The stock market price decline of 2008 was a wake up call for many investors at the Nairobi Stock Exchange. The unprecedented sudden and steep decline in prices shocked many investors as they watched the value of their portfolios drop significantly in just a few weeks.

However not all is lost here are some of the New Years tips for Investing in Stocks.

Shareholders of Unilever Tea Kenya Limited (UTKL) have passed a special resolution to de-list the company from the Nairobi Stock Exchange (NSE). The move follows success of an offer by Unilever Plc through its subsidiary Brooke Bond Group Ltd (Brooke Bond), to acquire the 11.8 percent shares held by minority shareholders in the tea company.

The offer was conditional on Brooke Bond receiving acceptances which, when combined with the existing Unilever Tea shares held by Brooke Bond (88.2 percent), resulted in Brooke Bond holding not less that 90 percent of the issued share capital of Unilever Tea.

UTKL Managing Director Mr Richard Fairburn said in a statement that the shareholders’ decision of delisting had been communicated to the Capital Markets Authority (CMA). ‘’We are waiting for instructions from CMA to NSE to de-list the company from the bourse,” he said.

Minority shareholders holding 4,602,329 shares representing 80 percent of the 5.75 million shares in their hands accepted the offer and Brooke Bond now holds 97.65 percent or 47,727,329 shares in Unilever Tea. Shareholders who accepted the offer have received payment at the offer price of Kshs62 per share, according to the instructions provided in the acceptance forms.

The move by Brooke Bond to acquire the third party shareholding in Unilever Tea is consistent with Unilever’s strategy to achieve a preferred wholly owned structure within East and Southern Africa, he manager said. The significant inward investment to purchase the third party shareholding in Unilever Tea is further evidence of Unilever’s commitment to Kenya.

Here are some guidelines to follow:

• But with this pain comes the opportunity to become a more astute investor in the future. Here’s a summary of important lessons to be learned from the recent market meltdown.
• Stocks do not go up for ever. Stock prices fluctuate minute-by-minute as well as decade to decade. Losing money with stocks is a fact of life.
• Stock market is like any other investment. You might open a duka today and get many customers, and tomorrow no one wants to shop from you. The key thing is to be vigilant and identify opportunities.
• Learn how to invest. The era of buying a stock and disappearing is long gone. Today you must know the why and how of investing.
• Price bubbles always burst, no matter what kind of asset (i.e., stocks, bonds, real estate, oil, copper, gold, silver, coins, stamps, artwork, grains).
• If you own a stock and its price chart confirms that it’s at or near bubble prices, sell it. On a simpler matter, if you feel a stock has reached its peak…sell…sell. Ask those who had Equity when it was costing Kshs320 and did not sell.
• Wait until a stock stabilizes and then buy it on the price upside. You might miss buying at the lowest price, but you’ll increase you chance of making money if you buy when prices are on an uptrend.
• Don’t base any investment decision on hearsay.
• Eliminate emotion, particularly anger and fear, from your investment decision making. You can’t control the movement of stock prices, but you can control your reaction to extreme volatility that causes the value of your portfolio to fluctuate.
• Be diversified. Don’t load up on one of two stocks or similar stocks from one sector. If you’re wrong, you can get killed, particularly if you own volatile stocks.
• Keep an ample supply of cash on hand. Cash doesn’t offer great returns, but it won’t disappear overnight like some stocks. And you’ll have cash available to buy stocks at bargain prices when they head to the upside.

Happy investing and remember the lessons come next year.

Contributed by Perminus Wainaina who is the CEO of Concept Advisory Services Limited and SmartBizAfrica Financial Analysts.

The piracy problem affecting shipping transport across the horn of Africa has become a problem for the Kenyan Economy because it is diminishing the volume of shipping using the Indian Ocean route and endangering the lives of crew and seafarers that use this route. Kenya’s Chief of Staff General Jeremiah Kianga was recently quoted as saying that Kenya’s Airforce would patrol the Kenyan’s territory at sea. Are Kenya’s armed forces prepared to handle this type of threat on its own territory. Do they have the capacity to protect Kenya from threats nearest to her.

Watch Video below.

Kenya Army

The army’s organisation is as follows: 2 armored brigades, 4 infantry brigades, 1 engineer brigade, 1 armoured reconnaissance battalion, 2 artillery battalions, 3 engineer battalions, 1 independent air cavalry battalion with 35 armed helicopters (Embakasi), 5 infantry battalions, 1 parachute battalion.

The country in 2007 imported 110 T-72 Tanks from Ukraine. 33 of the Same Tanks have been Hijacked by Somali pirates of the coast of Kenya in September 2008.

Tanks imported by Kenya in 2007 and 2008

Other armoured vehicles in the arsenal include Recce: 72 x Panhard AML-60/-90, 12 x Ferret armoured car and 8 x Shorland armoured car which were intially designed in the 1950’s and purchased by Kenya’s first Independent regime.

Kenya Airforce

• 7 Northrop F-5 Freedom Fighter figher aircraft. There are reports that Kenya seeks to purchase an additional 15 used F5 fighter jets from Jordan.
• 37 helicopters (11 x Hughes 500MD Defender with TOW, 8 x Hughes 500ME Defender, and 15 x Hughes 500M Defender);
• 31 transport fixed wing (7 x de Havilland Canada DHC-5D Buffalo, 12 x Harbin Y-12 (II), 10 x Piper PA-31
• Navajo, 3 x de Havilland Canada DHC-8 Dash 8, 1x Fokker 70 (VIP), and 6 Dornier Do 28D-2 (in store);
• 23 transport helicopters (9 x IAR 330 Puma, 13 x Aérospatiale SA 330 Puma, and 1 x Aérospatiale SA 342 Gazelle);together with 34 training aircraft (12 x Scottish Aviation Bulldog 103/127, 8 x BAe Hawk Mk 52, 12 x Shorts Tucano, and 2 x helicopter Hughes 500D.

• The Air Force also has Air-to-Surface Missile (ASM) AGM-65 Maverick TOW, and Air-to-Air missile(AAM) AIM-9 Sidewinder.

F5 & F15 Jet Fighter.

Kenya Airforce F5 Tiger

MD 500 Defender Helicopter

Buffalo Transport Plane

Kenya Navy

• 10 x Missile Craft
• 6 x Patrol and Coastal Combatants
• 1 x Amphibious Craft; and 5 x Support Vessel

It is pretty amazing to discover that many of the worlds biggest Banks could get taken in by the exploits of one  well connected individual. It just goes to show how massive greed has corrupted the financial system all over the world and the full effect is yet to be felt by Emerging Economies such as Kenya.

Mr Jimnah Mbaru One of Kenya’s leading Financial Gurus, Chairman of Dyer and Blair has sounded the alarm bells on the state of the Kenyan Economy. He said the country has already suffered negative economic growths in the last two consecutive quarters; a clear indicator the economy was in a recession. Mbaru said other factors leading to the contraction of the economy include a decline in farm outputs, high cost of food as well as high transport costs due to high oil prices, which have prevailed recently. The question is how related is this crisis to the going ons in the West and how can the major financial players like Mbaru prevent a free fall.

Being part of a Business Consultancy(www.cymapk.com) that advices banks on how to implement IT solutions to monitor and track funds i know for sure that any offshore or foreign investments have to be tightly regulated to provide a safeguard for local Banking Industries. This failure to regulate in the west is really surprising and many are left wondering how this situation arose. Only time will tell perhaps.

My Irish friend Gerry called this the chicken’s coming home to roost. An old English saying that suitably depicts the state of many banks today.

How can we regulate against this greed ? How can we legislate against Pyramid or Ponzi Schemes which are still by commision legal in Kenya?

Here is the list of the Banks that have been affected worldwide.

• The Royal Bank of Scotland
• France’s BNP Paribas
• Spain’s Banco Santander
• Spain, Banco Santander
• HSBC

Create your Financial Blog at http://www.whive.com

Read more at CNN: http://edition.cnn.com/2008/BUSINESS/12/15/madoff.arrest.exposure/index.html

Read more at the Standard: http://www.eastandard.net/business/InsidePage.php?id=1144001462&cid=14&

As politicians create the post-election violence tribunal, it is important not to lose sight of the moral high ground factor at the heart of the troubles earlier this year.

Above all, from the very outset, all persons of goodwill must avoid the trap of moral equivalence. This will be the first and last resort of the real aggressors and would-be ‘genocidaires’ of the post-poll explosion.

The term ‘moral equivalence’ was bequeathed to the world by American philosopher William James 98 years ago, in his very last essay, ‘The Moral Equivalent of War’.

Put simply, moral equivalence is a truly dangerous fallacy that seeks to equate two sides in a conflict. It seeks to construe no distinction between killers and their victims. In political debate and philosophy, the doctrine of moral equivalence is the most cynical equivocation or double-speak.

It claims that the actions of both sides are equally reprehensible — equating a killer’s aggressive violence, complete with murder aforethought and vicious use of weapons, with a victim’s screams, fright, attempted flight and any defensive measure, including holding up of arms to stave off lethal blows. As we enter the tribunal process under the shadow of possible proceedings at The Hague, we need to keep a clear distinction between aggressive and self-defensive, life-preserving violence.

Self-defence can be defined as the ultimate right of every sentient creature. It is beyond the shadow of doubt, as well as beyond denial, that central Kenya communities were the targets of violence early this year. It is also beyond debate that the violence was massive, unprecedented and constituted an existential threat to the peoples of the Mt Kenya region.

WRETCHED LIE

The scale of the violence in some regions was such that it cannot possibly have been unplanned. To argue that the violence that tore through Kenya beginning on the early evening of December 30 last year and lasting for much of January was merely an episode of spontaneous mass madness is to tell a wretched lie.

When was the last time a mere loss of temper resulted in the displacement of 350,000 persons in a matter of 72 hours? Didn’t 2,000 youth kill about 30 women and children at the Kiambaa church two days after the presidential result was annouced?

Williams made this observation about the roots of war in the human psyche: “The earlier men were hunters and to hunt a neighbouring tribe, kill the males, loot the village and possess the females was the most profitable, as well as the most exciting, way of living. Thus, were the more martial tribes selected and in chiefs and peoples a pure pugnacity and love of glory came to mingle with the more fundamental appetite for plunder.”

This is the kind of violence loosed upon Mt Kenya communities in Rift Valley province, without any warning, mercy or sense of proportion. The aggressive violence unleashed on mostly Kikuyu peasants, on the pretext President Kibaki had “stolen” the election, did not take place in a pre-colonial setting but in one of Africa’s most modern states. This atavistic violence almost spiralled into civil war when reprisals began in Naivasha and Nakuru in the third week of January.

Again, Williams, in his 1910 essay, had very instructive words, this time on the intersection between the violence of earlier men and modern violence: “Modern war is so expensive we feel trade to be a better avenue to plunder. But modern man inherits all the innate pugnacity and love of glory of his ancestors.

“Showing war’s irrationality and horror is of no effect on him. The horrors make the fascination. War is the strong life; it is life in extremis; war taxes are the only ones men never hesitate to pay, as the budgets of all nations show us.”

In keeping with the nature of modern conflicts, post-election violence was brought to an end through international mediation, with the warring parties being urged to call a ceasefire and negotiate. As has been seen from time immemorial, both sides have sought the moral high ground, believing that their cause is superior.

At that juncture, even the doctrine of moral equivalence can be unwelcome to both sides. In the case of Kenya, we need to move beyond this would-be moral deadlock.

By Aristotle Omondi, A social science researcher at the University of Botswana.

My friends,  I discovered some really nice tips on Smartbiz which i thought i should share with you. I really think Safaricom is still the best Stock to acquire as the company has a lot of growth prospects. Anyways without further ado here are the tips. What do you think?

The Nairobi Stock Exchange showed signs of recovery from a prolonged bear run (persistent fall in share prices). Most counters were up on the back of renewed investor confidence in the market, but this was short-lived as prices went on the low towards the end of the week.

Here are some stocks to watch according to analysts at Emerging Africa Capital, the Nairobi-based investment consulting company:

Access-Kenya: The counter inched upwards with demand rising, but at some point the market having no supply. The counter is a good buy for the short to medium investors.

Total: With the company having successfully bided for the assets of a rival marketer, expect action on this counter as punters take up positions. Good stock for speculative buyers.

KCB: The counter continued dominating the market with the volumes moving up. The price is up but still discounted. This is a good buy for the medium to long-term investors.

Safaricom: The mobile phone company has announced half year results, with profit before tax up a marginal 2.2%, which have generated interest on this counter.

Equity Bank: The counter remains a value stock owing to the current low price. With sound fundamentals, the counter is expected to continue drawing savvy investors, especially for sort-term gains as this has been a highly speculative stock.

Read more at Whive.com http://newwhive.whive.com/poll.php?user=KingBee&poll_id=46

Read more at Smartbizafrica.com http://www.smartbizafrica.com/financial.php

Postkenya.com is a Web 2.0 style Email Platform that allows members to register and sign up for new email accounts.

Email accounts are structured in the yourname@postkenya.com format

The Platform allocates each user with space according to their usage. The current limit is 100 MB for Database Space per User.

Our Usage currently stands at 2,800,000 Bytes and growing.

A guide to PostKenya.com advertising.

PostKenya.com also offers numerous advertising opportunities, namely:

Your Brand Idea.

The idea is to create a brand, i.e. Your Brand. This will therefore be reflected in all your campaign materials with similar brand characteristics. These characteristics include, but not limited to:

· Banners-the banners shall be put on advertising space on PostKenya.com. In the banner shall be your picture and your vision in very bright and recognizable colours and your website too.

· Text Ads-these text Ads appear on different sections of our PostKenya.com mailing service.

Sizes available for Banner Ads

1. 468 by 60 pixels
2. 360 by 280 pixels
3. 798 by 90 pixels
4. 120 by 600 pixels
5. 160 by 600 pixels

Due diligence report will be updated here.

The Co-operative Bank IPO is here with us. From Thursday October 30, the bank is inviting you to make an offer on the 701 million shares it’s offering to the public in order to raise Kshs6.7 billion. Unlike the Safaricom issue, it is not a privatisation where the main shareholder has chosen to get out. Cooperative Bank is seeking to raise money to invest in expansion.

Under the Banking Act, there are limits to the amount of money a bank can collect from the public in terms of deposits. Indeed capital-to-deposits ratios restrict the level of deposits, which a bank can collect from the public. The Co-operative Bank of Kenya is at a point in its growth curve where it cannot engage in any meaningful expansion and growth without a massive capital injection.

The more that bank has in terms of share capital the more it’s able to do business with ease as it can lend more. This translates to a better P&L (profit and loss) and hence good returns to its shareholders.

However, even as we discuss the merits of the IPO there is widespread fear that this initial sale might not achieve its goal, at least at this period in time. Who will subscribe to the offer is the big question especially with skittish Kenyans who form the bulk of retail investors.

Co-op Bank IPO is tied to Safaricom’s in the sense many investors have learnt a few lessons albeit not positive. The success of this IPO will hinge on how fast Safaricom investors are willing to forget the bad experience. Many retail investors, and who make IPOs lively, have not forgotten that barely six months into trading Safaricom share has shed 30% of its listing value.

In addition, analysts are predicting a bumpy ride for the mobile phone shareholders, as more investors are willing to offload the stock at any price. This has been witnessed day in and out as supply exceeds demand even as the price goes below the listing price.

Investors have not forgotten the problem with the refunds. Some lost theirs through the confusion while many complained of the process having taken too long. Who can forget the queues snaking in Nairobi streets and the shoving and jostling as investors made their applications?

But what pains most investors is the expected profits which didn’t materialise. Billed as the largest IPO south of the Sahara, there was false optimism that the share would hit a high of Kshs15 and make a new breed of millionaires, just like the KenGen IPO did in mid 2006.

It is not only the retail investors who had misplaced their ambitions. Financial institutions led by banks came on board to finance its customers and are reaping big. And with the share below the listing price, there is widespread panic from all corners as banks try to readjust their non-performing loans in line with the new reality.

Going into the festivities, there is some feeling on the ground that investors might choose to forgo the IPO in readiness for December holidays and January school fees commitments. This argument does not hold water. Despite the high rate of inflation Kenyans are still engaging in their favourite past times i.e. drinking and partying. Money then is not issue. What should be on discussion is how much investors will afford to put in.

Safaricom’s shortcomings are a positive for Cooperative Bank. As of today, no bank, even Equity, has indicated any plans to finance the IPO. We are then going to see only serious investors as opposed to Safaricom where financial institutions went out of their way to dole cash to investors.  And serious investors are what is needed to streamline the Nairobi Stock Exchange.

Many retailers who got in did so for the simple reason that money was available. We can relate this to the speculative attitude adopted by retail investors since KenGen days.

Perminus Wainaina is the CEO of Concept Advisory Services, an investment adviser and stocks agent for African Alliance. He can be reached at perminus@conceptadvisoryservices.co.ke

3:08 PM on Sep. 18, 2008

The launch of Orange brand by Telkom Kenya yesterday at KICC ground is a milestone in Kenya telecommunication industry and specifically mobile telephony sector. According to the Chief Executive Officer of Telkom Kenya Mr. Dominique Saint-Jean, the company now offers several services in one package, with unrivaled value and simplifying the customer experience at competitive prices .

The launch might be the easier part considering the landscape they have to cover in order to gain even 10% percent  of the market shares. Kenyans have a queer calling habits, at the time when Michael Joseph said that most people thought it was a joke but new entrants into the mobile telephony market would ignore this at their own peril. There are a number of things which differentiate Kenyans from other breeds of humankind.

1. The close ties and expectation of the people around us
2. The unique sizes of the families, ok am talking about  how extended is the extended family is
3.   The need to fit in certain class or status. I know most of you will say no to this but truly speaking Kenyans are very class conscious  people
4.  The deep caring mentality of the close friends
5. Love for free things, to be fair let just say cheap things
6. Extraordinary loyalty to specific brands

Taking all the above and you get a unique brand of people with unique habits.

For Orange brand to succeed Telkom Kenya should be ready for epic battle and the followings might come in handy:

Price:

The company should let accident a happen in the mobile calling charges. A dramatic lower calling charges specifically in cross network calls will surely shake up things and having said that Kenyans like free things  or almost free, this will definitely makes them turn and look at the Orange direction. There some fundamentals to be taken care of as far as the pricing is concerned but adopting current revenue maximization as well as quantity maximization would be the best way to go at this time. Orange calling flat rate charges of Ksh.7 per minute for all calls between Orange Mobile, Orange Fixed Plus and Telkom Fixed is a good point to start. But the key here is cross network calls and let me explain why.

People buying lines or phones for the first time consider which network does the majority of their friends and family have to make decision. At the moment with high cross network call charges the new subscribers would consider who they will call frequently and if for example most of these people own Safaricom lines then that seal the deal very easily. Lower cross network calls charges would mean that the decision for new subscribers and even existing ones would not be based on their friends and relatives.Truly the future might be Orange but without considering this most people will buy the lines and keep them in their pockets for calling a few people on the network.

Creating Customers advocates

This a secret weapon most people don’t realize Turn your customers into advocates and keep them on your side  before the competition does. Customer advocates are the key to fueling growth and staying ahead of the competition.  Deliver the perfect customer experience with the right product assortment, and they’ll come to you. Creating customer advocates in a larger aspect is more than just a reward programs. By the way talking about the reward programs Kenyans love them, just look at how many people listen to Classic 105 in the morning to know where the Classic105 Zain man is and you will understand what am talking about.

Excellent Customer Service

One thing most customers hate is the fact that when they have a problem they cannot reach the service provider due congestion or sheer number of people calling at that time and  thus the line is infinitely busy. For heaven sake if you are service provider you have the liberty to create as many lines for your customers to reach you as possible. The reason most of them don’t do this is beyond my pay grade. During the launch of Orange brand the Chief marketing Officer of Telkom Kenya Njeri Rionge eloquently assured the public that all aspects of their customer relationships will be improved and for that most people on the street will say amen.

Cutting age innovation and mixing things up

Lack of innovation. Some businesses never change, but they lose their market share when a new company comes along with a new way of doing things. Take motorola for example. They stayed the same, it was comfortable, and they didn’t see Nokia coming. And bang goes their market share as millions of their loyal customers traipse off to fill their trollies with modern and affordable stuff. Well that might not be the case in the Kenyan market with with innovation driven giant like Safaricom leading the way Orange has to do more than enough. That is why they should mixup things and let innovative accidents happen and the management should ensure they notice potentially useful accidents.

Clear Marketing Startergy

The TV ad war taking shape in Kenya is expected to intensify in the coming months and with Iconet also expected to launch their services soon, it is going to be titanic battle. But could it be that Kenyans are TV ad resistant. I mean we notice the ads for its entertainment value but for not for what the extended purpose is! If that is the case then a strategy change is necessary. More so in terms of how to pass the message to the public.

Ladies and gentlemen could Orange brand be the best thing to happen to Kenya since the coming of Bamba 20?

Author: Kennedy Kachwanya

Website: http://www.whive.com/blog.php?user=kachwanya

The problem of NSE continues with shares prices heading South most of last week. The question on the lips of most commentators is how much worse can it possibly get. Increasingly last week, all too many seem to be pointing finger at the shear number of Safaricom shares plus some hidden hands which might be manipulating specifically the Safaricom share prices.Take a look at the following:

Geoffrey Irungu wrote in Busines Daily “As Safaricom’s share price decline drags down the total board at the Nairobi Stock Exchange, and the fortunes of hundreds of thousands of Kenyan investors” he continued to note ” Since its debut at the bourse, Safaricom has declined by a third, faster than the market average of a quarter, —implying there is more to the share’s slide than the prevailing bear at the market.”

Ng’ang’a Mbugua wrote in Daily Nation “Share prices are low, so why are we not buying?” He noted that when the  prices fall in NSE, the investors run away but sprint back when the prices begin to go up. The result is that many small-scale investors end up buying overpriced stocks and often lose out when the prices decline “to correct themselves” as experts say. Yet they could make more money by buying when the stocks are cheap.

Washington Gikunju writing on Business Daily took a dig at the fact that the banks might be the first victims of deepening prices of the Safaricom shares “Many financial services sector observers fret that the banks doled out too much money after lowering the requirements to the bare minimum. All that was required for collateral by most banks was evidence that the borrower was an account holder with the lending institution.”

If you are an investor in NSE take it easy and breath deeply. You have just survived the worst bear run seen in Kenya market history. I know the gut feelings of most investors at this time is to dump their shares and get out of the market. Well i will tell you not, because you might justify the theory that most people tend to give up when they are just three feet from gold.

Before the listing of Safaricom shares Prof. Anyang Nyong’o warned that the Safaricom shares were overpriced. Being an electioneering period his warning was taken as political brinkmanship. Actually it was the most politicized IPO ever with former finance minister Mr. Amos Kimunya once told Mr. Raila Odinga then ODM presidential candidate that Nairobi Stock Exchange is not a fish market. So with Safaricom shares it might be a case of proper adjustment.

The good news is that by all possible angle you look at it we have reached the bottom of this bear run and sooner than later the stock market prices will start rallying upwards. The factors which have been driving cost of living are cooling off. The oil prices are falling in the international market and we expect them do so in Kenya. The rate of inflation is going down and the liquidity problem which gripped Kenya in recent months seems to have been solved.

Author: Kennedy Kachwanya

Website: http://www.whive.com/blog.php?user=kachwanya