10 shilling shares

The recent surge of share splits was unjustified based on the overall trading history of the companies. So it’s only a matter of time before some of these shares dip to their pre-split / hype prices. Any share that was trading for less than 100 shillings in the last 18 months is a candidate for a correction – to the below 10 shillings mark and that includes CMC, ICDCI, and Sasini.

IPO’s
Now that a few IPO’s have passed, but not their euphoria, it is apparent that investment advisors of future IPO’s will have to rework their calculations to satisfy institutional and seasoned retail investors. While government divestment offers will be geared to the mwananchi, smaller private companies will have to ask themselves if by offering IPO shares at about 10/= each, they want to be like Eveready or Scangroup and end up with up with 100,000 shareholders who own 100 – 200 shares each.

Rising shareholder costs
– Kengen told us their 2006 annual general meeting (AGM) – after the IPO would 80 million shillings and another post IPO company Firestone will have their AGM in Nakuru on March 22 (where fewer shareholders can attend).
– With over 175,000 new shareholders, the cost to Eveready of even inviting all their new owners to the AGM is quite prohibitive – mailing out accounts & AGM notices would cost about 4 million shillings ($63,500) [i.e. 175,000 letters X 25 shillings postage per letter]. So Firestone shareholders will also be asked to approve a change in company articles to allow such notices to be sent by e-mail or fax.
– The same postage costs will apply when Eveready mail out their dividend cheques. Since most shareholders have the minimum 100 shares, they will receive payment cheques of Kshs 60. which is hardly justified when you factor in bank & postage charges
– Also to cut costs, the company has sent out slimmed down accounts that are about the size of the president’s speech on Jamhuri day.
– On a positive note, Kengen have made an arrangement with (their bankers) KCB so that shareholders can cash their Kengen dividend cheques at any KCB branch at no cost.

Alternative investments
KTN had a story on Friday about the Central Bank (CBK) crackdown on pyramid schemes – and it was followed by a poll on whether they should be banned. The result was 16% YES, 84% NO (i.e. they should not be banned.) Though unscientific, you sense from the poll that these schemes have become lifelines/shortcuts to riches for a diverse variety of Kenyans.

In fact many of these schemes have been shut down at the urging of commercial banks – who have had to deal with swelling crowds in their banking halls – either depositing or receiving cash in the merry go rounds. Some of these investors blame jealousy from banks (who want to hold their money and give out as loans) and the Nairobi stock exchange for putting pressure on the CBK to act (since they have been selling shares to re-invest in these quick cash back avenues with guaranteed returns.

Improved opportunities for graduates

Two years ago I placed small advertisement in the newspaper to fill a secretarial vacancy. Twice after that, the job holders found better jobs, so I had to do it again – a year ago, and also this February. Within a week of each advert, almost twenty applications were received.

Two years ago, almost all applicants were university graduates; for the second ad, about 2/3 who responded were graduates and this time – of the 20 applicants received in the first week, only half were university graduates. Does this mean that there are better opportunities for graduates? Or they feel better about their prospects that they won’t accept an entry-level job these days. Good times and more opportunities I hope for them

The results of this were a quick experiment. But a caution here; if you apply to a job at high profile company, it may take up to two months (or never) to be called in for an interview or sent a regret e-mail.

jobs
from the daily papers

African development bank (ADB) (Nairobi): Macroeconomist, agriculture expert, infrastructure specialist, procurement assistant, disbursement assistant, IT & telecommunications assistant, administrative & financial assistant. Apply to the resident representative, Kenya country office 4861-00200 Nairobi

Alliance for a green revolution in Africa (AGRA) [ supported by the Bill & Melinda Gates and Rockefeller foundations]: – which will be headquartered in Nairobi, and program operations will be implemented by a supporting organization – program for a green revolution Africa (ProGRA) – also to be based in Nairobi
Executive director, evaluation & learning officer, program officer(for education & training for crop improvement), director for strategy & learning, program officer (for crop genetic improvement & farmer variety adoption), program officer for (agro-dealer development) [2 positions], policy officer, communications officer, program officer (financing seed production systems) apply through KPMG Kenya at agra@kpmg.co.ke by 23/3

Software developers at credit reference bureau Africa (CRB Africa) . Apply online by 31/3

Senior program officer Kenya at DFID. Apply through adept systems recruit@adeptsystems.co.ke by 14/3

Kenya Anti Corruption Commission: Accountant, forensic investigator III (tax expert), forensic investigator III (audit expert). Apply to the director 61130-00200 by 16/3
Related – the Kenya Revenue Authority is hiring detector dog instructors and detector dog handlers. D/L is 23/3

Nairobi Java House limited: general manager, coffee division manager, and HR manager. Apply to hr@nairobijavahouse.com by 14/3

Safaricom: Simu Ya Jamii Area Manager, Simu Ya Jamii Administrator, Network Monitoring Centre (Nmc) Shift Technician, Senior Tax Accountant, Principal ERP Developer, Principal Business Analyst, Data Services Planning Technician, NMC SSS Senior Engineer-OM Senior CRM System Developer. Apply online

Serena hotels: marketing manager, e-Commerce Manager, sales executive, IS Manager (Kigali) and sous chefs. Apply though Hawkins associates – hawkins.asssociates@khigroup.com by 14/3

other bits of news

advertising Capital FM (98.4) are for the second year running their Image plus promotion that offers medium size companies 120 30 second radio advertisements over the course of one year for about 1.4 million shillings – inclusive of production costs.

affirmative action: In public procurement & disposal, preference will be given to local contractors & suppliers exclusively for goods/supply contracts of less than 50 million shillings ($710,000)shillings and Kshs. 200 million ($2.85 million) for works procurement.
– Bidders will also enjoy a margin of preference of 15% if supplies used are sourced in Kenya
– Bidders will also enjoy a margin of preference of 6% where local shareholding is less than 20% and 5% for shareholding between 20% and 50%

aviation tourism revival continues with airline licenses renewed for air Italy, Neos, Livingston, (Italy – Mombasa / Zanzibar), Fischer (Poland – Mombasa), Malav (Hungary – Mombasa), and Edelweiss (Switzerland – Mombasa)

coffee: An expo will be held on March 8th at Serena – facilitated by the export promotion council

housing: the government will put up 400 mixed housing units in Mlolongo – Athi river Kenya slum upgrading network in conjunction with UN Habitat (Mavoko for middle and low income housing)

investor seminar: Strathmore University – SIFE Team will hold an investment conference dubbed Smart NSE Investments 2007 on Saturday, 3rd March 2007 from 8:30am – 4pm at the university auditorium. Charges are KSh.100 (Exclusive of Lunch)

media training: The 5th Eastern Africa Media Training conducted the Inter Region Economic Network (IREN) will take place in Nairobi between March 14 – 16

security: serious stuff on the Somalia Coast where another ship (MV Rozen) was hijacked by pirates this week
– Kenya to buy patrol boats to secure the waters of Kenya and the port of Mombasa
– (kizingiti, siyu, mokowe, kiwayu) patrol bases in Lamu have been upgraded to be police stations

Savings accounts that save

New changes to banking act forbid banks’ from imposing charges on savings account holders as long as they maintain the minimum balance. This will promote a culture of savings, which is important even as real savings rates are negative.

(Here’s a snapshot (PDF) of some of these charges from 2 years ago

This week, I closed a savings account because, when I got my (half-yearly) statement, I realized that they had been charging me 200 shillings ($2.9) a month. Even as I opened a different savings account within the same bank, the account rep. said, despite my protests, that the new savings account would attract a 25-shilling per month fee. I also got dinged 300 shillings for transferring the account.

No bank has yet come out and declared how they would abide by the new rules, but it takes long to right a ship and it will probably take a few months to rework their savings products with new brochures, IT codes & account parameters.

Of the last few years savings accounts have become hybrid account that have ATM cards, visa cards, electronic banking & SMS access etc. – all of which banks could extract a fee for the extra services to account holders.

To comply with the changes, banks are likely to come out with plain, no frills savings accounts. They will adjust the minimum fee appropriately but have no more ATM cards or extras – just money sitting in the bank earning intrest, and not reduced by bank charges.

Technological graveyard

I’m looking to replace my current laptop which still works okay but looks to be an outdated dinosaur (Windows 98, Office 2000, 2 GB hard drive, 48 MB RAM, Intel-MMX, floppy disk and CD-ROM – which I used primarily for MS Encarta and MS Flight when I bought the laptop, has USB ports – but can’t read flash disks)

Now 6 years later, I am looking at much-improved specs machine (40 GB 512MB DVDrw, 1.7GHz, no software). It’s not state of the art, but that would be too expensive and computers have a short technological half-life.

I was thinking of all the gadgets I have used and discarded in my lifetime – communications (answering machines, pagers, cordless phones, car phones, modems), music (LP’s, real player, cassettes, mini discs), entertainment (VHS, gold disks, camcorders, hand-held video games, still camera) etc.

Who knows which of the items we use today – laptops, DVD’s, satellite dishes,- will be around in 6 years time. E.g. is dvb-h the future for TV’s? Only time will tell.

New newspaper

A newspaper is the latest project by the team behind hit radio stations Kiss FM and and Classic 105.2.

Newspapers in Kenya are still doing ok, while in the developed world they are in a bit of a struggle and it has been predicted that newspapers in the developed world may cease publication around the year 2040.

The last new non-tabloid launched was the weekly Leader from Royal Media in 2005.

The new newspaper is currently hiring writers through advertisements on KISS FM.