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.

Diamond Trust EGM

Diamond Trust Bank will have an extraordinary general meeting (EGM) on December 21. The company has not amended its articles of association since 1982 and want to update them to reflect new capital structures, governance, CDS and the electronic age, among others.

Jubilee Insurance will have an EGM on December 18

The various proposed amendments will have outcomes including:

  • New capital: Creation of preference shares and also clears the way for a share split.
  • Shareholders who don’t approve of company actions can have their shares forfeited. E.g. minority Serena shareholders who did not approve the conversion to TPSEA
  • Modern technology: Allows notices and other documents to be e-mailed to shareholders. (This can save costs; i.e. the company has 10,000 shareholders and budgeted Kshs. 7 million for printing and postage of the ongoing rights document). . Also allows board meetings to be held by teleconference or video conference, allows dividends to be paid by electronic means (e.g. bank transfer, direct debit) not just by cheque and notices can be sent to shareholders outside Kenya
  • Super shareholders? New articles recognize that 10 members constitute a meeting and allow any director or any 2 members to convene an EGM. The company’s top 10 shareholders own 48% of the company while the next 50 own another 10%.
  • Governance: recognizes that directors are not disallowed from doing business with the company provided they disclose this to fellow directors and also don’t vote on such issues. Also, fellow directors may remove a director who misses 3 meetings.
  • Cap on underwriting commissions at 10%. (Another cost-saving measure since the on-going rights issue has budgeted placing commissions estimated at 28%). Also, stockbrokers may be paid in the form of shares.
  • Makes provisions that stem from the 2006 budget speech where the Finance Minister proposed that any dividends unclaimed after 7 years be returned to the CMA’s investor compensation fund from where individuals can claim when they resurface.
  • A bankrupt person may vote by proxy

Charterhouse depositors cry foul
Charterhouse Bank and depositors are asking (in a full-page newspaper notice last week) why was their bank, with no liquidity problems, shut down without sufficient explanation and why they are still denied access to their funds almost six months later even after a court had lifted the order? The accounts of the bank remain intact and they are still earning interest on almost Kshs. 3.1 billion in deposits there as the statutory manager has invested surplus funds in government securities. Only staff costs have shot up reflecting the additional managers deployed from the central bank.

Bank eX Files

I remember watching the X-files when it was the show to watch. The agents would enter a dark warehouse or factory. They would whip out their flashlights and find their way through an abandoned building, tearing down huge cobwebs, wiping away dust, and peering under covers in search of a deformed skeleton or alien foetus.

That’s one of the last unpleasant tasks of a bank hangman which is what I was doing today – minus the gun, courage, cute co-worker, and aliens of course.

Today we did the same thing, starting with opening many padlocks at the entrance, covering our noses with handkerchiefs, removing any light-colored clothes and stuffing our socks into our trousers before we entered this warehouse. My handy Nokia phone comes with a torch which proved to be useful as the place is dark inside even at noon.

We have heard gallant tales and applaud the efforts to revive companies like Kenya Meat Commission. But this is how the revival all starts – with bank workers breaking down locks they had put up years before as we take yet another round of prospective buyers to visit/inspect the abandoned property before they submit any bids.

The skeleton these agents are looking for is not hidden. Even as we move through the dusty place with torches and noses covered to keep out the dust we are looking at the skeleton of someone’s dreams – the building which they put up, the new machines they imported from South Africa & India (state of the art then, outdated scrap today), the manager’s suite they decorated, faded door signs around the well laid out premises marking rooms like productions, manager, bathroom, sales office where people would busily work towards realizing the full potential of the owner’s dream.

Today it’s just a skeleton. But if the buyer likes the skeleton enough to put some money down, someone else’s dream & vision will rise again over the skeleton of someone else’s.

Mlolongo: As we drove past mlolongo yesterday there was a bulldozer knocking down a controversial petrol station built on the road reserve. Further down the road, other buildings marked for demolition were beehives of activity with workmen doing more demolition work. The owners of these buildings have heeded the government’s directive and are removing their buildings at their own cost, and with a chance to salvage their stones and material.

But many are not abandoning their dream projects; – they are instead only shaving off about 10 ft of each building that they deem to have encroached on the road reserve, and hoping the rest of the structures will stand on their own. I hope they will be proved right in their assessment because when the bulldozers are done, there won’t be any ex-files for the bank to revive.

December 1 opportunities

Telkom dealership: resellers for Telkom’s 3G wireless service (fax, voice, internet) in Mombasa, Kisumu, Eldoret, Nyeri, Nakuru, Meru, Muranga, Kakamega, Voi, Kisii, Kericho, Thika, Embu, Malindi, Nanyuki, Garissa and Machakos. D/L is 5/12.

Water distributors for Ha Ha drinking water, nationwide.

housing: Satellite City – a low-cost housing estate compositing 265 units will be built in Mlolongo, Athi River

Jobs

  • Various jobs at abbott site
  • Chief executive (& secretary to the board) of the Association of Micro Finance Institutions (AMFI). Apply to info.amfikenya@africaonline.co.ke by 8/12
  • Legal officer at Del Monte. Apply to nanasi@delmonte.co.ke 13/12
  • Public affairs officer at the Canadian high commission. Apply to nairobi-competions-concours@international.gc.ca by 8/12
  • energy company involved in hydropower and geothermal development: petroleum geologist petroleum drilling engineer, exploration geophysicist, financial analyst, financial auditor. Apply thru PWC at ess.ke@ke.pwc.com by 15/12
  • I&M Bank: apply online for cashier & teller positions.
  • Brand & communications manager at java. Apply to hr@nairobijavahouse.com by 13/12
  • Kenya Wine Agencies Ltd: trade marketing representatives, information & communications technology manager. D/L is 13/12
  • Ministry of State for Youth Affairs -Section officer II (500 posts), Technical instructors (61 posts). Apply to the PS P O Box 34303 Nairobi by 8/12
  • Postbank: senior manager marketing & business development, database administrator, legal officer, internal auditor, inspectorate officer. D/L is 18/12
  • Safaricom: retail centre manager (Nairobi), retail centre agent (Nakuru, Eldoret, Mombasa, and Kisumu). Apply to hr@safaricom.co.ke by 8/12
  • Senior economist at the World Bank – Sudan. D/L is 11/12

New Nation

Friday December 1 marks the launch of a revamped Daily Nation. Hope it streches to other papers the rest of the week, not just Friday’s – Monday and Wednesday could also do with a bump.

KQ goes regional

As expected Kenya Airways will get some regional jets, the Embraer 170 which can be expected to serve Kisumu (once fixed) and other regional routes. The Kisumu route showed the preference passengers have for jets versus turbo- props.

An earlier post & debate

More investment news
– Diamond Trust rights are trading on the NSE
– Stanbic Uganda IPO open to Kenyans
– Mumias opens this month
– Is the Family Finance capital raising legal? They say yes, other banks say no, CMA says nothing

Housekeeping
+ve In the last year, Hotmail (which I was about to abandon) has increased mailbox sizes from 2MB to 25 MB and now to 1 GB.

Anonymous comments are allowed again, but are likely to be ignored.

-ve my hotmail address has come to the attention of some of our West African brothers such as Ibrahim, Isaaic More, Idris Musa, Adamu Abubakar, Bala Mohammed, Zuma Amed, Ken Ono, Kaburo Abu, George Watara who have all sent me multi-million-dollar business proposals of which I am yet to decide on.