Category Archives: Stanbic 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 August 2012

Comparing to last quarter and a  year ago.   
The StableBarclays ↑
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) ↓
 
Review 
The portfolio, excluding new shares, is up 11% since May 2012 while the Nairobi Shares Exchange main index is up 6% over the same period.
  • Best Performer: Kenol (up 23% in 3 months), Bralirwa 14%)
  •  Worst Performer: Diamond Trust (down 8% in 3 months), Kenya Airways (after the rights issue that yielded
  • In: Equity Bank – read a recent  Equity Bank analysis report.
  • Out: Britak, Uchumi
  • Increase: Took up all of the Diamond Trust Bank rights
  • Decrease: none
  • Unexpected gains/losses: Kenol suspension was listed, Bonus share of Stanbic Uganda bonus was issued (4 new for every existing share)
  • Looking Forward to more listings like the one announced today from Umeme – a monopoly electricity distributor from Uganda that is 100% owned by Actis,  and which plans to have an IPO in Uganda and Kenya later this year.

Dividends Payments across East Africa

Having bought shares in recent East African IPO’s (Uganda: Stanbic Bank and Rwanda: Bralirwa Brewers), there appears to be some progress in addressing one of long standing problems of buying such shares – and this is the bank charges associated with receiving and having to process dividend cheques that are paid in currencies that are fractionally weaker than the Kenya shilling

With Stanbic, the Kenyan arm of the African bank has shown little interest in facilitating this even though a significant number of Stanbic Uganda’s 25,000 shareholders are Kenyan. In fact, the staff pension funds of Kenya Airways and Central Bank are listed among the top 10 shareholders of the bank.

At Bralirwa, the dividends are issued by KCB Rwanda and via a late message, KCB Kenya state they are paying/cashing the cheques up to RWF50K (~Kshs 8,000) across the counter. ( If higher the cheques will be sent for to Rwanda).

While the next step should be for East Africans to receive cross-border dividend payments by mobile money such as mpesa dividends this is only available to Kenyan shareholders. For now, the facilitation of affordable across-the-counter dividends, and other cross border trade & investment payment options is something that banks, not just KCB, with a regional footprint like Equity, Stanbic, Diamond Trust, and NIC should also take up.

EDIT: New communications from the banks show new options for Kenyans who have invested shares across East Africa as follows:

Bralirwa: Any cheques of less than RWF 50,000 (~Kshs 7,750) can be cashed at the counter of any KCB Kenya branch at a fee of RWF 200 (Kshs 31) on production of an ID or a passport

Stanbic Uganda: no certificates will be issued for the 1:1 bonus, and no physical annual reports will be mailed. But shareholders can now elect to receive dividends by electronic funds transfer, or mobile money (airtel money or m-pesa) after confirming their details at Comprite (Uganda) Registrars whose Nairobi office is at Marakwet House, Elgeyo Marakwet Road.

Shares Portfolio May 2011

Enjoying the fruits of some good 2010 performance in an uncertain 2011

Comparing share performance to three months and a year ago.

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

Review:
– Best performer: Bralirwa 11% (this Q), then East African Breweries 10%
– Worst performer: Kenol (-4%)
– In: Barclays
– Out: Safaricom
– Increase: Kenya Airways
– Decrease: None
– Performance: The Portfolio is down 1% in the last three months while the NSE 20 Share Index is down 7%
– Uchumi, which is out of receivership, has finally got the green light from the CMA to re-list at the Nairobi Stock Exchange, though the date and conditions of re-listing have not been specified.
– Safaricom’s 2010 results which will be released on May 18, are widely expected to show a drop in revenue and profit owing to the price wars in the mobile sector.
– Kenol resumed its battle the Ministry of Energy after a quiet period as motorists grappled with an unexpected shortage of petrol (This inspired an innovative site called Find Fuel . The Kenol AGM was live streamed and can be found on YouTube.

– Stanbic Uganda had reduced profits owing to bad loans combined with staff & IT expense increases.

Events & Outlook:
Looking forward to
– Dividend payments from Diamond Trust, KCB, Scangroup, Stanbic (Uganda), Kenol
– Bonus shares from Diamond Trust (1:5), Scangroup (1:5), and Stanbic Uganda (1:1)
– New share listings: There’s been no word yet from Transcentury and Britak. During the quarter, CFC-Stanbic spun off their insurance arm – CFC Insurance which is now listed on the stock exchange, and will soon to be joined at the NSE by CIC Insurance.

Why list?: The newspapers, this week had advertisements from the Capital Markets Authority (CMA) highlighting tax and other benefits of listing shares or raising capital in Kenya. These include;

Newly listed companies will enjoy reduced corporates taxes if;
(i) They list 20% of their shares, they will pay 27% income tax for the next three (3) years on profits (while other corporates pay 30%).
(ii) List 30% and pay 25% tax for next 5 years on profits.
(iii) List 40% and pay 20% tax for next 5 years on profits.

Tax exemptions;
– A tax amnesty on omitted past income
– Dividend taxes paid to venture capital firms
– Income to employee share option programs (ESOP’s)
– Interest income on long term infrastructure bonds

Also all East African nationals are treated as ‘locals’, not foreign investors in allocation of IPO shares and get (lower) withholding tax on their dividends. These and other tax deductible expenses including payments for credit-rating, listing & issuance costs, and some exemptions from stamp duty, can be found at the CMA site.

Share Portfolio February 2010

Unchanged since last quarter and compared to a year ago

The Stable

Diamond Trust ↑
Kenya Airways ↑
KCB ↑
Safaricom ↑
Scangroup ↑
Stanbic (Uganda) ↔
Uchumi ↔
Trades: None
In: None
Out: None
Increase/decrease: None
Best performer Kenya Airways up 106%, then Safaricom 38%
Worst Stanbic UG, no change (actually was up 5 UGX per share, but the Uganda shilling is weaker)
Unexpected Gains/Losses: None
Performance: Portfolio is up 11% while NSE index is up 17% in three months – thanks largely to Safaricom which is ¼ of the index.
Events
– Uchumi may resume trading at the Nairobi Stock Exchange after four years of suspension now that shareholders have approved restructuring of remaining debt in consultation with the banks who put the chain under receivership.
– Unlisted investments are tricky to track and problematic to measure or exit.