Monthly Archives: May 2006

2006 Nation AGM

The Nation Media Group held their 2006 AGM at their plant, located just after JKIA Airport in Mlolongo. The company had a very good 2005, during which its profits passed the 1 billion shilling threshold and its newspapers, television, radio and other divisions all showed impressive growth and significant market leadership.

Media censorship referendum
The Chairman Mr. H. Awori and the CEO Mr. W. Kiboro clearly stated that the company’s investment future was at risk if a draconian media bill drafted by the Ministry of Information is passed by Parliament. The bill would among other things;
– Limit media ownership e.g. nation newspapers would not be able to own more than 10&% of a radio or TV station. They currently own all 3 outlets.
– CCK board would loose its independence, and be packed by political appointees who will regulate the sector at the whim of the executive.
– A “content advisory committee” would determine what is acceptable to be broadcast, and also determine what can be screened, at specific times of the day.
– Rolls back media gains even further than during the dark autocratic days of previous government.

Future plans
– Will engage other bodies and the public to challenge the media bill.
– Company may soon increase the price of Daily Nation and Sunday Nation (first since 2001) to offset increased newsprint costs.
– To meet the demands for increased financial information by Kenyans, they will start a business daily paper
– New offices? MD Kiboro complained to his staff that there is too much noise on Kimathi Street (from nightclubs) and it’s difficult to work after 7 PM.

Kengen take note: With 200,000+ shareholders, Kengen can limit their AGM crowd capacity by holding their meeting at Masinga or Turkwell dams, far from Nairobi – The Nation has about 8,000 shareholders and hired over 10 Akamba buses to ferry shareholders 15 km to their plant.

Goodies Pleasant lunch in an open tent preceded the AGM. All shareholders received small gym bags, nation polo shirt, and copes of nation, taifa leo, east African and weekly advertiser. Lunch was “wedding food” – pilau, chichken, beef, and soda.

Shareholders questions
– First two shareholders to speak were AGM veterans who did not perform well today – each spoke for longer than the Chairman had before applauding paper’s coverage of Anglo leasing and other corruption.
– Asked for more dividend (which was the same as last year but puffed up by bonus share)
– Nation to mobilize the public against media bill
– Nation should consider offshore borrowing since the company is averse to borrowing locally and funds projects using internally generated cash (also to increase dividend payout)
– More complaints about BARS.

Barclays 2006 AGM

It’s AGM season again and there are simply too many of these to attend this month. I was at the Barclays one last year and will try and visit some new companies this year.

Mwananchi attended the 2006 Barclays AGM and was kind enough to contribute his report:

Held at KICC. Well organized & surprisingly not crowded. Started on time. Before you ask… there were lunch packs provided… more on that later…

BBK pays hefty dividends so not a problem on that end but there was a new Chairman Okomo-Okello also on TPSEA. (Serena)

In spite of the Chairman’s request that only financial/annual report related questions be asked prior to the adoption of the accounts, the usual UNRELATED questions started!

Questions & Answers:

  • Lunch doesn’t take into account dietary needs. Adan (Adan Mohammed is the Barclays MD) answered that it is not easy to have each shareholder’s needs provided for. The lady asking this question was within 3 metres of me & seemed very upset about lunch…
  • Freebies like umbrellas. Adan (no-nonsense) said giving freebies to the attending shareholders is not fair to those who could not come.
  • Transport/reimbursement from Shaags: Same answer as Freebie
  • Nothing or minimal questions on the accounts (Accounts then adopted)
  • Protests from one shareholder (aka VituVingiSana) who had relevant accounts/FS questions! After much mumbling he was allowed to ask why growth in assets doesn’t match the overall industry. Charles (FD) explained a major customer withdrew his “holdings” after the liability matured.

AOB:
The non-financial questions were answered at this stage. There was an EXCEPTIONALLY long letter read by an old man who protested about lack of a Barclays branch in his town, short opening hours, high fees, etc.

Complaints abounded on the delays by BARS, removal of chairs at BARS offices, etc. The Marks of BARS were asked to stand up & be recognized! Board was going to look into the matter.

There was a boxed lunch but I had to leave ASAP so no idea what was in it but the management ended up dining at the Inter-Continental Hotel.

The Kengen setup

Our high expectations about Kengen must ‘fail’ for the good of the country’s future IPO’s and stock exchange.

Politics showed its’ hand when the share allocation was made democratic as possible. As a result institutional and foreign investors were short-changed in the process which was now tilted to favour wananchi. The hunger to own a new company, cheaply available at the stock exchange followed and the flames were fanned by banks, employers and financial institutions who availed easy cheap loan to borrowers to engage in the risky business of share buying.

Meanwhile, large investors set aside millions of dollars and shillings for months leading to the IPO, only to receive a maximum $1,000 worth of shares when the results were announced.

Future IPO’s may not be as popular with wananchi as Kengen was – and the government will need the support of these financial, institutional, and foreign investors to participate in these subscriptions e.g. of Telkom and other state corporations.

Most important is that investors need a reality check – to learn that there is no sure thing about share prices – (even Safaricom). If you buy a share at 11.90 today, to sell it at 60 tomorrow it is only possible if there’s someone who believes that it is worth 100, and so will happily buy it at 60. The same lesson should be applied to banks who engage in such risky lending – and can now see that there are investors who will not buy our shares at 60 or 38 or maybe even 25 shillings.

We all bought Kengen with thoughts of Kenya Airways and Mumias-like appreciation in prices, but probably forgot that these shares were un-loved until only recently, and languished for some years after their IPO.