Foreign investors participation in the Nairobi Stock Exchange

Most analysts attribute the recent upward trend in volumes at the NSE as a result of foregin investor activity. Here is a summary of the foreign investors participation in Kenya shillings from 22nd June to 24th June;

SALES
Period Total; 24-Jun-09; 23-Jun-09; 22-Jun-09;
EABL 40,617,600; 000; 30,117,600; 10,500,000;
EQUITY 9,221,930; 1,600,000; 6,124,600; 1,497,330;
KENOL 7,931,000; 721,600; 7,209,400; 000;
OTHERS 6,859,290; 2,974,725; 3,565,395; 319,170;
BBK 2,750,050; 000; 000; 2,750,050;
CMC 1,606,250; 1,606,250; 000; 000;
KENGEN 412,950; 000; 000; 412,950;
TOTALS 69,399,070; 6,902,575; 47,016,995; 15,479,500;

BUYS
Period Total; 24-Jun-09; 23-Jun-09; 22-Jun-09;
OTHERS 41,976,015; 3,801,550; 36,330,400; 1,844,065;
EQUITY 41,395,505; 25,379,005; 16,016,500; 000;
BBK 25,490,400; 8,532,900; 14,229,500; 2,728,000;
EABL 20,976,900; 000; 7,968,900; 13,008,000;
SAFCOM 11,838,180; 8,778,880; 000; 3,059,300;
KCB 1,150,000; 000; 000; 1,150,000;
TOTALS 142,827,000; 46,492,335; 74,545,300; 21,789,365;

GRAND TOTAL 212,226,070; 53,394,910; 121,562,295; 37,268,865;

Observations;
Most souggt after stock - hot cake; Equity (41m), BBK (25m), EABL (21m)

Stocks under censure - Hot potato; EABL (40m), Equity (m), KENOL (8m)

Tithing

An controversial subject.
According to Wikipedia
A tithe (from Old English teogoþa "tenth") is a one-tenth part of something, paid as a (usually) voluntary contribution or as a tax or levy, usually to support a Christian religious organization. Today, tithes (or tithing) are normally voluntary and paid in cash, cheques, or stocks, whereas historically tithes could be paid in kind, such as agricultural products. Several European countries operate a formal process linked to the tax system allowing some churches to assess tithes.

<strong>Tithing in the new testament
According to Catholics, as those who serve at the altar should live by the altar (1 Cor 9:13), it became necessary for provision of some kind to be made for the sacred ministers.
Some claim[citation needed] that as tithing was an ingrained Jewish custom by the time of Jesus, no specific command to tithe per se is found in the New Testament. References to tithing in the New Testament can be found in Matthew, Luke, and the book of Hebrews.
For Catholics, the payment of tithes was adopted from the Old Law, and early writers speak of it as a divine ordinance and an obligation of conscience, rather than any direct command by Jesus Christ.
Some Protestant denominations cite Matthew 23:23 as support for tithing.
Away with you, you pettifogging Pharisee lawyers! You give to God a tenth of herbs, like mint, dill, and cumin, but the important duties of the Law — judgement, mercy, honesty — you have neglected. Yet these you ought to have performed, without neglecting the others.
(Albright & Mann, Matthew, Anchor Bible, Vol. 26 (1971))
and its parallel Luke 11:42
Woe to you, Pharisees! You tithe mint and rue and every edible herb but disregard justice and the love of God. These were rather the things one should practice, without neglecting the others.
(Fitzmyer, Luke, Anchor Bible, Vol. l, 28A (1985))
Most New Testament discussion promotes giving and does not mention tithing. 2 Corinthians 9:7 talks about giving cheerfully; 2 Corinthians 8:3 encourages giving what you can afford; 1 Corinthians 16:2 discusses giving weekly; 1 Timothy 5:18 exhorts supporting the financial needs of Christian workers; Acts 11:29 promotes feeding the hungry wherever they may be; and James 1:27 states that pure religion is to help widows and orphans.

My first tithe
I have never ‘tithed’ in my life. I also never believed that a significant number of Christians actually tithe till last year, when I learnt the following;

Tithing opinions• A female colleague who once gave all her savings to tithe, and soon lost her job. She later got another job and appears to be doing well
• A kenyan man whom I met in Uganda while on some international assignment. I came to regard him as the most corrupt person I have ever met; going by the way he ran a patronage system of kickbacks in procurement against behind his employer’s back. I later learned that, despite his shady deals, he was indeed a very committed Christian and gave his 10% to Church without fail every month.
• Tithe need not necessarily be 10% every month but should be a consistent amount committed every month
Now am about to tithe for the first time, end of this month….and I honestly believe this will improve my relation with God

NSE shares take a great leap

Without notice, shares at the Nairobi Stock Exchange gained substantially today. Some of the counters with the gretest gain as at 1 pm today;
Athi River Mining up 10% to 99.9
Safaricom up 9% to 3.60
Coop Bank up 9% to 8.90
KCB up 7% to 22.75
CMC up 7% to 13.10
more gains expected going forward

Smali pirates nowp up property in Mombasa town

Spent some time in Mombasa last week. Other than the unusually cold weather, one cannot fail to notice the changing skylines of Majengo and Membe tyari areas. These areas were formerly marked by old mud walled houses despite their proximity to the CBD. But that will soon be a thing of the past, thanksto the infamous somali pirates.

Awash with dollars, the pirates have been snapping up the properties and quickly putting up marble finished storey houses in their place. One year ago, a 1/8 of an acre plot in these places was going for Kshs. 2,000,000 (us$ 20,000). Now the pirates are willing to pay as much as Kshs. 8,000,000 (us$ 100,000) with an additional plot away from the island thrown in. Which land owner would refuse such an offer.

Even more interesting, the pirates all have kenyan Identity Cards,making the transfer process much easier. These developments add a further twist to the pirates story; are they harmful or beneficial to kenya? Ask the residents of majengo!

V-tel Consortium: kirinyaga construction wont pay up

There is a story about kirinyaga construction being unable to pay up their part of the 12bn required for the second national operator (v-tel consortium). Aparently, they want the dubai company to loan them their share of the license fee, despite being awash with cash. (see the eastafrican this weeek)
The same thing hapened to the kenya national federation of cooperatives in the econet consortium. In a metter still in court, the federation was unable to raise its share of the license fee for the third mobile operator. Are kenya companies so corrupt that they apply for a stake in a consortium knowing ab inition that they wont pay up?
They all make transcentury appear like in a class of their own. Trancesntury acted as a saviour to the rift valley consortium when gridlock of south africa pulled out last minute

Investment Seminar

Today, I attended an investor’s seminar at nse, organized by sterling securities lTD.

Charges
1000/= payable at the entrance

Attendance
About 30 people. Evenl;y distributed between laldies and men. All people who have invested in the past and mostly laymen (in stocks trading terms)

Issues of Interest
Agents
Lots of stock agents acting for brokers have set up SHOP of late. Some cases of lost cash Eere reported at the seminaR. Aparently, the brokers are responsible for an agent's 'fuck ups'. a broker should refund cash stolen/misappropriated by his by their agent.

Nominee accounts
Its illegal for brokers to use nominee accounts for normal trading or application for IPOs. However, some brokers are using them big time.

Private transfer of shares
One can privately transfer shares without going though the nse sale procedures.

Investment banks vs brokers
Investment banks are allowed to trade in shares in their name, brokers are not. However, brokers still do trade.

Raising campaign cash from nse
There were fears that the upcoming privitisation (see safcom, kenya -re, mumias, kengen) could be used for politics and not govt deficit financing

Share splits
Look out for nay shares selling @ 200+. all these are candidates for splits in the next 12 months

Investment clubs
Most clubs are unabel to agree on how to split profits arising from contributions, where people contribute differently. A guy has come up with a software to value members' worth.

Eveready IPO
The company is not doing well. Generating negative cash flows, sales declining, compe from counterfeits etc. However, a massive oversubscription expected.

Kenya Railways deal; the winners, losers

The govts of Kenya & Uganda finallyput pen to paper to allow a consortium led by Sheltam a south African company to run the Msa.- Kampala rail network for 25yrs. This is a deal with potential for serious consequences on various sectors of the economy.

Road Transport
It will be cheaper, faster and safer to move containers from msa to kampala and upcountry via rail than road. companies like excel logistics, express kenya (nse listed) etc will suffer serious decline in revenues. Unless they reengineer their business model these companies may collapse in 24 months.

Manufacturing
Movement of good to and from msa will be faster and cheaper. lead times are likely be cut by as much as 200%. Kenya will more competitive... a ball for investors.

Matatu sector
If Rift Valley railways establishes efficient rail passenger transport from mtaas like githurai, eastlands, kibera to town. then matatu's in those areas are in for declien especialy at peak times. Investors will be forced to pull out or improve the services. a + for consumers.

Govt divestiture program
If sucessful, the concessioning will serve as a model for other struggling public sector enterprises. we are likely to see more and bold moves like KPA privatisation, KAA etc..... a plus for the economy

Road maintenance
Fewer overloaded trucks on our roads means longer lifefor roads and less accidents

i think its up up up from here

Healthy or unenthical competition

This post is motivated by an interaction i had 2 days ago with executives of an agro-based processing co., a clear market leader in their field in East Africa. Since my interaction with them is professional, I will censure their identity.

On enquiry about how they have managed to maintain 95% of the market share while their dozen or so competitors shared 5%, the MD, an Englishman was blunt. Whenever a new entrant or an existing player tries to capture market share in a certain location, a high level meeting is held to discuss their 'conduct'. Such meetings have only two possible resolutions:-
(i)the player is too small to worry about
(ii) launch a blittering war

In the secon option, the 'intruder' has no chance for survival. The dominant player is normally willing to sell at prices lower than the production costs in that locality for as long as the competitor remains afloat. This is supported of course by good returns from the rest of the region where they're a virtual monopoly. Up to 100 upstarts have been crushed in this manner in the last 24 months, i was told.

This reminds of of similar scenerios recently

EABL Vs Castle Brewing
Possibly the biggest corporate war in Kenya recently. Ended in a deal highly skewed in favour of the former. This has driven the earnings of EABL to unprecedented heights while confirming them as a defacto monopoly. EABL is said to have colluded with the then KANU govt to make sure castle did not acess malt in kenya, a product EABL controlled.

Uchumi VS Nakumatt
First round ended on 31st May 2006 when Uchumi's board closed down the retail chain and admitted bankruptcy, and going into receivership. With the govt. appearing serious about reviving uchumi, there will be a repeat battle in the near future. There has been allegations of unfair trade pratices including tax evasion on the part of Nakumatt. The investigation is on-going.

Coke VS Softa
'In the fist 100 days of softa launch, Coke bought the drinks in huge quantities and disposed of it' This made Kuguru overestimate the demand and engage in meaningless production and investment. Apparenly, coke had hope to run kuguru's working capital dry and leave them for the dead. This war is not over yet coz Kuguru targetted the lower end of the market and slashed prices. Lately they have launched 'mecacola' to target the muslim population who shun coke, a symbol of american finacial domination. Reports are that kuguru are slowly catching up. Their branded coolers are now in the market.

Coke VS Ansper
Kuguru were not the only firm to attract coke's wrath. Ansper beverages entered their soft carbonated soft drinks market in the 90's. They targetted coke's market directly (restaurants and pubs). The rest is history. In 2005, coke fianaly migrated to the 'ultra modern' factory in Embakasi where Ansper once operated from. All along there were allegations of faul play.

KQ VS Air Kenya
There was a fierce war in the mid 90s for control of domestic routes (read kisumu & msa) pitting these two. KQ established Flamingo Airlines, specifically to cut Air Kenya and the other small players to size. Air Kenya collapsed. Travellors have virtually been dealing with a monopoly since then. Only now are we begginining to see a semblance of compe from Easr Africa Air.

Others are
Safaricom VS Celtel
Celtel survived only after MTN of Kuweit bought them. MTN has revitalised Celtel with their deeper pockets and better stategy.

Are the bigger and better companies in kenya simply doing business the right way or are they involved in serious faul play to stiffle competition which they are afraid of?