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Old December 12th, 2007, 12:57 AM   #1
Kisumu Ndogo
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Kenya's Safaricom-nomics What Impact Awaits NSE

Could a successful IPO increase Market Cap to 1.2Tr Shillings by next years 1st Quarter?

The NSE vice-chari said the shares should be sold at a premium so that the government can get as much revenue as possible from the sale. It is thought that the IPO could raised as much as Sh75 billion( 1.2b$) if 15 billion shares are sold or Sh60 billion if there are fewer shares.

Mr Wangunyu Nairobi Stock Exchange vice chair said at least 80 per cent of the shares should be reserved for the locals and a provision set that should the local demand increase, that this ceiling would be raised.


Mr Wangunyu said that at least 80 per cent of the shares on offer should go to local investors and be increased in the event that demand is higher, meaning foreign investors would not be assured of any stake.
If such were to happen, it would deny the global coordinator and book runner – Morgan Stanley International Plc – a chance to earn handsome commissions. For the global firm, the commissions are key to the transaction because it - with Dyer & Blair - bid five cents to do the transaction advisory services job.

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Old March 18th, 2008, 01:45 AM   #2
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Kenya:The Long Awaited Safaricom IPO is here

The much-awaited Safaricom Initial Public Offer will be open to the public on March 28, Finance Minister Amos Kimunya has said. The government will offload its 25 percent stake in the mobile phone service provider at Ksh 5 per share for the 10 billion shares available.

"What I expect out of this transaction is that we will be generating at the very least Ksh 50billion(almost 1 billion USdollars)," Kimunya told a news conference.

He said there would be a slightly different pricing structure for local and foreign investors. The company is jointly owned by the government at 60 percent and Britain's Vodafone, 40 percent.

The IPO, touted as the biggest in the market, was delayed last year because of elections.
Kimunya said he was optimistic the IPO will open up the market for more investors despite the credibility crisis facing the Nairobi Stock Exchange. Two brokerage firms, Francis Thuo and Nyaga stockbrokers, have been put under statutory management denting investor confidence.

Safaricom posted a pre-tax profit of Ksh 17.19 billion in 2007, making it the most profitable firm in East Africa.

Public interest in owning stocks has risen in recent years, with many of the initial public offerings on the bourse since 2003 having been highly oversubscribed. Analysts and brokers have said they expect the Safaricom IPO to be heavily oversubscribed.
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Old March 18th, 2008, 01:47 AM   #3
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Safaricom Sale To Be Via Internet

The Safaricom shares in the coming Initial Public Offering (IPO) will be sold through an electronic system.
According to transactional advisors to the offer, the Internet-based application would ensure less time is spent in processing applications and more transparency in the process.

“Manual application in the previous offers have resulted into longer periods for processing and headaches for the receiving banks. We want this to take the shortest time possible,” noted Mohamed Hassan, joint managing director, Dyer and Blair Investment Bank.

By logging to www.kenyaipos.co.ke, investors already having CDS accounts will be able to place orders for the shares at their convenience. Payment for shares would then be made to appointed stockbrokers for receipt.

However, the manual applications would still be used for those who would not be able to access Internet facilities.

In the offer, investors will need a minimum of Sh10,000 to participate in the IPO which the Government expects to raise at least Sh50 billion to finance development programmes across the country.

Share value

In a programme released last Friday by Finance minister Amos Kimunya, the 10 billion shares will cost Sh5 per share, with a minimum of 2,000 shares at application. The sale opens on March 28, 2008, and will close on April 23, 2008.

The Internet-based initiative is the first one in the country and experts will be keen to see its success. Previous offers have been characterised by long queues in brokerage firms.

At a media briefing at Safaricom House, the advisor also assured that the system had undergone robust security testing and approval by Safaricom Limited and the Government.
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Old March 18th, 2008, 01:48 AM   #4
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Safaricom IPO to Test Stock Market Capacity.


By James Anyanzwa and Kimathi Njoka

Serious concerns are now emerging over the capacity of the troubled capital markets to handle the expected influx of shareholders for the planned Safaricom initial public offering (IPO).

This anxiety follows an announcement on Monday that prospective investors will be able to apply for the shares of the giant mobile telephone service provider online.

The much-hyped public offering will undoubtedly test the capacity of players in capital markets to manage and handle an issue that will bring in a massive 10 billion new shares in a market with 14 billion shares. The sale of the Government’s 25 per cent stake in Safaricom, the country’s most profitable company, is scheduled for March 28.

It will close on April 23, with shares expected to start trading at the Nairobi Stock Exchange (NSE) on June 9.

Finance minister Mr Amos Kimunya’s decision to go ahead with the Safaricom sale has been heavily criticised as a deliberate attempt to lock out thousands of potential investors.

The fate of more than 100,000 investors whose shares are suspected to have been irregularly sold by the troubled Nyaga Stockbrokers is unknown.

Kimunya’s silence over the credibility issues in the capital markets has further continued to raise eyebrows.

The new approach of buying Safaricom IPO shares via internet is expected to reduce long queues at brokerage houses.

The Dyer and Blair Investment Bank General Manager, Mr Mohammed Hassan, says the automation of the IPO process will speed up the processing of applications, thus saving time.

"We expect more than one million investors to participate in the IPO," said Hassan.

He said electronic application would also simplify the application process.

"We are looking at increasing channels for applying shares, and automation is one of them," he said.

Online application

To apply for shares online, an investor will be required to have a CDS account. Applicants will log onto www.kenyaipos.co.ke to place an application.

Online application of shares is a practice well entrenched in the developed world and has helped reduce the IPO processing time to a minimum of four days.

If the process proves successful, Hassan says, it will be replicated in all future offers.

The e-IPO will make it easy to track information on all applications and also save time on automated reconciliation and paper trail reports.

The Safaricom IPO is expected to push the NSE market capitalisation to more than the Sh1 trillion mark, from the current Sh860 billion.

Experts now see increased trading once the IPO is concluded.

"We envisage a situation where trading volumes could increase by between 200 to 300 per cent," the NSE Chief Executive, Mr Chris Mwebesa, told The Standard recently.

The IPO has been priced at Sh5 per share for a minimum of 2,000 shares per person.

The Government is offloading 25 per cent stake or 10 billion shares through the NSE, an offer expected to net at least Sh50 billion in gross proceeds to finance development programmes.

The preparatory process for the IPO started mid-last year and was set for opening last December. Legal hurdles held it back after then opposition — Orange Democratic Movement party — moved to court seeking to stop the process. The party had argued that a privatisation commission had not been put in place. It has since been constituted.

The offer has been divided into two pools — domestic and international. Domestic investors have been allocated 65 per cent while international investors will take the remaining 35 per cent.

But in case the domestic pool offer is oversubscribed by more than 200 per cent, there is a provision to plough back 15 per cent from the international pool.
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Old March 18th, 2008, 01:50 AM   #5
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Traders raise more capital as the stock market grows

Stockbrokers and investment banks are in the race to shore up their financial strength in readiness for the expected rise in competition after the Safaricom sale.

Industry insiders said a number of broking firms have crafted financing plans to increase their capital to enable them cope with the operational demands expected to come with a bigger market.

The capital is meant to stabilise the stock brokers. Those that are already dealers on their account or are investment banks need more funds to exploit big opportunities in the market.

Institutions that are ready to embark on the process include Suntra and Dyer & Blair investment banks, Reliable, Discount and Solid Securities.

Suntra Investment Bank intends to increase its capital to Sh250 million from the current Sh100 million while Dyer & Blair last year raised its own to Sh1 billion from Sh800 million.

Solid Securities is aiming for Sh130 million while Discount Securities intends to hit the Sh30 million mark– the minimum for an investment licence.

These developments also reflect the changes taking place in the banking sector where rapid expansion and the launch of new products has sparked a race for better capitalization.

Suntra Investment Bank said the increase in capital has been necessitated by its move into fund management. It has just launched a unit trust consisting of an equity fund where investments mainly go into the buying of shares, a money market fund and a balanced fund that consists of both equity and money market investments.

The chief executive, Mr James Murigu, told the Business Daily that the unit trust will be formally launched next month.

Rising demand for investment opportunities and the rush to the equities market has forced many stockbrokers to begin shedding their traditional image of near-informal outfits that are mainly suited for retail investors with small accounts to the more formal and complex avenues of investment.

Most brokers have acquired new softwares and upgraded their ICT platforms to cope with the new demands. Inadequate capital has however remained a major source of concern with poor liquidity blamed for the recent collapse of brokers such as Nyaga and Francis Thuo & Partners.

Nyaga is believed to have collapsed with at least Sh500 million worth of investors’ funds, making it difficult to sort out the mess using the Sh100 million loans that the Nairobi Stock Exchange advanced to it.

The situation was made all the more urgent when it recently emerged that a few other brokers have yet to receive full licences for the current year.

Capital Markets Authority acting chief executive Stella Kilonzo extended the period by which the brokers should meet the legal requirements by three months. Most of the brokers have however said they are in the process of putting their houses in order.

Solid Securities which has been bought by NIC Capital – a subsidiary firm of NIC Bank — which is considered one of the top 10 banks by assets in Kenya – has declared that it is restructuring and increasing capital as it seeks to grow.

At Reliable Securities, the general manager, Mr Eric Makabuti, told Business Daily that plans were underway to increase the company’s capital in readiness for conversion into an investment bank.

“We are soon going to apply to become an investment bank. We are preparing a business plan along these lines. We are also introducing a new software that will enhance online trading of securities. Our aim is to train staff on the use of the software after the Easter holidays,” said Mr Makabuti.

At Dyer & Blair Investment, the drive for expansion has been on since last year when the company formerly established a branch in Uganda. The investment bank also moved to expand its office space at Loita House by taking an extra floor. Currently, the institution is setting up an office in Westlands where it is preparing to eventually set up its headquarters.

A major boost for the institution is that it and its international partner Morgan Stanley form the team for the transaction advisor for Kenya’s largest IPO valued at Sh50 million. The government is selling 25 per cent of Safaricom, which is valued at Sh200 million when a discount of 14.7 per cent is taken into account.
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Old July 23rd, 2009, 03:34 PM   #6
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Post Kenya | NSE and Financial Sector

Post market trends, news and Information ups and downs, IPO'S that is NSE.


Nairobi Stock Exchange
The Nairobi Stock Exchange (NSE) is the principal stock exchange of Kenya. It began in 1954 as an overseas stock exchange while Kenya was still a British colony with permission of the London Stock Exchange. The NSE is a member of the African Stock Exchanges Association.

Nairobi Stock Exchange is Africa's fourth largest stock exchange in terms of trading volumes, and fifth in terms of market capitalization as a percentage of GDP.[1] The Exchange works in cooperation with the Uganda Securities Exchange and the Dar es Salaam Stock Exchange, including the crosslisting of various equities.

The exchange has pre-market sessions from 09:00am to 09:30am and normal trading sessions from 09:30am to 03:00pm on all days of the week except Saturdays, Sundays and holidays declared by the Exchange in advance.[2]

The NSE's offices and trading floor are located at the Nation Centre along Kimathi Street. Trading is done through the Electronic Trading System (ETS) which was commissioned in 2006. A Wide Area Network (WAN) platform was implemented in 2007 and this eradicated the need for brokers to send their staff (dealers) to the trading floor to conduct business. Trading is now mainly conducted from the brokers' offices through the WAN. However, brokers under certain circumstances can still conduct trading from the floor of the NSE.

Two indices are popularly used to measure performance. The NSE 20-Share Index has been in use since 1964 and measures the performance of 20 blue-chip companies with strong fundamentals and which have consistently returned positive financial results. Included in the Index are Mumias Sugar, Express Kenya, Rea Vipingo, Sasini Tea, CMC Holdings, Kenya Airways, Safaricom, Nation Media Group, Barclays Bank Kenya, Equity Bank, Kenya Commercial Bank, Standard Chartered Bank, Bamburi Cement, British American Tobacco, Kengen, Centum Investment Company, East African Breweries, EA Cables, Kenya Power & Lighting Company Ltd. and Athi River Mining. This index primarily focuses on price changes for these 20 companies.

In 2008, the Nairobi Stock Exchange All Share Index (NASI) was introduced as an alternative index. Its measure is an overall indicator of market performance. The Index incorporates all the traded shares of the day. Its attention is therefore on the overall market capitalization rather than the price movements of select counters.

There is however a third Index; the AIG 27 Index that compares price movements of 27 companies identified as relatively stable. The rational behind the index compares to that of the NSE 20-Share Index. But whereas the AIG is primarily defined by the AIG company (a financial service company and part of the AIG Group), the 20-share Index is from the NSE itself.

Infor: Wikipedia.
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Old July 25th, 2009, 11:19 AM   #7
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Kenya firms seek to cross-list in South African bourse



Consultations are going on that will see companies listed at the Nairobi Stock Exchange cross-list at the Johannesburg Stock Exchange (JSE).

JSE business development manager in charge of African desk Geoff Musekiwa said the negotiations with various stock markets in Africa, including the NSE aim at allowing companies with a market capitalisation of at least Rands 500 million (Sh5 billion) to list at the biggest stock market in Africa.

Successful firms will list at the JSE Africa Board which is part of the JSE main market segment launched in February this year.

For a firm to list, must be based in Africa or most of its operations be based on the continent.

It must meet the Africa Board listing requirements and appoint a JSE approved sponsor to guide the process.

Mr Musekiwa said they have held talks with stock market players in Kenya, Zambia, Zimbabwe and Tanzania.

“We have met with Mr Peter Mwangi (NSE CEO) but we could not see Ms Stella Kilonzo (Capital Markets Authority CEO) because she was engaged elsewhere but we left some documents with her office,” Mr Musekiwa told the Daily Nation during a trip to the bourse in Johannesburg by journalists attending the 3rd Standard Media Forum.

The listing firm will retain its local listing with the costs depending on the monetary value of the listed securities.

Currently, Kenya Commercial Bank, Kenya Airways, Jubilee Insurance and East Africa Breweries are also listed at the Tanzania, Uganda and Rwanda stock markets.

Mr Musekiwa said companies that list at the JSE will have access to a market where they can raise more capital in Africa and have access to local as well as international investors.

“It is part of our efforts to promote the stock markets in Africa given their significance in economic development while enabling our firms to grow,” said Mr Musekiwa.

Already, a Namibian financial services firm, Trustco, has listed at the JSE and is in the process of raising R.200 million (Sh2 billion) for its expansion programme...

http://www.nation.co.ke/business/new...z/-/index.html
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Old July 27th, 2009, 06:30 PM   #8
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Rwanda: KCB Shares Start Trading On Stock Market

John Gahamanyi And Ruth Kang'ong'oi
18 June 2009

Nyarugenge — Kenya Commercial Bank (KCB) group shares, started trading on the Rwanda Over the Counter (OTC) market yesterday, partly igniting the bank's share rise on the Nairobi Stock Exchange (NSE). The event marked the listing of the first equities stock in the market and the first cross-listing of any stock in the 18-months-old market.

James Musoni, Minister of Finance and Economic Planning launched the trading that saw KCB share opening at Rwf160 and closing at Rwf163 on its debut on the ROTC market. "KCB has, by this cross-listing, shown its confidence in our financial sector and the growth of our economy thus giving our people the opportunity to buy its shares," Musoni said before ringing the bell to inaugurate trading at Kigali Serena hotel.

Market reports show that out of 50,000 shares offered for sale on the ROTC market, 42,800 shares were traded in 12 deals. At the close of the session, KCB counter had 7,200 shares on offer at Rwf163 per share and 800 shares on bid at Rwf160.

Celestin Rwabukumba, Operations Manager of Capital Market Advisory Council (CMAC) said that the volume is bigger than the number of KCB shares traded on the Uganda Stock Exchange (USE) in the last six months. "This is encouraging," Rwabukumba said. By press time, Rwabukumba said KCB share on the NSE was continuously gaining, attributing the trend to the cross listing and other market conditions.

Immediately after Musoni rang the bell, it was reported that KCB's share on the Nairobi Stock Exchange (NSE) had jumped to Ksh22.78 (Rwf166) from Ksh20.27 (Rwf151). KCB cross listing makes it the only listed company on the ROTC market which is predominantly characterised by debt securities.

Musoni said Rwanda's economy has high growing demand for long term capital investments than the domestic capacity is able to support.

"The integration of regional capital markets will provide an avenue through which the economy will tap the regional capital markets," the Minister added.
Oduor-Otieno, the bank's group CEO said cross listing was very vital for the growth of Rwanda's stock market.

"This is a very important occasion for us as we help open a new chapter for this country's finance market. We believe this will now provide investment opportunities to thousands of Rwandans willing to invest in the stock market since it now makes it convenient for them to invest in the company right here in Rwanda," said Oduor-Otieno

KCB's cross listing in Rwanda comes barely seven months after it began operations in the country.Peter Muthoka, KCB Group Chairman said last year the bank posted Rwf42.7 billion profit before tax, 42 percent above the group's performance in 2007 which enabled the board to pay a dividend of about Rwf7 for every ordinary share.

The bank has had its shares cross listed in Uganda and Tanzania.Musoni hoped that private companies in Rwanda would follow suit and put their shares on the ROTC market
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Old August 9th, 2009, 04:57 PM   #9
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Foreigners scoop up shares ahead of expected price rise


By WACHIRA KANG’ARU
Posted Saturday, August 8 2009 at 16:12


After fleeing at the height of the global financial crisis, foreign investors in Kenya are back at the Nairobi Stock Exchange taking advantage of the low-priced shares. Monthly statistics from NSE show that last month, foreign investor activity at the bourse accounted for more than 60 per cent of the total market turnover.

“Since March 2009, foreign investors have been doing a lot of business,” said Mr Job Kihumba, executive director Standard Investment Bank, and the second vice chairman of NSE.

“Unfortunately, it does not seem to be the case with local retail investors.”
Data compiled by CFC Stanbic Financial Services shows that between April 4 and Friday last week, foreign investors had bought over Sh4 billion worth of shares while selling about half of that, meaning they are buying more than selling.

This is also an indication that they are taking up positions in readiness to reap any expected upturn in the stock market. This is a different scenario from what prevailed in the last half of 2008. Over the third quarter ending September 30, 2008, foreign investor activity accounted for 37 per cent of total NSE market trade with the month of September recording the heaviest foreign turnover of 72 per cent.

And other than July 2008, the other two months recorded a net sale meaning that foreign investors sold more than they bought. By the third week of October, the NSE year-to-date return on the index was down 40 per cent, leaving investors smarting. “Shareholder value dropped by Sh196 billion between September 1, and October 9, 2008 as global financial woes intensified,” CFC Stanbic Financial Services reported.

A majority of the foreign investors are returning to take positions in companies that they had earlier exited. On Thursday last week, for example, foreign investors were most active on the Safaricom counter where they bought 97 per cent of the counter’s total turnover.

Also notable for having attracted heavy investor activity were Equity Bank, KCB and BAT (K) counters. “Although foreign sales on the counters were higher than foreign buys,” says CFC Stanbic Financial Services. On Wednesday, foreign investor trade accounted for about a third of the day’s total turnover, while on Tuesday their activity accounted for more than 50 per cent of the day’s traded volume.

Holding steady
“Foreign interest on these counters has seen the prices either holding steady or inching higher in recent times,” said CFC Stanbic Financial Services. With local investors having shifted from the stock market to the bond market, with investment in government papers seen to give better returns than stocks, foreign investors have been left to take advantage of the low prices at the stock market.

Notable is the fact that while the NSE 20 share index has declined 7 per cent year-to-date, it has recovered 40 per cent from its low of 2,360 in March 2009, meaning an investor who brought shares in all the companies that make up the NSE 20 share index in March has today made Sh4 for every Sh10 invested. For local investors, however, it seems once bitten twice shy is their philosophy; one that might prove costly as the market limps on.

They have failed to take advantage of the fact that NSE’s Price earning (PE) ratio - the most common measure of how expensive a stock is - has dropped from a high of 23x in July 2008 to current 13x. This is the reason why foreign investors are trooping back and buying cheap after having sold high last year.

Start buying
Expectation is that local investors will start buying when the share price starts to rally, by which time the prices will be high with little to make of the price gains. At the time, foreign investors will be preparing to sell. “It is a process of both education and experience,” Mr Kihumba said. “Local investors need to know that when the market takes a downturn, it is time to enter, not to turn away.”
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Old August 15th, 2009, 04:23 AM   #10
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i love this site, it gives me the chance to jot my thoughts
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Old August 15th, 2009, 12:45 PM   #11
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i love this site, it gives me the chance to jot my thoughts
Matt1783 your highly welcome to this forum we look forward to see more contributions from you on business and other topical issues.
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Old August 25th, 2009, 03:24 AM   #12
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New home for property at NSE

Published on 24/08/2009


Nairobi Stock Exchange (NSE) investors have every reason to smile when real estate is listed at the bourse. This follows reports that the Capital Markets Authority is at an advanced stage with plans to list the first real estate investment trust, popularly known as Reit in financial jargon .

"We are formulating rules to guide how retail investors will be able to trade in quoted REITs at the bourse," said Ms Stella Kilonzo, the chief executive of the CMA in a recent interview. A source at the CMA said following the announcement of rules guiding the formulation of collective investment vehicles — the launch of the first Reits would follow soon.

"The announcement of the first Reits will be done soon," said the source who requested anonymity citing a confidentiality agreement with CMA. Reits provide an avenue through which investors can pool resources to develop or trade in properties with returns shared equitably after a specified trading period.

Reits are traded at stock markets in the form of shares, helping liquidity as property can be sold at the exchange in whole or bits, once they are floated. With the listing of the first Reits, individuals with property will have the option of offloading such property into the market and trade with it at the bourse.

Once a Reit is listed at NSE, anybody can buy and sell their shares to trade in real estate business while creating a pool of resources that can be used to develop the property market and address the current shortages in the residential, commercial and industrial housing. Such a listing will also allow small-scale investors wishing to trade in real estate to have a chance to trade in the shares of such a Reits — effectively owning and trading in real estate by buying the quoted shares of any Reits listed at the bourse.

Earning returns
Real estate investment experts say that the development is bound to address liquidity crunch, which property owners find themselves in after putting all their money into developing a property, whereas sometimes takes time to make recoup investments or begin earning returns.

Mr Paul Sigsworth, the managing director of ICEA Asset Management said that the timing was appropriate because Nairobi has been generating interest on the global property scene due to its unique poison as the launch pad to the East African economies. "The recent publication of the rules to allow pension funds to invest in property earning funds, Reits and other collective investment schemes without necessarily being listed at the bourse is a welcome one," said Sisgworth.

The first Reits listing — widely anticipated before the end of the year — will increase activity at the bourse as individuals and companies, including the National Social Security Fund (NSSF) and insurance companies, which hold so much property will have an avenue to dispose of huge properties which they were otherwise constrained to. "Such a listing would increase the level of development as private developers can easily access tied up capital in properties whenever they sense an investment opportunity elsewhere," said Prof Johnstone Kiamba the chair of the Kenya Institute of Planners.

The world over, Reits have been used as the avenues to spur real estate development particularly in mobilising funds to address residential housing projects. Best remembered is Darin Gunesekera, an expert in low cost housing development from Colombo, Malaysia, who employed an almost similar model to increase affordable housing in his home country and eliminate slums. "Kenya can use Reits to collect capital from the stock market to eradicate slums and provide decent housing," said Gunesekera at a past conference.

Investment outlook
Since the debate on REITs came a fore, a number of firms have shown interest, citing immense opportunity that the listing of the first Reits portends for the real estate sectors. Among the big names that have shown interest in the concept include Rutleys — the investment arm of KnightFrank — an international property company.

Last year the firm launched a Sh13 billion property fund in response to what it termed a "good property investment outlook" for the country and the East African region. The firm, however, had to list its shares in Johannesburg and London stock exchanges, leaving out NSE after it failed to find a suitable local REIT partner coupled with specific guidelines on the operations of such investment trusts in the country

Another local property company with US ties Bora Capital was also keen to venture into the market using REITs. "As soon as the regulations have been put in the market by CMA, we would be more than willing to take up the opportunities that such a development brings along," said Mr Joe Macharia, chief executive of Bora Capital.

Advance plans to launch a Reits follow the successful completion of a study on the best model to apply when introducing the first Reits. Reits, however, have their downside for a country like Kenya. Analysts say that enough caution should be put in place to ensure that the correct valuations of buildings are reflected in the Reits.

If an overvalued property is listed in a Reits, the level of return from such shares would be minimal as the property does not reflect the true market trends. There has also been concern on the need of a solid statistics base on the trends on the level of returns for property in the country as the real estate business is highly varied and could be misleading to some investors.
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Old September 24th, 2009, 05:04 PM   #13
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Kenya to refund investors with failed stockbroker

Thu Sep 24, 2009 11:28am GMT


NAIROBI (Reuters) -
Kenya will pay out 302 million shillings to investors who lost money when a stock brokerage collapsed last year, finance minister Uhuru Kenyatta said on Thursday. The east African nation has been taking measures to restore flagging investor confidence at the Nairobi Stock Exchange after the fall of Nyaga Stockbrokers, followed by Discount Securities. "Protection of investors is critical to sustained growth of securities markets world over," Kenyatta told a news conference. "The main objective of the payout is to restore confidence."

The minister appointed a former central bank governor, Micah Cheserem, as chairman of market regulator Capital Markets Authority in March, in a bid to stem the lack of confidence. An antifraud unit for the stock market has been set up and stockbrokers published half-year financial results for the first time this year. CMA is also prosecuting the directors of Nyaga. More than 27,000 investors will be paid money back with 90 percent getting full payment, Kenyatta said. The law allows for a maximum payment of 50,000 shillings per investor.

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Old May 24th, 2010, 08:18 AM   #14
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Innovation puts Kenya on the threshold of banking revolution

Through M-Kesho, the instant access to an Equity Bank account will definitely further the bankability of ordinary Kenyans. Photo/FREDRICK ONYANGO


Following the recent flurry in branch expansion, banking the unbanked, SME targeted banking products, mobile money transfer, not to mention ATM proliferation and of course the advent of credit referencing bureaus in Kenya one would have thought that apart from agency banking, the space for innovation in the commercial and retail banking space was nearing exhaustion.

Frankly, as much as being able to withdraw money from my M-Pesa account felt really nice, I always felt that having to withdraw money, then trooping to the nearest M-Pesa agent to deposit it, and then send it to my folks in the village was still a cumbersome process.

In my view, it would be easier if I could just deposit the money directly from my account to M-Pesa at the ATM point, and then send it wherever.

Well, Safaricom and Equity Bank have gone a step further and removed the ATM and the all too familiar queue in the banking hall from the picture and virtually transformed our mobile phones into banking facilities all in one swoop. Fancy that, huh!

The product M-Kesho has also opened up the agency banking space at no expense to Equity and provided access to a banking licence to Safaricom, without the latter having to go through the regulatory red tape that has been responsible for confining the growth of mobile money in the Kenyan economy.

Let’s start by looking at the sheer volumes this partnership could entail for the banking sector in Kenya.

Assuming that M-Pesa subscription stands at 10 million, and also assuming that a majority of these subscribers are in the unbanked population, the instant access to an Equity Bank account will definitely further the bankability of the common mwananchi.

Then, there is the fact that since the account is electronically based, all transactions will be easy to track, and therefore the credit referencing database will soon have a great platform for tracking and rating the creditworthiness of a huge chunk of the Kenyan population.

This data will in turn hand the consumer i.e. M-Kesho account holder, immediate access to a credit facility based on their transaction history, without the unpopular rigours of having to fill numerous forms, find guarantors for their loans and open their financial cobwebs to some nondescript bank-loan officer who does not even have the ability to grant them a loan in the first place.

Then there is the issue of agency banking.

Statistically, the local shopkeeper is essentially the most reliable credit reference that any financial system can have and this is exactly where you will find the numerous M-Pesa agents situated (20,000) to be precise.

If 20,000 agents register 500 clients then we have 10 million new bank accounts which will transfer or hold an average of Sh2,500 each or roughly Sh25 billion in electronic cash, circulating in the economy at any one time.

From an investment analyst’s point of view, the system will give us on a silver platter a platform for tracking the spending patterns within the economy, and thus the ability to predict and create models for formulating monetary policy which reaches to the very grassroots level that has been so elusive in the past.

The new Agents also stand to gain from the incentive based system since, all financial transactions from purchase of plane tickets to consumer credit will be performed by them, thus creating much needed employment, while at the same time reducing the hustle of travelling to a bank every time one needs to transfer or withdraw some cash, not to mention a myriad of advantages that will accrue to both the investor and the banking fraternity as a whole.

The agent will effectively be transformed into your retail banker and cash will not have to be moved from localities since the same cash will instantly be used to service other financial needs in the locality.
Don’t forget here that a new channel will be open for swiftly disbursing development stimulus funds and probably the financial assistance to poor families without them having to spend on getting to financial centres to access funds that are more useful elsewhere.

I will not even try to quantify what it will do for disaster management and even from the corporate frontline, the disbursement of dividends to investors.

Incidentally, there are other externalities like mobile phone number registration since the ID number is a primary requirement for access to the service.

Basically the implications are endless so let’s focus on the obvious for now.

Risk is always an issue when all these factors come into play but it is worth noting that Safaricom has been in the money transfer business for long enough to have got the gist of it and Equity bank does not need any lessons regarding security and dealing with microfinance in Kenya.

The weak link obviously lies in the agency system, and hopefully the two institutions will expend extra resources to ensure that the agents do not mess up one of the most innovative partnerships of our time.

The entry of other commercial banks and telecom firms will eventually provide the competitive mix that will probably elevate the Kenyan populace into the most efficiently and effectively banked society globally, and further prove the unending advantages that crossing the digital divide can offer developing countries and emerging markets as a whole.

It will also highlight the advantages of open mindedness and innovation as drivers of economic breakthroughs in the 21st century.

The mobile phone will definitely be a one stop shop for all financial transactions from banking, accessing credit, formulating monetary policy, investing in the capital markets to probably buying a loaf of bread at the local retail shop.

Then retail banking will become a phone based issue leaving banks to deal with SME’s and corporate customers and probably investment advisory services.

Imagine walking into a banking hall or a stock brokerage and finding it empty.

http://www.businessdailyafrica.com/O...z/-/index.html
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Old May 24th, 2010, 08:20 AM   #15
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i am really happy the revolution that is taking place in both the financial and the communication sectors
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Old August 24th, 2010, 08:18 AM   #16
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Money Markets

NSE Outperforms African bourses



A trader at Nairobi Stock Exchange. The bourse recorded strong growth for the first half of the year,
a recovery after past years of reduced activity. Photo/FREDRICK ONYANGO

By Johnstone Ole Turana
Posted Tuesday, August 24 2010 at 00:00


The Nairobi Stock Exchange has outpaced its peers in Africa, positioning Kenya as a preferred investment destination. The bourse recorded strong growth for the first half of the year, a recovery after past years of reduced activity. The equities and bond markets have recorded robust growth due to positive interim results and expected strong economic recovery,” said Mr Eddy Njoroge, the chairman of Nairobi Stock Exchange (NSE).

The NSE equity turnover since the beginning of the year grew to Sh61 billion, almost double the annual equity turnover in 2009, which was Sh38 billion.Analysts say the improved performance is due to growth of the bond market which has witnessed a threefold increase on its turnover, which topped Sh338 billion by last month.

The entire bond turnover for 2009 was Sh110 billion.
The NSE 20 Share Index has also gone up by 37 per cent outperforming other major stock markets such as in Nigeria, Ghana and South Africa which grew by 24.7 per cent, 14.75 per cent and 2.49 per cent respectively. Wider representation of key sectors in the bourse and robust counters especially from Kenya’s financial sector which saw minimal effects of the global banking crisis has also lifted the stock market.

“Nigeria’s stock exchange is still smarting from the banking crisis which forced the Central Bank of Nigeria to rescue the troubled banks which accounts for huge proportion of trading, Ghana’s equities market is still small and thin while South Africa’ stock exchange is yet to recover from the effects of the global financial crisis due to its strong linkage,” said Mr Edwin Nyaducha, a managing principal of Inkubate, a corporate finance and business advisory firm.

The capital market is expected to continue recording improvement as the new constitution comes into effect. “The vote is an upside for the socio-economic environment and signals a brighter future for the local economy and the exchange,” said Mr Njoroge while presiding over the listing of the KCB Bank Rights Issue shares at the Nairobi bourse.

Increased borrowing
The stock exchange is riding on the increased borrowing appetite from the public as businesses shy away from banks loans. “The focus on domestic fund raising initiatives is critical as it not only prove the ability to tap resources, but acts as a barometer of level of maturity to potential investors especially for foreign direct investment,” said Mr Amish Gupta, an investment banker with Standard Investment Bank. The strong performance of NSE is a pointer to the resurgence of equities markets in Africa as it is viewed by investors as one of the strong emerging markets.

“This year, Africa will account for 20 per cent of business hence our focus is to increase the footprint in Africa both in terms of presence and operations,” said Mr Stephen Jennings, chief executive of Russia’s Renaissance Capital which has a subsidiary in Kenya.

The discovery of oil in countries such as Ghana, Uganda and Angola and improved global commodities prices has made Africa a hotspot for foreign investors.The East African Community Common Market has opened up the region with Kenya as the preferred hub due to its relatively advanced economic status. With an estimated market population of 130 million people, the demand for goods and services is expected to provide rich business ground for investors. Increase in disposable income and changing lifestyles have necessitated the need to meet the growing demand.

http://www.businessdailyafrica.com/N...z/-/index.html
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Old August 24th, 2010, 08:29 AM   #17
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NSE Clip





23 August - Kenyan Markets Wrap - Samuel Gichohi - Standard Investment Bank
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Old September 8th, 2010, 06:22 PM   #18
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Bharti Airtel's plans for Africa with CEO Manoj Kohli

Manoj Kohli, CEO of Bharti Airtel International has been tasked with cementing India's biggest mobile company's place in Africa's burgeoning telecoms market. But he faces some tough competition from already established players like South Africa's MTN, Vodacom, and the Vodafone powered Safaricom. ABN's Nicolette Arends spoke to Manoj Kohli about the company's strategy in Africa.





8 September - Kenyan Markets - Samuel Wachira - Drummond Investment Bank

Alishia Seckam speaks with Samuel Wachira, General Manager at Drummond Investment Bank, looking at:
  • State of the NSE 20
  • Kenyan economy expected to grow 5.2%
  • Private investment
  • Nation Media Group to cross list on Rwandan Bourse
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Old September 8th, 2010, 11:48 PM   #19
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NSE demutualisation to kick-off by January 2011

Updated 4 hr(s) 57 min(s) ago
By JAMES ANYANZWA

Quote:
The Capital Markets Act will be amended in the next four months to pave way for the planned demutualisation of the Nairobi Stock Exchange (NSE).The current members of the NSE approved the proposal for a demutualised exchange in March this year, but a lethargic political process required to enact the necessary legislations into law has held the process back.


Traders at the NSE. Once demutualised, the exchange will be called Nairobi Securities Ltd,
with an authorised share capital of Sh1 billion.

In a demutualised exchange, the ownership, management ad trading rights are segregated from one another.Peter Mwangi, the NSE chief executive, said amendments to the CMA Act would come into force on January 1 next year, after the Finance Bill is passed into an Act of Parliament. He said the exchange stands ready to make the necessary applications to effect its demutualisation once the 2010 finance bill is assented.

"In furtherance of this, the NSE recently streamlined its operations in preparation to becoming a full service securities exchange," he said at the First Annual African Alliance East African Investor Conference Gala dinner in Nairobi. Traders at the NSE. Once demutualised, the exchange will be called Nairobi Securities Ltd, with an authorised share capital of Sh1 billion.

The NSE members, mainly stockbrokers and investment banks, resolved to retain 80 per cent shareholding in the demutualised company for two years, before diluting it to 40 per cent through an initial public offering (IPO). The CMA’s Investor Compensation Fund (ICF) and Treasury will each own 10 per cent stake in the new entity. The existing 19 stockbrokers and investment banks would split the 80 per cent stake equally among themselves.The ICF is expected to its sell a portion of its stake in the demutualised company to replenish its reserves. Currently, brokers enjoy a monopoly of the NSE. The demutualisation process seeks to deal with corporate governance by separating ownership and trading rights of the member firms.

conflict of interest
Proponents of the process see it as the solution to the challenges facing the exchange, which include conflict of interest. In some cases brokerage firms, who are the principal members of the bourse, act as dealers, and fund mangers. The brokers also agreed to change the name of the demutualised exchange to Nairobi Securities Ltd, with an authorised share capital of Sh1 billion, and the change the memorandum and articles of association to reflect the new status.The NSE’s current paid up capital is fixed at Sh200 million. Demutualisation is expected to transform the exchange, and position it to realise its vast potential, and attain its vision of being a leading securities exchange in Africa with a global reach
.
http://www.standardmedia.co.ke/Insid...id=14&j=&m=&d=
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Old November 5th, 2010, 06:11 PM   #20
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Follow Boardroom Intrigues by: DONALD TRUMP

Featuring Lisa from Kenya in the Apprentice..2010

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