Category Archives: Nairobi Jobs

Mostly Equity – Suspensions & Housing Evictions

Equity suspended: Equity Bank was briefly suspended as a Central Depository Agent by the Central Depository & Settlement Corporation (CDSC). They have smartly escaped unscathed without answering any charges owing to:
– Playing one regulator against another the. The Capital Markets Authority (CMA) immediately reversed the ban, and reinstated Equity while terming the CDSC action as being against procedure
– By invoking the ‘small investor’ Equity said that they were in trouble because they had reached out to the small investor, lending them funds to buy Safaricom shares without collateral, and some people did not like that

Lost in the story is:
– Equity split shares were supposed to start trading on April 14, but have been trading as split prices and have appreciated about 40% since the announcement
– The spat makes the CMA and CDSC look bad; by having a turf war (PDF) and fighting in public both claiming to fight for the integrity or interest of investors
– Why won’t Equity pay the minuscule amount or respond to the regulator (CDSC)?
– Comments made by the CEO at the bank AGM, bragging having the most investor accounts in the country coming back to haunt at a time when brokers are (i) broke (ii) resentful/envious
– More tales at the stockskenya forum

Equity moves in at Housing Finance: At Housing Finance, Equity is asserting its authority at the bank and Equity directors will now form 1/3 of the Housing Board of Directors, with Peter Munga (Equity chairman) Benson Wairegi (Equity vice chairman) and Babatunde Soyoye (Helios) all appointed in 2008 and who will all be ratified by Housing Finance shareholders this month.

During the 2008 rights issue at Housing Finance, Equity also increased their ownership stake from 20% to 24.9% while sister institution British American Investments (Britak) also increased from 4.9% to 7.5%. The rights issue also saw the National Social Security Fund reduce stake from 7.8% to 6.8% as the Government of Kenya which did not take up any new shares saw its stake reduce from 7.3% to 3.6%

Opportunities

Free Download Githongo Book – The most talked about book in Kenya – It’s Our Turn to Eat – the Story of a Kenyan Whistle-Blower (John Githongo) by Michela Wrong will be available for download from April 10. yes you probably have a bootleg copy, but this is the real one from the publisher

– Invest in a Government of Kenya Bond to raise 10, billion shillings ($125 million), and earn a potential 10% bond return (PDF); minimum application amount is 50,000 ($625), and the offer closes 22 April. (better than Madoff?)

– Maker Faire Africa (MFA), a celebration of African ingenuity, innovation and invention, will take place August 13-15 at the Ghana-India Kofi Annan Centre of Excellence in ICT in Ghana’s capital, Accra there are opportunities to sponsor the summit

– Jitihada is the Kenya National Business Plan Competition – (details) (PDF) that will be launched in mid-April.

Create a Logo for an international mobile banking conference and win $200. Details here, found at @whiteafrican

Jobs
– Old mutual: Broker distribution manager, Mass market manager. Apply to recruitment@oldmutualkenya.com by 17/4
– National social security fund managing trustee. apply through manpower associates by 26/4
– Capital Markets Authority: Assistant Manager (Legal Framework), Accountant, Assistant Manager (Investigations), Manager (ICT). D/L is 15 April

Kenya Infrastructure Bond

The government of Kenya infrastructure bond closes on Wednesday and looks to be a successful fully subscribed offer that will raise Kshs. 18.5 billion (~$231 million).

It will have proved irresistible to funds and institutional investors who have been looking for investment outlets as the Nairobi Stock Exchange slump persists, and the sure 12.5% annual return from the Government of Kenya over the next 12 years is a sure bet. The 12.5% interest payments will be paid semi annually with principal repaid in 2015, 2017 and 2021. Bonds from Mabati and Barclays were fully subscribed in 2008

Through the minimum investment is just Kshs. 100,000 (~$1,250) it looks like there’s little interest from retail investors, with many smarting from the free-falling NSE and more concerned with protecting their existing investments (read these great tips) from rogue stockbrokers to sign up for bond which, the fire-fighting Capital Markets Authority (CMA) has not gotten round to providing much investor education. The short window (about 3 weeks from Jan 28 to Feb. 18) may also not have favored retail investors.

The success of the bond which is earmarked for road, geothermal and water projects comes despite some reservations (little infrastructure spending identified, limited oversight, may affect Kenya’s credit rating). The bond was first set out in the 2008 budget by the Minister of Finance.

Read more bond perspectives from the Kenya Capital Investment Group blog

Opportunities

Start your own collection agency from Collection Africa

– Join embattled Suntra investment bank as a manager – investment banking & fund management or manager – stockbroking.

Equity leads the Kenyan Economy

The first Bank (as usual) out with the 2008 profits is Equity Bank with the usual staggering financial results (PDF) for 2008 with 101% growth in profits and 103% in loans.

But a closer look at the numbers show some more subdued stats that may indicate an economic slowdown, and which may be confirmed when other banks (especially Barclays and KCB) release their year-end results in the next two months.

– Equity’s growth in assets is 45% from a year ago, but 6% in Q3 and 3% in Q4
– Equity’s deposits are 55% up from a year ago, but this breaks down to 23% in Q2, 10% in Q3 and 6% in Q4
– Equity’s’ loans are up 87%, but the 41% increase in Q2, was followed by 17% in Q3 and 2% in Q4
– Expansion costs – income up 98% from a year ago, but expenses have kept track – up 97% from a year ago (in 2007, the spread was 73% and 52% in 06/07)
– Factor in Safaricom IPO lending (interest and fees) estimated at– and Q2 income was 3x higher than in any of the other two quarters
– Cross-checking against the 2007 election and disruption in economic activity, in 4Q of 2007, Equity had growth of 18% in deposits and 33% in loans with 54% in profits in same quarter, with in 1Q of 2008, had 8% deposit and 11% in loans, rates which outpace 4Q of 2008

Shareholders will be happy with the Kshs. 3/= dividend, but the 1 for 10 share split, will add a huge float of shares to an overflowing NSE pool.

Bank opportunities
most from the daily papers this week
– African Development Bank is currently accepting applications for its Young Professionals Program . Apply online by 20/2
– Barclays seeking debt recovery agents – auctioneers, re-possessors, valuers and investigators. D/L is 28/2
– Commercial Bank of Africa: senior manager finance. Apply through KPMG by 25/2
– Family Bank Bancassurance Manager. D/L for online applicatiosn is 6/3
– IFC Investment officer (private equity & investment funds division) Africa, based in Nairobi. D/L is 27/2

Analyzing Kenya Pipeline

Pre-IPO Peek at KPC

Kenya Pipeline Company (KPC) is expected to be the next big privatization project to help plug the current Government of Kenya budget deficit. The IPO transaction adviser selection process is already underway for KPC and other state corporations

How much can one glean from audited accounts of the giant company? I got hold of a 2007 annual reports of the company – a rare big glossy booklet that mentions every project e.g. SAP, ISO, fibre optics, refurbishments in Western Kenya, Mombasa, Athi River, with lots of graphs.

KPC still mostly compares itself to other state corporations in terms of goals such as to raise capacity from 440,000 to 880,000 lire per hour by August 2008 – a massive project that later turned controversial and may have cost the last MD (Okungu) his job in January 2009.

Financials
– 2007 revenue of 8.8 billion shillings (~$117 million) (2007 was 8.45 billion and 2003 was 6.5 billion). 2007 Revenue comes from export services (4.3b), local services (3.7b), and 748 million from Kipevu storage fees
– Pre-tax profit of Kshs. 4.3 billion in 2007 (~$53 million)
– Earnings per share was 163 shillings [153 in 2006, 2003 was 29 shillings) – company’s shareholding is made up of 18 million ordinary shares of 20/= par each.
– Dividend paid out of 8.25 per share each year 2007 and 2006
– Cash of 4.5 billion (1.1 billion in 2003) of which 2.5 billion is in Treasury securities (which they only started investing in from 2005)
– Paid 2.2 billion in direct and indirect taxes and was recognized by the Kenya Revenue Authority as a distinguished taxpayer
– Total assets of 20.2 billion shillings (18.7 billion in 2006) – however fuel stocks of 13 billion shillings (384,509 cubic metres) that is owned by marketers is not included in their accounts. [2006 was 36 billion comprising 856,958 cubic metres]
2008 decline: summarized KPC financial accounts show revenue declined by 7% to Kshs. 8.2 billion and pre-tax profit 54% down to Kshs. 2.6 billion in 2008

Auditors: Accounts audited by controller and auditor general, who hired Deloitte & Touche; who said the accounts were ok except to note that 1.2 billion receivables (current assets) include 348 million owed from an unnamed oil company that is the subject for a court case and for which no provisions have been made

Scandals: has been a cash cow for politicians for years with a high turnover of managing directors, manager and directors. Different parts of the report mention Kshs. 967 million pending in lawsuits, 404 million leasehold land unable to develop since it is gazetted forest land, 347 million from Oil Company, 314 million of obsolete spares, and Kshs. 221 million for a finance deal with Triple A that cost the previous MD (Ochuodho) his job. The company also provided Kshs. 382 million of services to National Oil Corp of Kenya (related company as they are both owned by the Government– do they pay all oil marketing fees?

Banking
Bank with NBK, CBA, Stanchart, Co-op. In 2007, they paid off all bank loans (EIB, Stanchart, and CBA) amounting to Kshs. 500 million in 2007, but are still stuck with the 221 million Triple A loan.
– KPC recently signed a syndicated loan of Kshs 8.2 billion with CFC-Stanbic, Barclays, CBA, Citibank, and KCB.

Exports:
– Exports 58% to Uganda, 155 Rwanda, DRC 14% Tanzania 6% Sudan 4% Burundi 3%
– strong shillings bad for export sales
-pricing structure – more expensive at Eldoret and Kisumu means that the company loses revenue if other countries e.g. Rwanda, Uganda remove their oil at Nakuru or Nairobi depots
– 50% of their revenue comes from fuel exports, and With oil being found in Uganda, Sudan, and possibly Congo, is the pipeline capable and adequate to transfer oil from central Africa to the coast at Mombasa?

Others & Non-core activities
– Will Construct an LPG plant with private sector investors (including Kenya pipeline refineries limited, and now-collapsed Triton) in Mombasa at a cost $50 million and one in Athi River at a cost of $13.5 million by Bharat of India
– Other income includes Kshs. 8 million in helicopter income, and also disposed of 120 million worth of helicopters in the year 2007
– 50 million donated to the Ministry of Youth Affairs
– 6 acres worth of land worth 30 million in Nairobi was donated for a street children rehabilitation center
– Spent 114 million in advertising (by a monopoly) and 35 million shillings in legal expenses
– Has shares in the Petroleum Institute of East Africa and Consolidated Bank
– Successfully changed their pension from a defined benefit to a defined contribution scheme

Outlook:
– Slight financial dip in 2008 will probably be attributed to the post-election disruptions
– Capital spending could be significant as they are extending the pipeline to Uganda (Eldoret to Kampala). Also, the company already spends quite a bit in pipeline rehabilitation costs, but won’t a completely new pipeline (though more expensive) be a better solution?
– Needs a stronger management team led by a strong MD – like Kengen’s Eddy Njoroge (someone with a legacy to protect who will shun the wheeler dealers) and a stronger board (not just the Energy ministers’ cronies)
– Could be a good IPO buy i.e. a cash cow pre-tax profit margins of almost 50%

Other Opportunities
– Bank of Africa: branch managers, assistant branch managers, operations assistants’ recruitment@boakenya.com by 5/2
– Consolidated bank credit manager, administration manager, apply to the Head of HR 51133-00200 by 31/1
– Housing Finance senior relationship manager (mortgage finance), portfolio manager, legal officer, human.recources@housing.co.ke
Dyer & Blair sales agents, and for several hundred other weekly jobs visit Kenyan jobs blog.

Kutwa Tuesday: Sam’s Kids


They may be called Barack, Michelle, Obama, or other creative names, but many of these new kids born and given fabulous American
baby Obama names were conceived as a result of Uncle Sam’s bungled election debacle in December 2007.

Opportunities

Airbus University Challenge: the Airbus
Fly Your Ideas challenge is open to university students around the world with ideas on the future of aviation and improving its environmental position. Prizes are €30,000 and deadline is 1st December 2008

Georgetown Fellowships Apply for the Georgetown University Law Center’s Global Health Law Fellowship Program. D/L is February 16 2009

Kenya Content Conference Tandaa 08 a local content conference sponsored by the Kenya ICT Board takes place on November 14 2008.

Kenya’s Top Women The Business Daily invites you to nominate Kenya’s Top 40 women under 40. send their names, contracts and reasons why they are worthy (in less than 500 words) to top40under40@nation.co.ke by 30th November

Government of Kenya jobs:
– Judiciary 25 resident magistrates. D/L 21/11
– Electoral commission of Kenya – 39 district election coordinators

Biz brief’s

Co-Op IPO: is 1/3 of the way to target with just 3 days to go optimistic about the Co-Op IPO. transaction advisers have now released cash flow and share price projections that should have been in the Co-Op Prospectus. what happens if they fall short – will D&B pay C-op for the shortfall? Is there a last minute investor who will get preferential terms to bridge the gap? The prospectus states that in the event that this minimum amount is not attained, approval may be sought from the Authority to proceed with the listing of the existing shares and any Offer Shares that are subscribed under the Offer.

I got an SMS (as did other Co-op customers) inviting me to take part, but the application desks/tents still look rather forlorn

Equity – HF: November 4 was not just Obama day, but also the date when the Housing Finance and Equity Bank deals should have been completed

Foreign Investors Tough times for the former Rift Valley Railways and Tiomin who continue to flounder: Tiomin’s latest statement notes. …. the Government of Kenya has not completed the remaining bureaucratic steps required for the transaction to close…..Tiomin’s management shares our investors’ extreme frustration at this unreasonable delay….. Tiomin has acted in good faith and we are very disappointed….. If the closing continues to be delayed, we will consider terminating the MOU on the grounds of unreasonable delay….. Tiomin will issue another press release when further material information is available. Pity they have no local defenders

Geothermal prospects : two companies are scoping in Eburu (gilgil) and Menengai for geothermal energy

Brew turf Coca Cola launch minute maid juices in Kenya (what happens to 5 alive) as EABL launch Alvaro in Uganda

Sat-TV: DSTV will launch pre-paid scratch cards, following in the footsteps of rival GTV who are reaping from the ongoing English premier league

Insurance by M-Pesa: Madison Insurance now accepting insurance installment payments by M-Pesa following Old Mutual, which enabled investment, plan payments

Radio Standard Group prematurely possible radio investment worth Kshs 250 million as KISS FM parent Radio Africa rolls out their 4th radio station – XFM (rock music)