Category Archives: NSSF Kenya

No drugs at NSE

The Nairobi Stock Exchange (NSE) through a paid statement by its chairman, Mr. Jimnah Mbaru, has responded to recent allegations that the growth of funds invested at the NSE had come from drugs or other illegal sources.

He says it’s mainly from a basic shift among institutions and individuals who previouly used to invest in land and real estate but have now moved to more liquid invstements such as to equities and government securities

The increased funds come from, among others sources:
– many Kenyan parents don’t have to pay primary school fees anymore since the advent of free primary education
– better management & compliance of pension funds who before had too much real estate investments including the NSSF
– increased insurance premium collections and increased corporate retained earnings
– substantial remittances by Kenyans in the Diaspora – estimated at $750 million to $1 billion annually
– international investors
– & first time investors in stock market including over 200,000 who bought into the Kengen IPO

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.

Your beer, your pension

Jaindi Kisero argues that the National Social Security Fund (NSSF) should be shut down and then re-constituted as a pension body that can be run without interference from the Government.

The NSSF owns shares in East African Breweries (8.26%) and British American Tobacco (20%) whose sales may suffer some Alcoblow effects. The police crack down on drunk driving on highways is having positive effects – the number of drunks on the road has reduced and there are fewer accidents – but in the process some prominent bars are seeing a drop off in patrons who now prefer to use their neighbourhood or ‘local’ bars where there are no road blocks/or from which they know all the panya routes or short cuts to their homes.

More serious are the proposed new penalties which include an 18 month jail sentence for repeat offenders – in essence you could lose you job and more than two productive years of your life for having one too many beers.

Final Business Brief for 2005

Serena
Serena shareholders are being encouraged to accept the offered new shares in a special mailed prospectus. The deal has been endorsed by the board as well as financial advisors of the company and is being promoted as a unique opportunity that takes advantage of a number of factors including one-off tax credits amounting to 504 million shillings from Tanzania & 96 m from Zanzibar, and the higher revenue and margins that Serena enjoys from operating hotels in Tanzania and Zanzibar. The company also plans to acquire hotel properties in Nakuru and Western Kenya in 2006. I have no doubt, the takeover will be successful and I look forward to owning new shares in Serena after March 2006

Standard
The Standard Group’s year ended in September and revenue increased from 1.76 billion to 1.99 billion. However, increased administrative and distribution costs meant that profit for the year reduced from 78m to 66m and the company will not pay a dividend in 2005.

Kengen
Another politically-correct deal was concluded last week and while this is not the first time that conflict of interest issues are being raised in the energy sector, it does raise questions about the outcome of the upcoming Kengen IPO.

New blood at NSE
2006 looks to be a bright year at the Nairobi Stock Exchange, with several companies expected to list some shares at the NSE for the first time since Mumias did in 2001. Kengen leads the pack with 30% available to the public while other companies who have expressed interest include the Scanad Group, Suntra Investment Bank, Sopa Lodges, Wananchi online, Adopt-a-light, belated Equity Bank ( who were expected to float some shares by October ’05), Sarova Hotels (target is June 2006), and Nakumatt (target 2007)

Cashing Out
Already investors are setting aside cash by liquidating other investments. NSSF which has already sold shares in KPLC also plans to sell other shares in Housing Finance, National Bank of Kenya and Sameer Investments. Top investors have also sold shares in Barclays, Uchumi and CMC.

ISP licences
The Communications Commission of Kenya has extended the deadline by one month for licenced ISP’s to apply for mandatory modified ISP licences. Companies will have to provide details of their current shareholding and tax compliance status – otherwise they will be de-registered in 2006.

Banking
– Co-operative Bank of Kenya has applied to the CCK for a value added service PRS license, which will become effective around January 15.
– Can giving micro-finance loans to men reduce the level of violence against women?
– Post Bank has officially ended its once popular premium bonds savings scheme and tomorrow (31/12) will be the deadline for bondholders to encash their bonds which will not be worthless thereafter.
– World Bank vs. Western Union: The amount of wire transfer remittances to Africa is greater than the amount of official direct aid.

Nairobi City Council
The NCC had quite an interesting week as;
– The Kenya Revenue Authority walked away from a deal it had struck with the NCC to collect land rates on behalf of the council.
– Members of the United Business Association and WeCanDoIt advised their members to renew their single business permits with the council to avoid harassment and arrest. The two groups which are challenging the council, claim that their members are being targeted for harassment.
– This week, NCC staff pulled down fences that surround private parking compounds in the city, insisting that owners put up modern fences that beautify the city.

Jobs
At the Kenya Revenue Authority
– Commissioner of domestic taxes CDT/05: Applicants expected to have MBA with at least 5 years senior management experience at audit or accounts in large organizations as well as good knowledge of revenue acts in Kenya.
Commissioner of customs services CCS/05: Applicants should have a business degree – preferably MBA, 5 years experience in senior management of large organizations and good knowledge or revenue acts in Kenya with emphasis on the East African Community Customs Management Act
Apply through KPMG’s executive selection at esd@kpmg.co.ke by 16 January.

Media jobs
Nation Media Group
– Television: Swahili reporter/anchor, sports editor, cameraman
– Radio: news presenter
– True Love magazine: senior fashion editor, fashion editor, and staff writer.
Apply to the group human resource director, Nation Media Group P O Box 49010-00200 Nairobi by January 4.
Standard
Senior reporter broadcast division. Apply to the group human resource director at hrd@eastandard.net
Kenya Times
– circulation sales executives: Nairobi (2) Eldoret Mombasa Kisumu Machakos Nakuru and Mt. Kenya
– advertising sales executives: Eldoret Mombasa
– advertising manager
– chief accountant
– managing director
apply to kenyatimes@timesnews.co.ke by January 6.

New Year’s resolution
Doubling church attendance can raise income by almost 10% recent research indicates. But is money a good reason to go to church? linked from www.aldaily.com.

(NSSF) No Social Security Fund

At a forum to discuss the proposed controversial conversion of the National Social Security Fund (NSSF) from a national provident fund scheme to a social insurance pension scheme, actuarian Sandeep Raichura dropped some hard facts about the current state of the fund right now. E.g. (i) if you start working today at age 25, and join the NSSF scheme, and work for 30 years, you will receive a 200,000 shilling lump sum when you retire at age 55 – which is less than the average annual salary of Kenyans of 260,000 shillings per year. (This assumes you only make the statutory 400 shilling per month contribution, which the NSSF will invest and earn a reasonable 10% p.a.)

While the NSSF has a history of poor governance and dubious investments, the social challenges that it faces are a greater risk to retiree’s e.g. (i) Contributions are too low; At independence it was 40 shillings per month, now it is 200 shillings (ii) <embers are too few: NSSF has about 800,000 members, yet there are 2 million Kenyans in formal employment and over 5 million in informal employment who are not members (iii) There are 1 million Kenyans over 65, and another million approaching 60 years.