Category Archives: Bralirwa IPO

Dividend Payments across East Africa – Redux

It’s been four years since this post and the signs are still not encouraging for cross-border dividend payments across East Africa.

Good – Safaricom: I get my dividends by M-Pesa – in fact one came last week, right on the 15th anniversary of the company. At Safaricom, M-Pesa is the preferred method of paying dividends which are below Kshs 70,000 to shareholders – and this would work for almost 99% of their individual shareholders who all own less than 100,000 shares each.

But for Ugandan shareholders of Safaricom, to receive the share of the largest dividend in Kenya’s history ($256 million), they get a cheque in the mailbox  that takes 4 days to clear. The next thing for M-Pesa dividends is to have them automatically reinvested into buying other shares; but for now you can instantly lock the funds away in an interest earning M-Pesa fixed deposit.

No change – Stanbic Uganda: Shareholders in Kenya get a cheque in the mail which takes one month to clear and costs $8-10 per cheque. No improvement, and not likely to change.

Bad:  (a surprising step back this year is) Bralirwa: At last review, Bralirwa (the Rwanda brewery) dividend cheques were issued KCB Rwanda, and KCB Kenya was encasing cheques at their branches in Kenya provided Kenyan shareholders presented their cheques, and proved their identity – they could receive equivalent cash payments up to RWF50K (~$67).

This year that option is not there as KCB Kenya is not encashing cheques! A shareholder has to deposit the dividend cheque into KCB or any other Kenyan bank to get they payment.  I tried that at my Barclays branch and they refused as they simply don’t have Rwanda francs in their bank system.

10 November 2015

Shares Portfolio: November 2014

Comparing shares to last year and last quarter, the portfolio is up 7% in three months (excluding new investments), while the NSE 20 share index is up is up 0.5% since August 2014.

The Stable

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Bralirwa (Rwanda) ↓
Centum  (ICDCI) ↑
Diamond Trust ↓
KCB ↓
Kenya Airways ↓
Kenya Oil ↑
Mumias Sugar
Nairobi Shares Exchange ↑
Safaricom ↑
Scangroup ↓
Stanbic (Uganda) ↑
Unga ↑
Changes
In: Mumias Sugar
Out: None
Increase: Kenya Airways, KCB, Scangroup
Decrease: None
Best performer: NSE Kenya (up 121% since IPO), Centum (16%), (Unga 14%)
Worst performer: Kenya Airways (down 22%) Bralirwa (down 19%)
Unexpected Events:
– Bralirwa share dip which has been linked to the bonus share
– KQ’s loss in the half year. Amid the arrival of a half-dozen new Boeing 787 Dreamliners and other aircraft and long serving CEO Titus Naikuni stepping down there was one more shock from the airline in the form of a half year loss of Kshs 10.45 billion ($116 million)
– Are Kenya bank stocks overvalued as a Citi report says?
– Listings by Kurwitu Ventures (at Kshs 1,500 per share, which was higher than British American Tobacco that’s at 904 now) and Flame Tree (FTG) in recent weeks in the GEMS category of the NSE.
– Both Equity and Housing Finance forming holding companies and transferring banking and mortgage business respectively to the new group parents.
– The vicious fallout between BritAm and Cytonn.
Looking forward to
– Unga’s acquisition of Ennsvalley, a bakery worth Kshs 500 million ($5.55 million)
– Uchumi’s rights issue to raise Kshs 895 million ($10 million) by offering shareholders 3 shares for every 8 held at Kshs 9 per share, with the funds to be used for expansion in East Africa and refurbishment of stores.
– Seeing how Mumias Sugar shares proceed..having gone from highs of Kshs 40 in years past, to 1.4 this month.

Thanksgiving Portfolio November 2012

Compared to last quarter  and four years back.
The Stable
Barclays
Bralirwa (Rwanda)
Diamond Trust Bank
East African Breweries (EABL)
Equity Bank
Kenya Airways
Kenya Commercial Bank (KCB)
Kenya Oil Company (Kenol)
Safaricom
Scangroup
Stanbic (Uganda)
Unga ↔
What’s changed?
In: Unga
Out: None
Increase: None
Decrease: None
Dividends: Safaricom, KCB, Barclays, EABL
Unexpected gains/losses: Bralirwa’s share price appreciation and Safaricom’s rebound (back up to the Kshs 5/+ IPO price) coupled against another shocking half years Kenya Airways forex loss
New listings not taken on: There are on-going rights issues for Family Bank, UAP Insurance, SMEP Trust, Uchumi and CFC Stanbic

Best performer: Bralirwa’s (up 54% in 3 months) then Safaricom, Diamond Trust, KCB
Worst Performer: Stanbic Uganda (down 33%) 
Performance Summary: The NSE 20 share index is up 10% in the last three months, while this portfolio is up 22%. Compared to four years ago, the NSE Index is up just 6%, but the portfolio only had Diamond TrustKCB SafaricomScangroup Stanbic (Uganda)↓ in 2008, is much larger.

Guide to Kigali

A guest post by Niti Bhan
Getting There is not difficult  as there are Kenya Airways flights and also Rwandair flights. Our experience with Kenya Airways was not the best however. Our flight (via Bujumbura, Burundi) was on time and comfortable but the luggage for ALL, but three, passengers was never loaded in Nairobi, (or so they told us). Though, we were traveling under the “Priority” luggage tag due to colleague’s KLM frequent flyer card, the luggage arrived the following day, with the locks broken on the suitcases and the contents ransacked. 
In terms of  Visa and eGovernment, this aspect was very impressive, even before we left for Rwanda  We applied for visas online in the morning and though the response to the submission said it would take three (3) days for the visa, we received our PDF visa documents the very same day by email  (to be printed out and carried on the flight).  The payment for this cost US$ 30 at the airport and there is a little process of approaching the immigration counter before one is sent to pay at a cashier and then return  for a stamp.

The duty free at the airport is ridiculously cheap – with cigarettes cartons US$1 cheaper than in Nairobi and the Scottish single malt, Glenmorangie, cost just US$28 as compared to $40-50 for the same bottle in Singapore, Europe and the USA!

Getting around : The first thing to note in comparison to Nairobi is there is little traffic except for rush hour in morning and evening. The roads are wide, even, and clean and it was a pleasure to drive even during evening hours.

Kigali is a small town and reminds me of Bangalore in the late 1980s before the big boom – it has pleasant weather, mountainous vistas, hillsides with homes and a slower pace filled with mopeds – such as TVS 50 and ubiquitous  “motos” = boda bodas. All drivers have helmets, with spare for riders and they are marked with numbers and names. Taxis were less commonly seen.

Where to stay:
We stayed at the Hotel Chez Lando – close enough to the airport yet it felt central to the town. We paid US$ 60 per single room which were neat, clean and comfortable. Only soap is offered in the bathrooms though and such amenities were limited. On the other hand, guests have Wi-Fi internet  access (via password) throughout this garden style hotel.

There is breakfast included in the rooms, as well as a bar and restaurant . The hotel also has pleasant walkways with the heady scent of night blooming jasmine when walking through to the guest rooms.

Note: There was a theft in my room and the front desk was reluctant to act upon it in any way. We hear that police tend to say “It must be Kenyans” if thefts occur, and this had also happened to our colleague who had her house burgled by 4 armed men who took everything of value. Rwandans will claim Kigali is safer than Nairobi, but I leave that to your judgment.

Communications: Our Safaricom connection worked but even though Airtel advertising has seen around Kigali  the prepaid Airtel one did not, – & they say that it will be arriving soon.

The top two service operators here are MTN (see everywhere, discreetly) and Tigo. We also saw  internet cafes and  one assumes most businesses and hotels have broadband as that was widely advertised through RwandaTel. Is Rwanda working towards internet access (and thus provision of eGovernment services) for all? Yes, that I would agree with based on what I heard (though MTN money from the city to rural recipients, is not yet convenient for due to shortage of agents) and saw (our visa response rates)

Dining We ate at the Hotel Chez Lando that was reasonable with beer in an open air environment, food tends towards a European menu rather than more local offerings that seem available in Kenya;  one of the many Chinese restaurants  had good food, fast service and was affordable and there was also KhanaKhazana – a premium Indian restaurant  whose food (speaking as an Indian from India) was superb, some of the best I’ve eaten and the restaurant was packed with expats from all over the world.  The service was better, in my personal estimation, than in Kenya, although our Kenyan
colleagues feel the Rwandans to be slow. There is tradeoff made there for waiters here are empathetic, courteous, and willing to help you choose and navigate the menu.

Beer: Mutzig is the highly recommended local beer and its better than a Heineken and maybe (dare I say) than  Tusker! It comes in two sizes, extra large and regular and is the preferred beer over the more plebian Primus (considered the Budweiser of Rwanda). 

Our hotel’s bar was packed with non resident diners (the front half is separated by a garden gate from the residential half) and had TV sets, a pool table and casual open air seating. On the other hand, with all its non smoking rules, and Rwanda is said to be stricter about smoking than Kenya.  However, this was not felt as a major constraint by our smoking colleague.

Shopping & Sightseeing: Not much of this happened due to our packed
work schedule but a  must-see in Rwanda is the Genocide Museum in Butare. The reverberations of this nations’ events of 1994  can still be sensed across the country (we went deep south close to the Burundi border as part of our
work, passing the Ethnographic Museum) and influences the country’s patterns of behaviour. April is the national month of mourning and the country, effectively shuts down.

Rwanda cannot be understood without understanding this national event, and even our group (on a commercial trip) could not avoid the bullet holes in our local office, or the scars – both mental and physical – as some of our colleagues, narrated their stories of survival.

Business opportunities: MTN Money has been there for three years but rural agents are not as common as the local Bank Populaire de Rwanda – which has more rural outlets than MTN Money agents per local interviews on cash flow,  although for the city dwellers, it is more convenient. There is opportunity here, as the government moves towards eGovernment and providing internet access for all, for a wide variety of services and applications on the mobile platform.

One also did not see much activity such as jua kali metalworks, fabricators etc. and the rural market’s household goods shop had only china made offerings and no local ware such as in Kenya. Only one tailor was seen on the 110 KM trip to upcountry locale. Biashara is not as obvious nor as common, and one has heard is much more regulated by local councils and regions. In Kigali, Indians were seen doing business as were the Chinese.

Biggest Surprise: Rural Rwanda barely noticed us mzungus and we did not feel we were foreigners like we had in other rural regions e.g.  in Kenya. Only in a rural market, was our Kenyan colleague teased for having a mzungu with her. Our second biggest surprise, (coming from Kenya,) was the minimal wall paintings seen  across rural Rwanda and how structured and regimented the buildings were – similar construction, similar colours and mostly natural earth walls in comparison to the bright series of walls  (with cheap corporate advertising) one sees in Kenya.

Overall, a peaceful, small, well managed nation was the impression left although one could see prisoners in their bright orange suits at work in the city as well in the rice fields in the rural areas. Prisoners do not escape when working the fields because, if they do, their families homestead will be confiscated in return by the government.

Summary: The sense was that Kagame would indeed reach his 2020 vision of becoming the Singapore of Africa, but I add the caveat of the obvious and unnecessary thefts from the hotel room as a caution.

Shares Portfolio November 2011

Comparing changes to three months ago and a year ago, investor confidence has dipped further, and the Kenya shilling is even weaker, having fallen past the Kshs. 100/$ to the dollar before last week’s drastic rate hike by the Central Bank brought the rate back to to 95, but which also pushed most commercial banks loan rates to 25%

The Stable
Barclays Bank ↓
Bralirwa Breweries (Rwanda) ↑
British-American Investments (Britak) ↓
Diamond Trust Bank ↓
East African Breweries (EABL) ↓
Kenya Airways (KQ) ↓
Kenya Commercial Bank (KCB) ↓
Kenya Oil Company (Kenol) ↓
Scangroup ↓
Stanbic (Uganda) ↔
Uchumi Supermarkets ↓

Review: The Portfolio is down 2% in the last three months as is the NSE 20 Share Index, which is also down 2%.
– Best performer: Bralirwa 24% (only share that has appreciated in this Qquarter)
– Worst performer: Britak -38%, Kenya Airways -25%
– In: Britak
– Out: None
– Increase: KCB, KQ
– Decrease: None

Other
Splits: None
Bonus: None
Dividends: Interim from Kenol, and Barclays, and it was pleasant to be able to encash a Bralirwa Rwanda dividend cheque over the counter at KCB in Nairobi – unlike with Stanbic (UG) Uganda, that takes about a month clearing and the bank charges can take a huge chunk out.

Events:
– Safaricom shocked with a 47% drop in half year profits to September 2011.
– Kenya Airways got shareholder approval for a rights issue to finance fleet expansion in the next few months (Said to be at Kshs 21/= which is about where the share is now.
– Tanzania has the Precision Air IPO and Tanzania Breweries sale but the mixed signals – welcoming/shutting out East Africans, and not getting proper approval from Kenya’s capital markets means there’s likely to be little cross-border participation once results are announced.

Data: The NSE now has a shares app for Android mobile phones and signed a partnership creating two new FTSE NSE indices.