Category Archives: Kenya Re

Kenya Re IPO

Better late than never, along comes the Kenya Re IPO shuffled to the top of the privatization deck . The ace card is still Safaricom, while Kenya Pipeline should be a joker in waiting.

It’s nice to venture back into the IPO game (after passing on the last two – Access Kenya, Eveready) and I should have my Kshs 19,000 ($288) ready to go after getting the prospectus(Minimum is 2,000 shares for individuals at 9.50 per share).

The IPO delay has not been explained, but the former managing director and financial controller of Kenya Re did not help matters by getting indicted for corruption related offenses just as the process was underway nor did a late attempt to absorb the run- down Kenya National Assurance (KNAC 2001) into Kenya Re.

Despite the 2,000 share minimum for individuals you can expect it to be over-subscribed going by the numbers who applied for Eveready and the amounts individuals applied for with Kengen. While recent IPO’s (Access Kenya, Eveready) have not performed as well as earlier ones (Kengen, Scangroup, that could all change now .

Foreign and institutional investors got burnt in Kengen (the first IPO in years) after they applied for millions of dollars worth of shares only to end up with $1,000 each. Subsequent IPO’s have defined specific allocation criteria – for individuals, employees, corporate investors, others and now even insurance companies. Corporates/institutions have also been given another incentive in that they unfairly won’t have to pay until they know how many Kenya Re shares have been allocated to them.

The market is still down , as I and am sure many others have traded less this year. Most activity had revolved around new share issues and recently split shares and the reduced trading has meant less income for the brokers.
Some say it is because of the falling prices or shares are still too expensive/overvalued, others says it is because of stockbroker misdeeds.

Dividend by EFT
In another move to curtail rising shareholder costs Scangroup has twice tried to entice investors to get their IPO refunds and now dividends by signing up direct bank transfers (EFT’s) to get money straight into their accounts. EFT’s offer faster payments, by pass risky cheques (can get lost in post office and investors have take about two weeks to get funds), but while EFT’s are free are most bank’s it’s also a sly way of passing on the cost of dealing with shareholders to shareholders themselves.

The most expensive round of beer you’ll ever buy

Archer has regaled us with some great bar tales of late. So here’s a nairumor to caution/silence all those big talkers and big spenders who take one tusker and suddenly become as generous as a politician tuning a stewardess by buying rounds of drinks and sharing their million shilling investment plans and income secrets.

It is said that someone with ulterior motives will cozy up to you to listen, and maybe get a free drink for listening. Usually such a person would be a sly thief eyeing one of the three fat nokia’s you’ve laid out on the table. Now there’s another fox that’ll befriend you and ask for your business card. That person could be tax agent who’ll Google (check up on) your records at the Kenya revenue Authority the next day to see how your big bar talk measures against the small income tax returns you filed at the KRA.

Kutwa Tuesday (June 12)

IPO Wanted


To plug a hole in the budget

Kenya Pipeline is in the news again – this time suing the Kenya Times group. The company has an enviable profitable track record for a Parastatal which makes it a ripe prime candidate for an IPO but mostly gets saddled with bad news for all the wrong reasons and controversial. A dose of public shareholding will lead to greater transparency & accountability and less political football at the company which is more profitable than Kengen (It earned 3.9 billion (pre tax) in June 2006, up from 2.4 billion in June 2005 (Kengen reported 3.8 and 1.8 billion pre tax in those years)

Kenya Re earnings
Point brought out by MainaT’s comment – what was Kenya Re’s true profit in 2005?

Post TED: Kenyan wildlife
The Economist analyses hippos and cheetahs

opportunities

Jobs
– Director of internal audit at East African development bank. Apply through KPMG at esd@kpmg.co.ug by 20/6
Investment Climate Facility for Africa: Finance Director, Director, Strategic Knowledge, Projects Director, Director, and Legal/Regulatory Affairs. Apply through PWC at recruit@tz.pwc.com by 15/6
– Project manager at inmobia. Apply to job@inmobia.com by 12/6
– Research assistants at kemri-wellcome. Apply online
– Management trainees at Kenya wildlife services. D/L is 22/6
– Chief internal auditor at Kenya women’s finance trust. (D/L is 18/6)
Nielsen: IT system manager, research executives. Apply to hr@acnielsen.co.ke by 16/6
Safaricom: senior manager financial systems & analysis, site acquisition officer, senior learning & development officer, senior buyers (communication, technology – 3 positions). Apply to hr@safaricom.co.ke by 15/6
– Group head of ICT at UAP insurance (D/L is 21/6)
urgent cargo: credit controller, sales executives, HR & admin officer. Jobs@urgentcargo.com by 22/6
wilderness lodges (owners of keekorok) head of marketing, internal auditor. Apply to recruit@adeptsystems.co.ke by 22/6

Awards
Africa women entrepreneurs (from Ethiopia, Kenya, Rwanda, Tanzania Uganda) get voices heard and be recognized. Nominations to be submitted to the Cineartsafrika website by 29/6
East African community students essay competition. D/L is 19/7

Partnerships
– Become a Citi hoppa franchisee. Cost at 50,000 per bus and get details at info@citihoppa.com
– Become a Keringet water distributor. Details at keringet@water.co.ke
– Get a mobile phone kiosk Sasanet. Details at sales@sasanet.co.ke

Vote The electoral commission of Kenya has reopened voter registration from June 11 to July 10 for Kenyans wishing to vote in the elections expected in December 2007.

Previous Kutwa Tuesday

Kenya Re 2006

Kenya Re published their 2006 results in preparation for IPO planned for June. Assets were up from Kshs. 11.6 billion in 2005 to 12.8 billion ($183 million) in 2006 and net insurance premium revenue rose from 2.1 to 2.8 billion over the same period. The year also saw management expenses increase from Kshs. 290 to 453 million resulting in a reduction of pre-tax profit from Kshs. 947 million in 2005 to 762 million ($10.9 million) in 2006.

Kenya Re accounts are straight forward, but insurance reporting is tricky. Once a year, usually between March & May), insurance companies publish their year end results. But there is no rhyme, some report only total assets, some don’t report profit/loss, or net asset positions while others have more/less detail – making it difficult to compare and see which companies are performing better. I wish their reporting could be harmonized.

Musical Chairs

After steering Kenya Commercial Bank to profitability, respectability and restoring shareholder confidence (a long process that began with Gareth George), KCB group CEO Terry Davidson could be on his way out. The bank had advertised for the group CEO position as Davidson’s contract will expire in mid 2007. Applications should be sent to Manpower Associates (Naiorbi) within the next two weeks. Who will replace him? Only a career banker can, as the JD specified applicants must be under 50 years of age and have worked in banking for at least 15 years, with at least 10 in senior management. In 2005, KCB created the post of deputy CEO and selected former finance permanent secretary, Martin Oduor Otieno who still holds the job.

Also looking for new leadership is the (about to have an IPO) Kenya Reinsurance Corporation which has also advertised to replaced their suspended managing director and head of finance. (Interested? Apply to jobs@biz-ideas.biz by 16/2)

Kenya Re IPO

In another budget promise fulfilled, the Government will sell 40% of Kenya Reinsurance Corporation in an IPO, probably by the end of the year, or early in 2007.

They have now advertised for a lead transaction adviser, legal advisor, reporting accountant, receiving bank, PR firm and lead broker. Applications are expected at Treasury by September 8.