Category Archives: Kengen IPO

Standard Raid: the Good, the Bad, and the Ugly

The ugly: Both the Sunday Nation and Sunday Standard reported that a second raid was planned for Friday night, but was aborted by the heavy rains and traffic jams that shut the city till late at night.
The Bad: The mzungu used the N word as he marshalled his troops around the Standard offices during the raid. Sounds like a bad parody of a mercenary or is it the real thing?
The Good: The sale of Kengen shares to the public was accelerated and made as democratic as possible – with minimum lots of 500 (at an investment cost of 5,950 shillings) and a guarantee that small investors will be assured of receiving their shares.

Just as Anglo Leasing attention was diverted immediately by the release of the Goldenberg report, in a smart move, the Standard raid will be followed by the Kengen IPO, the largest in Kenya’s history. This is not the first time this has happened as additional KCB shares were sold to the public in 1990’s to as a way of deflecting political heat from the Government. Look for more advertisements from the office of public communications trumpeting that “this is the government that gave ordinary Kenyans a chance to buy shares in Kengen & Telkom”.

Standard Chartered in 2005
Loan portfolio increased by 3b to 59.7 billion willing but fee & commission income dropped from 2.04 to 1.98 billion shillings. Of the top 3 banks (Standard Chartered, KCB and Barclays) only KCB recorded increased commission & fee income in 2005, which can likely be attributed to its new partnership with Western Union.

Net interest income increased from 2b to 3.3 billion while interest in government securities in which the Bank is heavily invested (24b shillings, equivalent to 70% of loan book) increased slightly from 1.84b to 1.99b.

Still, after tax profit increased from 1.83 to 2.44 b and the total dividend for the year will be 7.5 shillings per shares (out of EPS of 8.69), which is up from 6.5 in 2004. The final dividend of 3.10 per share will be paid after June 2 to shareholders (books close March 31) and the company’s AGM will be held at the Intercontinental Hotel on May 31. Long serving Chairman, Mr. H Awori will be retiring after the AGM. Preference  shareholders will be paid a 6% dividend as well on April 3.

Uchumi
Uchumi halved its six-month loss from a year ago but is still struggling. Half year sales of 1.8b were exceeded by purchase costs of 1.4b and operating costs of 681 million shillings. The 6-month loss in December was 362 million, an improvement from 632m in December 2004.

Shareholder services
CFC Financial Services has announced that they will remain open on Saturday’s until the Kengen IPO period ends. The bank has also opened offices in Eldoret and Kisumu to serve shareholders in Rift Valley and Western Kenya.

There is a shortage of stockbrokers outside Nairobi and Mombasa and this could start a trend as the demand for such services has increased since CDS trading began and now with the Kengen IPO. It would be nice to see some partnerships between stockbrokers and banks that have huge branch networks. E.g. Dyer & Blair setting up part-time desks in branches of National Bank or Postbank on some days of the month to serve shareholders in rural areas.

Jobs
The African Trade Insurance Agency (ATI/ACA) is hiring commercial & political risk underwriters. More details at www.africa_ECA.com and apply at Recruitment@Africa_ECA.com by March 31.

Housing Finance Company of Kenya is hiring
– business development manager (Ref HF/401)
– information system auditor (HF/504)
– relationship officer (HF/610)
– legal assistant (HF/809)
Apply by March 17 to human.resources@housing.co.ke

East African Breweries is hiring
– sales information & administration manager
– trade marketing manager
Applicants must have university degree in business or sales and 5 years successful experience in trade marketing, sales or marketing at an FMGC. Apply by 15 March to hrrecruitment@eabl.com

The Louis Berger Group is seeking infrastructure consultants to work in the Sudan. Current positions open are;
– chief of party
– senior engineer
– manager finance & administration
– manager acquisition/procurement
– other engineering professionals
Applicants must have bachelor’s degree and 5 years relevant experience. More details at www.louisberger.com and applications can be sent to staffing@louisberger.com.

Events
The Vagina Day monologues will be held at the Carnivore on Tuesday March 7 from 7 p.m., entry is 500/=. I saw it once, two years ago with a lot of beer, and I am told if you’ve seen it once, you’ve seen it all, since I’m told that local producers are not allowed to adapt/add new material to the event and must stay true to Eve Ensler’s book.

Here comes Kengen

Kengen
The Kengen IPO will open with rather short notice on March 20 with shares priced at Kshs 11.90 each.

Francis Drummond has published a roadshow timetable to increase awareness of the IPO which will run from March 20 to April 26.

  • 10th March 2006 – Mombasa (Nyali Beach Hotel)
  • 13th March 2006 – Embu (Isaac Welton Hotel) and Nakuru( Merica Hotel)
  • 14th March 2006 – Meru (County Hotel), Eldoret (Sirikwa Hotel) and Kisumu (Imperial Hotel)
  • 15th March 2006 – Kakamega (Golf)
  • 17th March 2006 – Garissa (Nomad Paradise)

At the movies
Finally, Nairobi theatres have some decent drama movies I can watch such as The Constant Gardener, Munich, Memoirs of a Geisha and Syriana all showing now. This has been a tough year to find non-PG/kid comedy or Indian movies that theatres here prefer to show. I remember calling up Fox theatres many months ago when “Constant Gardener” opened worldwide and they had not heard of it and were not aware it was set or shot in Kenya.

February 21

Bank news

SMS Banking: Paramount Bank is the latest to introduce SMS Banking in conjunction with Safaricom. Each SMS received e.g. for mini-statements, withdrawal/deposit notifications, balance queries and Forex rates will result in a 10 shillings debit to an account. This compares with Co-op Bank which charges 15/= to 30/= for similar services via mobile phone.

Top dog: Citibank Kenya gets a new MD

Un-doing Githongo

The Kenya Pipeline Company has resumed construction of its headquarters in Embakasi which was stopped by then-PS John Githongo. A move to a new building, once completed, should save the company about 50 million a year which it pays to the National Bank for renting one-quarter of its headquarters in downtown Nairobi.

Other news
BAT: In 2005, British American tobacco turnover increased from 9.87b to 11.2 billion shillings and after-tax profit increased from 1.21b to 1.38b. The company will pay a final dividend of 4.5 shillings after the AGM on 25 April to shareholders as at 20 March. Total dividend for the year will be 12.5 out of EPS of 13.82 shillings for the year. Like EABL and Safaricom who probably feel some guilt over their high annual profits, BAT reminded the public that they paid 5.3 billion shillings to the government through excise, VAT and income taxes last year.

Kengen has cancelled a controversial plan to reserve IPO shares in the company for a select group of investors.

The NSSF is still saddled with several prime plots a year after they first tried to sell them. These include a 4.7 acre parking lot between GPO & Grand Regency, .9 & 1.3 acre plots on State House, 2 acres opp. Fairview Hotel and 63 beach-front acres in Kikambala Mombasa, among others. They appear to have sold their 50 acres near Karen, 20 acres on Langata Road and 2.5 acres on Hospital Rd in Upper Hill.

Opportunities
Develop websites for the Government of Kenya (tender 3/2005/06 ) including the official government website and standard sites for each of the 33 government ministries. Apply to the Secretary to the Cabinet and Head of Public Service, P O Box 62345-00200 Nairobi by March 20. More info can be obtained from the ICT secretary at info@kenya.go.ke and the application process also includes a non-refundable fee of 10,000 shillings.
Import from Japan: The Government of Japan is funding an import substitution program for businessmen and companies through the Government of Kenya Monday. Apply by March 13 to crownagents@ke.crownagents.com.

Jobs
– AATF administration & finance manager at the Africa-agricultural technology foundation. Apply at aatf@aatf-africa.org by Feb 24
– Danida Kenya senior private sector development adviser. Apply here y Feb 23.
– IFC Expert consultants at the Africa business environment rapid response task force. Apply at ifc.org/careers by March 3.

Politics
Political Reform*1: Planning Permanent Secretary, Dr. Edward Sambili, has called for the Kenya Anti-Corruption Commission to probe allegations of misuse of constituency development funds (CDF).
Political Reform*2 From South Africa – Contained in the ANC’s election manifesto is a code of conduct for their municipal candidates that Kenyan MP’s should be asked to swear to include;
– I will fight against corruption in any guise or form.
– I will listen to the views of the community and hold a public meeting with all community members to report back on my work, at least four times a year.
– I will live in the community that has elected me.

No Kengen

 

Every investor I know is interested, setting money aside, and eagerly awaiting to buy Kengen shares – and time and again, investment bankers, government officials, and institutional investors have expressed sentiments that this will be the biggest IPO in Kenya’s history

But now the Sunday Standard has reported that the IPO will may lock out anyone who can’t buy a million shares – which is contrary to earlier expressions on the part of the government that the IPO would be as fair as possible and be allocated to as many investors.

I don’t read political mischief in this, but it appears that Kengen is a can’t lose investment – and whoever gets the shares at say 20/= will immediately flip them on at the market price (say 100+ shillings) earning a substantial profit (and with no capital gains tax in Kenya, huge profits will be made). Still, I am hoping that the controversial clauses may be removed to enable us small investors, who can’t afford a million shares, to get a chance at the NSE’s version of Goggle

Marathon watch

I spent part of Sunday watching the half-marathon runners pass through the neighbourhood. Like last year, I stood among motorists who felt that they had been inconvenienced by the marathon and who had tried to drive somewhere – church, shopping, office – on Sunday morning only to find the roads closed by the Police. Many of them turned round and went back home, while others switched off and got out of their cards to watch, and alternately scowled, complained that runners were walking not running (this was at about the 15 km mark of the 21km route), looked at their watches, bought & read newspapers, argued with the Police crew at the corner, or complained that they would boycott Standard Chartered Bank, who sponsored the event.

The fact that notices were placed by Standard Chartered, Police, and other companies like Kenya Airways (advising passengers to check in early) meant that not as many people were disrupted by the events, as was the case last year. I stood there and clapped for everyone who passed, then only clapped for those who ran (not walked by) as a a mixture of people old, young, in & out of shape, a team from Korea, of various professions (I saw a banker, lawyer and restaurant owner I knew), some with inappropriate shoes like sandals, or tracksuits (in case it rained like last year – which it didn’t) them . Didn’t rain like last year, but the runners were a smaller field, with lots of tourists it seemed.

new contract
On the company’s fifth anniversary, Safaricom CEO Michael Joseph had his contract extended for another (and final) two-year contract by the firm.

IPO delay?
The Institute of Surveyors of Kenya (ISK) has asked that the asset valuations of the Kenya Railways and Kengen be re-done since they were previously carried out by companies who were not registered valuers. ISK also asked the Capital Markets Authority to delay the Kengen IPO until this is done.

Equipment contracts
– Kenya Data Networks has signed a contract with Siemens to supply fibre optic equipment for KDN’s 1140 km long network.
– Celtel is expected to sign a $53m (4 billion) shilling network upgrade contract with Ericsson.

America Calling

MBA to Kenya: Wharton, the University of Pennsylvania business school, will hold a Nairobi reception on its MBA programs on November 2, at the Grand Regency Hotel from 7:00 – 9:00 pm. Register here.

DV 2007: The 2007 United States diversity visa (DV) lottery registration began on October 5th. Persons seeking to enter the lottery program must register online through the designated website by December 4, 2005. Kenyans are still eligible.

More Debates: Medeva TV will resume, Agenda Kenya, their popular debate show, with debates shown on KBC on each of the last four days leading up to the November 21 referendum. If you’d like to be part of the audience in the show, call 557569/70/71 or visit their offices at The GoDown for details.

Also, Strathmore University will hold another debate on the Constitution this coming Saturday.

More Standard Jobs: The Standard is looking to hire business executives for both its print and electronic departments. The job entails sourcing clients, making presentations, meeting targets, and coming up with strategies that will ensure good customer care. Applicants should have business degrees, be less than 30 years old, and have 1- 3 years sales experience. They should apply by October 25th to the Human Resource Manager at P. O. Box 30080 Nairobi (perhaps e-mail would be faster).