Category Archives: Jimnah Mbaru

IPhone to Kenya

Today will see the official launch of Apple’s i-Phone (3G) into the Kenyan market by Orange mobile. You could say it’s a case of bad timing as Kenyans are going through tough economic times and perhaps entering a recession period.

Recession or not?: With (very) high prices of petrol (until recently), electricity, maize and other foods, a spike in the government deficit, global financial turmoil, fewer tourists, reduced remittance volumes all signs would point to an economic slowdown. Right?

But not the Central Bank of Kenya (CBK): I have been in the past ‘impressed’ (did I say it was the best bank site?) by the volumes of reports published by the Central Bank, mostly because they are timely, though difficult to decipher the message.

The CBK reports have predicted some hardships but remained very optimistic and rosy about the country’s economy. But it appears that the messages are tailored to suit the tone of the day because Kenya’s leading business newspaper has taken note.

Today’s Business Daily has a very harsh critique of the CBK reports (which many banks, funds, government departments use to formulate their policies). The BD editorial laments the consistency of presentation, shifting periods for which data is presented, differences in figures published by KNBS (statistics bureau) and a determination by its authors to manipulate data through a series of omissions and change of periods under review that makes it nearly impossible to keep track of ongoings in the economy.

Former Nairobi Stock Exchange boss Jimnah Mbaru (who’s also a sometime author) thinks Kenya is headed for a recession and has published a column which ran in some newspapers and appears at Capital FM website titled How Kenya can escape recession. He advocates (like US President-elect Obama) that the Kenya Government spend its way back to robustness. Some of the proposals he suggests include reduce interest rates and cash ratio (which have already happened) but also some strange ones like the government should buy Safaricom shares, sell buildings, and mandates that more sewers be built he also says hedge funds cashing out brought down the NSE this year…hmm.

Blog views: In the absence of a Finance Minister, the Government is engaged in a series of Voodoo economics.

i-Phone outlook: Looking around Nairobi with all the Hummers, new Range Rovers, new apartments complexes etc., it is clear that there’s an affluent class that does not feel the pinch of a (possible) recession and despite the tough year it has been, there have been several new entrants in Kenya.

The i-Phone which has been a worldwide smash, and impressed many (not all) its customers, can be expected to do well here also. Like with the Blackberry before it – which was circulating here unlocked/hacked before its official debut, it will now be licensed and supported after the official launch.

Wanted NSE II

Accurate NSE data

Yesterday, I flipped through all the business news stories, and noted stock market rather flat/ with little trade activity But the 9 PM Nation news had Great News for Nation Media Group and Equity Bank whose shares jumped by 20 shillings to 356 and 15 shillings to 276 respectively. Funnily that had not caught my eye, on my phone updates, the Rich newsletter or even the KTN news. The Nation news ticker did not have the NMG share price, but it had Equity down by 1 to 259 shillings – and watching business news on Citizen TV later had Nation down by 17 shillings to 333 as did the CNBC Africa stock ticker.

It seems that since the NSE stopped updating their site on May 7, there seems to be a wide interpretation of how the days trading went. NSE Update: they now have yesterday’s prices list, and will probably follow with the company announcements made over the last two weeks

Stockbroker director info
In dealing with rogue stockbrokers, investors should be vigilant, read their statements from stockbrokers and the CDS, read newspapers, especial the Business Daily, browse stockskenya and other online forums – and visit and observe their banks and brokers.

There are warning signs given out which some heed. There are people who got out of pyramid schemes early and there are customers of Nyaga stockbrokers who observed the shady deals n their statement, complained and had their accounts “restored”. Some stayed on believing these errors, while others walked away before the fall, moving their share accounts intact.

A follow up to the where to buy shares series and following in the footsteps of great posts by Emerging Africa and Riba Capital. Many investors only came to know the director(s) of Nyaga Stockbrokers after the fall, so get to know the directors of the others before you invest

information from stockbroker websites, and Google caches

1. Afrika Investment Bank: Directors: Kibuga Kariithi, George Maina, Ken Wathome, Linus Gitahi.

2. Apex Africa: (no info online)

3. Bob Mathews: (no info online)

4. CFCFS wholly owned subsidiary of CFC and CFCFS Board of Directors comprises of Charles Njonjo – Chairman, Andrew Douglas Gregory, Sunil Sanger – MD, J.G Kiereini, Uday Jani, M. Soundararajan

5. Crossfield: Chairman-Nilesh J. Kotedia, J.T Swaley, Kumar Krishna (MD), Herbert Joseph Gore (GM)

6. Discount Securities (no info at site, but cache yields bios of directors– but which could be outdated; Chairman- William Murungu, Allan Simu, Executive Director- David Githaiga….)

7. Drummond Investment Bank (no information of directors at site, but Google cache yields bios of staff and their contacts – but which could be outdated: Ndungíu Gathinji (Chairman)….._)

8. Dyer & Blair : Has bios of key staff online: Jimnah Mbaru- Chairman, Mohammed Hassan- Joint Managing Director and Co-Chief Executive ……..)

9. Faida Investment Bank: Bob Karina (MD).

10. Kestrel Capital: Charles Field-Marsham, Founder and Director, Andre DeSimone, Executive Director.

11. Ngenye Kariuki is wholly owned by the Ngenye Kariuki family. (no info at site, but cache yields bios of staff and their contacts – but which could be outdated).

12. Reliable Securities (none), but Mr. Josephat Konzolo is the managing director.

13. Renaissance Capital: no info online but media reports have chief executive – Maina Mwangi, Terry Davidson, Mutahi Kagwe as directors

14. Solid Investments: Was previously 75% owned by Kithinji Kiragu. Other shareholders include the estates of former shareholders Mr. Cyrus Ita, a former Siakago MP and Mr. Dominic Kavuu, a former senior manager at Standard Chartered Bank (K). It will be renamed NIC Capital Securities after NIC acquired 58% for 157 million shillings in 2007.

15. Standard Investment Bank: (no info online) Media reports that Mr. Amish Gupta will be in charge after leaving Renaissance early this year.

16. Sterling Investments: Stanley Ngaine (Chairman), John E. Kirimi, Ahmed S. Ndope, David Ithanya.

17. Suntra: James H R Murigu (MD), Nguru Wachira (Chairman), George Ongaya-Okoth, David Kinyua Waweru, Mr. Fred Ngatia.

CFC-Stanbic Bank EGM: merger approved

An extraordinary general meeting to approve the CFC – Stanbic merger was held on November 12 at the Intercontinental Hotel

Deal: Stanbic is the largest bank in Africa with a presence in 18 Africa countries and 21 others around the world (including Bank of America in Argentina which they just bought). It has assets of $140 billion and 43,000 employees – and by combining their (relatively) small Kenyan operation with CFC, they will become the 4th largest bank in Kenya.

Approval got: CMA, CBK, monopolies commission.
Approval to be got: shareholders, SA reserve bank, NSE.
The Deal should be complete in about a month.

The meeting was led by CFC Chairman Charles Njonjo. Fellow director J. Kierini introduced the board and, other dignitaries present who including D. Ndonye (Deloitte), Jimnah Mbaru, Kaplan & Stratton advisers, and Craig Bond and a team from Stanbic include his son who works at Stanbic Kenya.

CFC MD Soundararajan explained the rationale for the merger – synergies, very similar and complementary customers, regional opportunities, and enhanced capital adequacy. Customers will get a one-stop shop for all their business, staff get to work in a bigger bank with more careers opportunities (and all employees are assured of retaining their jobs).

Shareholder questions

  • Dilution of minority shareholding? : Management said they are getting into a bigger entity
  • Are major shareholders bailing? : Gambit will get paid in new shares but also about 5.8 billion shillings. MD answered that shareholders are staying and the company is not going anywhere
  • Mgmt. afraid to say that CFC being; Management says it’s a merger, and not a sale; the new entity will have 40% – CFC and 60% – Stanbic shareholders.
  • If CFC is growing well, why sell? Need for capital is important. MD said that he needs about $100 million, while the new entity will have around $60 – 70 million. The merger will enhance the company’s growth plans
  • Due diligence on Stanbic? ; Done and they shared strategies which each other to see if they were on the same path. Also, board member (and lawyer) Fred Ojiambo denied that a 25 billion shilling lawsuit had eroded the value of Stanbic (K) saying that claim had no firm base
  • Why no bonus shares instead of selling out?: MD said CFC had in the past given the largest bonus divided in the history of NSE 21 for 1 and the board will consider that at the right time

This is it: The historic moment passed in a flash as the Chairman proposed that all six resolutions be passed in a single vote since they were all interdependent.

The resolutions passed in a single vote:

  • Created 117 million new shares to accommodate Stanbic
  • Empowered the directors to allot shares to Stanbic
  • Changed the name of the company to CFC Stanbic Holdings
  • Transferred the bank business (assets, liabilities, employees, creditors etc.) to Stanbic
  • Amended the new articles of association
  • Changed the business of the company from a bank to a holding company
  • Now CFC Stanbic Holding co to remain listed on the NSE while CFC Stanbic Bank will be a 100% owned subsidiary

Other speakers

Craig Bond: The Head of Stanbic Africa, said they got lucky in Kenya as the first bank they identified turned out to be the right partner offering great synergies; in Nigeria, they have looked at 6 banks which have not panned out. He said that Stanbic which intends to be the ‘best emerging-markets bank’ in the world had identified 3 countries that they intended to dominate in Africa – SA, Nigeria and Kenya where they intend to break into the top 2 (not remain #4), by rapidly expanding branches in 2008.

Commenting on the largest bank in the world ICBC buying 20% of Stanbic (it’s 70% owned by the Government of China) – he said China is coming to Africa in a big way for her resources, and it offered Stanbic cheap money with the promise to match them $ for $ in any investment in Africa

NSE Chairman Jimnah Mbaru said he was proud that the deal happened under his watch and confirmed that he expected NSE to approve the deal by end of the week. He looked forward to having a big institution with the capital to enable the economy to meet growth goals in terms of resources. And finally called out to family-owned companies to see what could happen if they transform themselves into institutions as the late Mr. Jani had done with his firm which was now merging with Stanbic.

There were further tributes to the late Mr. Jani who created the company in 1951 with a vision for into to partner with an international powerhouse, MD Soundararajan and directors Njonjo and Kiereini for making the deal happen

Humorous moment: Chairman Charles Njonjo was sad that there were only ‘5’ shareholders present when the meeting started but got happy as the numbers had reached about 100 by the time it ended. However, it didn’t really matter as he had 45% proxies from Africa Liaison and Gambit while fellow director Kiereini had 30%.

Goodies: souvenir pen, umbrella, big lunch box with little food from intercontinental – (Fanta, cake, apple, and a bit of goat, chicken, and sausage)

other news

Barclays launched tranche one of its bond – 1 billion shillings, maturing in November 2014.

Rwanda and Burundi to join the East Africa Development Bank once they subscribed via share capital

Equity Bank extends banking hours to almost match office hours; 8 a.m. – 4:30 p.m. on weekdays and 8 a.m. – Noon on Saturday

The National Housing Corporation is offering investors loans to build rural and peri-urban homes. The maximum loan amount is only 1.5 million shillings – and it’s advanced at 13% over up to 10 years

Sasanet investors want to notify partners, bankers, and other companies (including Safaricom) that the company had not refunded investors their funds.

Urban transport gets more expensive as all the major transporters Citi Hoppa, KBS and matatu owners start a blanket 10 shilling per ride fare hike to counter rising fuel prices


  • Celtel territory sales executives (17). D/l is 16/11
  • IT manager at EA Cables. apply thru deloitte
  • Jamii Telecommunications: account managers (3). d/l is 16/11
  • KBR various jobs in Iraq, Afghanistan, Kuwait. But
  • Madison: finance manager, senior investments manager
  • Microsoft: public sector lead account manager – public sector & education solution sales professional (business productivity), infrastructure consultant, MBA graduate
  • Head of ICT services – Standard Group. d/l is 13/11
  • Chief Operating Officer at Renaissance capital. apply to by 19/11

No drugs at NSE

The Nairobi Stock Exchange (NSE) through a paid statement by its chairman, Mr. Jimnah Mbaru, has responded to recent allegations that the growth of funds invested at the NSE had come from drugs or other illegal sources.

He says it’s mainly from a basic shift among institutions and individuals who previouly used to invest in land and real estate but have now moved to more liquid invstements such as to equities and government securities

The increased funds come from, among others sources:
– many Kenyan parents don’t have to pay primary school fees anymore since the advent of free primary education
– better management & compliance of pension funds who before had too much real estate investments including the NSSF
– increased insurance premium collections and increased corporate retained earnings
– substantial remittances by Kenyans in the Diaspora – estimated at $750 million to $1 billion annually
– international investors
– & first time investors in stock market including over 200,000 who bought into the Kengen IPO

Way Forward for the NSE

The Nairobi Stock Exchange (NSE) will in a few months start electronic stock trading – which is expected to triple the volume of share traded at the exchange daily. Also the current allowed price spread of 10% will be increased to 20%.

NSE Chairman Jimnah Mbaru has over the years made several speeches advocating for the NSE to forge trade partnerships with the Johannesburg Stock Exchange (JSE)including having Kenyan companies’ cross-list on their board. Kenyan companies that can consider cross listing include East African Breweries, which was ranked the 76th largest in Africa, and possibly Kengen.

The JSE which recently went public saw the volume of trading and liquidity increase many times over when it began electronic trading a few years ago.