Monthly Archives: February 2007

Death of a Stockbroker Part II

See Rogue broker alert and Death Part I

Francis Thuo (FT) stockbrokers have been suspended from the NSE for 14 days. Once this story is over, succession issues are likely to be blamed since the firm’s leader and visionary chairman passed away last year.

need more info: This month the Nairobi Stock Exchange launched a new site that is much improved with more news and features, but their sister regulators’ CMA site appears not to have been updated in a year.

The FT story is one which the CMA should be on the forefront reassuring investors. We have seen reports on TV several times over the last year that insider and suspicious deals would be investigated, but no reports have been released or repercussions seen.

For shareholders, the process of transfering share accounts to other brokers was supposed to be seamless and shares should be safe if verified using CDS statements. It appears some FT clients were aware of FT liquidity problems and opted not to sell shares through the firm (and be issued with cheques which would bounce).

During the 14 day suspension, a deal is likely to be worked out to salvage the company, though after getting such a bad rep, customers are not likely to sign up unless FT relaunches under a new name, brand and service oreintation. One other brokerage was up for sale last year, but it would not attract any investors since its reputation was so poor.

Battle for Africa Online

Telkom (South Africa) looks to emerge the winner in the battle for Africa Online after the African Lakes board (parent company) have accepted Telkom (SA)’s bid of £9.72 million (£25 per share) beating out Africa Telecoms Company (ATC) [which comprised Wananchi Online, Schneider Media and East Africa Capital Partners] who had offered £5.04 million (£18.50 per share)

While ATC had commited to move the company headquarters to Naiorbi, Telkom have not indicated their intentions for Kenya, as the Ethiopian and Malawian operations will be disposed of.

Meanwhile ATC will go ahead with its plans for laying out consumer broadband infrastructure to Kenya and other pan-African markets.

Motoring moment

Chrysler 300 officially here

One prediction (or wishful thinking) from a year ago has come true and there was a Chrysler 300 sitting in the DT Dobie showroom on Sunday. The car which has won numerous awards, and featured in every other rap video since it was introduced, can now be bought by Kenyan motorists (w/right hand drive steering) at a price of 5 – 6 million shillings ($85,000 after our prohibitive taxes are added up) [Chrysler site prices them at $25 to $36,000]

Unfortunately it shares the DT Dobie showroom with its corporate sister – the world beating Mercedes Benz E-class which is just about every other Kenyan’s dream car. Also, as with most American cars, the engine size does not make its fuel consumption pocket friendly at our petrol prices (~$4.3/gallon) even though Chrysler states that the 300’s consumption is better than that of a Subaru Legacy GT (common on Kenyan roads).

Is coolant necessary?
Over the weekend I had to top up a car radiator and found myself having to choose between water and coolant. In my experience coolant (aka anti freeze) is designed primarily for winter weather driving where water (in sub-zero temperatures) will freeze and damage engine systems.

Yet, most cars are imported to Kenya from winter countries (arriving with coolant already in the radiator system) – and while Kenyan drivers have always used water in in their car engines (petrol & diesel), many vehicle owners insist on using coolant since that is what the car is accustomed to.

But is it really necessary? Coolant is sold at petrol stations at prices ranging from 250 shilling to 500 shillings ($7). This is as much as what many drivers pay for fuel at the station. I have always used water, and while have occasionally bought coolant, I have never noticed any difference.

In searching the web, the best answer I could find, implied some benefit to some cars from using coolant instead of water.

Many cars overheat because dirty water is poured in to the radiator (usualy by petrol stations attendant). If car owners were careful about ensuring that onlu clean water is used, they can save some money instead of buying unnecessary coolant.

bullet proof cars
There was a story in the Sunday Nation about a company (Radar Danminar) that would soon be selling bullet-proof Toyota land cruisers for 19 million shillings ($270,000) . Alternately they could make your current car bulletproof in a few weeks time for 10 million shillings.

The article rightly points out armored cars are not the answer/will not prevent car jacking of motorists as their cost is too high and you can only arm huge, powerful cars like Land cruisers, Mercs, or BMW’s, and not smaller 1600cc Toyotas that most Kenyans drive.

Bleak beef futures

Pass any restaurant today and everyone is ordering all variants of chicken or fish on the menu and skipping anything that contains beef. Drive past many of the popular nyama choma (roast meat) eating places and there are more staff than customers and very few vehicles parked outside. Bulls that used to fetch 20,000 shillings ($285) at weekly auctions can now be bought for as little as 5,000 shillings. And the latest marketing gimmick is that you’ll get a free ¼ kilo if you buy a kilo of meat at some butcheries.

The cause of all this is rift valley fever, a mysterious deadly disease, that has spread slowly from the remote parts of North Eastern Kenya but has now reached Nairobi and other urban areas despite several measures taken to combat it.

February 8 Pot Pourri

bounced bond: Celtel intends to retire its 4.5 million bond notes in February 2007. They were due to mature in 2009

standard goes main: The standard group moves to the main investor segment of the NSE from the alternative counter on February 13.

coast gets university: Kenyatta University will open a new campus in Mombasa

port expansion: Kenya ports authority will create 3 new container berths (terminals) by dredging port Reitz and reclaiming 100 hectares in west kipevu

Foreign investors take punches
– Even as Woodside oil packs up their equipment to return to Australia, the National oil corporation of Kenya has issued a new international tender for non- exclusive surveys offshore in Lamu

Tiomin has stopped the Kwale sands project (citing delays and cost overruns) after the project lender had withdrawn a $15m facility.

Jobs

Regional managers (2) for East and West Africa (Ref: DN001) at African management services company (AMSCO) . Apply to recruitment@amscobv.com

Coffee development fund
credit & commercial manager, finance manager. Apply by 23/2 to the managing trustee 52714-00200 Nairobi

FSD Kenya
– Agriculture finance specialist (16/3)
– Challenger fund manager (28/2)
Apply to lydiah@fsdkenya.org

Relationship manager Mombasa at Housing Finance. Apply to human.resources@housing.co.ke

Kenya Airways
– Area manager Eastern Africa
– Head of in-flight services & standards
Apply to the Group HRD 19002 Nairobi by 16/2

Human resources manager at KPMG. Apply to esd@kpmg.co.ke by 9/3

Audit seniors at Manohar Lall & Rai . Apply to info@mlnr.net by 15/2

Public relations manager at the Nairobi stock exchange (NSE) . Apply through Deloitte at esd@deloitte.co.ke by 21/2

PKF: audit managers (PKF/AM/100) audit supervisors (PKF/AS1/101) audit seniors (PKF/AS2/102). Apply to pkfnbi@ke.pkfea.com by 23/2