Category Archives: Investing in Kenya

Kenya’s Money in the Past: Nairobi Stock Exchange in 1997

What companies were listed on the Nairobi Stock Exchange, twenty years ago, in 1997? A chart of listed shares appeared in Financial Review which was a popular magazine that featured business, and later political stories.

Still Listed
BAT Kenya
Bamburi Portland Cement
Barclays Bank of Kenya
Car & General
Carbacid Investments
Credit Finance  (later CFC, now Stanbic?)
Diamond Trust
Dunlop Kenya (now Olympia)
Eaagads
East African Breweries
East African Cables
East African Portland Cement
E. A. Oxygen (now BOC)
Express Kenya

ICDC Investment (rebranded as Centum)
Jubilee Insurance
Kakuzi
Kapchorua Tea
George Williamson (Williamson Tea)
Kenya Oil (Kenol)
Kenya Power & Lighting
Limuru Tea
Nation Printers & Publishers (now Nation Media Group)
National Industrial Credit (now NIC Bank)
Pan Africa Insurance (now Sanlam Kenya)
Sasini Tea
Unga Group


De-Listed 
CMC Holdings
A. Baumann & Co
Brooke Bond (became Unilever Tea)
Hutchings Biemer
Elliotts Bakeries
Kenya Orchards
Marshalls
Ol Pejeta Ranching
Timsales
Uplands Bacon Company

Gone
African Tours & Hotels (now Kenya Safari Lodges)
Chancery Investments
Consolidated Holdings
City Brewery Investments
E. A Bag & Cordage
E. A . Packaging
E. A. Road Services
Kenya National Mills (absorbed into Unga)
KCC (there’s now New KCC)
Motor Mart & Exchange
Pearl Dry Cleaners
Philip Harrison & Crossfield
Sofar Investments
Theta Group

This Standard article explains what happened to some of the companies. e.g. City Brewery manufactured City Lager beer, and Theta was a tea factory while many others were bought out or went out of business,

Also, see Who Controls Industry in Kenya in 1968. 

Kenya’s Money in the Past: Spymaster Memoirs by Bart Kibati

Excerpts from the Memoirs of a Kenyan Spymaster, a unique autobiography by Bart Joseph Kibati who worked in national intelligence for over two decades, where his job was to, with others in the business, identify and analyze threats and advise the government. It is a revealing look at many sectors of his life (he got married the same day that Tom Mboya was shot), Kenya’s transformation in the independence era, the business environment, and the state of security in East Africa and international relations, while serving in two administrations during  which he interacted with Presidents’ Kenyatta and Moi.

Spymaster excerpts

Police & Cattle & Remote areas

  • Cattle rustling by cattle raiders – Ngorokos (former soldier) has long been a feature in Kenya, with Laikipia and Samburu raids spilling over to Turkana, Baringo and Isiolo areas. Suguta Valley where over 40 police were killed in 2012 is a place that police have long avoided going to for years because of the dangers.
  • While the ‘Ngoroko’ plot against Moi, was a myth, it was based a well-intended idea to have an elite fighting unit to chase and deal with bandits.
  • For decades, Lamu’s Boni forest, which is near the Somalia border, has been a hideout for poachers & bandits and this has been sustained by poor policing practices in the area and support by local tribes.

East Africa & Leadership Styles

  • Some keen observations on some of the factors such as economic desires, ideology & actions of leaders  – Kenyatta, Nyerere and Obote/Amin and other political party & government officials in the run-up to why the East Africa community collapsed.
  • Two days after the signing of an East African a treaty in 1963, there were coup attempts in all three EAC countries.
  • To make their decisions, Kenyatta relied on finished intelligence information, while Moi wanted raw information.
  • Moi wanted to know why the Kikuyu hated him and Bart told him about quotas in education and government, and the collapse of their banks (which were rolled into Consolidated Bank) and area infrastructure, to which Moi replied: “How can the government build infrastructure if they ask donors not to release funds?”

Industry & Economy

  • Beach plots allocated by the President and partnership with hoteliers resulted in massive hotel empires at the coast or wealth from selling utility plots – by people around the president.
  • The greed of property developers and corruption of environmental regulators.
  • The government moved to grant duty-free cars to university lecturers in a move to pacify their radical ways.
  • Coffee smuggling from Uganda, through Chepkube, opened the eyes of many people in government, including police, to quick great wealth that could come from corruption.
  • The Numerical Machine Corporation was a success. It just could not shed the ‘Nyayo car’ tag.

Human Resources  & Working in the Government: 

  • When he finished form four at Mangu High School, he had job offers to work at East African Airways, Barclays Bank, the Post Office, Kenyatta University, and also the option to continue his schooling at A levels!
  • The recent repeal of indemnity for security forces (and TJRC) makes it hard to do police work such as combating terror threats and is a demonization of patriots.
  • How colleagues, and politicians scheme to transfer, promote or demote other security staff.
  • There is no pension for older Kenyans who, while experienced, are discarded under the guise that they are preventing youth from getting jobs. It seems the Government hopes they will die soon and stop draining the meagre government pension.
  • There were no successful coups in Kenya due to (long-term spymaster chief) Kanyotu and the Special Branch. The 1982 coup was unnecessary;  It could have been stopped but for a leak and bureaucracy. But Kanyotu was later misled by Pattni into the Goldenberg scam.
  • The more open that national intelligence services become, with things like having a visible head (of tee NIS) and a website, the less effective they have become.
  • Finally, he ends by asking if Kenya is facing more terror attacks, urban crimes, and rural banditry today because the country doesn’t have a functional intelligence collecting unit. Or there’s more reliance on technical intelligence than human intelligence by a demoralized, ethnicized spy unit.

Some revelations in Spymaster are shocking, but many of the stories have been cited elsewhere with different interpretations, and many of the people named have passed on, or circumstances have changed. Also another story elsewhere, quotes Lee Njiru a long time civil servant who says that: (the) Official Secrets Act binds civil servants to keep secrets for 30 years and the period had elapsed and he was now free to share what he knows.

Also read The Birth of an Airline by Owaahh, which narrates from the Spymaster book, about the break-up of East African Airways and the birth of Kenya Airways.

Huawei Mate 10 Kenya Launch

Huawei has launched its Mate 10, a premium phone in Kenya in conjunction with e-commerce platform Jumia. The company which now sells 140 million phones a year, and aims to power past Samsung and Apple in the global phone sales race, has been in Kenya for 19 years powering base-stations, communications, surveillance, and fibre networks, devices and systems including M-Pesa and will next do intelligent traffic lights starting in Nairobi.

Huwaei’s traditions of innovation, research, engineering, patents and new technology are all seen in the Huawei Mate 10 which is compact than its Mate 9 predecessor, but with the same screen size. The Huawei Mate 10 runs on Android 8.0 and is powered by the Kirin 970, a powerful Huawei-made chipset which enables the artificial intelligence (AI) capabilities for the phone to study the phone user’s habits, and predicts future usage and allocates phone resources to enhance the user experience.

The AI also allows real-time translation on the phone, by voice or of documents, by taking a picture (e.g. of a page of Chinese text) of 50 languages (and counting). This happens on the phone, not in the cloud, and this provides better privacy & security for the user, minimizes data usage and is faster. Huawei has a partnership with camera maker Leica that has seen them enhance photography capabilities; e.g. the Mate 10 camera recognizes millions of images of people, scenes and objects like food being photographed and optimizes the settings to produce better pictures from the combination of two 20X and 12X cameras.

For practical use in many markets, the Mate 10 is a dual SIM phone capable of holding two 4G SIM cards, and the new powerful battery will easily last two days with normal use despite the large screen and fast processing speeds – and a quick charge of the phone for just 20 minutes should be enough to get a full day of use. The Mate 10 has a curved back for easy grip and is spill and dust resistant.

The Mate 10 can be plugged into a screen to work like a desktop for the user to make edits and show items like demos and presentations right from the phone. The split-screen allows true multitasking of functions and the user can still take calls or check social media while working on other projects.

The Mate 10 phone is now available exclusively on Jumia for Kshs 79,999  (~$775) and for the Black Friday sale period, Jumia is offering a free power bank and a Kshs 2,000 shopper voucher. In the coming weeks, there will be more variants of the Mate 10 offered on Jumia, at Safaricom shops and the open market including the Mate 10 Lite phone that will retail for about $500.

Government Guarantee to Kenya Airways and Shareholding Increase

Today the Kenya government signed guarantee deals to secure Kenya Airways (KQ) continued financial support from EXIM Bank US, and a consortium of Kenya banks and also converted its debt to more equity, significantly altering the ownership structure of the airline.

The Government had advanced loans of Kshs 4.2 billion and $197million to KQ, and the debt conversion will see a 19.1% increase in their shareholding. Aside from, that Kenyan banks, which were owed $217 million, received a 38.1% shareholding in KQ in exchange for $167 million of that debt.

The $267 million government debt and bank conversions are part of a series of complex restructuring deals. The resultant shareholding of KQ will be Kenya Government 48.9%, Kenyan banks 38.1%, KLM 7.8%, and other shareholders will have 5.2%, after a  massive dilution that shareholders approved at an EGM in August 2017. Not all bank and all government debts were converted as that would have seen the government stake go above 51% and they wanted KQ to remain a private company, not a state/parastatal one. The restructured board will comprise 3 directors from the Government, 2 from the banks, and KLM will have 1 representative.

Treasury Cabinet Secretary Henry Rotich said that the guarantee and restructuring by the government was not a bailout and the Government expected repayments of dividends from KQ within the next decade. The Government had been faced with two options with regard to KQ one of which (folding the airline) it could not pursue, and it chose the other, to support the airline, for which, the Cabinet confirmed through an independent business case study by the Seabury Group, that the airline could, through shareholder support, be turned around and have a viable future. He said the capital optimization would enable the airline to trade on its own balance sheet.

Transport Cabinet Secretary James Macharia said that aviation sector, led by Kenya Airways,  contributes 10% to Kenya’s GDP and was a central engine that supports other economic activities like investments, horticulture, and tourism. Also by having a strong KQ, this would strengthen the case to make Nairobi’s JKIA airport a regional hub and his Ministry was in the process of finalizing plans to add a second runway and expanding existing terminals to enable the airport to serve 12 million travelers a year.

The bank shareholding will be through KQ Lenders Co, a special purpose vehicle that will be managed by Minerva Fiduciary Services of Mauritius and the agreement was signed by Madabhushi Soundararajan a career-banker, as director.

NASA Post-Election Economic Boycott of Brookside, Bidco, Safaricom

Last week, Kenya’s opposition movement, the National Super Alliance (NASA), who boycotted the repeat presidential election held on October 26, announced an “economic liberation programme” and called on their followers to boycott the products of three companies Bidco, Brookside, and Safaricom.

What’s the link?

Brookside Dairies is associated with the family of President Uhuru Kenyatta. The company was started in 1993 and Brookside has grown to control about  44% of the processed milk market in the country, ahead of New KCC and Githunguri Dairies.

Brookside has acquired several dairy companies and still sells milk under their original brands including Tuzo, Molo Milk, Ilara and Delamere.  While the NASA statement mentions that when Jubilee took over milk farmers were getting Kshs 35 per litre while consumers paid Kshs 72 per litre, and that today farmers still get Kshs 35 while consumers pay 120 per litre, the economics of milk prices is a complex one, not attributed to the processor alone. Brookside collects milk from over 160,000 farmers every day.

Safari com: MP’s from the NASA side have  accused Safaricom, arguably Kenya’s most successful company, and some of its employees who they publicly named, of enabling  incorrect election results to be transmitted during the August 8 elections, something which the company has denied and also expressed concern that their employees had been needlessly endangered as they did their jobs and the company merely fulfilled a contract to support the 2017 Kenya general election.

NASA MP’s have gone ahead to public switch from using Safaricom to rival Airtel, even as Safaricom dealers warned of dire effects for their employees and communities.

Safaricom has 6 of its 45 shops in the Western/ Nyanza Region which is the bedrock of NASA support. Whether this is a turning  point for Airtel in Kenya as a company which has branded as Kencel, Celtel, and Zain and which has steadily lost ground and value to Safaricom over the years, remains to be seen.

But members of parliament from ODM (the main party in NASA)  have in the past voiced critical comments about some of their issues with Safaricom from even before the 2017 election –  especially during debate on the gambling and sport betting bills in the last parliament, earlier this year.

Here are some comments by Nicholas Gumbo, the then-Member of Parliament for Rarieda and Chairman of the Public Accounts Committee in the National Assembly.

Then-Member of Parliament for Gem and Deputy Minority Leader, Jakoyo Midiwo threatened on more than one occasion to introduce legislation to break Safaricom.

Bidco: The edible oils company is probably the most vulnerable of the three brands, and was likely targeted because its group chairman Vimal Shah, is the chairman of MKenya Daima an offshoot of the Kenya Private Sector Alliance (KEPSA), of which he’s a past Chairman, and which has throughout the election season been championing for respect of the election outcomes, grievances to be addressed in the constitutional ways (through the courts), for politicians to be careful about their public utterances and for normal business life to resume. KEPSA recently released a statement that read:

This is why we have consistently called Kenyans’ attention to the disastrous economic consequences of the present uncertainty which affects all Kenyans. The Private Sector having reviewed the loss and has estimated it to be about 10 per cent of the GDP equivalent to Kshs 700 Billion

Earlier this year, Bidco announced plans to become a billion dollar turnover (Kshs 103 billion) company by 2021 (their current turnover is Kshs 25 billion) by diversifying into the production of fruit juice, soft drinks, and cereal products.