Monthly Archives: December 2007

Urban Living Expenses

Continuing on the expense tracker series, as well as writing on urban inflation and spending. index

After trying various online expense tools, I fell back and used Microsoft Excel to track expenses by a simple spreadsheet. It’s easier because I can work offline to add entries unlike the online offerings – and so far I have five months of data, tracking discretionary spending. These are payments made voluntarily – not statutory ones like taxes, pension, loan repayments of which I have no control.

The numbers

less than 1 %

– other expenses0%: These are various uncategorized or one off expenses that don’t full into any category

– Bank charges 0%:There are actually higher but since I am on a flat rate account plan, only pesa point charges appear on the radar.

Recreation 1%: Very low, but I have avoided the golf course so far this year

Education 1%:only registration fees for 2008 and will be much higher next year

Personal 1%: haircuts etc.

Repair 1%: no car service done yet owing to very low mileage over the period (more on that later)

Clothing 1%: Men don’t shop for clothes, but this will actual be proved incorrect later

Newspaper 2% – shockingly high. When you realize that you’ve spent a few thousand shillings on newspapers in just 5 months, the daily habit of reading newspapers seems rather expensive, for information that is available through so many other means.

Communications 3%: Again, men are different than women I’d argue and our Safaricom/celtel costs are much less for men than women in the same occupation. In fact a typical bill airtime unit will be spent as follows 50% text messages, 25% phone calls, 25% phone Internet browsing & e-mail). Cyber cafe charges also fall under this category.

Groceries 3% : rather high considering that groceries/food are not in my docket.

Electronics 3% one off purchases

Utilities 3%: water, electricity can remain low if you know what to look out for and understand/adjust your habits.

Investments 5%: The figure is much higher but this only captures discretionary, not automatic investments and share repurchases.

Dining 7%: like with newspapers, another shocker, because a lot of it is so unnecessary and could be easily avoided and should be reduced.

Drinks7% The reason EABL will over time make more money than Safaricom, and why you should buy more shares. So much of our social life, and networking in Kenya is fueled by a round of drinks.

Co-related expenses

Transport: Early on in the first month i realized that car parking was going to be a major unnecessary expense, while driving to work was sometimes inconvenient (leave early & return late or sit in traffic with 100,000 other cars ) – so i chose to use public transport more – and relax, read, watch music videos etc. and leave the driving headach to others. Also with the increasing cost of petrol (89 shillings [$1.40 ]per litre this week) this week, and with further increases expected, driving is an evening and weekend activity. The low mileage means no car service incurred, despite pestering calls from the garage/mechanic. Results are over the months are Parking 2%, Transport 4% (matatu/citi hoppa/KBS – but also some holiday travel) and Fuel 7% .

Relatives: men don’t shop for themselves, but adding up the cost of giving in cash and kind tends to others can add up – and I had no idea it would be this high. Gifts 2%, Charity 4% and Family 5% means 11% is going out – mostly to relatives.

Rent 39% : You could argue that this is not discretionary, but it is and shows why i can’t afford a mortgage now, which will cost about another 20% of my funds.

Off to next year, and to capture increased education and recreation expenses some things will have to cut back.

Job offer
From wazobiajobs.com: a job with Cisco Systems as a Global System Integrator Channel Account Manager in Nairobi.

Postpone Safaricom IPO?

Today’s debate on the KISS 100 morning show was whether the Safaricom IPO should be postponed to next year.

No dates have been announced but it was (and still is) widely expected to kick off on December 10.

Those in favor of a delay rightly argue that most Kenyans struggle from December to February with holiday bills (extra food, travel, gifts) and school expenses (in addition to January fees, there are new uniform and book costs as well) and their little savings will not be available even for this much anticipated IPO

They also argue that the December 27 election will be a distraction to investors who will be out of Nairobi.

Those in favor of the IPO taking place in December that, the fewer buyers the better, since it will be over-subscribed anyway and this will just give investors a slightly better allocation. They also argue that they have saved for this and should be rewarded for their efforts at being prepared for the IPO.

Readiness factors

– The market is ready, and no marketing will be necessary for this IPO. Investors are ready to buy now, then deal with what they bought after.

– Timetable will be tight, but other countries are able to do it. Giant Indian bank ICICI’s June ’07 IPO ran for only four days and was over-subscribed on the first day.

– Stockbrokers say they are not, and have asked that it be delayed till next year, but they’ll just pay their staff extra to work overtime during the holidays (and hire temps/interns to plug the gaps).

– Banks have abundant liquidity and will have loan packages towards the IPO to lend out the day after any announcement is made

– A local financial firm CCS Financial solutions (not to be confused with CFC Financial services) has come up with a financing product (in conjunction with ABC Bank) that will also deal with the inevitable refund cheques. (Read more at Nairobist)

– A correction: NSE Chairman Jimnah Mbaru is not contesting for the Starehe seat in the upcoming elections.

verdict: As with Kenya Re, I advise readers to by pass IPO’s – but what are your views, to go ahead or not?

Turbulent 2008
– Could liquidity be drying up in the world credit markets?
– Is there any fundamentals behind the high price of oil, or is it only the fear factor?

Random Saturday Observations

– Cement index: There was a Nation story today about new faces and other giant killers who knocked out several prominent members of parliament in party nominations last month. However some signs were on the wall for non-performing MP’s; cement industry people could tell which MP’s are likely to survive/be thrown out on election day (December 27) based on how much cement a constituency CDF has bought – an indicator of how development minded an MP has been over the last five years.

– Nairobi City had been transformed hawkers everywhere, undoing all John Gakuo’s hard work. One group I’d not mind seeing are the fruit vendors at a time when Uchumi is selling imported tangerines at 350 shillings ($5.50) per kilo and oranges at 160 per kilo from South Africa.

– Pesa Point should relocate their kileleshwa ATM from the Kasusku center where it is not accessible after 6:30 PM – to the police station across the street where it is equally safe, but can be accessed 24/7 like all other pesa point ATM’s.

– A stockbrokers office is up to no good again – messing around with clients funds & shares, and making unauthorized sales without informing investors. Diligent investors who discover the anomalies are told they are ‘errors‘ which will be corrected.

– Exam markers for KCPE essays say they can tell the difference between academy and public schools students – The differnce in quality is so stark with academy kids way ahead.

– It seems pretty woman liaisons that start on the beaches of Mombasa now end with afternoon shopping trips at Nakumatt Nyali for groceries.

– Local pubs watch out most Nairobi butcheries are are shortchanging buyers of roast meat. I always knew it – but how can you prove it without looking cheap? If you argue before cooking, your order is going to be messed up, but if you wait to complain after you see the roast meat on the table, you’re too hungry to refuse what’s on offer.

Business briefs
– Allahabad Bank (of India) is looking to acquire a small to mid-sized bank in Kenya or Tanzania.

– Cooperative Insurance Company has extended its private placement from November 23 to December 31. The placement needs more publicity as every new investment officering this year has been over subscribed – from bank rights, to new bonds and IPO’s

– Standard investment bank partnered with the National bank of Kenya to offer stockbroking services through NBKL branches. Are insurance companies watching this – how their stockbroking siblings are using banks to penetrate into rural Kenya?

– The World Bank will seek to mobilize the African Diaspora towards partnerships to develop the continent. More than 1/3 of Africa’s highly qualified human resources are presently in the Diaspora and most are unlikely to return to the continent, but do remit $4-6 billion per year and a significant number of professionals from the continent are cu. One of the proposals is for the WB to work with the African Union to create a Diaspora Remittances Investment Fund.

– The Cheetah index business site has been launched by African Path

– Nakumatt Kisumu is now open 24 hours daily

– Safaricom and EABL had better hurry up with their Christmas promotion competitions

Local media

– Along comes K24, Kenya’s first 25 hour new channel. According to the People newspaper it is backed by Regional Reach mogul Rose Kimotho and it will use Kenya Broadcasting Corporation (KBC) to distribute its signal as part of a private/public partnership. K24 will also see the reemergence of Jeff Koinange last at CNN and other local media exiles.

Morning shows have been American broadcast network cash cows for years – and now they have come to Kenya. NTV started it off with NTV this morning which has been running for about two months, and last week Citizen started their own called power breakfast. They have to generate more content to fill up the 3 hours.

– Needs content; I was initially a fan and fell for the beautiful scenery of NTV’s Cobra Squad but now can’t stand the monotony and repetition – (5 min) car chase, cop blunders (5 min) foot chase, twist in story, (5 min) car chase, gun fight, (5 min) car chase…….