Monday, September 29, 2008

Bad News Bears

Correction Window: At the beginning of the month it was Crown Berger shares that did a swan dance on some pedestrian financial results and last week it was the turn for Portland cement (EAPC) shares to take a drastic dip in value with the announcement of reduced profits.

This has generally been a tough year for manufacturing stocks and the next few days should see year end results of both Kengen and KPLC who have been battling over tariffs and leaving consumers suffering and manufacturing companies & industries threatening to shut down or decamp owing to high electrical costs.

There are some shares on the NSE that are perceived to be under-valued and some that are over-valued (don’t pay dividends, appreciate on speculation, limited trading activity) - and the announcement of financial results (with the waiver of the 10% daily share price rule) gives the market the chance to correct/adjust share prices. But will these share drop? Do they have any reason to? Their P/E ratios are already so low.

Already Safaricom CEO Michael Joseph has said that the price dip of Safaricom shares have no impact on the company’s performance (their quarterly results will also be tricking in soon)

$10 hotel room

Location: zero star, government owned, grilled crowded room
Facilities: No lights, No shoes or belts allowed, no bathroom, no food
Occupants: depends on the concierge

This ‘hotel’ does not sound like an enticing place to be in Nairobi on a Sunday night, especially when you decide to make a midnight run clad almost in pajamas to a 24-hour Nakumatt store - but that’s what the fabulous Kenya Police decided to offer this local investor in the new 24 hour economy.

After some light grocery shopping, I drove out only to have a policeman with a torch flash me down. I stopped thinking it’s the usual (aimless) check for an insurance sticker on the windscreen, or the officer needing a lift? But no:

Kijana you have driven out of there - yes?
Yes
Did you know you have broken the law?
No I did know that?


The two AK47-totting cops enter the car, one in front seat one in the back and command me to turn round, and proceed back to the store parking which I do. They then ask me demonstrate my driving exit route - and I indicate and proceed into the road (its midnight no other cars on road)

Aha kijana you see, you crossed a double yellow line – you should have turned left and gone to the roundaboutbe fore preceding this way

(This is a weak tale as, this is a narrow road which somehow has four lanes in the daytime, with matatus inventing two of their own, while these cops were asleep, or are too busy to help my friend who was car-jacked a mile away last night. Also the road has not been painted in years, and he claims there’s double yellow line somewhere?)

We drive back to their (nest) vantage point to watch for more ‘offenders’ (prey) - and right on cue, a Toyota Land Cruiser speeds out and takes the same offensive line. This prey looks bigger and more promising than my small car and the front seat cop jumps out of the car before i can fully stop to flash down the SUV – which has a Somali-looking driver (Aha, he’s hit the lottery as; expensive car + Somali driver = $$$, right?)

Meanwhile the other cop jumps into the front seat and orders me to park on the pavement. He removes the car key and asks for my driver license which he then reads as he starts to recite the hotel guest options:

Do you have 5,000 shillings (~$75)? (which is the spot fine/bail he says I will have to pay at the police station so that I may go home and sleep in my bed, failure to which it is on to the cell room with no shoes till I appear in court in the morning)
No
He tells me to call my family and tell them I won’t be home tonight. I sit quietly; I have had a rough day but there's no point making it worse - this in an obvious shakedown and the less said the better. These guys are out with AK-47’s to make money not to waste time with paperwork at the station. I remain quiet and he says that when his colleague finishes with the Somali/Land Cruiser driver, we will proceed in tandem to the police station/cells. I have called in enough favours today from friends and no point needlessly burdening them at midnight on Sunday. My new best friend continues to initiate conversation:

Do you have that money?
No
Where do you live?
Down the street
Where do you work?
In town
Do you have family?
Yes
How much do you have?
(silence)
Do you have two thousand?
I think I have 1,500
That’s not enough
(silence)
Lete hiyo (bring that)
I upturn my wallet with receipts and change from the super market
I only have 650 (about $10),
That’s not enough, no way (More silence)
Lete hiyo I hand over and he throws the key and license back in my lap.
I’ll let you go because, you also have a family.

And out he gets, to join his colleague at the Land Cruiser. I then start up the car and go home where it all seems like a bad dream 12 hours later. Accepting the 'hotel offer' would likely have made a more interesting blog post, but I hope I won’t have to write that one. And all you other 24 hour shoppers should be on the look out for 24 hour predators.

Friday, September 26, 2008

Missing the Kenya Airways Party

I did not attend this year’s Kenya Airways AGM – which is a shame because that was the inspiration for starting this blog. I heard there were the usual questions about buying or leasing planes, goodies for shareholders, loss of shares to Nyaga stockbrokers, perennial candidate making another run for board seats etc... I don’t know why the company shifted from the Bomas of Kenya to Kasarani for meetings but that to me is a step back as Bomas was a perfect setting for the company

anyone who was there is free to add/write in a report - and I hope to attend next year

Trivia from reading the annual report
- Company is very sensitive to changes in the price of world oil – however their fuel costs are hedged 45% to December 2008 and another 25% to March 09
- Now a sky team member with revenue last year of Kshs. 60 billion (almost $1 billion) and carried 2.7 million passengers
- Regional spread – Kenya contributes 9% of revenue (and 11% of profit), Africa 42% (49%), middle east/Asia 20% (19%) and Europe 29% (21%)
- their maintenance facility can change a 777 engine in 3 days and can do all but two checks in-house that mandatorily have to be outsourced
- Capacity/Construction work at JKIA has brought challenges – so the airlines has bought buses to ferry passenger to remote parking have not noticed, and passengers have complained about a shortage of check in counters and departure gates (which may explain some delays)
- Have 330 pilots (61 in training) and will be recruiting more management trainees this year
- Website passed $1m ticket sales mark in December 2007
- Has 74,551 shareholders, but only 29,761 have immobilized their shares

Thursday, September 25, 2008

Tuesday, September 23, 2008

Mabati Bond

One of Kenya's most successful private companies - Mabati is set to launch a corporate bond at the Nairobi Stock Exchange. This is a few months after two tranches of Barclays Bank Bonds, and with the Kenya Government still keen on a $500 million sovereign bond, it appears bonds are back just a year after they were out of favour at the NSE, with the equities markets having cooled off considerably.

Friday, September 19, 2008

Kutwa Friday: Everything Must Go

It’s been a while since the last Kutwa post. Here’s a rundown of things, most from the daily papers and various sites that have piled up

Banking: Co-Operative bank are deep into the marketing program for their October 20 listing at the Nairobi Stock Exchange. They may also venture into mortgage finance
- Barclays and Standard Chartered will both offer mobile messaging services to their customers
- Rand Merchant Bank (SA) plans to expand to Kenya
- Salary cards are coming to Kenya as FNDS3000 Corp which launched its payroll card program in South Africa and will follow into Nigeria, Kenya, Tanzania, United Arab Emirates and Qatar

What's in a Name?
a step forward: Telkom Kenya is now Orange: more on their new site and products

will they have orange phone booths?

- Nyanza petroleum dealers is now called Auto Xpress
- Chloride exide is now Chloride Solar
- The naming rights for Nyayo national stadium are up for sale to a corporate bidder (will it be Safaricom or Zain Stadium?)
a step back
- A new name is recommended for the discredited electoral commission of Kenya
- Grand Regency is now Grand Laicos Hotel?!

Developments: A new 21 storey 5-star hotel in Nairobi to be situated next to Barclays plaza (and is a stones throw away from the former Grand Regency)
- Kenya anti corruption to build a new headquarters
- Two battery recycling factories will be set-up; one in Changamwe and one in Konza
- Ethacom international will set up an ethanol production plant in in Bungoma
- Nairobi City council is seeking 50 acres for a new cemetery

Airlines: There’s little reporting about a pending strike of Kenya Airways engineers; however K24 TV reported that this may affect plans of President Kibaki to fly to London next week as engineers were going slow on maintenance of his planned aircraft and also other repairs after another little reported aircraft incident.
[image: KQ 777]

Energy: Following last months electric shock it was pleasant to see my electricity bill drop from 2,600 to 1,800 shillings ($26). No thanks to KPLC though, as the savings came largely from taking cold showers that reduced consumption from 161 to 115 units . Meanwhile there was another increase in KPLC fuel cost from 769c/kwh to 778c/kwh this month.

popular item in supermarkets

- Why doesn’t the government owned National Oil Corp (NOCK) who are supposed to check against check the high petrol prices charged by oil marketers sell petrol at the Kshs. 100 per litre (~$6.4/gallon) price that Energy Ministry says is correct?

- An S-class with the fuel economy of a Toyota? Pity Merc drivers are not concerned about fuel economy

ICT: The Kenya government plans to set up an official blog by September this year to facilitate better communication between the government and the public. "The blog will allow the government to respond to everyday issues being raised by the citizens," PS Bitange Ndemo told journalists in Nairobi. "More and more people are turning to the internet to read, write or say whatever they want to say and if such forums were properly utilized, especially during the election period, we would not have experienced the kind of problems we had in the country at the beginning of the year." hat tip Xinhua News - China
- Also the Kenya Government will set up a $39 million venture capital fund
- Telkom /Orange makes peace with Safaricom
- Controversy about an outsourcing scholarship
- Outsourcing #1: Pioneer BPO Kencall will manage call center for Telkom/Orange
- Outsourcing #2: site stats here show that Mauritius (9%) has overtaken the UK (8%) to be the third highest source of traffic to bankelele – after Kenya (45%) and the US (17%) - but, upon closer scrutiny for true fans there, it turns out the readers actually Kenyan-based - but routed through Mauritius.

Opportunities: The Skunk Awards 2008 is your chance to recognize and reward the leaders in the various ICT fields in Kenya. Chosen by YOU, the real stakeholders in the Industry. Vote for ICT Company of The Year, Best ISP, Most Innovative ICT product, Best Local Website, Best Local eCommerce Website, Worst Local Website, Best Local WebHost, Most Open Sourced (is that a verb) Organization, Best Customer/User Support, Worst Customer/User Support, Best Training Institute, Most Promising ICT Startup, Best Paying Company, ICT Entrepreneur of the Year, Best Local Application, Most Transparent ICT Tendering Govt Branch, Most Successful Government ICT project, and Worst Government ICT project. Send in your nominations to skunkawards@gmail.com before Friday October 10th.
- Apply online to be an Acumen Fund Fellow 2009-2010. D/L is 20 October
- Take part in the Wildman Triathlon in Watamu on October 18.
- Zebrajobs is a cool new job site that has some interesting opportunities in this past of the world

Other jobs: You can’t compete with Kenya’s largest employer, the Government of Kenya. Soon available at the Governments Public Service site will be jobs including at the Ministry of finance principal accountants - 26 posts, chief accountants - 64 posts accountant II - 320 posts!; at the ministry of energy (director of renewable energy, senior deputy director of renewable energy (engineering) , senior deputy director of renewable energy (biomass) ) ; at the Ministry of immigration - immigration officer II - 200 posts; at the ministry of fisheries, chief fisheries officers – 142 posts, fisheries officers – 78 posts; and at the Ministry of medical services - Nursing officers III - 686 posts, clinical officers III – 548 posts, medical lab technologists – 124 posts and Pharmaceutical technologists III – 100 posts. The application process involves a mix of new and old technology – you can download the forms online but applications must be sent in by snail mail (post office) to the to the secretary PSC p o box 30095-00100 Nairobi by 13th October. Thereafter applicants can check the status of application by sending an SMS!

- Dyer & Blair: Database administrator, network specialist systems administrator. Apply through Manpower Associates by 26/9
- Econet wireless rolling out in Nairobi Mombasa Kisumu Eldoret (when?) is hiring head of field operations, field operations engineers, manager – RF optimization, RF Planning & optimization engineers, Manager base station sub systems, BSS engineers Regional managers – passive infrastructure . Apply to techrecruit@econet.co.ke by 29/9
- Equity Bank is hiring credit officers, and debt recovery officers
- Genghis capital: head of stockbroking, head or research securities dealers. Apply by 10/10 to the head of HR at 9959-00100 Nairobi
- Gulf African bank: Area sales manager, manager product development (housing) credit administration manager, head of audit - apply to recruitment@gulfafricanbank.com by 22/9
- HLB ashvir: audit seniors audit manager – apply to audit@hlbashvir.com by 20/9
- KCB branch managers, Business bankers- apply to recruitment@kcbco.ke by 28/9

Wednesday, September 17, 2008

Anatomy of Local Collapse

With Lehman, AIG, Bear Stearns, Merrill Lynch and other banks in the news, or in need of a rescue, it’s time to look how does this play out locally?

Kenya has experienced several collapses over the last few years – from listed companies (Uchumi supermarket), stockbrokers (Nyaga, Francis Thuo), insurance companies (Invesco), medical plans (mediplus), Banks (Euro, Daima, Charterhouse), and numerous pyramid schemes. What are the stages?

Before: First come the rumors, which can be whispers from clients facing frustrations, or sometimes well meaning staff leak to their trusted clients that something is amiss. At any given time, a company could face this and currently there are murmurs about a stockbroker, a transport company, and an insurance company - but none about banks.

During: Next the rumors gather steam and reach serious partners who deny the company access to cash that it needs to survive. The struggling company will by this time have stopped paying on time and will be known for inventing excuses for delays in payment. So suppliers will stop deliveries (bare shelves), customers withdraw cash and banks will refuse to lend to ailing to the company/bank.

An aside - in the current issue of the Financial Post, entrepreneur Dr. Manu Chandaria talks about the secrets of Asian company success including using supplier credit as the expansion capital - and he emphasizes that a growing company to have a perfect reputation with creditors to get the supplier financing to grow

But eventually word leaks out and depositors try and withdraw their cash from the bank or pyramid, a major creditor moves to seize assets, any of which may hasten the collapse of the company; Eventually the government or a bank may try and appoint a receiver, but often its too late.

After: If there is enough hue and cry or a serious precedent likely to have far reaching effects, the government may step in and try and revive the company – the government has capitulated to the cries of shareholders, suppliers, farmers (sugar/coffee etc.) and politicians several times over the years and tried to revive numerous companies that have collapsed.

If it’s a bank, its depositors get paid up to 100,000 shillings ($1,400) from the deposit protection fund, if its an insurance or medical company it’s a total loss for subscribers who will have to source for new cover packages even if the company had enough assets left. The fate of shareholders is still been sorted out at Nyaga and Francis Thuo, while its a total loss for the thousands who ‘invested’ in unregistered pyramid schemes even though millions of shillings of their ‘profits’ remain unclaimed in bank accounts that have been frozen.

Employees of the companies quietly get new jobs and airbrush the unfortunate period from their CV’s



Lehman employees







Owners/Principals rarely face prosecutions, and having amassed enough to survive a few years of legal battles, may retire quietly or sometimes end up in parliament

Locally: So far it appears that the succesful AIG Kenya [worth ~$35 million] will be insulated from its parent problems. It will probably be absorbed by another local insurance company or CBA bank who are a major shareholder.

Monday, September 15, 2008

Facing South and West

With the NSE under water, even lower than the post-election period, it may be time to look West and South for investment ideas. Not too far West, where the US where the financial tsunami is still warming up (threatening to take down Lehman and AIG today), or too far South where it will take some adjusting to Zuma time.

Here there’s some previously unthinkable debate about postponing the Coop Bank IPO and how low the fundamentaly sound (PDF) Safaricom (could) be by the December holiday period.

What’s in store in the rest of Africa?

Kenya: Unilever shareholders have till October 6 to decide if they want to get paid de-list the company.

Togo: According to the Business daily Kenyans may be able to invest in Ecobanks’ rights issue to raise $1 billion. 5 new shares can be bought for every 9 held at $0.29 (~Kshs. 20) per share, minimum 500 shares, and closes October 3

Malawi The Real Insurance Company of Malawi offering of 77.5 million shares at kwacha 2.30 (~Kshs. 1.15) per share, closes on September 19

Botswana The Funeral Services Group offering of 36 million shares at P1.00 (~Kshs. 10) per share. Closes September 22

Insular Tanzania continues to lock out foreign, deliberately including East African, investors from their market, so no thanks!

More at africanshareholder.com

Plane truth
[image: KQ 777]

Embattled Kenya Airways who are facing local strike threat and customer service issues were ranked No. 93 in Top 100 Airline survey; how did they fare against their regional peers in terms of passengers carried and revenue (euros)?

Airline, passengers carried, revenue in millions of euros
12. Emirates, 21.2 million passengers, EUR 6,801 million
27. Virgin Atlantic --
41. South African, 7.5 million pax, EUR 2,184 million
73. Egyptair 5.7 million pax, EUR 1,166 million
90. Ethiopian 2.29 million pax, EUR 583 million
93. Kenya Airways 2.8 million passengers, EUR 611 million

Friday, September 12, 2008

Real Estate Moment

Thanks to Maishinski and Jim Dandy for real estate advice in advice in recent comments on housing investments for those in the Diaspora – touching on management, financing, project issues – and lead to cost/property price issues. What is the residential cost per square foot in Naiorbi? They are frequently cited for commercial properties, but not for residential properties where houses are marketed by the location (most important), presence of compound, servants’ quarter, pool and finaly - number of bedrooms (whcih can be deceptive – I saw a 3 bedroom house that was previously a one bedroom, and the third bedroom had originaly been a walk-in closet)

More on Real Estate

first Dr Laila Macharia advises on housing finance myths and how to overcome them - These are;
- That one needs to be married to own a home.
- That a single person looking to purchase a home has to struggle for years
- That a family must save for a really long time to set aside money for their dream home.

and second Pesa Tu (hi; welcome back) gives away secrets of a successful housing developer as he reviews the dangers of the Nairobi apartment craze and the dangerous path the housing market is going down - these are

- Buy land in Lavington, Westlands or Kileleshwa
- Get the building plans approved
- Line up financing for the construction
- Put the artistic renderings of your XYZ apartments in the papers
- Sell 80% of the apartments before construction
- Bank your profits

Real estate can be a lucrative but risky investment jungle and if the by-passes and super highways as envisioned by Kenyans are ever built, there's no reason why one can't live in Machakos, Thika, Naivasha and be a quick sub-hour commute from the office to home.

Thursday, September 11, 2008

Bank Rankings: Final Word

The final word on the banking sector comes from the 2007 bank supervision (PDF) report from the Central Bank of Kenya.

Notes:
- CBK ranks banks using CAMEL (capital adequacy, asset quality, management quality, earnings, and liquidity); 10 banks are strong (down from 13 in 2006), 27 satisfactory, 8 are fair and none were ranked marginal or unsatisfactory. Overall the banking sector totaling 951 billion in assets (~$14 billion)is satisfactory, but with 6 large banks controlling 58% of the industry
- Increase from 575 to 740 branches (293 in Nairobi) in 2007 [all province had increase in branches led by Nairobi (54) and rift valley (46) with only central bank with a decline in branches (-2)]
- Number of deposit accounts increased by 42% to 4.7 million
- Regulatory issues tacked include disaster management, IFRS, Basel II, licensing of shariah banks
- The sector employed 21,657 in 2007 (4727 management, 3865 supervisory, 12,773 clerical, 292 other) up from 15,568 in 2006
- Some of the (97) forex bureaus flout laws such as not recording transactions, money laundering, transfer of ownership, operating parallel hawalla accounts, liquidity
- Coming up: microfinance institutions will be licensed, credit reference bureaus will become operational, capital increases expected

And where are the 4.68 million (deposit) bank accounts kept?

Bank, No. of accounts, (no of branches)
Equity 1,840,332
Cooperative 556,073 (54)
Kenya Commercial 487,667 (135)
Family Finance 465,308
Barclays 428,531 (95)
National Bank of Kenya 233,026 (34)
K-Rep 169,796 (26)
Standard Chartered 131,618 (34)
Housing Finance 45,842 (10)
Stanbic 31,906 (8)
Diamond Trust 29,589 (13)
Others are Consolidated 25,078 (12), CBA 23,657 (17), I&M 22,053 (10), NIC 21,452 (15), Fina 14,446 (7), CFC 12389 (8), Transnational 11,053 (9), and Citibank 2,927 (3)

Monday, September 08, 2008

Kenya Bank Rankings: June 08 Briefs

ABC; assets up 16%, deposits 17 and loan 7%, income is up 12% but expenses up 17% with no growth in 2008. Too early to tell about kisima at this indigenous bank>
Bank of Africa : deposits up 20% and loan 34%, income 51% with expenses up 41% but NPA also up 59%. French bank, quiet style, but making more marketing efforts to shore up size.
Barclays: assets up 22%, profit 21%, deposits 22% and loans up 30%. Income is up 35% from a year ago but expenses up 45%. In 2008, deposits are up 18% but loans up 1% - change of direction? Did not actively participate in Safaricom, and this big bank everyone (unfairly) watches to see how they react to Equity Bank
Baroda: profit up 31% deposits 9%, and loans up (staggering for them) 57%, in 2008, both income and expenses are up 29%, and though deposits are flat, loans are up 25% - no longer playing safe
Chase: asset up 76% deposits 58% and loan 88%. Income is up 48% but expenses up 75% and NPA 86%. in 08 loans up 29% and deposits up 51% at this fast growing local bank which has now ventured into stockbrokerage as Gencap
Citibank: assets up 65% and profit up 74%. 2008 looking even better as income is up 49% compared to just 7% in expenses, and remains immune (and insignificant) to parent turmoil
City Finance: assets up 2% , deposits up 12% strategy shifting with shifting bank with loans down 59% government securities and placements up by higher margin from a year ago. Just 8 million in staff costs in six months?
Commercial Bank of Africa: (CBA) assets and profit up 21% loans up 52%, and income up 23% compared to expenses 26%. Increased lending in 08 with 36% loan growth since December. Blue chip bank adjusting to the times, quietly did Safaricom IPO and dabbles in insurance
Consolidated: assets up 6% deposits 24% and loans 36% - with income and exp up 10%. Up for sale, can't list so likely to be sold privately, and hopefully without controversy
Cooperative (Co-op) : asset up 23% profit 51% loan 44%, and NPA down 54% but insider lending up 40% from a year ago. IPO set for October 20 this year – but has it cleaned up enough legacy bad debt?
Credit: asset up 23% profit up 36% deposits up 25% and loans 44%
Development bank of Kenya (DBK) - assets up 33% deposits up 41% and loans 53%. The
Development financier is up for sale by the Government (ICDC)
Diamond Trust: asset up 40% deposits 37% loan 34%, income up 45% but expense up 64% as bank continues its expansion in Kenya, Uganda Tanzania and Burundi (every other bank says Rwanda)
Dubai Bank asset up 5% deposits 8% income 18% expenses up 13%, somehow translating to profit rise of 85%
Ecobank (formerly EABS) assets and deposits up 4%. Income up 34% and expenses up 10%. The parent Ecobank is currently raising $2.5 billion, (equivalent to Barclays Kenya assets) – showing how far Kenyans banks have to go in the big leagues
Equatorial: assets up 26% deposits 29% , income 21% but expenses up 31%, with no growth in 08
Equity 100% growth in assets loans and profits, and 78% in loans. Income up 140%, with expenses up 106% from a year ago. How long can this exponential growth go on?
Family bank : assets up 39% deposits 23% loan 52%, but income has tripled as have expenses at ‘Equity Blue’
Fidelity: asset up 29% deposits 36% loans 40%
Fina: Assets up 13%, deposits 14% and loan 32%. Income up 26% but expenses up 47% leading to a 24% lower profit. Many banks encroaching on the turf they created in Rwanda
Giro: assets up 1%, , deposits flat but loans up 10% , income up 26% with expenses up 10% - also leading to a surprising 86% profit surge
Guardian: assets and deposits up 11%. Income up 37% with expenses up just 26% leading to a profit surge of 76%
Habib AG Zurich: assets up 10% profit 22% deposits 13% and loans 31%
Habib Bank: assets up 4% from year ago, but no growth in 2008
Housing finance: asset up 34% deposits up 15% and loans up 27%. But profit down 20% (income up 1% while expense up 5%). in 08 deposits are up 5% and loans up 15%. Raised new funds from shareholders and will expect a boost from Equity Bank as anchor shareholder
Imperial; assets up 16%, deposits and loans up 22%. One bank reputed to have the fewest customers, but massive profits from them
(Bank of) India: asset and loans up 15%, with profit up 35%
I&M: asset and loans up 33%, income up 25% as expenses up 16%. Shareholders funds up 60% from new investors and the bank is opening new urban branches
KCB: assets up 66%, and deposits up 20%. Profits are up 77% (income up 50% with expenses up 38%) from a year ago. New funds raised, going regional in eastern Africa and will be cross-listed as well.
K-Rep: assets up 13%, deposits 15 % loans 10%. Income up 12% but expenses up 33% leading to a sharp drop in profit
Middle East: income up 15% and expenses up 33%
National Bank of Kenya assets up 3%, deposits and loans virtually unchanged, but income up 16% as expenses up just 4% leading to a surge in profit of 46% . government shareholding is up for sale
NIC: asset up 37% deposits 31% and loans 39%. Profits are up 38%, as income is up 26% with expenses up 17%. Expanding their stockbrokerage operation, and also opening new branches,
Oriental: assts up 12% deposits up 32% and loans 16%
Paramount Universal: assets up 13% with deposits and loans up 17% at one of the smallest banks
Prime Bank: super growth, with asset up 59%, deposits 57%, loans 66%. Income up 56% with expenses up 30% leading to a surge in profit up 98%
Southern Credit; assets up 9%, deposits and loans up 10% - but income is up 14% with expenses up 31%
Standard Chartered; sleeping giant - assets up 2% profit 1% deposits down 2%, but loan up 15%. Income up 6% but expenses up 10% from a year ago
Transnational: assets up 19% profits 16% deposits 23% and loans 19%
Victoria: flat, assets down 2%. Deposits are down 34% as loan up 18% - and income is up 18% but expenses are up 58%

Crown Restored

The Capital Markets Authority has waived the 10% rule today to correct Crown Berger’s distorted share price - and the share is up about 50% at Kshs. 38.6 to about where it was before the mystery trade.

Thursday, September 04, 2008

Stolen Crown

What happened to the shares of Crown Berger last Friday was an anomaly that gives a bad impression of the NSE. The company announced an increase in pre-tax profits on Thursday only for their shares to nose dive from Kshs. 38 to Kshs. 8 on Friday, before settling at 19.75, about 48% lower – on a volume of just 10,000 shares.

Still as the running thread of NSE insiders shows, such one day spike trades have usually on the upper side (Equity, Citi Trust, CFC, to name a few), and don’t merit much complaint, except from skeptics. But if I was a shareholder of Crown (used to be one two years ago), I’d be very upset that 50% of my portfolio in an otherwise sound company has been wiped out in one day. What Crown is going through is no different than any manufacturing company as this time of high oil prices; they have even had mostly good press - expanding regionally, attained Super brand status recently etc.

There’s a supposed 10% rule on price moves following market information, which is selectively applied. This unusual trade was sloppy or sinister, should never have been allowed.

Wednesday, September 03, 2008

Kenya Bank Top 10s

half year to June 30 2008

Pre-Tax Profit: Barclays 4,295 million shillings [$64 million], KCB 3,394, Equity 2,997, Standard Chartered 2,321, Citibank 1,694, Cooperative 1,664, National Bank of Kenya 902, Commercial Bank of Africa 847, Investment & Mortgages 767, CFCStanbic 698 [$10.4 million]
12 month profit change : Ecobank 633% (to Kshs. 66m), Family 290%, Equity 189%,
Bank Africa 105%, Prime 98%, Giro 86%, Dubai 85%, KCB 77%, Guardian 76%, Citibank 75% then Consolidated, Cooperative, NBK, Credit, I&M

Deposits: Barclays 128,765 million shillings [$1.92 billion], KCB 93,372, Standard Chartered 73,512, Cooperative 59,072, CFCStanbic 57,040, Equity 42,116, Commercial Bank of Africa 35,135, National Bank of Kenya, 34,020, NIC 30, 165, Citibank Kenya 27,836 [$415 million]
12 month deposit growth: Equity 78%, Chase 58%, Prime 57%, Development Bank 41%, Diamond trust 38%, Fidelity 36%, CFCStanbic 33%, Oriental 32%, NIC 31%, Equatorial 29%, Transnational 23%, Barclays and Imperial 22% then KCB, Bank Africa, ABC.

Loans: Barclays 106,691 [$1.59 billion], KCB 60,165, Standard Chartered 45,351, Cooperative 43,411, CFCStanbic 38,746, Equity 34,273, NIC 25,727, Diamond Trust 22,320, Commercial Bank of Africa 21,803, Investment & Mortgages 20,703 [$309 million]
12 month loan growth: Equity 139%, Chase 88%, Prime 66%, Baroda 57%, Development Bank 54%, Commercial Bank of Africa 52%, Family Bank 51%, Co-op Bank 44%, Credit 44%, Fidelity 41%, then NIC, Bank of Africa, Diamond trust, I&M, CFCStanbic, Fina, Barclays.

Where to work: high employers - 6 month staff expenses; Barclays 3,287 million [$49 million], KCB 2,767, Cooperative 1,387, Standard Chartered 1,306, Equity 1,245, National Bank of Kenya 864, Commercial Bank of Africa 423, Citibank Kenya 416, CFCStanbic 389, Diamond Trust 330
directors; Standard Chartered 61 [$910,000], KCB 57, Cooperative 26, Commercial Bank of Africa 25, NIC 22, CFCStanbic 21, National Bank of Kenya 17, K-Rep 17, Southern Credit 14, Diamond Trust 12

Assets: 12 month asset growth: Equity 135%, Chase 76%, KCB 66%, Citibank 65%, Prime 59%, CFCStanbic 42%, Diamond trust 40%, Family bank 39%, I&M 33%, Bank of Africa 23%, Barclays 22%
Return on assets: Equity 4.28%, Citibank 2.85%, India 2.84%, Barclays 2.58%, Stanchart 2.45%, Coop Bank 2.31%
Non-performing assets: Cooperative Kshs. 8,841 million ($132m) , KCB 6,982, Barclays 5,986, Ecobank/EABS 3,492, CFCStanbic 3,435, National Bank of Kenya 2,559, Housing Finance 2,302, Standard Chartered 2,045, Equity 1,845, Commercial Bank of Africa 1,540
Sgare capital : Barclays Kshs. 19,233 ($287 million), Equity 19,005, Standard Chartered 9,615, KCB 9,591, Citibank Kenya 7,791, CFCStanbic 6,865, Cooperative 6,710, National Bank of Kenya 4,912, NIC 4,649, Diamond Trust 4,259

Monday, September 01, 2008

Kenya Bank Rankings

Kenya’s banks assets and profits at June 30 2008, for the first half of the year
1. Barclays; assets Kshs. 166,702 million [$2.48 billion], (pre-tax profit of Kshs. 4,295 million [$64 million])
2. KCB; 160,230 (profit: 3,394)
3. Standard Chartered; 94,570 (2,321)
4. CFCStanbic; 78,948 (698)
5. Cooperative; 72,018 (1,664)
6. Equity; 70,102 (2,997)
7. Citibank Kenya; 59,495 (1,694)
8. Commercial Bank of Africa 44,035 (847)
9. National Bank of Kenya 43,360 (902)
10. NIC; 37,590 (650)
11. Diamond Trust; 34,262 (618)
12. Investment & Mortgages (I&M); 32,775 (767)
13. Prime; 17,088 (283)
14. Baroda; 16,070 (302)
15. Housing Finance; 12,942 (51)
16. Imperial 12,851 (350)
17. Bank of India; 10,960 (311)
18. Ecobank (formerly EABS); 9,474 (66)
19. Family Bank (formerly Family Finance); 9,278 (273)
20. Bank of Africa; 9,036 (76)
21. Fina; 8,729 (65)
22. Chase 8,497 (109)
23. K-Rep; 7,197 (4)
24. ABC 6,126 (82)
25. Habib Zurich; 5,931 (111)
26. Guardian; 5,530 (60)
27. Giro; 5,379 (67)
28. Southern Credit; 5,338 (11)
29. Development Bank (DBK); 5,165 (90)
30. Equatorial; 4,820 (46)
31. Consolidated; 4,228 (8)
32. Victoria; 3,988 (78)
33. Credit; 3,637 (53)
34. Habib Bank; 3,611 (70)
35. Fidelity; 3,590 (29)
36. Transnational; 3,224 (53)
37. Middle East; 3,106 (35)
38. Paramount Universal; 2,584 (22)
39. Gulf African; 2,529 (-138) * #
40. Oriental; 1,809 (26)
41. Dubai; 1,518 (26)
42. City Finance; assets of 522 million [$7.8 million], (profit of 11 [$164,000])
43. First Community -- (--) * #
* New bank
# Shariah bank

Same time last year had Barclays, KCB, StanChart as the top three, Co-op ahead of CFC, NBK wer 6th, CBA ahead of Citi, and Equity were 9th

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