutes and 49 seconds, which according to my tariff (Ongea) should have cost me Ksh. 30.54.

However due to abnormal reduction of my credit balance I was forced to call customer care. The first time I called, I was told that there is call log update time lag of 10 minutes. I did wait for the proscribed 10 minutes and called again. This time I was lucky because the log was now complete and I was given a complete audit of how my meager 400 bob was spent.

Believe it or not the aforementioned call of 3:49 long cost me Kshs. 70.62. I am just wondering whether this is a thing that regularly happens at Safaricom. Is this the main contributor towards the billions they are going to post at the end of the year?

As a hustler trying to make ends meet in this economic near melt down era, I have lost confidence in this service provider. The Customer care service executive I talked to promised me that she has forwarded my complain (She never told me to who) and that I shall get my refund within 48 hours. I told her that I hope I shall receive what is justly due to me.

I am perplexed because it took them only 3 minutes and 49 seconds to get Kshs 40.08 from me which was not due to them. Why should it take them a whole 48 hours to refund me the same? How many unsuspecting Kenyans are undergoing this kind of robbery without noticing while imagining that its their wayward sons, daughters, spouses and siblings misusing their handsets?

I do feel that Safaricom should come clear and inform the public of what they are doing to ensure that the public gets quality service at an affordable price. So far they are the most expensive even though I have remained loyal to them.

This incident has been a loud wakeup call and safaricom should be sure that should they not a visible move towards thinking of me (Clients) before the billions and silverware they will bag, then one day not so much in the future they might find themselves in the Panpaper Webuye paper Mills Ltd Situation. It would be a shame on all of us and an example of greedy executives not caring about their clients and investors.

Thank you.

Yours faithfully
E. O. Otipa

Gates Back at the Top on Forbes Rich-List

2009-03-12T10:23:00.007+03:00

Forbes magazine has released its annual list of the world's richest people, most of who have been hit really hard by the global financial crisis. Total net worth of the 2009 list is US$.2.4 trillion - down from US$.4.4 trillion in 2008. Total world billionaires reduced to 793 from 1,125 in 2008, as more billionaires fell off the list with the crisis. The average net worth per billionaire on the list dropped 23% to US$.3 billion from 3.9 billion dollars in 2008.

According to Forbes, the top 10 richest people in the world and their net worth are as follows:

Name	Company	Net worth US$’billions’	Change in Net worth compared to 2008
William Gates III	Microsoft	40	-31%
Warren Buffet	Berkshire Hathaway	37	-40%
Carlos Slim	Telecom	35	-35%
Larry Ellison	Oracle	22.5	-10%
Ingvar Kamrad	Ikea	22	-29%
Karl Albrecht	Aldi	21.5	-20%
Mukesh Ambani	Petrochemicals	19.5	-55%
Lakshmi Mittal	Steel	19.3	-57%
Theo Albrecht	Aldi, Trader Joe's	19.3	-16%
Amencia Ortega	Zara	18.3	-9%

Billionaires by region:

Region	Billionaires	Net worth US$.’Billions’
US	359	1,100
Europe	196	655
Asia-Pacific	130	357
MidEast/Africa	58	156
Latin America	50	175

Changes in the world billionaires list: 44 new billionaires joined the list (including a Mexican drug lord), 656 dropped out of the list and 52 didn’t change in position.

Bob Mathews: Obituary of a Reincarnated Broker

2009-02-27T22:19:00.002+03:00

Bob Mathews Stockbrokers seems to have failed to learn from its past and has once again been suspended from trading at the NSE for 10 working days. A limited liability company, Bob was incorporated on 6th April 1994 and licensed by the Capital Markets Authority (CMA) on 1st July 1994 and become a full member of the Nairobi Stock Exchange (NSE) and Central Depository Agent (CDA) of the Central Depository and Settlement Corporation (CDSC). Due to liquidity problems Bob only managed to operate for one year before closing down (suspended) in 1995.

13 years later, in 2007, Bob Mathews (surprisingly) reopened its doors to the public in the middle of a bull-run. As tradition would have it the broker (among other five) was once again faced with liquidity problems a year later after failing to fulfill some very basic requirements for license renewal by the CMA. Bob was let off the suspension hook at the last minute. Fate has finally had its way and now the broker faces a threat of being permanently suspended from the NSE once again.