Access Kenya IPO results

Access Kenya summary
Individual applicants: who applied for the minimum 5,000 shares get 900 shares, while those who applied for 25,000 get 4,000.
Institutional investors: that applied for the minimum 100,000 get full allocation, while those that applied for 1 million get about ½ that .

Serena expands to South Africa
Serena shareholders will this month be asked to approve creation of a South African subsidiary company

CMA reforms planned
The Capital Markets Authority has commissioned a consultancy to modernize & improve its operations by strengthening its legal and regulatory framework. Part 1 of the study will have the consultants evaluate the capital markets and central depositories acts, look at secondary market malpractices & sanctions, cross border listings & trading, methods of dispute resolution among others. In Part II, the consultants will come up with revised regulations that, based on the weaknesses identified in part 1, ensure that Kenya investor laws & regulations adhere to international best practices. This is part of the FLSTAP reform program of the Ministry of Finance and consulting firms can apply by June 13.

Kutwa Tuesday

These are stories I have found (kutwad) and want to share this Tuesday

Getting a story straight: One way of getting your story out through the media is to buy space and have your statement run exactly as you mean it and straight to the public – and there are two recent instances of that.

Street Lights: First is by the CEO of Adopt-A-Light Esther Passaris who launched her transformed street lighting crusade into an anti-poverty and anti-corruption vehicle that may lead her to being the next mayor of Nairobi.

This comes after the City council of Nairobi disowned the contract they had with her company and advertised for other companies to fulfill outdoor lighting & advertising functions which were had been exclusively done by Adopt a light.

What’s in your water bottle?: The second statement is a concerned water expert who is worried that Kenyans may not understand the different types of bottled water being sold – drinking water, natural mineral water, mineral water, carbonated water etc. – and that water bottling companies are being liberal with the advertising truth. He writes that natural mineral water is bottled at source, and with no chemical treatment, which is an expensive process – and he doubts that it is possible for a company actually producing such water, can sell it at the same price as drinking water. I.e. some of the companies are making false claims on their water bottles. He also cautions users to check the amount of fluorine in bottled water as it can lead to bad teeth and bone disease (Should not be more than 1.5mg per litre)

Do they work?: Of course the media love a story waged on their papers and companies such as Kakuzi, Portland cement, Kenya pipeline, Nzoia Sugar and other companies have all bought space (in more than one newspaper) to run statements, usually denying allegations of financial impropriety. There was even an infamous statement defending Anglo Leasing a few years ago.

Esther Passaris took out 2 page advertisements in both the Sunday Nation and Sunday Standard – probably at a total cost of Kshs 1.5 million (840,000 for the Nation, and over 600,000 for the standard)

The media is happy because these statements add to advertising revenue and often lead to other statements and form a base for them to tackle stories that they may have been hesitant to delve into. IMHO, it is unwise for corporations to place such self-serving advertisements especially to deny allegations – the better thing is to lie low and let the bad press (negative stories) pass, plant a few trees & build schools (CSR is good first aid for a scandal wound), answer questions from regulators or authorities – but don’t splash your story in the media!

(See past PR statements by De La Rue and Italians in Malindi.

Communications Wananchi has applied for a data carrier network operator – DCNO license – joining other firms such as KDN, Simbanet, Telkom, UUNET and Access Kenya.

Bounty Hunter: In a Ugandan newspaper, I came across an article (copy here) about the search for Felicien Kabuga who is wanted for his role in the 1994 Rwanda genocide. The article had more depth than any story I have read in any Kenyan paper (fear of libel laws perhaps), but what continues to amaze me is that despite almost every literate urban Kenyan knowing about the search, a reward on offer of $5m (down to Kshs 335 million at current exchange rate), recent photos of Kabuga that the Nation published a few months ago, and significant evidence that he spends a great deal of time in Kenya – no one (his friends & associates) cares enough, for posterity, or for the reward, to turn this guy in. And now there’s a deadline – as the mandate for the International Criminal Tribunal for Rwanda (ICTR) and presumably the reward will expire at the end of 2008.

Brother please! Just came across this story – which at first I thought was from the the Onion or some satire website. But it appears to be a true story – that the wreckage of a six-seater aircraft has been found in Cameroon three months after it crashed. So should we be greatful that the KQ crash site was found within 48 hours?

Money go round: Even as some of the larger pyramid schemes are experiencing cash flow problems, smaller ones are still attracting new investors. In the newspapers every day there are more schemes in the works listed in the classified sections under business opportunity – all offering 16 – 20% returns per month, just for investing a small amount for a weeks.

Real estate The Kenya anti corruption authority (KACA) is seeking land in milimani, upper hill, kilimani or wastelands, presumably to set up a new office building. Lots sought should be 2 to 5 acres in size, close to major road and details should be sent to the Director by June 14.

Mining
– On J7 July at the Msambweni divisional office, a case will be heard between Simon Ndungu Karanja vs. Tiomin over his 1.9 ha piece of land
– Gippsland offshore petroleum of Australia is doing an geophysical survey of the Kenya coast (kipini area, ungama bay)
– Tile & carpet center are prospecting for carbon dioxide in (Kereita forest) of Kiambu district
– Oil giant Halliburton is moving is headquarters from Houston to Dubai!

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

Eye on media

ET: There’s a new magazine on the streets called ET – or Expression Today edited by David Makali that takes a look at happenings in the media industry.

  • Nation: A look back at W. Kiboro’s tenure, the bungled staff retrenchment program that led to internet e-mail & rumours, how NMG got a TV licence from a reluctant President Moi, challenges faced in launching the business daily and an in-depth look at the problems they have faced with staff in Tanzania and a TV licence in Uganda.
  • Standard How KTN has slipped behind NTV in the latest TV rankings (from Steadman), why Katherine Kasavuli, Swaleh Mdoe, and Louis Otieno left and the staff revolt that followed, a rumor of interest from Transcentury or foreign investors, a quote by Kwamchetsi Makokha on how the standard shareholders brought in dream team (including himself) to spruce it up for a sale. But once the paper was turned round, they decided not to sell it anymore – and got rid of the dream team.
  • Royal media: management triumph over editorial desk has handicapped the Leader newspaper.
  • Kenya Times: Ruto takeover being rebuffed.
  • KISS newspaper – what its outlook & potential.
  • KBC interference and cash flow problems
  • Business magazine Market intelligence is no more.
  • Other media issues like poor staff pay at the Nation, how financial muscle (Uchumi, Samuel Gichuru & KCB) gets negative stories killed in the editorial room, and a recap of the Artur raid saga.

It’s a great read for 100/=.

NIC Bank AGM

The 2007 NIC Bank AGM was held on May 16 2007 at the Intercontinental Hotel

Who’s the man?
The Chairman, Mr. JPM Ndegwa, was able to handle most questions and diffuse tense moments and awkward (not difficult) questions with careful answers and occasional jokes. He kept reminding shareholders to ask serious, not peripheral questions after the first question was – how can the deputy chairman, be older then the chairman? – answer was deputy is not my successor, he only chairs meeting when I’m away

Shareholder questions
AGM’s are quite routine except for shareholder interaction & questions or if there is special business to discuss, or multiple applicants for director seats such as as Kenya Airways or KCB

Dividends:
– Questions (Q) What are unclaimed? What happens to them? Answer (A) – These are cheques yet to be banked, but which NIC has to hold for about 12 in case shareholders or their dependants show up. However after the budget last year, unclaimed dividends will eventually be transferred to the CMA investor compensation fund.
– Earnings per share growing, but dividend per share still a huge way behind. A – Growth in dividends is prudential, NIC can’t pay out 100% of earnings as dividends, and it also has to build up reserves.
– Q; Too many taxes on dividends A – Take it up with the government
– Q; Shareholders without bank accounts have trouble cashing cheques A – Chairman said it’s high time everyone got a bank account, and stop carrying cash around which is dangerous
– Q; shareholder who has bought shares several time gets 3 invitations to AGM and 3 small dividend cheques (and has to pay for each to clear) A – Chairman said he should check that all the shares were immobilized in the same CDS account which should consolidate all the shares
– Q; Why no bonus shares? A – Bonus shares do not increase shareholder wealth, only divide it more times. But it’s popular now, so they may consider it. But for now, if you want more shares, buy more
– Q; Why give t-shirts, don’t want them and want more shares instead A – Chairman answered it was a gift/token of appreciation to those who show up to do the business of the AGM. Added that it was actually a nice pullover, which he would appreciate over the next year (unlike dividend which is only used once)

NPA Q – NPA’s up over the last 5 years, what is the bank doing about them? A – NPA’s are actually down over last 5 years. These are actually prudent provisions by NIC rather than lost money which the bank goes after aggressively. In fact since year end (2006) statement were published and 1st quarter (2007) results published last year, this figure has reduced by another 300 million shillings

Growth plans to sustain profit.? A – New NIC capital division will engage in commercial paper and bond activity which does not require lending. Also careful expansion into new branches. Nakuru branch was opened to support extensive asset finance business in the region. Also new branches at Westlands and the Junction (Dagoretti) are already profitable

Costs Q – Staff costs up significantly but staff numbers relatively unchanged A – new mangers hired to lead the bank into new business. This has been successful as NIC has grown 4 fold in last 5 years. Also union demands have meant bank increase staff salaries

CSR: Q – the bank’s corporate social responsibility (CSR) projects seem to benefit only whites (mzungus as seen by the picture in the annual report A – that is not correct projects benefit all Kenyans. The bank has focused on the environment and education which benefit all Kenyans
Why not support AIDS war? A – Bank has supported Nyumbani Home and has a staff HIV policy but focus this year is on environment and education

Hot button issue
Q – Management of the Bank not representative of Kenya as they all come from one region and the wealth needs to be spread around the country got some generous applause A – This is a company not a political forum. All managers are hired on merit. The CEO position was widely advertised (nationally & internationally) – they got the best man, and the results speak for themselves. Resources (dividends) will go to the areas of people who buy shares in the company got even greater applause

AGM Goodies: NIC half-sweater, Intercontinental lunch box (one rib, chicken drumstick, soda, spring roll, mini pizza, samosa, apple, cake slice)