Monthly Archives: June 2013

I&M Bank lists at the NSE

I&M (Bank) Holdings formally listed at the Nairobi Stock Exchange in the banking segment on June 25, 2013. I&M Holdings is the 6th largest bank group in the country with  assets of Kshs. 144.7 billion ($1.74 billion), profits of Kshs 5.73 billion ($69 million) as at December 2012.
 
This was the culmination of a three year transaction process that had several steps including a cash-less acquisition of 100% of I&M Bank by City Trust Limited (then-listed on the alternative shares segment of the NSE, and City Trust  owned 7.3% of I&M), a 1:5  share split to create make 27 million shares (up from 6 million), the issue 364 million additional shares to I&M shareholders in a swap – all resulting in 392 million shares to star  trading at Kshs 50 shillings ($0.60) each on the NSE. 

Within that period, I&M Bank also had a private placement to raise about 2.4 billion ($30 million), launched an e-commerce platform, launched a multi-currency debit card, bought stakes in banks in Mauritius, Rwanda (55% of Banque Commerciale du Rwanda) and Tanzania and also got investment funding from Proparco & DEG banks.
At the launch Dyer & Blair Investment Bank Chairman Jimnah Mbrau advised other family-owned firms to emulate I&M in such moves in order for them to live on long after their founders.
I&M shares started trading at Kshs 93 per share this morning. 

Dakar & Mauritius Redux

Updating previous visits by @Honoluluskye and @kkaaria, here are more travel tales from Dakar  and Mauritius  by @kahenya and @carolmusyoka respectively 

Dakar
Getting There:  My best bet on this would be to fly from Nairobi, through Addis to Bamako and then on to Dakar. It’s a more comfortable ride than Kenya Airways (KQ) and from what I heard, has better quality of inflight services. KQ was delayed at take-off and was not really worth it. Cost of the ticket return is about US$ 1400 + tax.
Senegal now has an Embassy in Runda, Nairobi – and it’s mandatory that you obtain a visa here, or you’ll get turned back in Dakar. The visa process is not really complicated, but also accept that there are numerous delays at the embassy, and book way ahead of your travel (about  3 weeks. The cost for the visa (for under 30 days) is Kshs 1,750 for Africans and Kshs 3,500 for non-Africans.
On Arrival: In Dakar, getting out of the airport was fairly easy; they scrutinize your visa and picture to ensure that it is you, but once you get your passport stamped, you are good to go. It took about 45 minutes from getting off the plane to getting into the hotel. There were no unexpected taxes or fees, and the cost of a taxi back and forth between our hotel, and the airport was about US$ 15.00.
Getting Around: I stayed in the hotel where the conference was so there wasn’t much commuting taking place. There are numerous ways to get around, from what seemed to be a well-built bus service, but more  common were small taxis which are very reasonably priced for the distances covered.
Bring your French with you, and it will get difficult, so it is always best to get the hotel concierge involved if you are uncertain about where you want to go, but for the seasoned traveller, walk out of the hotel, walk a bit of a distance and then flag down a taxi and you are guaranteed to get reduced rates. Walking is also a good way to get around, and I did that a lot, in the evenings when it was cooler.
Not once, did I feel insecure about walking around at night, and I did walk out as late as 1.00 AM. I was told to mind vendors who can be very pushy but that was it. I could not quite remember being warned about crime and did not see anything happen. Its quite a peaceful place.
Social Scene: For something good, expect to pay about US$ 200+ per night though it may get affordable. In 3 days, the electricity failed once for a few minutes and that was it. I ate dinner out twice, which cost about Kshs 1,000 per meal. There was a lot of fish involved, and rice. I randomly picked meals and they were quite good.
I used a bit of extremely bad French and English. I did not ever once run into an English written publication. Everything was French. A lot of the Senegal people I met were more interested in telling me where their fabric shops were and talk about Gorée Island, but besides all that, did not quite talk much else. When it comes to Agriculture, I watched a news clip one evening, and if my French was right, the government was encouraging people to focus more on agriculture and was going as far as creating access to clean and safe water for consumption and agriculture.
 
Stay in Touch:  Making calls was very easy. I bought a SIM card from Orange/Sonatel, put it into my phone, waited about 30 minutes for it to be activated and that was it. The network also has monthly BlackBerry packages, but it seemed overkill to buy that for 4 days.  Roaming from Dakar is expensive, hence the choice of buying a local SIM-card – and if you save your numbers in the + {country code} {number} format, it is as easy as dialing as if you are at home. Call quality was ok, but sometimes sounded poor as most of their international calls are routed through VoIP.
Calling from Senegal across Africa and overseas seemed to be affordable, possibly the most affordable city in Africa! I topped up about Kshs 850 ($10) and that was more than enough for me to call Kenya, South Africa, China and USA every single day for a few minutes and text non-stop. I also managed to find the Tablet Cafe at Medina set up by Google which was impressive and the hotel had very good Wi-Fi hotspots that allowed for Skype access.
Odd Points:  The Senegalese are a bunch of really nice people, very warm and affectionate and really go out of their way to make you feel at home. What I found odd was that they also work out a lot, and right outside the hotel, you will find local joggers every morning and evening – more than I have seen anywhere else in the world. A taxi driver pointed to some senior government official going for a jog with 2 bodyguards one afternoon.
Somewhat related, the Minister of Communication, Telecommunications and Digital Economy, Cheikh Abiboulaye Dieye, impressed by arriving on time to give his speech, and then keeping to the allotted time without diverging into political rhetoric or making outlandish statements.
Going to Gorée Island had to be the highlight of the trip, seeing the actual guns used in the making of the movie, The Guns of Navarone, which were actual forward artillery pieces during World War II made it just about the best thing there is to see, but also learning (and seeing) about what slaves had to endure before being shipped off to the New World. Even the movies we watch today have nothing on the reality of what really happened.
Shopping & Sight-Seeing: There are many European style malls – like Sea Plaza which was right next to the hotel, which put places like Westgate and Junction to shame. I guess many of this malls are there due to the proximity to Europe an actual real focus on investment as well as French and Arab influences which are easy to see. It shocked me that things there are quite affordable even in malls, unlike Kenya where buying some things seems to be a compromise if you are buying for a mall. I bought a lot of fabric and artwork, as well as some books to read and catch up on my French.
I spent about US$ 500 for shopping and stuff, managed to get a bit of bowling done, went out for drinks and a cigar at some fancy lounge and stuff like that.
Biggest surprise about the Country: Honestly, after watching news clips about Dakar, I expected a downtrodden backward country, but that was not the case. Dakar is a beautiful and fairly well developed country. There were times you could not distinguish between being in Dakar and being say in Corsica or Ibiza due to the Mediterranean atmosphere. Their Duty-Free was also very impressive, featuring a tobacconist where obviously, I had to make a stop and shop.
 
Mauritius
Getting There: You have two options; Nairobi-Madagascar via Kenya Airways, then Madagascar-Mauritius via Air Mauritius or a direct Nairobi-Mauritius flight on Air Mauritius.  Though direct flights are only on Saturday, Tuesday and Thursday, it is preferable as Madagascar is horrible, and can take up to five hours during which you wait in a room without food and drink. Tickets cost about $700.
On arrival, there is no visa requirement just a yellow fever certificate requirement. It was a very busy immigration area but the officials are friendly.
Getting Around: There is a public transport system and taxis are available, but I didn’t use any as I was at a conference. I also felt pretty safe getting around. They are insane about speeding and there’s a deep respect for speed limits in designated zones as there are traffic cameras and strong penalties for breaches.
Communications: Do not use Safaricom roaming…..horrifically expensive. the hotel i stayed in was all-inclusive and had Wi-Fi but it was very slow.
Social Stuff
– English is widely spoken. French too and the Mauritians are exceedingly friendly!!!
–  A good hotel will cost about 100 euros all-inclusive and the electricity was quite reliable
– In terms of food, there is lots of Indian influence so a staple is rice and curry.
Shopping & sight-seeing: Port Louis market and Gran Baie lovely for shopping and hanging around – and there is plenty of tourist stuff to do like boat tours, swimming etc.
Biggest surprise about the country?  How small it was – 65 kilometers long and about  45 kilometers wide

Why Unit Trusts are better than Bank Savings Accounts

A guest post by @smartyannette 


We all desire to save and/or invest at some point in our lives but we fail to accumulate the little extra we have or we lack adequate financial know how to do so. Obviously, we are more likely to save if we have an investment goal and that’s why I think Unit trusts are a much better deal compared to saving accounts in banks.

Unit trusts are professionally managed collective investment schemes where investors pool their money. The accumulated funds are then invested in a portfolio of assets (stocks, bonds, bills, etc.) and the individual investors gain in proportion of their investment, if the value of the underlying assets increases.

Common Unit trusts are Money Market funds that invests in short term securities like Treasury bills, Equity funds that invest in a variety of stocks, Bond funds for bonds and finally Balanced funds that combines all these asset classes. The money market funds are considered low-risk and tend to have lower minimum balances. The others are mainly long term investment options. Gains from Unit Trusts range from about 8% to 16% per annum based on level of risk. In comparison, Commercial banks offer about 4% per annum and only fixed deposit accounts compete favorably, with some over 10%.

You should probably choose Unit Trusts over savings accounts because the former offer better rates of return. Also, If you desire to invest in the securities market, but want to avoid the risk of investing in one company then you may consider Unit trusts as a safer and more stable option. Unit trusts also enable one to invest in a variety of securities at once and get periodic interest unlike some banks that only award interest at year end. 

Investment Banks are specialized unlike commercial banks and you are more likely to easily access financial information and advice as well as brokerage services from the former. The recently-ended Capital Markets Authority open day expo in Nairobi showcased a variety of firms that offer their customers the option to invest in Unit Trusts.  They Include Old Mutual, Genghis Capital, Stanbic Investments, Dyer and Blair investment bank, Britam, Apex Capital, Apollo and CIC. The minimum balances are as low as Kshs. 500 at Genghis Capital and Kshs. 100,000 (~$1,200) for some of the other firms.

Most firms give a capital guarantee, meaning that the principal you put in is secure, but it is always safe to check. Management fees and initial fees also vary depending on the type of fund, and while some companies charge it based on the interest earned, others may charge it on principal. Some firms also allow you to access your money upon request via MPesa while others require you to wait for 3 business days for payments to clear. In comparison, money in a savings account is only an ATM visit away so chances of misspending are high.

Base Titanium to be a model Kenya Mining Case?

Last week, Base Resources and Base Titanium had a session in Nairobi to update the media on the progress of their Kwale Mineral Sands project. CEO Tim Carstens, the Managing Director (who has made 50 trips to Kenya in 2 years) spoke about the progress developments that started in October 2011 and are now 83% complete with the plant expected to go live in the third quarter of the 2013 processing the extraction of three products used in industrial pigments, plastics, paper, and paint colouring.

So far, along with the three fields identified in Kwale, Base has a new dam filled with 6M cubic feet of water, a new 8KM road (from a nearby highway) to the plant – which is itself being assembled like a large pre-fab lego structure, a new dock being constructed at Kilindini (on the mainland side), and a (1,000 ton/hour) ship loader that is being assembled in Durban. In addition they have worked with KPLC to get stable electrical via a new substation, obtaining equipment for the site like the worlds’ two largest bulldozers in – all while  maintaining an exceptionally safe work environment for the current 2,000 workers in a community that has not had past experience in mining.

Despite these investments which are expected to total $300 million for the project, the mine has a useful life of, and will be depleted, after just 13 years after which the company will hand the land back to the government, but now with plant, water dam, electricity, and road for it to to do other things. 

Base Titanium is a Kenyan company that is subject to Kenyan laws and will disclose every dollar they pay to the government as part of an international extractive industries initiative they have signed on for. Carstens believes that Base Titanium will demonstrate that large scale quality mining projects are possible in Kenya and that mining can replace coffee as the country’s fourth-largest export with approximately $2 billion in export revenue.

While many 
local communities typically associate the discovery of oil and minerals with instant wealth, Base has had to manage and communicate the expectations of the community in terms of  extending benefits such as employment opportunities (which will number about 1,000 during production), purchasing foodstuffs from the local area, and most important in payments. The proposed Kenya mining Bill specifies the sharing  of mining revenue with 75% going to the National Government, 20% to the county government, and 5% directly to the community which should alleviate some problems seen in Nigeria and Tanzania where locals don’t see benefits from the mines.

Carstens also said that Base Resources, which is listed in UK and Australia, is now 1% owned by Kenyan shareholders and they are continuing to talk to local fund managers on the potential for further investments in mining.

Tablet for Business Tales: Part I

How do you introduce someone who’s watched the new world of tablets, launched with the first iPad, go by very rapidly and evolve into many stronger models three years later – and who does not believe in them? Very gently…!

Despite the prevalence of iPads and other tablets at conferences, on the TV news, and even around Nairobi,  I still have not met anyone, other than @Wanyama, who uses a tablet productively as their main business device.

I recently got a generous offer to review the Samsung Galaxy Note 8.0 (Model GT-N5100) from Samsung Kenya after the recent 2013 Kenyan Blog Awards in which Samsung was a sponsor.

The first order of business was to get a SIM card, and that was at Safaricom who also cut the card down to micro-SIM size with a special stapler. It’s also very easy to switch the Note from Safaricom, to a Wi-Fi when you find a signal, and save on some money. I also bought a Micro SD card, but when it came to getting a hard shell/case for the Note that took a bit longer. I went to several shops, who all had a variety of 7″ and 10″ cases, and this is a new size in the market at 8″ (the Note is aimed at Apple’s new iPad mini), but eventually, I found one at Fone Express.

Need to invest in larger Suit Jacket pockets

Another challenge was portability of the Note. It does not seem to fit in many jacket pockets, but larger pockets are something one should request from a tailor when ordering a suit in the future!

Tablet’s are about apps, and there is a Google Play Store and a separate Samsung Store that I’ve not really tried. In the first month, from the Google one, I downloaded several apps I was familiar with such as:

– Evernote (great when you take notes on different devices like laptop’s or mobile phone and sync) and Adobe Reader

– Waze, Ma3Route and Ushahidi for Nairobi traffic updates

– Skype for communications

– The New York Times, Bloomberg, the Financial Times and the Wall Street Journal for news

– DSTV to see programming highlights

– Tried out several simple farming applications to track farm inputs and sales.

Road Bump: Swype is a nifty program that makes typing faster in touch screen devices. It costs $0.99 and I was able to buy it from the Google store (which also prices paid apps in Kenya Shillings) after I added my credit card details. However, when I uploaded Swype, I found that I could not access the tablet as there was no keyboard to Swype/type in my access password on the top screen.

I spent a few days going back and forth with the Swype (online) and then Samsung (in Nairobi) teams without success and I had no choice but to go for the most radical option – which was to wipe out the tablet.  This seems to be a common issue in the tablet world in which people are constantly adding and deleting apps, some of which don’t work properly, or compromise all devices.

There were quite a few guides online and videos on YouTube showing the simple commands to reset it to factory mode – and fortunately, it worked! Within a few minutes, the tablet was back to life, and once I got online, the previously downloaded apps were ready to re-install including Swype, which I’ve re-added, without incurring an additional charge.

So far the Note is growing on me. It’s nice and easy to use for taking notes at meetings, where I previously used to carry around a laptop. With a hard case, and larger jackets, let’s see where how far this can go.