Kutwa Tuesday: Equity Bank & Tiomin

recently in the media

Equity Bank returned to super nova status with almost 200% growth in June 2008, compared to a year before. From a pedestrian growth (at their rate) in Q1 of 8% for deposits and asset, they rebounded to 23% gains in both during the second quarter of 2008 after the Kenyan peace deal and their heavy involvement in the Safaricom IPO – redeploying funds from government securities.

March to June income grew faster for the first time in three quarters, after being evenly matched in December and March. And at 70 billion ($1.05 billion) in assets, will be 3rd largest bank in Kenya by year end (how long before they overhaul Barclays and KCB?). Also how much of a boost did NBK get from Safaricom and Barclays lose by staying on the sidelines? – Thank Kofi or Safaricom?

Alternative investments
in my mailbox
– The Barclays Bond is looking to be a good investment for retail crowd – a Kshs. 100,000 ($1,500) investment will deliver 11.5 %% for the next 7 years. Third tranche of bond coming soon
– Following the Stanbic IPO, Uganda has a rights issue from New Vision
– Tanzania has Nicol – the National Investments Company Ltd newly listed on the Dar es Salaam Stock Exchange

Biz briefs
– The Jinchuan Group Limited China will invest $25 million into the stalled Tiomin Kenya Limited project (purchasing 70%)
– From Indian Ocean Newsletter: Transcentury eyes a bid for Uchumi Supermarkets
– Rate hikes – four mid-size banks have hiked their base lending rates above 15%
– Diamond Trust Bank answers some common shareholder FAQ on deceased, lost, or dormant shares
– Stanbic Uganda leads the way communicating with its (31,000) shareholders – from sending annual reports by e-mail to communicating about divided payment calendars and difficulties, while inviting shareholders who have not received theirs to contact the Bank. Any Kenyan companies doing that yet?
– Vodafone to buy back under valued shares: what about Safaricom?

From the blogs
– Archer finds a faux/fan site for embattled Kenyan Transport Minister – Chirau Mwakwere
– How good is Safaricom’s bambanet service? (a review)
– A marketer’s perspective on the Coke vs. Alvaro brew war

Opportunities
– Nominate a company as one of Kenya’s Top 100 (D/L 31/7)

Internships/scholarships
– science & technology scholarships to study in Algeria (10) and Morocco (15) for recent high school graduates.
– Graduate trainees at the Kenya Revenue Authority. Apply by 22/8 using snail mail to the senior deputy commissioner HR 48240-00100 Nairobi
– British Council – Africa knowledge transfer partnerships for (2) graduates to work at MEA Limited and Booth Extrusions d/l 8/8

Jobs
– Marketing manager at East African Breweries
– Google Africa: Geographic Specialist (Temporary), HR and Communications Associate, Localisation Project Manager – Africa, Strategic Partner Development (SPD), Local Markets, Technical Support Associate, Google Applications (all Nairobi)
– I & M Bank: Cashiers/Tellers for Nairobi, Mombasa & Kisumu, Relationship Manager/Officer
– Jetlink Airlines: technicians, engineers, telesales officers, reservations officer. Apply to hr@jetlink.co.ke by 8/8
– KCB: Contact center services manager, quality assurance & business processing manager. Apply to recruitment@kcb.co.ke by 8/8
– Neptune software: Lead developer, associates consultant (2), consultants (2), sales manager, and client relationship manager. Apply to Kenya@neptunesoftwareplc.om
– Executive director Media council of Kenya (D/L 8/8)
– Paynet: Sales accounts manages, system support analyst. Apply to careers@paynet.co.ke 1/8
– USIU: Network administrator, internal auditor, purchasing coordinator, jobs@usiu.co.ke 8/8

Urban Inflation Index

a week early, with some changes

Tracking prices of some urban commodities compared to six months ago and a year ago

Fuel: Litre of petrol fuel (at local petrol station) is Kshs. 101.50 ~ $1.50 (up 15.3% in ½ year)
6 months ago: Kshs. 87.99, Year ago: Kshs. 80.79
despite record world oil prices, government joint tender system has cushioned some impact on the economy – even oil companies are not celebrating

Staple food: Maize flour (2 kg. Unga pack at Uchumi) is Kshs. 73 (up 40% in ½ year)
6 months ago Kshs. 52, Year ago Kshs. 50
farming woes continue, poor crop expected this year

Other food item: Sugar (2 kg. Mumias pack) at Uchumi is Kshs. 145 (down 3% in ½ year)
6 months ago: Kshs. 150, Year ago Kshs. 150 Kshs
new minister trying to clean up notorious sector

Entertainment: Bottle of Tusker beer (at local pub) is Kshs. 130 (up 8.3% in ½ year)
6 months ago; Kshs. 120, Year ago: Kshs. 100
agricultural input costs rising, but post-budget sin tax pushed prices up. You need this to network in Kenya, or switch to Alvaro?

Communications: mobile phone promotion
This month Safaricom has Ongea tariff which has phone calls priced Kshs. 10 per minute all day, while Celtel has a Kshs. 3 per minute tariff (and with a conditional ‘free’ call package thrown in). Safaricom is also promoting broadband hotspots for the entire Nairobi and Mombasa areas.
– Six months go: Safaricom had extended the hours for Kshs. 8 calls on Saasa tariff, while Celtel had Kshs. 4 per minute calls to 3 preferred numbers
– A year ago Safaricom had Super Tariffic tariff which has calls 38% cheaper and SMS 30% cheaper than the previous tariff
mobile communications one of the few things that are getting cheaper

Exchange rate
1 US$ equals Kshs. 67.4 (shilling has appreciated 4.7% in ½ year)
6 months ago: 70.7, Year ago: 66.5
strong , but now sliding, shilling has cushioned some impact of high oil prices, but exporters are complaining

Electricity cost
New addition
My electricity bill in July 2008 is Kshs. 1,860
A year ago was Kshs. 995
Consumption was the same, the culprit was fuel costs adjustment which added Kshs. 820(649c/kwh) to my bill compared to Kshs. 200 shillings (170c/kwh) a year ago as KPLC recently increased the electricity charges which could have some adverse effect on the economy later in the year – already big manufacturers are investing in power plants and alternative generation sources.

Foreign Correspondents in Africa

– “We went into the heart of Africa self-invited — therein lies our fault.” (Henry Morton Stanley)
– How to write about Africa (Binyavanga Wainaina)

The 2008 Kwani Lit Fest kicked off on Wednesday night with a talk on How foreign correspondents have formed the literary image of Africa with a panel consisting of Steve Bloomfield (The Independent/Monocle), Binyavanga Wainana (Kwani), Jonathan Ledgard (The Economist) and Mary Anne Fitzgerald (London Times)

excerpts

For
– Foreign correspondents write for a foreign audience
– African newspapers who can (Daily Nation, Mail & Guardian) don’t use local correspondents. They pay Reuters to cover other African countries yet local expertise is plenty
– While it’s not appropriate for a news organization to have one person cover the entire continent called Africa, there is only room for two stories a week from Africa in many organizations. And they are often about misery
– Kenyans are as ignorant about Somalia as Americans
– Africa is still the place where young journalists are sent to the vast continent to cut their teeth in journalism. It is where many careers are made
– African countries should not be treated with kid gloves, and foreign reporters should not shy away from writing about the ills of Africa in the interest of positivity or pan Africanism. E.g. Kenya went through a violent period this year and it was a much more advanced society than Yugoslavia a decade ago

Against
– Many Africans grew up with images of the rest of Africa shaped by foreign correspondents and authors. These images are not necessarily the true Africa
– Foreign correspondents inhabit and write about a world alien to most Africans – so how can they write about Africa? They are not encouraged to deviate from the formula
– East Africa was romanticized by the pioneers of foreign journalism and Hollywood. The history of West Africa which was more complex (slavery, trade) and is still not widely understood or covered by the foreign press.
– Unfortunately, foreign correspondents sometimes become the story e.g. I couldn’t leave my house because of the genocide outside.

Even

On Keith Richburg and his controversial book Out of Africa: For black American correspondents there are advantages (sense of community) and disadvantages (danger as you may resemble one warring tribe) to working in Africa.

Kutwa Tuesday: Reverse Safaricom IPO and other such tales

Safaricom needs a reverse stock split to get rid of their unhappy shareholders.
– Anyone who has less than 10,000 shares by December should be paid off by the Government or Vodafone at the IPO price of 5 shillings or market price, whichever is lower at the end of the year. Investors will not sell their shares at a loss and the least they can do is recoup their money from this mess (excluding their loans)

Kenol tweak: 36.67 million shares change hands worth 3.3 billion shillings on Friday. Meanwhile kenol/kobil stations have the most expensive fuel in Nairobi. Diesel has hit 101 shilling per litre ($1.55), while petrol is at 108, that’s about 6 shillings more than my station of choice.

Cola tweak: After enduring a difficult first quarter, coca cola is having a bit of a tumble in the second quarter due to to EABL’s Alvaro – at least in urban areas where it has become the non-alcoholic drink of choice for many previous soda (and juice) sippers. Coke has unleashed another multi-million shilling giveaway promotion to win back customers


alvaro cases at Nakumatt

Celtel tweak – More celtel confusion; The ink is not dry on posters for their newest promotion and already the terms have changed (for the better) [for customers to get free calls will now cost 65/= ($1) a day down from 99/=].

August will be a significant month for the mobile sector as Celtel switches to the Zain brand, Safaricom release their first quarterly results after the IPO, and Econet should finaly/hopefuly roll out operations.

Media tweaks: All journalists and correspondents practicing in Kenya must be registered with the Media Council of Kenya – and to do so they must each pay Kshs. 2,000, while foreign journalists will have to pay 10,000 ($154) per year [those on short term assignment of up to 3 months pay 5,000]. Amounts due by 30/9. Television radio and newspaper organizations also have to pay a quarterly fee depending on the number of media outlets

– Standard tweaks Two weeks after the launch of the new Standard, their strap line of the standard has changed;


new standard at launch


standard yesterday

Sunday Nation tweaks now has the best of best of Whispers – favorite columns of the late humorist Wahome Mutahi and some articles of the New York Times

From the blogs
– Pointer for Access Kenya shareholders to read
– There are only 60 lions (adult) in the Mara – but that’s an improvement by 50% from year 2001
– How bad are things for those who took IPO loans for Safaricom? Ssembonge shows that small investors are hurting more than bigger borrowers.
– Cautionary tales on life insurance from Tujuane
– Peer pressure: tales of GDP growth of rates of 8% in Ghana and
21% in Angola
– Link to a puff piece in memory of the former finance minister
-US Airways to remove all in-seat movies from their planes, while Emirates is targeting to remove all paper (in-flight magazines and publications) to save a ton of weight on the new A380 (to compensate for a ton of water for showers in first class (from airliners.net)

Opportunities

African Banker Awards. deadline for nominations if 31 July in the following categories: African Banker of the Year, African Bank of the Year, African Investment Bank, Best Development Bank in Africa, African Microfinance Bank, Best Issuing House, Most Innovative Bank, Deal of the Year, Socially Responsible Bank of the Year, Best Global Bank in Africa, Award for Gender Sensitivity

Jobs
from the daily papers last week
– Aircraft Leasing Services: captains, first officers for Embarer 135. als@als.co.ke
– HR director at Housing Finance. Apply through deloitte esd@deloitte.co.ke by 1/8
– MD of KCB Rwanda. Apply to recruitement@kcb.co.ke by 8/8
– KPMG Uganda: Internal Audit Services manager, Senior Internal Auditor, Internal auditor, forensic auditors. Apply to talentrecruit@kpmg.co.ke by 1/8
– Corporate affairs manager of Nation media group.
– Independent sales agents at Standard Chartered Bank. Apply to Susan.Ombati@ke.standardchartered.com by 31/7

Others vacancies at Kencall, Kenya Airways, and Family Bank [Credit officer, Procurement Officer, Works Officer, Accountant, Accounts Assistant, Administrative Assistant, Assistant Manager, Audit Manager, Branch Accountant]

Beach plots too good to be true? Lots of land available in Mombasa for real estate investment from Datkit agents including 3 acres creek in new Nyali with 120m sea frontage, 1.3 acres over looking Nyali golf club, 5 acre lots in kikambala, 14 acre beach plot next to Neptune beach, 25 acre beach plot next to kaskazi hotel with 168m beach front, 1/3 acre residential plots in shanzu (2nd row from beach)

Safaricom 5s

Safaricom IPO Day 30: Deals 1,297, Turnover Kshs. 257.9 million [$3.9 million] Average 6.23 High 6.60 Low 5.95 Last 6.20 Volume 41.4 million shares. Feels and smells like a bear raid. [Commentary and data from Rich.co.ke – NSE data vendor, with Free real time prices between 0930 -1500]

– What is the role of Morgan Stanley in the price of Safaricom?

– How about a reverse stock split of Safaricom to weed out 2/3 of the unhappy 800,000 shareholders and get a manageable share register?

End of day update – Turnover Kshs. 450.4 million ($6.92 m), Average 6.20 High 6.60 Low 5.95 Volume 72.5 million shares. Rich.co.ke commentary; A very weak session. The article in Business Daily, a large trade on the prompt board at 6.20 all pushed this market over. It was all so fortuitous and coincidental to be quite remarkable. The price is undervalued here by a wide margin.