Monthly Archives: May 2007

KQ hits turbulence

Down: Profits dipped slightly owing to increased competition, and the weakening US dollar. Kudos’ to the NSE for the timely release of company accounts (now if they could only offer .txt alternatives alongside the huge PDF files). Sooner or later a company is going to reach a limit – and either report flat (or declining) revenue or profits, but shareholders don’t take too kindly to the inevitable.

Pilot stabilizes: In the wake of the KQ 507 crash, the airline MD has released a statement on safety issues to quell murmurs that the airline operations were stretched in pursuit of profit. Another statement of reassurance from a former manager.

Up: The airline has been voted Africa’s Leading Airline by readers of Travel News magazine. KQ also won for best regional, local airline, Msafiri magazine and frequent flier programme (with KLM).

ARM to retire bonds

Athi River Mining will convert 125 million shillings worth of corporate bonds into shares in the company as existing shareholders will be asked to approve the creation of 25 million new shares for this purpose.

The bonds were launched in October 2005. Of the 800m raised 600 was for completion of clinker plant in Kaloleni (near Mombasa) and 200 million was for repayment of bank debt.

Other corporate bonds include Faulu Kenya, PTA Bank and Mabati – with few new issues expected and little trading in them. Previous corporate bond giants – Safaricom and Celtel (who also retired their bonds early), opted to get bank financing the last time they needed expansion funds.

The real Safaricom EDGE

(Premium) Story in the Nation about the Cabinet being presented with a paper to approve the sale of 25% of Safaricom to the public.

This is a winning card this election year that will be foremost in the minds of investors and voters. A well managed Safaricom IPO before December could deliver more votes than needless voter expenditure or rhetoric from any leader.

Power shift: Meanwhile Bloomberg reports that – for the first time since WWII more money will be raised from European IPO’s than US ones. Stringent regulations, high costs (6.7% of IPO versus 3.3% for Europe) and the weak US$ to blame as 14 or the 15 biggest recent IPO’s were listed outside the US.

Media bill 2007

There have been many columns written about the Media Bill 2007 that was presented in Parliament this month and which seeks to instill responsibility among journalists. However it is missing from the ministry site, there are no PDF’s available (so far) and I was only able to get a copy thanks to a networked bloggger.

It was disappointing that so far everyone talks about it, but few (member of the public) have seen it. Even media houses have remained selfish with the document, withholding it and only telling us what’s bad about it. Actually the bill is quite bare, except for providing for the establishment of a media advisory council, media advisory board and a code of conduct for journalists.

– Pros: It creates about 20 new jobs (board seats) on two new bodies (media advisory council and media advisory board)
– Is not as broad as previously envisioned when it appeared that it would cover cross ownership and content issues.

Cons: Much has been written about it – read some (here, here, and here)

The bill is crafted by people who believe that the media are out to get them so it comes out as something that a media-challenged celebrity may have written – guiding the media on what to do and what not to do via a code of conduct. It seems to be directed at the Standard which is believed to have editorial issues dictated by ownership (the bill calls on journalists to refuse to allow the interests of ownership or management to influence news’ judgment and content inappropriately) and therefore one ups the Standard by drafting a bill that seeks to forbid intrusions into individuals private life (without the persons consent), alarming headlines (a staple of tabloids to lure buyers), the use of hidden recordings (ala Githongo) and confidential/unnamed sources – with penalties such as deregistration of journalists.

Likely outcome: As bad as the bill is, it may actually pass in parliament because no politician likes the media – they will make a show of opposing the bill, but all will welcome the chance/forum to complain about negative coverage.

Jobs

from the newspapers over the last week

Commercial and political risks underwriter at Africa trade insurance agency – ATIA. Apply to Recruitment@Africa-ECA.com by 15/6

Marketing manager at nation media group: apply to hrrecruit@nation.co.ke 30/5

National communications secretariat of the republic of Kenya: communication legal expert, accountant, system administrator. Apply to ncs@elimu.net 15/6

Pricewaterhousecoopers: public financial management and procurement specialists. Apply to recruitment.ke@ke.pwc.com by 15/6

Sony (South Nyanza Sugar Company): CEO/ M – details here. Also HR development manager, procurement manager, management accountant, property manager, sales operations manager. Apply by 20/6

Olympia Rights Issue

Olympia capital is seeking to raise 600 million shillings in a rights issue later this year, after approval by shareholders. Part of the proceeds (Kshs. 87 million) will be used to repay a shareholders loan that was used to bridge the purchase of Plush Products in 2006.

The acquisition of Plush is expected to more than double the company’s turnover in 2007 Olympia’s accounts were not qualified, but the auditors have noted that their company has a negative working capital position – which has been offset by gains from the Botswana subsidiary – from which Olympia generates 5X more turnover than it does from Kenya.

More reading on Olympia: (here and here)