Monthly Archives: November 2006

22 November 1963

It happened long before I was born but this one event has fascinated me for as long as I can remember. It set the stage for the greatest web of conspiracy theories, signaled the end of an era, and plunged the world to new depths of the human horror.

Before 9/11 it was, and arguably still is, captured by and became the most-watched videotape in history. You can’t help but watch it again and again, second by second, this tragic moment in human history, the tape is silent but conveys cruelty, hope, horror – and screams many other emotions as a life ended while condemning others and altering millions more who questioned what they saw and what they were told

I have seen that tape in different formats, read dozens of books, seen hundreds of photographs, and postulated many more what-if and why-was, who-did-it variations in my mind. It goes on and on. Somehow this mystery may never get solved until the day the world stops and we can rewind to that moment of that dark day and watch it from multiple angles and have the answers revealed.

Mombasa: so near, yet so far

Despite my earlier rant about being a dumbestic tourist who can’t’ picture a holiday that doesn’t involve Mombasa
[beach/swimming/historic/ferry/boating/seafood/lazing/meditating/madafu]
of the edge of the world] the craving to visit the coast is back again. In my life I have seen the big five animals, and will do so again, but I am in no rush to go to the territory of a rogue buffalo or elephant armed only with a camera and a laptop.

The coast is a different story, a must see place even though it rarely changes. But December is not the best time to go to the coast – I was there last Christmas and the place was too crowded.

Reasons to go
Air fare deals: It’s gotten a lot easier to get to the coast since fly540 has announced that they will fly to Mombasa for a round-trip fare of 5,440 shillings (about $75)
– This comes about six months after East African Safari Air launched Mombasa flights at a round-trip fare of 8,900 shillings.
– Now Kenya Airways has responded with rock bottom Kshs. 2,500 fares – but for flights the opposite way. i.e. from Mombasa to Nairobi from December 24 to 31 and from Nairobi to Mombasa from December 31 to January 6 2007.
– I hear that the road repairs are progressing well on the bad stretch near Mombasa.
– No water: Another reason to escape Nairobi is the water shortage. Even as the Nairobi water company is reporting increased profitability and collections there’s a biting water shortage/rationing plan that is going on amid heavy rains. I have been reduced to a beggar going round to relatives & friends houses with 20 litre drums begging for water. I hope their neighbors don’t think I am smuggling changaa to these houses.

Reasons against
– Bad timing because the Mombasa business community is not happy with how the Mombasa city council is managing the town
– Also at the tourism expo held at the Sarit centre at the beginning of November, most Mombasa hotel were reporting that they were fully booked for the December/Holiday period. Hence KQ having to have extra flights and having cheap tickets to fly the opposite way.
– Mombasa is flooded after some heavy rains
==
Madaraka update
The sale process of 600 houses by the Nairobi City Council and National Housing Corporation commenced in March 2006. However 359 tenants sued halting sale of 291 of the houses. The NHC and NCC are however proceeding with the sale of the other 309 houses whose tenants paid 10% deposit and are now expected to pay the balance by 22 January 2007 while a judge will issue a ruling on the 291 houses on December 4.

November Investments

The middle of November brings a choice of three new investment options to look at:

Eveready OFS
At 9.50 shillings per share this is the cheapest to buy. Others have gone through the prospectus. prospectus

This is a company that will largely depend on rural areas to remain in the dark i.e. anti KPLC. But the company needs top get into new products such as batteries for solar gadgets and laptop’s batteries- things that will provide future customers. But when asked about R&D on Capital FM this week, the MD mentioned that this is something they rely on Eveready US to do. So the views of an African country will not rank up there. Also watch to see if ICDCI retains it stake or takes advantage of the euphoria of retail investors buying in at the front to walk out of the back door (like Uchumi).

The shares are likely to be over-subscribed and I still maintain that the hassle of time spent visiting stockbrokers coupled with the inevitable refund of most of your money in a month’s time is not an enticing option. So I’ll wait till December, or opt for the bare minimum (500 1,000 shares at 9,500 shillings). Going by other offers this year (Kengen, Scangroup), the shares may double or triple in price in the first week and then stabilize after a month.

Diamond Trust rights issue
Priced at 50/=, good outlook for a bank looking to expand regionally and possibly absorb another bank next year. I have had the shares for over a year bought at 27/= now trading at about 76=. With the rights being sold at 50, that means one can get an immediate 50% return by flipping them immediately. I’ll probably buy my rights, and more, and hold.

Family Finance Building Society (FFBS)
This fast rising building society that intends to become a bank next year. Shares are priced at 60/= and are open to account holders, but anyone can open an account and buy the shares.

Like Equity: In preparing to become a bank, they have dutifully being publishing their quarterly accounts. Equity grew by 20% while FFBS grew its assets by 18% by June 2006 and both achieved their entire 2005 profits in the first half year of 06. FFBS is about 3.5X smaller than Equity, less efficient (operating costs are about 25% higher), and mobilises deposits similarly, but their fast growing loan book, like Equity’s, also comes with growing NPA’s.

Equity raised capital to become a bank in a private placement at 136/=. Thereafter the shares went to the OTC where I had a chance to buy, but passed on, the shares at 75/=. They were listed in 2006 at 90/= shillings and have settled in the 100 – 130 range.

Difficult to judge, but I’d rate it as a buy even though they have been very slow to provide information for new investors e.g. on who others shareholders are, when we’ll know about allocations, refunds, listing etc.

Pot Pourri

Biz news

Airlines
– Want to start an airline? Boeing has created a site to guide your operations into this very risky business. (From Randy’s Journal – a Boeing VP’s blog!)
– Kenya Airways now offers flight status information via phone to passengers at 20/= per SMS.
– There was a small story on the KTN news indicating that Five forty aviation (Lonrho air) which will launch air services to Mombasa this month will be priced as a low cost no frills airline.
– Pan Africa airways (which is hiring crews for F27 and B737aircraft) has also been licensed to operate from Nairobi to Mombasa, the coast and Loki.
– Jet Airways of India plans to launch flights to Nairobi next year

Banking: Kenwsitch and Pesa Point are collaborating to enable ATM customers to access each other’s networks.

Opportunities

Jobs
from the daily papers

Financial accountant – Nairobi at the Institute of security studies. Apply to jobs@issafrica.org by 24/11

Internal audit manager at Oserian flowers. Apply to jobs@oserian.com by 22/11

Pricewaterhousecoopers: (i) Financial effectiveness [senior consultants and consultant](ii) IT effectiveness [senior consultants and consultant] (iii) governance, risk & compliance/financial management in the public sector [senior consultants and consultant] (iv) governance, risk & compliance/internal audit services [senior consultants and consultant] (v) manager, human resource consultancy (vi) Human resource consultant [senior consultants and consultant]. Apply to the human capital manager at recruitment.ke@ke.pwc.com by 30/11

Asian languages: Last year a Confucius Institute opened at the University of Nairobi teaching Chinese languages. Now Kenyatta University if offering a diploma course in Japanese languages as a 2 year program beginning in January 2007 (application deadline is 24 /11)

Tender: The Kenya Anti-Corruption Authority (KACA) has advertised to procure an interview recording system (that works). KACA also plans to open an office in Mombasa.

IPO fizzle

No disrespect to the Eveready IPO which opens today, but there appears to be less enthusiasm for what it now the 3rd IPO this year after Kengen and Scangroup. There are lines outside stockbrokers today, and will be around for the next two weeks but nowhere near Kengen size.

Most of the fatigue comes from the over-subscription and resultant fractional allocations of shares to investors – each requiring several trips, phone calls and hours spent pursuing IPO shares.

Likewise to buy Eveready, I’d have to sell something or if I wrote a cheque i’d have to make several trips to my broker – who’s normally super efficient. But at IPO time, things get hectic with the long queues and harried staff – payments/orders get misplaced or have to be corrected, and a second trip would likely be in order, followed by a third in a month’s time, after the IPO results are known (11/12), to collect the inevitable refund cheque (after 15/12).

I may be better off just waiting to the shares to list (on 18/12) then simply send my broker an e-mail to buy the shares. Price volatility can be expected on day one, but with Christmas around teh corner, there won’t be much activity on the exchange and the price should hold steady (I hope) till January.

Careful banks: Unlike before when several banks lined up to offer loans to buy Kengen shares, they are still available, but there’s no marketing or fanfare announcing them. Also, while Kengen was sold on almost every street corner, this time KCB is the only commercial bank selling Evereyady shares.

Still I must commend some brokers who have opened satellite offices to process IPO applications, thus easing the crowds at their main offices.

BARS free
Barclays shareholders will endorse the sale of their BARS to CAPSEC of South Africa – in addition to a share capital increase, bonus, and share split at an EGM in Nairobi on December 8. Register closes Nov 29

No parking
The latest ludicrous proposal by city council is to double the daily parking fee from 70 to 140 shillings ($2) in order to finance the construction of parking garages. What the council should do is have a bond or enter an arrangement with a bank that will finance construction of the parking in record time and the council can repay the bank over the long term. The council would be ill-advised to finance construction using daily collections of which it has little control. The proposal also has no end date which means we could be paying double for the next 10 years, long after the project is over, or without any new parking garages ever being built.

Posta booster
There’s a story in the East African today about how the Postal corporation will reap over 16 million shillings ($226,000) from Kengen mailing annual accounts and notices for their AGM on November 30. Kengen had to pay for tens of thousands of stamps and has budgted 80 million shillings ($1m) for the day.

Nyramid update
A prominent city Church led by a charismatic preacher is behind one of the newest Nyramids.

Tesco’s here
Tesco, a former partner of Uchumi has opened its own Nairobi supermarket.

Cadillac’s to Kenya?
Cadillac returns to Africa via South Africa with right hand drive cars which will then be sold to other Sub-Saharan African countries -with BLS, SRX and STS models arriving early next year. Geenral Motors has a significant presence in the Nairobi through isuzu truck and minibus sales.