Category Archives: CBK

Centum seeks Carbacid

and other Bank Twits

Twitter is a micro-blogging tool that is really nifty for doing mini-posts, forwards and other remarks that (are on any subject) and are maybe not worthy of a full blog post. Here’s a summary of my week on Twitter:

– @louizah Zain Vuka has ended? Please confirm
– @NTV showing IFC-funded docu on women entrepreneurs – meaning manu-arsenal will be on tape delay – WHY? next @NTV ditched a static-filled channel & skipped their ‘half time’ piece to present second half live, on a much clearer signal! Kudos
– Sports journo era over? Player asks for trade on blog team obliges on Twitter player thanks fans on Facebook http://tinyurl.com/d967eu
– blog post Why Safaricom should spin-off MPesa http://bit.ly/gYZ86
– The Central Bank of Kenya reports have become incomprehensible B.S
– Upgraded Safaricom Investor relations page has media and CEO briefings http://bit.ly/VBZ2f
– Tanzania will now recognize Kenya manufacturers mark of quality http://bit.ly/USZHg
– Delta Air round-trip intro fares from Nairobi include (ex-tax) $650-NY/DC, $975-ATL/Chi/ Dallas, $1124-LA/SF and $1440-Detroit
– @kahenya @jamesmurua likes Riviera, which has good crowd and facilities, but beer is pricey and the place is a fire-trap
– So Joe Biden met Nairobi Mayor Majiwa in Chicago. There, that’s the end of the joke
– Safaricom CEO says M-Pesa not yet profitable http://bit.ly/TDV8D
– @leofaya says Kenyan promoters are killing Facebook http://bit.ly/zBHXB
– Today’s pavement uprooting is sponsored by Access Kenya – as the fibre optic railway is laid around Nairobi
– @Archermishale sports conspiracy goes that where a sport wants to sway a big game, they put in a low-quality ref, but didn’t happen on Wednesday
– Safaricom partners with Kenya’s largest bank KCB http://bit.ly/J4l92
– Kenya budget saga ($115 million) blamed on a typo – Quote ODB “N___ please!” http://tinyurl.com/p5hoyo
– blog post: two bank shareholder meetings same day same building same time http://bit.ly/86lNq
– @pinkm so you can only use debit, but not credit card to buy amazon books from KE? Interesting
– Ethiopian Air applies to fly from Nairobi to Amsterdam and Nairobi –Liege (Belgium)
– Land spin: Could there be a link between Migingo Island and the Kampala land Kenya got from the Uganda military?
– If MTN buy Yu or Access Kenya, they will have to negotiate with MTN matatu society for use of the name.
– blog post Its Our Turn to Eat (is credit card worthy) http://bit.ly/YnriQ
– NMG 2008 report gives prominent mention of new digital division, Making-Nation DVD and Zuqka portal http://tinyurl.com/qkcphc
– Centum applies to the CMA to buy Kshs. 350M of Carbacid shares and be the largest shareholder of the Nairobi listed (but suspended) company
– Senator cards advise customers to only upload to https, not http sites. It’s rare to find credit company giving card advice
– From Mars Group: Parliament’s Report on the Kenya Budget inconsistencies http://blog.marsgroupkenya….
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situs gacor

Urban Inflation Index: March 2009

Changes in the three months ago since my last review in December 2008 and also compared to February 2008, which was just over a year ago.

In 2009, oil prices and maize prices have become the national talk as scandals, shortages, and price hikes have plague these industries causing grave concern that the country could be destabilized.

With maize, a shortage of maize flour on supermarkets coupled with shady deals were highlighted in the media all leading to a motion of no confidence in Parliament against the Agriculture Minister in February 2009. it was shot down

In oil/petrol, the collapse of Triton petrol, a small politically-connected oil marketer had ripples across the industry. The firm appears to have made a big gamble and purchased and stored excessive stocks in the expectation that oil prices would remain high, but when they dropped, the firm imploded and the chief executive fled to India. It has become a monster scandal with staff losing their jobs, banks suing the government (through the oil storage and pipeline companies) and calls for another no confidence vote in Parliament, this time against the Energy Minister.

changes in the last three months

Gotten cheaper

Fuel: A Litre of petrol fuel (at local petrol station) is now Kshs. 75 (~$4.2 per gallon) which is about 20% cheaper than it was 92.7 in December 2008. Shell Petroleum led the price drop, forcing other oil marketers to follow suit and probably did in Triton with their price cut in December 2008. Petrol was Kshs. 88 a year ago

Unchanged

Staple Food: Maize flour which is used to make Ugali that is eaten by a majority of Kenyans daily. A 2 kg. Unga pack at Uchumi today costs Kshs. 96, compared to Kshs. 97 in December 2008. However it cost just Kshs. 52 a year ago

Communications: Despite the presence of two additional phone companies, the mobile price war has cooled and calls cost about Kshs. 8 (~$0.10) per minute. With Zain, the price applies across all networks, but for Safaricom it’s within their network only. New companies are offering gimmicks like Yu’s Kshs. 0.50 per minute (after making calls for two minuets at Kshs.7.50). However other prices, notably in data and equipment (handset prices) have dropped. Safaricom modem’s cost less than ½ their introduction price, and features like Picture messaging (SMS) now costs Kshs 3.50 ($0.04) (it was introduced at 20) a year ago Safaricom calls were also about 8 shillings per minute

More Expensive

Electricity: my bill last month is Kshs 1,800 – slightly less than the bill a year ago. However by looking at the components that make up the bill – fixed charge is Kshs. 240 (was 175 a year ago), fuel cost adjustment is 427c per kwh (was 199c a year ago), forex adjustment was 63c per kwh (was 31c per kwh) – all causing my bill to cost about 70% higher than my approximate consumption a year ago. This is also a sore point with Kenyan manufacturers and industries who have complained (PDF) about the high tariffs even as Kenya power & lighting company announced improved profits for 2008.

Foreign Exchange: 1 US$ equals Kshs. 80.07, it was 79.08 in December 2008. Remittances to Kenya which have dropped every month since October 2008, are partly to blame. US$1 was 70.7 shillings a year ago

Entertainment: A bottle of Tusker beer (at local pub) is Kshs. 130 ($1.60) up from Kshs. 120 in December 2008. East African Breweries, Kenya’s leading brewer, has complained about high input costs and new taxation, and for once their share price is almost as cheap as the recommended retail price of their main seller – a bottle of Tusker beer was 120 a year ago

Other food item: Sugar (2 kg. Mumias pack) is at 165, it was Kshs. 160 last December. 150 a year ago

EDIT: Also, more expensive is Housing – the rent was hiked 40% in January 2009; however that’s still about ½ what I’d be comfortable paying for a mortgage in the neighborhood.

Profit Warning Friday

KQ Profit warning for Who?
Kenya Airways issued a profit warning a few days after media reports had painted a rather rosy picture of operations at the airline with increased capacity and utilization. (That’s what happens when you release operating results without any shillings or dollar attached.

The fuel price, PEV, and reduced tourism has been well known within the investment community and this did not appear to impact the price until the actual ad and media corrections were carried in the newspaper, perhaps spooking retail investors and the stock is down 22% this week. The operational figures already show that the airline is in turnaround mode and is being hammered when it has already hit the bottom. I need to attend more investor briefings. Neither announcement appeared at the Nairobi Stock Exchange (NSE) website where company quarterly announcements usually run

Profit warning at the NSE
On Thursday, the Capital Markets Authority (regulator) release a brief (copy here ) addressing issues perhaps that should have been said by the NSE. It noted that bear markets do happen (NSE declined 50% between 2000 and 2002), stockbrokers are in trouble (reduced activity, means low turnover and low commission), are restructuring (layoffs and branch closure s), and exposed (risks could arise from fraud. Nevertheless, shares are safe and better left to long-term investors!

We are not rogue this came a day after directors of Suntra Investment Bank, made a similarly candid admission of trouble ”business is so low at the moment that we are actually eating into our own funds” – one of the few times a financial institution has admitted being in difficulty, as they tried to contain damager (a single court case), but which left spooked customers flocking to transfer their shares

Executives on profit

  • Michael Joseph the CEO of Safaricom, Kenya’s most profitable company, launched an unusual rant against the government and business climate saying the first three things an investor needs in Kenya are (1) a generator (ii) a 4WD car (iii) a security firm – before they can even think about making any investment in Kenya. he said they spend 1.5 million euros on diesel and called the new universal service fund tax stupid as the mobile sector is already over-taxed
  • A man who sees no losses on the horizon is the CBK governor, who remains an eternal optimist after launching an infrastructure bond. Kenya plans to raise Kshs. 18.5 billion (~$245 million for roads, electricity generation & distribution) from investors who will pay a minimum investment of Kshs. 100,000 or ~$1,250). 12.5% interest will be paid semi-annually with principal repaid 2015, 2017, 2021. He had earlier commented that global meltdown should not have much impact because Kenya is primarily a rural agro-based economy

What else happening?

  • Kenyan knows Madoff: listed among the hundreds of fabulous fraudster Bernie Madoff’s clients is Sangare Ranch of P O Box 24 Mweiga Kenya Africa
  • Barclays Uganda counters rumours of a collapse/closure
  • Global credit rating of South Africa, previous rate triton high credit ratings of Kenyan companies with collapsed oil firm Triton downgraded to DD, Sasini’s ratings maintained at BBB+ (triple B plus) and A2 (single A two) for the long and short term respectively, and Eveready East Africa Limited downgraded to BBB+ (triple B plus) and A2 (single A two) for the long and short term respectively. Moody have downgraded Toyota today, so who’s safe
  • Fuel shortage was experienced in Nairobi – back and forth between Kenya pipeline company, ministry of energy, oil companies who all absolved themselves for any responsibility; Read more at Coldtusker
  • Who’s the Total Man at the NSE?
  • Mumias profit down 73% to 231 million at the half year on sales of 6.2 billion (down 8%)

Regulator reassures depositors

Titanic Triton
The Central Bank of Kenya has issued a statement to reassure depositors at some banks that have had some panicked customers want to withdraw and safeguard their funds at their banks which they believe may be exposed to the Triton fraud and fall – which CBK says is less than 0.002% of the banking sector. Read more

Kutwa Tuesday: December 31 2008

1. Yes it’s Wednesday
2. this is the final post for 2008
3. Happy New Year
4. Welcome first time readers searching online for primary school exam (KCPE) results. This is a blog on finance and investment issues in Kenya mainly
5. stories you may have missed in December 2008

– National Oil Corporation NOCK will borrow $65 million from French Bank PNB Paribas
– Triton Petrol (now under receivership) has left several local and international banks exposed to bad loans. They were also partners of Reliance (India) in the second national Operator contract
– From January 2009 Kenyans can buy government bonds and bills for just Kshs. 100,000 (~$1,300) through the Central bank of Kenya. The next bill auctions are on 5th January for bills while bond are on 26th January. one must open a CDS account with the CBK (currently they hold 4,222 accounts that trade in GoK securities) more details here
– The CBK also released a report on commercial banks readiness and compliances with Basel II requirements
– New branches Banks opening new branches in December were National bank of Kenya (Kakamega, Eldoret airport, Embu, Ongata rongai), Bank of Baroda (Nakuru) and CFC Stanbic (Kisumu, Westlands – Westgate)
– Dyer & Blair Investment Bank will arrange a fund raising plan for TransCentury, one of Kenya’s leading Private Equity firms
– Standard Chartered expected to roll out a mobile banking platform in 2009 in Kenya for funds transfer, utility payments etc. (already operational in Uganda)
– Uchumi made a payment to debenture holders in December, can it re-list at the Nairobi stock exchange in 2009?
– Co-Op Bank shares began trading at the NSE – but mini bounce on day one was not sustainable

from the blogs
– Kshs. 2.5 billion worth of Equity shares trade hands in a surprisingtrade yesterday
– NIC Kenya’s leader in asset finance, but more retail and corporate has ventured into Tanzania acquiring 51% of S&F Bank – more here
– Want to buy goods online, but you don’t have a credit card – read up on Afripay – a local company that offers that service in Nairobi
– Why is it so hard for foreign (German) companies to invest in Tanzania?
– While Pirate terrorize the east African Coastline, what should be Kenya’s flagship navy vessel is rotting away in Europe.