Kenya | NSE and Financial Sector

[èđđeůx]

Originally Posted by Malaika254

Very soon, the CBD will be nothing but bars and clothing boutiques if this trend continues.

That's not good. it's called a CBD for a reason. It needs projects to bring it back to life.

[Adm.Adama]

i hear its very unattractive these days its very congested, too much mayhem, city council is sleeping on the job,and many other factors.. but it will get some new buildings in the near future, my cousin told me some people are looking into demolishing some structures in the CBD to build a new 20 or 25 floor hotel( westgate hotel i believe) and also several chinese companies want to erect their tower here but the future is bright for kenyan once these damn elections are over...

[èđđeůx]

Originally Posted by Adm.Adama

i hear its very unattractive these days its very congested, too much mayhem, city council is sleeping on the job,and many other factors.. but it will get some new buildings in the near future, my cousin told me some people are looking into demolishing some structures in the CBD to build a new 20 or 25 floor hotel( westgate hotel i believe) and also several chinese companies want to erect their tower here but the future is bright for kenyan once these damn elections are over...

Then they should do something about that, or eventually other areas will get like the CBD in time: crowded and chaotic. Expand roads if possible, repair sidewalks, and most importantly keep cargo trucks and other vehicles with no business in the CBD out. Build to accommodate traffic in and out during rush hours too.

I think the CBD will survive though. It should see as much construction if not more compared to Upper Hill eventually once the current buildings are bought and demolished. Don't want it going the way of a lot of American downtowns, and Joburg's as well, old and archaic.

[Adm.Adama]

Originally Posted by èđđeůx

Then they should do something about that, or eventually other areas will get like the CBD in time: crowded and chaotic. Expand roads if possible, repair sidewalks, and most importantly keep cargo trucks and other vehicles with no business in the CBD out. Build to accommodate traffic in and out during rush hours too.

I think the CBD will survive though. It should see as much construction if not more compared to Upper Hill eventually once the current buildings are bought and demolished. Don't want it going the way of a lot of American downtowns, and Joburg's as well, old and archaic.

They have clear rules but enforcement of the rules are low, it will survive no doubt

[samounde]

I think once Uhuru highway is improved traffic in the CBD will be better and thus make the CBD more attractive once again

[Sarjent]

Kenya diaspora remittances down 6.8pc in July

• In July, Sh7.8 billion ($92.7 million) was sent home compared to Sh8.4 billion ($99.5 million) sent in June.
• Average remittances inflow in the year to July 2012 amounted to Sh7.7 billion ($ 91.7 million) up from Sh5.4 billion ($ 64.2 million) recorded in the year to July 2011
• Remittances are the fourth-largest source of foreign exchange in Kenya after export earnings from tea, horticulture and tourism.
• CBK is relying on increased inflows as one of the stabilizers to the Kenya shilling against the dollar underlining the importance of the remittances to the economy.

http://www.businessdailyafrica.com/K...z/-/index.html

[SE9]

FTSE and NSE in new indexing deal

http://www.etfstrategy.co.uk/ftse-an...d-index-47319/

FTSE Group and the Nairobi Securities Exchange (NSE) have announced the launch of the FTSE NSE Kenyan Shilling Government Bond Index, the world’s first independently calculated benchmark tracking the principal Kenyan government bond market.

The FTSE NSE Kenyan Shilling Government Bond Index is designed to provide investors with an accurate metric to measure the performance of Kenyan sovereign debt.

The index, calculated on both a capital and total return basis, includes KES-denominated bullet bonds, zero-coupon bonds and strippable bonds with a minimum notional of KES 5 Billion. Sub indices are also calculated for a range of maturities.

Designed to be suitable for use as a performance benchmark, the new index will play an important role in the development of capital markets and corporate governance in East Africa. Also suitable as a basis for the creation of financial products, such as mutual funds and ETFs, the new indices enhance market access, contributing to the further growth and visibility of African debt markets.

The index complements the FTSE NSE Kenya Equity Index Series that was launched in November 2011.

Jonathan Cooper, Managing Director, FTSE Middle East and Africa, said: “The launch of the FTSE NSE Kenyan Shilling Government Bond Index Series, is the culmination of several months consultation involving both the Nairobi Securities Exchange and various market participants. The index offers innovative investment opportunities in the local fixed income market and provides the Kenyan debt market with increased international visibility.”

[èđđeůx]

Kenya’s biggest bank: The cult of Equity
A huge success at home has been less dazzling abroad

Source: http://www.economist.com/news/financ...ad-cult-equity

IN 1994 Kenya’s Equity Building Society was technically insolvent. It looked like the end of the road for a family business that had grown out of a cheque-cashing venture for farmers into a mortgage lender for Kenya’s poor. Its logo—a modest house with a brown roof—spoke to its mission to help low-income Kenyans make small gains towards a better life. But an economic downturn and some poor management meant more than half its loan book had gone bad and its accumulated losses were ten times its capital.

At the eleventh hour Equity’s board turned to James Mwangi, an accountant and banker with roots in the part of central Kenya where the society had started in 1984. The central bank gave Equity time to convert its depositors into shareholders. After a stint as finance director Mr Mwangi became the chief executive and helped to transform Equity into the success story of East African retail banking. He quickly shifted the organisation’s focus from the competitive mortgage market to small loans. The backbone of the new strategy was to offer Kenya’s vast unbanked underclass micro-loans from as little as 500 Kenyan shillings ($5.81); the average loan amount was 16,000 shillings.

Equity bucked the trend of branch closures around the country. It waived property-ownership requirements and allowed anyone with a national identity number to open an account. It was flexible about forms of collateral, accepting marriage beds or personal belongings. Some customers repaid loans with cow’s milk. Where there were too few customers for it to build branches Equity sent mobile ones, armoured trucks with a satellite dish on top and a bank manager inside.

New standards of service created a huge and loyal customer base. Insiders recall a small farmer in his 80s travelling for days by bus over the country’s crumbling roads to thank Mr Mwangi personally in Nairobi. Sceptics who thought providing financial services to the poor would entail a load of non-performing loans were confounded: such loans were 1.3% of the whole book in 2011.

Since 2000 the bank’s pre-tax profit has grown at an annual average rate of 65%. Today roughly half of all bank accounts in Kenya are with Equity. A gross profit of 33.6m shillings in 2000 has risen to 11.8 billion shillings for the first nine months of this year.

The only blip has been Equity’s failure, so far, to replicate its Kenyan success abroad. Equity has launched operations across the region, with a presence in Uganda, Tanzania, Rwanda and South Sudan. It is looking at Nigeria, Ghana, South Africa and the Congo “among other countries”, according to Mr Mwangi. A capital raising has been scheduled for next year to finance growth.

But some investors are wondering whether Equity’s model based on banking the unbankable is as exportable as they were told. In the past four years Equity has lost $359,000 on the $96m it has invested to build its East African platform. Return on equity in Uganda has been only 18%, compared with 34% in Kenya in 2011. Concerns that the bank may be overstretched have been worsened by the recent departures of two senior executives.

John Staley, who heads Equity’s Mobile Banking and Payment Innovations division, says that too much was expected too soon. It took 25 years to build the grassroots relationships that brought success in Kenya. He also believes that the branch model of old is going to be replaced by agents, who act as cheaper cash-in and cash-out points for customers. Agents are used by the mobile-money operations pioneered by telecoms firms, but persuading bank regulators to allow them is tougher. Kenya lets banks have agents but regulators in Uganda have blocked Equity’s attempts to recruit an agent network there. “If we have access to the agent model, then our regional expansion will fly,” says Mr Staley. Otherwise Equity will carry on soaring at home but remain grounded abroad.

[Adm.Adama]

Barclays Bank of Kenya may have beaten its competitors unknowingly in rolling out a pan-African presence following its parent company’s decision to merge its business in sub-Saharan Africa.

The merger forming Barclays Africa is expected to be finalised by June next year and brings together Barclays’ businesses in Kenya, Uganda, Tanzania, Zambia, Namibia, Mozambique, Botswana, Mauritius, Seychelles, Ghana and Nigeria under one unit managed from Nairobi.

Local banks have been accelerating their pan-African drive to create a continental free trade area that is expected to more than double intra-African trade in the next 10 years.

With majority of competitors in the top five banks by profitability in Kenya — KCB, Equity Bank, Cooperative Bank — establishing presence outside Kenya, Barclays and Standard Chartered seemed left out in the expansion plan although their parent companies had independent presence in other Africa countries.

This difference had started showing in profit growth as investors seeking to go regional demanded more integrated banking solutions which the local arm could not offer.

A statement on the proposed merger says the combined business will create a pan-Africa financial services operation and a platform for further growth.

The bank said the amalgamation will create the largest bank in Africa with 1,300 outlets. Barclays Bank CEO Antony Jenkins said the merger is essential in furthering ‘One Bank in Africa’ strategy on the continent.

“This transaction will give us a platform from which we can further grow our Africa business to the benefit of customers, colleagues, shareholders and the communities we operate in,” Mr Jenkins said in a statement.

A boost for nairobi in its process of becoming africa's financial hub

[èđđeůx]

NSE-20 share index nears 4,500 points as prices surge
http://www.businessdailyafrica.com/N...z/-/index.html

The NSE-20 Share Index surged to just 25 points shy of 4,500 points, boosted mainly by increases in prices of blue chip counters.

The last time that the index touched this psychological level was in January 2011.

Beer maker EABL was the day’s top mover, accounting for 41 per cent of Tuesday’s turnover with foreign investors taking up 98 per cent of the stock on sale.

Safaricom, the second most valuable firm at the bourse, remained flat at Sh5.65, with a market capitalisation of Sh226 billion. The telecommunications firm accounted for 13 per cent of the market turnover.

The Nairobi Securities Exchange, which currently has 60 listed firms, has announced that it is targeted seven new firms to join the bourse this year, which has opened on a bullish run.

[SE9]

Seeking London's help to develop Nairobi as the continental financial hub:

Plans to turn Nairobi into international financial hub heat up
Standard Media
3 February 2013

Nairobi’s vision of following the footsteps of London, and becoming a global financial centre, has started taking shape with a financial firm appointed to deliver the work — TheCityUK — seeking partners to participate in the development of the project.

This month will mark another chapter where top UK City businesses and officials are expected to receive a high-level Kenyan delegation to London to discuss plans to transform Nairobi into a world-class financial centre or destination.

The bodies appointed to deliver the work, under the sponsorship of the Lord Mayor of the City of London and the Ministry of Finance in Kenya, are TheCityUK and the Kenyan Capital Markets Authority (CMA).

TheCityUK — an independent membership body for promoting the UK-based financial and professional services industry — said in a statement that the focus of the Nairobi international financial centre (IFC) work is to be embodied in a Memorandum of Understanding (MoU) with Kenya.

To demonstrate its readiness and using London’s financial infrastructure as a road map, TheCityUK has now asked UK practitioners to express interest to be involved in the project’s proposed areas of development. It has identified these as, alternative dispute resolution, derivative securities, securities market and regulatory and administrative environment. Other areas are public private partnerships, experience exchange between financial and related professional services, training and education, branding, marketing and promoting and diaspora initiatives.

Areas of interest

“If you are interested in being included in this opportunity and would like to help influence its direction, please highlight your areas of interest at the link below and we will provide further information,” it says in a notice posted on its Website.

President Kibaki expressed the desire to build relationships with the UK to help develop Nairobi as an international financial centre to serve the East African region during a visit to London in July last year.

Speaking during a gala dinner he hosted jointly with The Lord Mayor of the City of London, Alderman David Wooton, Kibaki said Kenya’s economy was growing impressively and invited UK investors to be part of country’s success.

The Mayor said he looked forward to the successful conclusion of negotiations between TheCityUK, and CMA, in support of Nairobi’s plans to develop as an International Financial Centre.

“I am delighted by this important milestone in the partnership between the TheCityUK and our partners in Kenya. Developing Nairobi’s capacity as a financial service centre will mean it is well placed to support the creation of jobs and growth for the people of Kenya and across East Africa,” he stated.

Experts say the success of the project — aligned to objectives of Vision 2030 of positioning Kenya to attract fund flows into the country to support productive economic activities — depends on the proposed 5,000-acre Konza Technology City in Machakos County that would provide the vital high speed Internet infrastructure.

Under the economic pillar in Vision 2030, the blueprint recognises six priority sectors that will help the country become a middle-income economy by 2030. Under the financial services category, the sector is expected to become globally competitive to enable it promote high levels of savings to finance the various Vision 2030 projects.

[Adm.Adama]

Hope the MasterPlan they develop will be wonderful... Nairobi can never be like London but we can get close....

[èđđeůx]

Originally Posted by Adm.Adama

Hope the MasterPlan they develop will be wonderful... Nairobi can never be like London but we can get close....

You're right it can't. Nairobi will be Nairobi and London itself as well. You don't have to be them to be a competitive, global hub. And to be honest there's no certainty London will remain the premier global financial hub in the future (if anything it'll move further east).

[Rain Drops]

Originally Posted by èđđeůx

You're right it can't. Nairobi will be Nairobi and London itself as well. You don't have to be them to be a competitive, global hub. And to be honest there's no certainty London will remain the premier global financial hub in the future (if anything it'll move further east).

You sure about that? I always thought the competition was between New York and London and still is..Tokyo, Singapore, Hongkong, Shanghai do make noises but they are still not in level of those too, not in the future too.

[èđđeůx]

Originally Posted by Rain Drops

You sure about that? I always thought the competition was between New York and London and still is..Tokyo, Singapore, Hongkong, Shanghai do make noises but they are still not in level of those too, not in the future too.

Hong Kong and/or Shanghai are competitiors. Global growth and wealth is shifting in their direction, and they're already large important financial centers.

It may not happen in the short to medium-term, but long-term it's entirely possible and likely to happen.

[Rain Drops]

Originally Posted by èđđeůx

Hong Kong and/or Shanghai are competitiors. Global growth and wealth is shifting in their direction, and they're already large important financial centers.

It may not happen in the short to medium-term, but long-term it's entirely possible and likely to happen.

I disagree.. I read a report on this..yeah the economy is shifting however the financial hubs even in the future will depend on New York and London

anyway take this debate to Oasis, people here will be mad. I will be there later.

[èđđeůx]

Originally Posted by Rain Drops

I disagree.. I read a report on this..yeah the economy is shifting however the financial hubs even in the future will depend on New York and London

anyway take this debate to Oasis, people here will be mad. I will be there later.

Not necessarily. If anything they're becoming more independent from financial intermediaries in the west. Western banks and financial centers have been taking a battering since the start of the financial crisis. Not to mention both the British & American governments clamping down on risk-taking in the financial industry.

This really is just the start of the beginning. Asian banks are in better financial health, they're situated to benefit from markets with much stronger, solid growth, etc. So of course, in time London and NY will lose their competitive edges to the likes of up and rising Asian financial centres like Hong Kong, Singapore or Shanghai...Or potentially all three.

Issues like the UK potentially exiting the EU would just guarantee London loses its status as well.

[abckris]

Originally Posted by Rain Drops

You sure about that? I always thought the competition was between New York and London and still is..Tokyo, Singapore, Hongkong, Shanghai do make noises but they are still not in level of those too, not in the future too.

I agree totally. It's not like Tokyo, Singapore, Hongkong, Shanghai are yesterday's cities, these are old cities as well. I'd say each has a role in the international financial market but London and New York will remain. You left Frankfurt out of that list but it is big too. This has nothing to do with the EU, London was there even before that and it's continued when the EU was strongest.For New York it's more of very big companies in the US and it has developed its role so much, I doubt any city will take its place in future, they are quite proactive and innovative.

[forex profit]

its good time to buy NSE>?

[Sarjent]

Originally Posted by forex profit

its good time to buy NSE>?

2-3 months ago was better.