Category Archives: NSE insiders

Informing the NSE public

Read an article from the Washington Post where the Chairman on the US Securities & Exchange Commission, Christopher Cox, is intrigued by the idea of using blogs to disseminate important corporate information.

“A 2000 rule known as fair disclosure ended a long-standing practice of companies providing significant information to stock analysts and other Wall Street insiders ahead of the public.”

Monday’s naked insider manipulation of Citi Trust shares should have been a wake up call for NSE on information and rules for prices and trades. Watch to see if there’s any recall or punishment stemming from the ill-fated trade.

This is very important because currently pension funds, Kenyans in the Diaspora, farmers and other new investors are all stepping into the market and things like the Citi Trust fiasco tend to undermine our confidence in shares. The share splits of EA Cables and ICDCI were self-fulfilling prophecies – share price shoots up about 6X in a few months, leading directors to announce splits to make them more affordable.

”when you attract foreign investors, you also attract criminals who specialise in economic crimes” – Tommy Prins of Deloitte

Related NSE needs EDGAR

New age for investors
The Nation’s Weekly Advertiser interviews the brains behind Eight.co.ke, Jijini Markets and Stock Detective who offer financial information on activities at the Nairobi Stock Exchange. Pick up this weeks’ free copy of the newspaper around town in Nairobi and hopefully the story will appear soon on their website. (ed: none are affiliated with the NSE)

Upcoming @ NSE

– Barclays Rumour: The Bank will announce a 5 for 1 share split and a 1 for 38 bonus. Note: I don’t own any Barclays shares

– Riba Capital tips on the next Mumias offer.

– Family Finance Building Society will offer 15 million new shares to account holders at 60 shillings each (minimum placement is 30,000 shillings). The ongoing offer runs to the end of the month and may overshadow the, rather low key, Eveready IPO (which starts next Monday) in the same way Equity Bank’s listing stole the limelight (and perhaps investor cash) from Uchumi’s re-capitalizations earlier this year.

Family Finance mimics Equity which also raised 500 million shillings in capital in August 2005. FFBS was expected to be a licensed as a commercial bank by June 2006 but that has likely been delayed by the Central Bank until they shore up more share capital.

Mid week Business

Insider Trading
The CMA has announced an investigation into the dramatic price rise of EA Cables in the last two weeks. I understand the price gains since the stock split was announced but what the CMA should really look at are the price surges before the split was announced, and which took place on very thin volumes traded.

Jaindi Kisero, editor of the East African, explains how a stockbroker can manipulate the price of a stock upwards through “transactions done across the books – where two nominee accounts belonging to the same broker outbid each other and move the price to the level they have predetermined in their office away from the scrutiny of other players”. Maybe the result would look like this. EA Cables is likely to be innocent but brokers are not being candid about their nominee account dealings. The may also be a factor behind the steep day one price surges of Kengen and Equity Bank.

Banking Changes
– Bank merger: EABS Bank is seeking a merger with another bank to propel it into the top 10 of Kenyan banks. It was formed by a merger of East African Building Society and Akiba Bank in 2005. from East African.
– CFC has cut back its Saturday banking hours to a more conventional 9a.m. to noon. It appears that longer hours don’t mean longer profits and such banking may be better left to ATM’s which are 24-hours. The pioneer of longer hours was NIC’s MOVE.
– NBK has linked its ATM’s with Pesa Point.

City vs. Justice
On Monday morning, the parking lot at the Law Courts operated by the Nairobi City Council had been fenced and had signs proclaiming the parking as the site of a new courthouse and police post. But within an hour, staff from the city council had demolished the mabati fence and resumed normal parking activities.

Airlines
– New look KQ: Kenya Airways has advertised for the design of new uniforms and interior design of aircraft. Details at www.kenya-airways.com and deadline is September 30.
– Went to JKIA on Sunday Afternoon. The local terminal was clearly overcrowded with jets having nowhere to park and passengers had to walk past several other aircraft as there are no walkways. The airport authorities have scrapped plans to utilise the old (Embakasi) airport but something needs to be done soon. I remember arriving at Mumbai and being driven in a taxi out of the airport at 2.a.m. to the local terminal for a connecting flight, which was a bit scary for a first visit to India.
– African time If you get bumped by KQ as often happens these days it’s because the airline typically has about 5% no shows and so adjust their booking to ensure that there are no empty seats on flights. Sometimes everyone shows up hence someone has to get bumped.

Standard goes main
In January shares of the Standard Group will move from the alternative board to the main listing board at the NSE.

Absurd quote
A shortage of baby diapers in Nairobi is to being blamed on the Lebanon-Israel war in the Middle East.

Jobs

Chief financial officer at the Aga Khan Hospital Mombasa. Apply to hr@msa.akhskenya.org by August 25.

Programme officer at the Forum for African Women Educationalists (FAWE)> Apply through Deloitte at esd@deloitte.co.ke

NGO Council: Deputy director finance & administration, finance manager, legal officer, IT operator, Project officer, and other vacancies. Deadline is August 25.

Africa region director at the American Red Cross. check www.redcross.org/jobs for derails

Standard Group
Apply to the Head of HR
– Senior accountant (Treasury) D/L is August 18
– Sales executives. D/L is 26 August
– Regional sales & distribution managers. D/L is 30August

World Bank: The deadline for applications to the WB Young Professionals Program is August 31.

Shooting Star

Once again speculation in East African Cables stock has resulted in an unconventional jump from 204 to 213 shillings (9 shillings) per share on a volume of just under 3,000 shares traded yesterday. Compare that to another fast-rising stock – HFCK that gained 2 shillings (24.75 to 26.75 shillings) on a volume of about 300,000 shares traded on the same day.

Earlier this year, EA Cables made another astounding 17 shilling jump on an even smaller volume of just 1,000 shares.

Insider trading

I came out the Nation Centre building at lunchtime today and almost bumped into Mr. Okomo Okello, the Chairman of Serena Hotels (and Barclays Bank). I was tempted to ask him when the proposed restructuring of Serena that the Board had told us about at the April AGM would ever take place (they had said in a few months) – but divulging such information to me would be insider trading, and would he even talk to a stranger?

Still, I was reminded that I wish had bought more Serena shares after that AGM instead of East African Breweries. Serena shares have gone from 52 shillings to a high of 90, and today closed up 4.5 shillings at 85.5 (almost 6% in one day).

NSE Golden Jubilee

The Nairobi Stock Exchange celebrates its Golden Jubilee (50th anniversary) at Kenyatta International Conference Center (KICC) Nairobi from November 23 – 26 2004.

Entry is Kshs 100/= and you can meet stockbrokers, investment bankers and money managers and learn about investment options since deposit rates at banks are still very low.

On a related matter, KICC has become a beehive of activity since the former ruling party was evicted from the premises last year. There are exhibitions and conferences every other week and the place has been spruced up. With with the Goldenberg inquiry meeting in the basement, KICC should have a very profitable year (if only they would publish their annual results). KICC’s low point this year was in October, when the Kenyan government spokesman kicked out a clinic that had been there for 20 years, because he needed “more office space, and patients were a threat to his security.”