November Investments

The middle of November brings a choice of three new investment options to look at:

Eveready OFS
At 9.50 shillings per share this is the cheapest to buy. Others have gone through the prospectus. prospectus

This is a company that will largely depend on rural areas to remain in the dark i.e. anti KPLC. But the company needs top get into new products such as batteries for solar gadgets and laptop’s batteries- things that will provide future customers. But when asked about R&D on Capital FM this week, the MD mentioned that this is something they rely on Eveready US to do. So the views of an African country will not rank up there. Also watch to see if ICDCI retains it stake or takes advantage of the euphoria of retail investors buying in at the front to walk out of the back door (like Uchumi).

The shares are likely to be over-subscribed and I still maintain that the hassle of time spent visiting stockbrokers coupled with the inevitable refund of most of your money in a month’s time is not an enticing option. So I’ll wait till December, or opt for the bare minimum (500 1,000 shares at 9,500 shillings). Going by other offers this year (Kengen, Scangroup), the shares may double or triple in price in the first week and then stabilize after a month.

Diamond Trust rights issue
Priced at 50/=, good outlook for a bank looking to expand regionally and possibly absorb another bank next year. I have had the shares for over a year bought at 27/= now trading at about 76=. With the rights being sold at 50, that means one can get an immediate 50% return by flipping them immediately. I’ll probably buy my rights, and more, and hold.

Family Finance Building Society (FFBS)
This fast rising building society that intends to become a bank next year. Shares are priced at 60/= and are open to account holders, but anyone can open an account and buy the shares.

Like Equity: In preparing to become a bank, they have dutifully being publishing their quarterly accounts. Equity grew by 20% while FFBS grew its assets by 18% by June 2006 and both achieved their entire 2005 profits in the first half year of 06. FFBS is about 3.5X smaller than Equity, less efficient (operating costs are about 25% higher), and mobilises deposits similarly, but their fast growing loan book, like Equity’s, also comes with growing NPA’s.

Equity raised capital to become a bank in a private placement at 136/=. Thereafter the shares went to the OTC where I had a chance to buy, but passed on, the shares at 75/=. They were listed in 2006 at 90/= shillings and have settled in the 100 – 130 range.

Difficult to judge, but I’d rate it as a buy even though they have been very slow to provide information for new investors e.g. on who others shareholders are, when we’ll know about allocations, refunds, listing etc.

Pot Pourri

Biz news

Airlines
– Want to start an airline? Boeing has created a site to guide your operations into this very risky business. (From Randy’s Journal – a Boeing VP’s blog!)
– Kenya Airways now offers flight status information via phone to passengers at 20/= per SMS.
– There was a small story on the KTN news indicating that Five forty aviation (Lonrho air) which will launch air services to Mombasa this month will be priced as a low cost no frills airline.
– Pan Africa airways (which is hiring crews for F27 and B737aircraft) has also been licensed to operate from Nairobi to Mombasa, the coast and Loki.
– Jet Airways of India plans to launch flights to Nairobi next year

Banking: Kenwsitch and Pesa Point are collaborating to enable ATM customers to access each other’s networks.

Opportunities

Jobs
from the daily papers

Financial accountant – Nairobi at the Institute of security studies. Apply to jobs@issafrica.org by 24/11

Internal audit manager at Oserian flowers. Apply to jobs@oserian.com by 22/11

Pricewaterhousecoopers: (i) Financial effectiveness [senior consultants and consultant](ii) IT effectiveness [senior consultants and consultant] (iii) governance, risk & compliance/financial management in the public sector [senior consultants and consultant] (iv) governance, risk & compliance/internal audit services [senior consultants and consultant] (v) manager, human resource consultancy (vi) Human resource consultant [senior consultants and consultant]. Apply to the human capital manager at recruitment.ke@ke.pwc.com by 30/11

Asian languages: Last year a Confucius Institute opened at the University of Nairobi teaching Chinese languages. Now Kenyatta University if offering a diploma course in Japanese languages as a 2 year program beginning in January 2007 (application deadline is 24 /11)

Tender: The Kenya Anti-Corruption Authority (KACA) has advertised to procure an interview recording system (that works). KACA also plans to open an office in Mombasa.

IPO fizzle

No disrespect to the Eveready IPO which opens today, but there appears to be less enthusiasm for what it now the 3rd IPO this year after Kengen and Scangroup. There are lines outside stockbrokers today, and will be around for the next two weeks but nowhere near Kengen size.

Most of the fatigue comes from the over-subscription and resultant fractional allocations of shares to investors – each requiring several trips, phone calls and hours spent pursuing IPO shares.

Likewise to buy Eveready, I’d have to sell something or if I wrote a cheque i’d have to make several trips to my broker – who’s normally super efficient. But at IPO time, things get hectic with the long queues and harried staff – payments/orders get misplaced or have to be corrected, and a second trip would likely be in order, followed by a third in a month’s time, after the IPO results are known (11/12), to collect the inevitable refund cheque (after 15/12).

I may be better off just waiting to the shares to list (on 18/12) then simply send my broker an e-mail to buy the shares. Price volatility can be expected on day one, but with Christmas around teh corner, there won’t be much activity on the exchange and the price should hold steady (I hope) till January.

Careful banks: Unlike before when several banks lined up to offer loans to buy Kengen shares, they are still available, but there’s no marketing or fanfare announcing them. Also, while Kengen was sold on almost every street corner, this time KCB is the only commercial bank selling Evereyady shares.

Still I must commend some brokers who have opened satellite offices to process IPO applications, thus easing the crowds at their main offices.

BARS free
Barclays shareholders will endorse the sale of their BARS to CAPSEC of South Africa – in addition to a share capital increase, bonus, and share split at an EGM in Nairobi on December 8. Register closes Nov 29

No parking
The latest ludicrous proposal by city council is to double the daily parking fee from 70 to 140 shillings ($2) in order to finance the construction of parking garages. What the council should do is have a bond or enter an arrangement with a bank that will finance construction of the parking in record time and the council can repay the bank over the long term. The council would be ill-advised to finance construction using daily collections of which it has little control. The proposal also has no end date which means we could be paying double for the next 10 years, long after the project is over, or without any new parking garages ever being built.

Posta booster
There’s a story in the East African today about how the Postal corporation will reap over 16 million shillings ($226,000) from Kengen mailing annual accounts and notices for their AGM on November 30. Kengen had to pay for tens of thousands of stamps and has budgted 80 million shillings ($1m) for the day.

Nyramid update
A prominent city Church led by a charismatic preacher is behind one of the newest Nyramids.

Tesco’s here
Tesco, a former partner of Uchumi has opened its own Nairobi supermarket.

Cadillac’s to Kenya?
Cadillac returns to Africa via South Africa with right hand drive cars which will then be sold to other Sub-Saharan African countries -with BLS, SRX and STS models arriving early next year. Geenral Motors has a significant presence in the Nairobi through isuzu truck and minibus sales.

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).

Corporate Blog?

This afternoon I had an interview with a company about a website – and my concept was for the company to incorporate a blog to generate interest in the website and market the company better to its diverse customers, many of who accesses its products over the internet.

I mentioned that other corporations were doing this now and it gave a human face to their communications from CEO’s to customer service people.

I don’t know if my idea went over well, and I hope that I was wrong in my feeling afterwards that some of the panel appeared to have that we already have a website, blogu kitu gani? face.

After such a session, you are always very critical of yourself. During question time, I wanted to instead rush back to one or two points I had just remembered. And even taking the stairs down afterwards, I wanted to go back to the conference room and give them another 3 or 4 points that I had forgotten to mention that would strengthen my case.

Oh well, see how it goes. It was a very nice company, good to work with, and appears to have a nice work culture, and a very laid back (low bureaucracy) atmosphere.

Opportunities

from the daily papers this week

Manager at the Carnivore restaurant Nairobi. Apply to carnivore@carnivore.co.ke

Classic Camps: chief accountant, senior accountant(s), sales & marketing manager sales executive(s), executive assistant. Apply to classiccamps@accesskenya.com by 15/11

Commercial Bank of Africa: (i) internal audit manager [Ref: AM-BR] (ii) internal auditor [IA-BR] (iii) account relationship manager, corporate banking [ARM-CB] (iv) account relationship manager, business banking unit [ARM-BBU]. Apply to jobs@cba.co.ke by 21/11

Communications commission of Kenya: Supply, deliver, install and maintain solar energy solutions st CCK sites in Taiita Taveta, Isilolo, Suba and Thika districts. Submissions to solar@cck.go.ke by 13/12

Communications professional at DFID. Request an application form from dfid@adeptsystems.co.ke and reply to recruit@adeptsystems.co.ke by 1/12

Property valuer at Housing Finance. Apply to human.resources@housing.co.ke by 20/11

ILRI aka international livestock research institute. (i) Internal audit manager (ii) resource mobilization officer (iii) help desk administrator. Apply to recruit-ilri@cgiar.org by 24/11

Law Society of Kenya: advocates to consult on current professional development of lawyers, review the conduct process (standards & ethics) in place and make proposals on the same. Apply to lsk@lsk.or.ke by 24/11

McCann Erickson: (i) general manager (ii) account director. Apply to Emily.Mutua@scangroup.biz

National Museums of Kenya: (i) director, development & corporate affairs (ii) director, institute of primate research (iii) director, administration & HR (iv) director(s) (3) museum sites & monuments – for central, western and coast regions of Kenya. Apply to dgnmk@museums.or.ke by 30/11

Internal audit manager at Oserian.a apply to jobs@oserian.com by 22/11

Logistics manager at Oxfam. Apply to kenyajobs@oxfam.org.uk by 22/11

Practical Action aka intermediate technology development group: (i) program officer [technical support] (ii) program officer [financial support]. Apply to recruitment@practicalaction.or.ke by 24/11

Royal Media Services (i) ICT assistant (ii) ICT technician. Apply to hr@royalmedia.co.ke by 24/11

Sotik Tea (i) engineering manager (ii) field assistants/management trainees. Apply to info@sotikteas.co.ke by 24/11