Monthly Archives: August 2014

Shares Portfolio August 2014

The Stable

snoop

Bralirwa (Rwanda) ↑

Diamond Trust Bank ↑

ICDCI (Centum) ↑

Kenya Airways ↓

Kenya Commercial Bank (KCB) ↑

Kenya Oil Company (Kenol) ↓

Safaricom ↓

Scangroup ↓

Stanbic (Uganda) ↓

Unga ↑

Review

  • Comparing the basket to one year ago, the portfolio, excluding new shares, is up 22% since May 2014 while the Nairobi Shares Exchange main index is up 5% over the same period.
  • Best Performer: Centum (up 36% in 3 months), KCB 23%
  • Worst Performer: Kenya Airways (down 15% in 3 months), Kenol -8%
  • In: NSE
  • Out: Barclays, Equity, Portland Cement
  • Increase: Diamond Trust, Centum, Kenya Airways
  • Decrease: None
  • Unexpected gains/losses:  Centum’s endless deal making.

Reading the Tea leaves at Centum, Kenya Airways, Safaricom

Three companies that had their year-end in March 2014 have just published their annual reports which are now found on their individual websites. 

Centum
Has  a (massive ) 160 page annual report and 37,000 shareholders

  • At the August 2014 AGM shareholders will be asked to approve items including:
  1. The incorporation of Two Rivers Property owners Company
  2. The incorporation of Two Rivers lifestyle Centre limited Kenya branch
  3. The acquisition of 30% shareholding in Broll Kenya
  4. The acquisition of 73% shareholding in Genesis investment Managers Kenya
  5.  The incorporation of King Beverages
  6. The incorporation of Bakki Holdco
  7. The incorporation of Shefa Holdings

Other Notes

  • Rent income went from Kshs 6 billion in 2013 to Kshs 17 million in 2014?
  •  Other income was Kshs 443M, up from 12M
  • Cash flow went from Kshs 1.5B  to (minus)  -448<
  • The restated accounts have Kshs 237M paid to company shareholders, yet there are no dividends declared to be paid this year
  • For Genesis, they paid 1 billion for a company worth 153 million
  • They raised Kshs 4.1 billion in 2012 at about 13%
  • Centum Exotics owe Kshs 2 billion, Centum developments owe 1.8 billion and Two Rivers owe 2.5 billion to the company
  • 81% of investments are in Kenya, 13% in East Africa, and 5% outside and 87% of the groups assets are not held on any stock exchange. Centum’s investments include 17.8%  of General Motors East Africa, 15% of NAS Air  services, 27% of KWAL, 27% of Nairobi Bottlers & 43% of Almasi (Coca Cola bottlers), 35% of Platinum Credit, 1.6% of K-Rep bank, and 21.5% of AON Minet & 13.8% of UAP insurance companies

Kenya Airways (KQ)
130 page annual report and has 77 000 shareholders.

  • Are owed Kshs 156 million of Precision Airline of Tanzania (down from 242M)  and they own 41% of the airline.  KLM owns 27% of KQ. KQ are owed 4 billion by Aircraft Cargo Handling  and they owe the company back 7 billion
  • Have 12 year loans with Afrexim, Citibank, Stanchart that are guaranteed by USEximBank, while Co-Op bank financed purchase of a spare Embraer engine. The loans are at rates of 3.5 to 6.5%, and total $1 billion
  • KQ has paid Kshs 27 billion in airline deposits, and got a refund of about Kshs 2.8 billion in 2014 (from Boeing?). KQ also has Kshs 26 billion of aircraft lease commitments in the future.

The B787-8 aircraft will replace the B767- 300s on a one for one basis. The B777-300ERs provide growth in capacity. The B737-300s exit the fleet as JamboJet gains it’s Operating Certificate and determines its own fleet requirements. Two of the E170s will be returned to the lessor as will two B737- 800s, which will be replaced with new leased aircraft. KQ Embraer 190

The most important project for the Information Systems team during the year under review was the Boeing 787 e-Enabling project. The project was set up in February 2013 to implement the e-Enabling platform design recommended by Boeing for the B787 aircraft. The purpose of the e-Enabling platform is to ensure secure transfer of B787 Aircraft Software from Boeing servers to Kenya Airways servers and subsequently into the B787 aircraft.

  • JamboJet lost Kshs 118 million so far, but KQ will apply a deferred tax of 221 million from Flamingo, their previous low cost subsidiary airline against that
  • KQ sas 4,000  employees and also has an ESOP that has been inactive since 2006 (with 2 million shares) . While outgoing CEO Naikuni (famously) still has no shares, directors with shares include Alex Mbugua with 25,000 while Chairman Evans Mwaniki has 42,000.
  •   Spent Kshs 40 billion on fuel & oil, and 8 billion on aircraft hire. Have  Kshs 1 billion in fuel derivatives
  • Have Kshs 106 billion in revenue (85% from passenger flights) and 89% of revenue is foreign (i.e. non-local flights) and they fly to 62 foreign destinations
  • Putting a damper on Africa Rising, the Chairman’s statement notes that

African airlines international air travel expanded by 5.5% in 2013, a solid result but slower than growth in 2012 (7.5%). Overall, the demand backdrop for carriers in the region was strong, with robust economic growth of local economies and continued development of internationally trading industries. But some parts of the continent showed weakness, including the South African economy which recently experienced a slowdown. There has also been some slowdown in regional trade growth

  • The Kshs 5 billion loss in 2014 is an improvement from an 11 billion loss the year before.

Safaricom
136 pages and has 660,000 shareholders.

  • The Communications Authority (ex-CCK) gave Safaricom credit of Kshs 542 million against a license of Kshs 696 million.

Safaricom’s operating licence was issued for a period of 15 years from 1 July 1999 to 30 June 2014. On 25 June 2014, the Communications Authority of Kenya (CAK), formerly the Communications Commission of Kenya (CCK), confirmed the renewal of Safaricom’s operating licence for a further ten years from 1 July 2014 to 30 June 2024 at a renewal fee of USD 27 million.

  • Own 32% of TEAMS  (up from 22.5%). The company  acquired 10% at a cost of (just) Kshs 550, 620?!  TEAMS  had revenue of Kshs 382 million and a profit of Kshs 42 million in 2014. In 2013 they paid Kshs 556 million for the remaining 49% of One Communication which also has a deferred tax asset of Kshs 204 million.
  • There is an M-Pesa holding company that is separate from the company and who are trustees of all the funds that are held in M-Pesa. There is also a Safaricom Foundation that participates in many (small) projects and an M-Pesa foundation that is involved in larger (and fewer) projects.
  • Have Kshs 12 billion of bonds that retire in the next 18 month (7 billion in Nov 2014 and 4.2 billion in Dec 2015)
  • Bonga points; 84% of the points redeemed were for non-merchandise items (airtime, voice minutes, data bytes and SMS) while 16% were redeemed for merchandise items (phones, tablets?) in 2014.
  • The company bid and won a Kshs 201 million deal to brand Kasarani stadium and gymnasium
  • Lipa Kodi has 88 housing agents collecting rent from 60,000 houses while 122,000 merchants have signed on with Lipa Na M-Pesa
  • Directors: Chairman Nicholas Nganga has 885,00 shares, Michael Joseph has 2.3 million, Esther Koimett 517,000 and CEO Bob Collymore has 908,000
  • The newspapers in August 2014 note that shareholders will be asked to approve base station purchase from Yu for $1 million

5 Reasons not to link your Bank and Mobile money accounts

Safaricom, the mobile money market leader with M-Pesa with 19 million customers has partnerships with 30 banks and 160 financial institutions as per their 2014 annual report that notes The new (API) platform (launched in January 2014) helped streamline operations for businesses that disburse staff salaries through M-PESA, as well as those that receive payments through M-PESA and need to move cash to their bank accounts on a regular basis. 

It seems to  very convenient to link your bank to your mobile money account – so that you can top-up your mobile money account. More so when you really need it in an emergency, or late at night or when on the road far away from any mobile money agent – but with just a few clicks on your phone, you get the cash you need to facilitate whatever need.

But there are some issues to consider about having the convenience of drawing cash from your bank account sraight on to your phone.

1. It drains savings. Looking at my M-Pesa statement at the Selfcare page on the Safaricom site, most of the activity that I use M-Pesa for is for payments out. All deposits are made with a purpose, usually to pay out a corresponding amount soon after either as remittance, utility bills, airtime, meals, repairs etc.  It is easier to pay out money than build savings, and there are few savings options like M-Shwari, compared to the hundreds of expense item ones.

2. It is costly, with banks charging about $1 (Kshs 75-250) for customers to tap their phones and do the transfer from bank to mobile money. It costs much less, or is free to withdrawal cash from a bank ATM and deposit it at a mobile money agent.

3. Customers inevitably have things go wrong with their bank accounts – from misplaced funds to banks changing their terms or costs. What is  a transaction fails? or money  is sent to the wrong payee? Who do you complain to? You’re better off dealing  with customer service at one or the other, but not at both a mobile company and a bank

4. Banks may have less trust than telcos in terms of being custodians of small amounts of funds.

.. if you leave Kshs 1,000 (~$12) in your M-Pesa account it will be there until you use it, with no phantom charges eating it away (it won’t stay in your phone for 6 months). But if you leave the same Kshs 1,000 in your bank account for a few months, the money will be exhausted by various tariffs like ledger fees, dormant account fees, minimum balance fees and the account will be drained out and shut down.

5. Banks change their terms and conditions too often. M-Pesa tariffs were revised again this week after almost two years in a  very public way. Yet banks make several changes and don’t even inform customers till they see they stumble on new charges on their statements, or go to the bank and find that a service has been cancelled or changed.

Idea Exchange: Scholarships, Fellowships to Apply For

Applications are open for Chevening Scholarships  2015/2016. The Scholarships offers the opportunity to study for a one-year Master’s degree at leading UK universities and are awarded to outstanding established or emerging leaders across a wide range of fields: including Public Policy/Governance, International Law, Energy/Environment, Human Rights and Journalism. The deadline is 15 November.

EDIT CGI U 2015 Application Now Open. The eighth Clinton Global Initiative (CGI) U meeting takes place between March 6-8 2015, at the University of Miami, and will bring together more than 1,000 innovative student leaders to make Commitments to Action that address some of the world’s most pressing challenges. More than $500,000 in funding will be available to select CGI U 2015 students to help them turn their ideas into action. If you are 18 years or older and enrolled in an institution of higher education, Apply Now to be one as the early decision and travel assistance deadline is October 17, 2014, and the final application deadline is December 1, 2014.

The Deloitte Technology Fast50 Africa Programme is the region’s most objective industry-ranking to focus on the technology field, recognising technology companies that have achieved the fastest rates of revenue growth in Africa over the past five years. The deadline is 29 August.

The International Reporting Project (IRP) has a Health reporting trip that sends journalists to Mozambique (new media journalists are encouraged to apply) for an all-expense-paid, two-week reporting trip this fall. Interested applicants must be citizens of France, Germany, India, Japan, South Africa, the United Kingdom or the United States. Deadline is Sept. 2.

Five  (5) Journalism (5) opportunities to apply for in August include:

  • AJ+ offers reporting fellowship. Deadline was Aug. 1
  • Free online course in slideshow storytelling Starts Aug. 4
  • ICFJ, UN Climate Change Fellowship Deadline Aug. 12
  • Knight-Mozilla OpenNews Fellowship Deadline Aug. 16
  • Thomson Foundation hosts journalism competition Deadline Aug. 29

Apply to become a 2015 Knight-Mozilla Fellow  which comes with an opportunity to work with various leading news organizations. The deadline for applications is August 16.

Kenya’s Maktaba Award (Library of the Year Award) 2014 will be awarded in September. The Award, modeled on the German Library of the Year Award, aims to recognize excellence in the provision of library and information services in Kenya. Read More

The 2014 Mo Ibrahim Foundation Leadership Fellowships Programme is now accepting applications and those selected will receive mentoring from leaders at key multilateral institutions, namely the African Development Bank (AfDB), the International Trade Centre (ITC), and the United Nations Economic Commission for Africa (UNECA). To apply for this fellowship you must be a national of an African country,  have 7-10 years of relevant work experience, have a Master’s Degree, be under the age of 40 (or 45 for women with children) and the  deadline for submissions is 12 September.

The newly launched  Open and Collaborative Science in Development Network (OCSDNet) will provide funding support (of $50,000 to $80,000 CAD) to up to 15 case studies from eligible countries, mainly to researchers and practitioners affiliated with organizations based in countries that are eligible for support by the IDRC (these include within the Global South (Latin America, Middle East and North Africa, East and South Asia, and Sub-Saharan Africa). The deadline for submissions is September 8.

The Orange African Social Venture Prize  2014 aims to promote social innovation by supporting development through information and communication technologies (ICT). In addition to funding of up to 25,000 euros, Orange will provide support to three projects for six months from its local subsidiaries as well as expert advice from business and telecoms professionals, and the winner will benefit from a patent application that will be submitted and paid by Orange. Also, a special prize of 10,000 euros will be awarded to a project which has used an Orange API. Deadline is September 19.

Pivot East’s Mobile Impact Ventures Program (“MIVP”). The Mlab, East Africa’s accelerator program for impact ventures with innovative solutions in agriculture, health & water and education, is currently seeking applications for its second cohort. The program is backed by the Rockefeller and Tony Elumelu Foundations, through the Global Impact Investment Network’s (“GIIN”) Africa Impact Economy Innovations Fund (“IEIF”). The deadline is 27 August.

The Safaricom Journalism Fellowship Program at Strathmore University is designed to provide skills which combine technology literacy with business literacy for journalists engaged in business writing across the media houses in Kenya. The program will admit 15 of the most promising candidates in the first year.

StyledByAfrica seeks a Kenyan designer who will have a chance to feature at Berlin’s Fashion Week 2015. Young African designers based in Kenya are encouraged to apply by submitting a portfolio of their work to FA254′s official website. The deadline is August 20.

EDIT

Acumen:The Acumen East Africa Fellows Program is a one-year, fully-funded leadership development program that gives 20 individuals from across East Africa the training they need to accelerate their social impact and leadership potential. Applications are open until September 8.

Google RISE Awards are grants for organizations across the globe that promote Computer Science (CS) education or run initiatives that reach girls, underrepresented minorities, and students facing socio-economic barriers under age 18. Grants range from $15,000 to $50,000.

 Innovation Prize for Africa aims at mobilising leaders from all sectors to fuel African innovation in key sectors such as science, technology and engineering which contribute towards the sustainability of Africa. The IPA is becoming integral to facilitating ground-breaking thinking, creativity and driving awareness to the outstanding work being done in Africa by Africans. Entries for the Innovation Prize for Africa (IPA) 2015 are now open and the deadline for entries is 31 October 2014.  Note the IPA 2013 winner, AgriProtein went on to raise $11 million to build its first two commercial farms in Cape Town, South Africa.

Morland Writing Scholarships  are available for published works of between 2,000 to 5,000 words from anyone who has been born in Africa or both of whose parents were born in Africa. They are worth £18,000 and the application deadline is October 31.

TED Fellows: Apply now to be a 2015 TED Fellow. Deadline is September 21.

We look for different applicants than many other leadership-oriented programs. Instead of business people, professionals, policy wonks and government officials, the TED Fellows program focuses on doers, makers, inventors, advocates, filmmakers and photographers, musicians and artists, scientists, entrepreneurs, NGO heads, and human rights activists.

The inaugural East Africa Property Awards seek to bring together pioneers and leaders in real estate to showcase their products and who will be celebrated at a gala in Nairobi on November 27. There are 21 categories categories spanning across developers, real estate agents, interior design, telecommunications service providers and media. Apply before 11 November.

#TurnthePageonHateSpeech photo contest Are you a Journalist? Photographer? Filmmaker? Writer? Blogger? Cartoonist? Poet? Social Activist? Or simply an Engaged Citizen? Tell us What Hate Speech Means To You for a chance to win a free trip to the African Media Leaders’ Forum in Johannesburg! Deadline, October 15.

Ushahidi is launching a campaign dubbed Translators Power Ushahidi to help get 15 new languages translated to more than 80% completion by the end of 2014! Goodies and Schwag up for grabs.

See another EXTENSIVE list of online opportunities from Advance Africa.

What other opportunities are there for readers to apply for?

Hello WordPress

After almost 9 years of blogging on Google /Blogger, the blog has finally been migrated over to WordPress.

This is still a work in progress and I am still learning all the fun stuff on WordPress (and dealing with new volumes of spam) and all the new features on that I was never keen on, as I was focused on content, first.

The good folk at Angani have patiently walked me through the (ongoing) migration progress, coming over to visit and answering numerous newbie queries.

Over the next few days

– More features will be added

– Themes may change

– The (popular) reading list of other blogs will be restored

Feel free to suggest WordPress plug-ins and other business tools to add and also send in information of gaps in the site to fix