Category Archives: Uganda

Kutwa Tuesday – June 26

Uchumi revealed: Shedding some light on the Uchumi bond proposal, the receiver manager has stated that the problems that shut down Uchumi had more to do with management style than the market conditions. The newspaper says that the 650 million to be raised, 280 million will go to pay suppliers & creditors, 23 million interest on (bank) loans, 52m to pay terminal benefits of staff, 200m working capital as the company plans to open 3 new branches in Mombasa, Nairobi, and Kisumu.

The article adds that all suppliers have been paid for deliveries made in the last 12 months i.e. the company is profitable. The company had sales of Kshs. 1.3 billion in the first quarter of the year and had 2.8 million shoppers visit their stores. Sarit is their best store with April revenue of 90 million followed by Ngong Rd hyper with 68m (last was Eldoret with 8m) from an offline story in the financial standard.

Note: even if they re-list, won’t they be in the same boat as NBK and be unable to pay dividends for several years?

Rights Issue: Olympia’s rights issue was formally announced today with an offer for shareholders to buy 3 shares for each held.

Newspapers: New newspaper from the KISS team – called the Nairobi Star and billing itself as Kenya’s first full-color daily newspaper launches next week
– But what happened to the Kenya Times website frozen on June 8?

Trade not aid: According to an Oxfam report subsidies are responsible for poverty among African cotton farmers.

Political worm: Raila Odinga gets unfairly blamed for a lot of things, but he is not responsible for a malicious computer virus bearing his name that has caused IT admin’s some headaches this month

uh oh: Why is Obama’s campaign getting stuck?

uh oh 2: Sad to read that former track darling Marion Jones is
almost broke. Even though she wasn’t a big spender like Tyson or Jackson, legal bills fending off drug allegations have taken their toll on her finances.

Uh oh 3 & 4 : Zimbabwe to do a takeover of foreign businesses as Uganda parliamentarians have given Barclays, Sheraton, Kakira Sugar, and Uganda Telecom one year to float part of their share on the Uganda stock exchange.

War what is it good for? Is there a difference between Somalia, Darfur and Palestine?

Kampala expense tab

Uganda Securities Exchange

Where are my Stanbic shares today?

How much did a week in Uganda cost?

– Hotels (73%) are the one expensive item about the country. There is a commonwealth heads of government (CHOGUM) summit coming up later this year and there are major investments all geared towards that including new hotels coming up, sprucing up the town, and other investments to carter to VIP’s. Hotels in the Kampala CBD range from nice small $40 ones to $150 at Speke and Grand Imperial, to higher at the Sheraton and new Serena.
– Newspapers (1.38%). There’s the New vision, Monitor (owned by NMG) and Red Pepper which has evolved from a racy tabloid to a more respectable daily newspaper that is sold alongside the other two. Also, at around 3 PM each afternoon, the Daily Nation and Standard from Kenya can be bought outside the main Barclays Bank building in town
– Internet (1.68%). Cyber cafes are plenty around despite the electricity mini crisis. Most charge about 1/= (UG 25/=) per minute.
– Telephone (1.66%) You can use your Safaricom or Celtel lines as usual here. But for Safaricom, air time cards are only found at some MTN shops and are sold at about 35% extra. i.e. buy a 100 shilling card for 136 shillings equivalent. Seasoned travellers are either post-paid customers, or buy enough cards before they leave Kenya
– Meals & Entertainment. (8%) Food is relatively cheap compared to what we pay in Kenya even at places like Steers and Pizza Inn. Also included Spiderman at Garden City Mall (an upscale mall with the local Uchumi supermarket), rugby at Kyadondo, and a lecture series event.
– Gifts (8.61%) . Mostly clothes from the equivalent of Masai Market
– Transport (4.1%). Somewhere there is taxi to Entebbe airport (40km away for about Kshs. 2,000) but most getting around Kampala is on the back of a motorbike and dashing to your destination. At first it was scary, but you get used to it as it’s the fastest way to get around town as they squeeze through the city’s traffic jams. But they can be dangerous and someone told me there are a couple of accidents a day, some fatal – with the driver abandoning his passenger and bike on the spot. The only faster way to get through town is in a VIP motorcade (the President’s convoy is a sight to see) – Personal items 1.59%
– Other expenses 0.15%

Total expense: about 2 million Uganda shillings or US 1,200 or Kshs 80,000

– The one remarkable thing about Kampala is the level of safety – security is assured. Whereas in Nairobi you get worried about being out past 6PM and on some streets any time of the day for and are always on the lookout for phone snatchers, pick pockets or armed thugs, here there are no worries. The fact that all watchmen (shops, banks) have guns may be a factor, but a country that has gone through years of war has no tolerance for violence. With all the guns around, police are super-armed (as are VIP mototcades).
– This is also a country where you can encounter a wedding convoy with the bridal party riding in four humvees!

Jobs
Jobs from the Kenyan daily papers this week

Fund raising & communication manager at Action Aid. Apply to actionaidsomaliland@actionaid.org by 31/5

Akamba bus: General Manager, chief finance officer. Apply to mushtaqk@akambabus.com by 31/5

Barclays: Branch managers, branch coordinators, customer advisor, and local business advisor. Apply to the retail expansion program, market branch 30018-00200 by 25/5

Equity Bank: Business growth & development manager, operations manager, credit manager. Apply to jobs@equitybank.co.ke 31/5

Area sales manager at Eveready. Apply to asm@eveready.co.ke by 25/5

Flashcom: Finance manager, sales manager, network engineer. Apply to recruitment@flashcom.co.ke by 4/6

Kenya Land Alliance: network capacity building officer, assistant accountant. Apply to kla@africaonline.co.ke by 25/5

National Council for Law Reporting law reporter, assistant law reporter (2), systems administrator, web developer (2), proof reader (2), publishing assistant.
Apply online by 22/6

Pricewaterhousecoopers: human capital manager, head of marketing & communications. Apply to recruitment.ke@ke.pwc.com by 1/6

Stanbic IPO

This week I made a first foray into international investments (since a short-lived stint with T. Rowe Price mutual fund) by signing up to buy shares in the Stanbic IPO (Uganda).

Earlier this year a cement company had an IPO in Tanzania but that was not available to Kenyans while the Stanbic offer is. Though earlier marketed as being exclusive to Dyer & Blair (D&B) customers, other brokers have forged links with Ugandan financial institutions to enable more Kenyan’s to participate.

I paid 3/= per share at CFC (plus a 750/= processing fee) while a certain wealthy investor/dentist informs me that D&B has them at 2.85 each as does African Alliance at the same price.

Still, there are some risks of investments mentioned in a D&B analysis including limited trading days at the USE, no CDS system (we’ll get paper share certificates), power rationing could negatively impact company loan repayments, and the Uganda shilling may depreciate against the Kenyan one. Also, dividends will be paid in Uganda shillings (1 KES = 26 Ush) but at least they can be repatriated in full as movement of capital is free.

Stanbic is Uganda’s largest bank and is rated as the highest quality stock ever offered on their stock exchange.

Yoweri musings

advice from a neighbour

President Yoweri Museveni gave some history, leadership, business, and investment insights in a speech when he opened the new Serena hotel in Uganda.

Some of the things he mentioned touch on the future prospects of Tiomin, Kengen, Sasini, Serena, coffee marketing, and relations with China & and other foreign donors. I welcome any recent Ugandan visitors to comment, since I am yet to visit the Pearl of Africa beyond Malaba (trip planned for 2007).

Banking Round-up

In Nigeria, Banks have turned their tellers into prostitutes, appropriately titled “relations managers.” With 89 banks in Nigeria, competition can be fierce, and many businesses have complained of harassment by “corporate prostitutes” and Women’s Rights Watch Nigeria and other groups accuse some banks of “specifically mandating young, unmarried female staff to target and convince wealthy young men [that] these employers insist on skimpy outfits and unusual work hours”.

In Britain, Barclays Bank staff won’t get paid on time owing to a Banking error. The wrong date was entered into the bank’s computer system and as a result, as many as 62,000 Barclays UK staff and another 40,000 former employees will get paid a day late.

In Uganda, a Bank now collects taxes for the URA or Uganda Revenue Authority. Look for this outsourcing model to be expanded in Kenya where bank’s already collect utility payments for KPLC and other cash-strapped bodies.

In Botswana, the Finance Minister has warned Banks about their poor service. Mr. Gaolathe said there is growing concern amongst the general public regarding long queues in banking halls, especially at peak times and also took issue with the commercial banks for focusing on the prestige market at the expense of the larger community.

Lastly, in Canada customers pay as much as 16,000 shillings in banking fees (Can$C258 a year) for current accounts at some Banks.