Category Archives: NPA

Twitter Week: KQ Strike and Equity Profit Dips

Twitter is a micro-blogging tool that is relly 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:

– @coldtusker @kenentrepreneur the tea board of Kenya wishes to remind you that hawking of green tea leaf is
– Signed up too many usgov twitters to keep with #hilaryafrica. Will edit after her trip
– This is a good time for generator and diesel sale companies. I think there was a tax break for generator sales mentioned in uhuru’s June budget speech. No power last night, or this afternoon: will ignore the power ration schedule as a work of fiction KPLC. As bad as Nairobians complain about #KPLC the water crisis is of more concern
– R/T @shiroh the Stanchart diva trip is such a deal. $1,000 for 5 (shopping) days in South Africa for Ladies (incl, flights, hotels)
– Ethiopian Airlines net profit was $118 million, revenue up 33% with new airbus & Boeing orders pending. R/T @Jellyfish78 Kenya Airways vs. Ethiopian Air on Youtube is an informative but nasty spat http://bit.ly/13N34f and http://bit.ly/CM7Np. Also Ethiopian Air to fly Addis-Mombasa (via Kilimanjaro) http://bit.ly/OHsGq
– Diasporans giving up on Kenya http://bit.ly/K78g7
– Tahidi High tackles the mystery of paraffin in high school food
– On CitizenTV Delamere family shot live video in court and in jail. How? Still it’s a good spot light on the archaic judiciary. Delamere’s say Kenyatta family owns their dairy now while neighbours want to grab their 56 000 acre farm. Tom delamere testimony live – shot two dogs with two shots and denies he shot the man who died. How did ‘top lawyer’ tom ojiambo allow this?
– R/T @milonare Impunity starts with you, remember that when you cut in traffic and feel nothing. We reflect our leaders #fractals #Kenya
– Barclays Kenya raising credit card rates to 3.0% (up from 2.5%) from next month
– r/t @mainat Banks have reduced lending not because of interest rates but poor prospects of recovering loans in an economy that has stalled
– @rookieKE if you bank with consolidated, you can transfer cash from A/C to Mpesa using your phone
– You can get to the top of KICC Nairobi for $2 http://www.mamamikes.com/bl… (Though I believe Times Tower is higher)
– r/t @highwayafrica09 Call for Nominations – SABC-Highway Africa New Media Awards. See http://highwayafrica.com
– R/T @LarryMadowo FYI Equity Bank H1 PBT down 15% on one-off transaction last yr related 2 Safaricom IPO, Q2 profits up 25%
– Blog job: write about blogging, social networking & social media from Asia, MidEast and African countries http://tinyurl.com/ljxmcp
– R/T @kachwanya TEAMs shareholders seem to be the confused – there is no onward connectivity between Europe and Dubai, where TEAMS ends!
– Kenya stockbrokers association (KASIB) launched investor education handbook today http://www.kasib.co.ke/
– So @kachwanya @kainvestor, Nairobi City Council earns 14sh ($0.2) for every flyer tossed out of a car window?
– R/T @alykhansatchu #Kenya new 234 item price basket will track mobile-#cellular and computers charges & #camel meat #inflation
– So many aviation colleges in Nairobi with unemployed graduates, these (striking)@kenyaairways workers should know this
– Spent 15min at Nakumatt queue while some afro-diplomats paid for groceries with us $. Their exchange rate is KES72 =$
– COTU’s Francis Atwoli is going to brag about ending the #KQ strike, and coming through for workers.
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situs gacor

Something to Do

1. Donate

Through Mama Mikes and a bloggers for Kenya initiative.

There are also other other initiatives – like Save-A-Life, Kiss FM’s Jaza Lorry, the Nairobi Women’s Hospital, but beware of a revival of some NGO’s and unusual causes

2. Report Violence
Ushaidi.com is a tool for people who witness acts of violence in Kenya in these post-election times. You can report the incident that you have seen, and it will appear on a map-based view for others to see.

(3) Become a better tipper
Or, better yet, start tipping – because in Nairobi, tipping is something that we have left to tourists only.

Kenyans are woefully underpaid especially out security forces (some of whom had not been paid salaries even as they were asked to quell post-election violence) and yet they also guard our houses, million shillings cars, look after our families, serve us meals they can never afford, and never ask for more.

Many of them live in the very areas that relief initiatives are being formulated for – but just because they are not visibly suffering does not mean they don’t need our help. And while many of us are at the mercy of people whose ability to take our money we can’t say NO to (taxman, church, landlord, relatives), we need to spare a moment for those less fortunate who we interact with everyday, who also have lives and families, and are more at risk after working a full day. Yet we dismiss them so quickly, if they ask or dare to look like they are about to ask for help while at work.

So even if it means paying less tax or tithe, or having one less beer in order to spread some wealth around, get to know these people better and tip them well; waiters, maids, taxi drivers, bank clerks, and especially policemen – though how this can be done without being seen as bribing them – is a delicate task to accomplish.

Banking briefs

– Kenya’s leading bank, Barclays, is the first to acknowledge a distressed loans problem resulting from the post-election violence and standoff.

– From IHI blog; tired of bank charges? Consider a shariah account since they won’t incur frivolous charges that build bank profits.

Paper banks : Is the Nigerian banking model, which Kenya is going to emulate with increased share capital and consolidations, built on sand and bilking shareholders?

Other observations
– China speaks on the Kenyan political crisis blaming the west for imposing democracy on Africa.
– Mobile phone wars continue with Celtel shockingly low rates, while market leader Safaricom won’t compromise and keeps making money
– Hawkers who expected to be evicted from downtown Nairobi, on December 28, now enjoying continuing business with the political uncertainty in the air
– It’s not quite as staggering as Marion Jones or BALCO scandals, but from this month on a whole bunch of expensive, long hitting, golf equipment, widely used in Kenya,(including some Callaway, Titleist and TaylorMade), are now illegal. If caught using them you will be disqualified from a tournament or match event.
– Rapidly growing and expanding Fly540 airline taking a dig at Kenya Airways – with an advertisement that their propeller powered aircraft (ATR72) are more environment friendly than KQ’s jets
– Advertisers taking down the politician billboards that littered the city
– As fuel prices pass the 90 shillings a litre, will some petrol pumps in the country be able to process the sale prices over 100 per litre (3-digits) which are around the corner?
– Where’s the prophetic prophetic Mutahi Ngunyi gone to?

Opportunities

– Kenya Airways: Head Of Marketing & Corporate Communications, In-flight Performance Manager, Load Control Officer, Head Of Is Development (IS) , Systems Administrator, Training Officer – Fares & Ticketing, Qualified Pilots, Multilingual In-Flight Attendant, Customer Service Agent
– Sales positions at KCB. download form here.
– Director of research at the Mo Ibrahim Foundation. D/L is 31/1

Uchumi Anniversary

One year ago today, Uchumi closed down. The management resigned, and the government later stepped in with a rescue package, receiver manager, and arrangements with the companies’ banks.

AGM season; Yesterday Uchumi held a meeting for shareholders. Watching KTN, it appears the media were kept out (as had been at past shareholder meetings). I was not able to attend (as a shareholder) and I am requesting any reader who attended to comment with a synopsis or key issues mentioned at the Uchumi meeting or any other AGM at KICC yesterday. Anonymous comments are given less weight, so do sign your comment with a name/profile please. (Media reports here and here)

This is AGM season and there are too many events to cover. I have tried to avoid going back to the same companies, but when you have two or three on a given day, in addition to other duties – yesterday company AGM’s included Nation Media Group, Standard chartered and Uchumi, one can’t be everywhere.

Uchumi Receivership: Media reports indicate that Uchumi (under receivership) may have improved performance by 50% over their best recent year. The audited results have not been released do they public, nor do they when a company is under receivership.

A receiver / manager (RM) (or bank hangman) is appointed by debenture holders (usually bank or financial institution) when they see a company is going to crash. His/her job is to salvage what they can for the banks to recover their money (usually by sale of assets), not other shareholders or suppliers. By that measure, the Uchumi team (led My Mr. Ciano) has gone an extra mile in engaging & informing suppliers and shareholders in the recovery plan. Shareholders because Uchumi needs their goods on the shelves and shareholders to raise money.

RM’s usually are unable to revive companies. This is because, by the time they are appointed, the company is beyond salvation. The owners/management will have run it down, hidden information from banks on the poor performance of the company, withheld payments to banks, staff and unfortunately to the tax man and city council, among other fatal decisions.

Some RM’s have gotten very rich in this country, selling the assets of the company to themselves – at throwaway prices, employing their relatives, and enjoying the power to manager giant companies that they would not have risen to manage even if they had worked for 50 years. For others it has become a permanent way of life, as the company (under their management) remains profitable and they see it as a long-term job – see the Nairobi Grand Regency Hotel – that has been run by different RM’s for over 10 years now). RM’s also have to contend with lengthy court battles with the previous owners who also meddle in the company’s affairs through proxies.

But occasionally, and if appointed early enough, an RM can actually save a company. He/she can make some harsh decisions to trim fat e.g. shut down an unprofitable unit that was consuming too much money, terminate bad contracts, and fire excess/expensive employees. They are able to make decisions that a sentimental management were unable to. It has happened before (rarely) and sometimes the now grateful previous owners will acknowledge the work of the RM to turn around the company and will now come back and pay the bank and takeover their now lean & profitable company.

History Repeats

It is now acknowledged that commercial banks have put the ghost of bad debts behind them and have moved on to new clean lending books. However a lot of the decline in non-performing assets can be attributed to an increase in the overall loan book (not really a decline)

Also, the future may not be without a repeat if you fast forward two years from now when a fraction of the unsecured loans being hawked at anyone with a pay slip now will likely have gone bad. With the passage of the in duplum rule banks have to cut their losses and begin collection efforts as soon as they realise a loan is in trouble.

But the courts are clogged and it is difficult to collect from unsecured loans as there are no assets to recover and where the amounts being pursued are not worth the legal cost in money and time.

Other recent happenings

– Diamond Trust (Kenya) to participate in rights issue of Diamond Trust Tanzanian where it owns 33%
– Equity bank growth getting super heated?
– Family Bank is Kenya’s newest bank
– Housing finance new product for first time homeowners
– Kenya Commercial Bank gets a new CEO
– Perennial loss maker Oriental bank (formerly Delphis) is on track for a profit this year following a restructuring deal at Miwani Sugar.

Giant in pothole

Mugoya Construction Company has been placed under receivership by their principal bankers KCB.

– Earlier post.
– How a receivership happens.