Tuesday, January 30, 2007

refreshing news

the new high school kids have slowly started reporting to their schools. normally on every occasion when this happens we hear a lot of stories about kids with very good results who cannot get to high school. some do not even have fare. indeed in an earlier post i had mentioned that we had teamed with a group of friends to support at least one such girl. am happy that 'our' two pioneering girls will be joining high school today. one is going to a national school and the other is joining a provinacial school. however what has encouraged me more is the palmhouse foundation which has organised sponsorships for 40 students from needy families all over the country. and also in the nation today i read of a story of one michael ouma of ukwala secondary who is going back to school courtesy of the generosity of very many kenyans who are totaly unkown to him. that is better news than all those querels on elections, succession and associated activities. it makes me hope that finally kenyans are having a 'Kenyan' dream. encouraging those who are challenged and loving success stories like the americans do. hitherto, i always felt that the kenyan dream was only to see their tribesman/woman occupy statehouse period. whether such occupation added sufurias of ugali or not the kenyan was happy. and indeed they were ready to sacrifice their very life for 'one of them' to occupy the house on the hill.

however this other news is not as flattering. i met a friend who works in a brokerage firm. and he told me stories of how they made money with sameer, kplc and eac. nay they did not just buy low and sell high. rather they did a spirited campaign to have those shares sold at high prices. basicaly it involves lying to clueless investors about fictitious impending splits, bonuses, acquisitions and so on. those investors are not simple investors but rather high net worth individuals and institutions whose orders have the capacity to make share prices rocket. i dont when that starts becoming a crime so that CMA can act but it only reaffrims my earlier tips that a stockbroker cannot and should not offer you any advice on which stock to buy.

and is it real or was i hearing my own things? the NSE chairman suggesting that MSC shares be split to make them affordable. anything funnier than that? but some brokers are reporting that actually a bonus issue has been declared and MSC is only waiting for experts to advice on how it can be done. other brokers are suggesting that kplc is due for a record 22 for 1 split!

meanwhile the youth fund is out and even though it sounded hogwash at first, i agree with the minister's decision to start the loan at 50K first as pple get trained on how to us it. makes little sence doesnt it?

odegle tip of the day ... when the stock market becomes unpredicatable , try the bonds market. the investments are risk free


  1. hi odengle
    dont b suprised with these guys, they r out to make money at any cost.
    by the way wat is ur take on e a cables? has it reached its peak or can it rise again considering they double their profit? are we in for a bonus?

  2. i was surprised actually i was scared by jimnah mbarus suggestion regarding mumias. im conviced the current leadershio in CMA or NSE are not going to make changes coz thinsg are rosy for the most changes come about due to adversity.

  3. anon... if you look at the fundamentals then you realise that cables is not a very good buy. the P/E ratio is sitting at 47! in fact i think that cables has not even reached its peak. its supposed to slide further. however there are only 200K shares out there. compare that to kengens 2 billion and you can speculate that the price can still go up. coupled with the fact that the firm is controled by pple close to power. meaning that they can easily get major contracts. for example if kenya decides to go it alone on the fibre project then i suspect EAC will be awarded the tender on a gold plate. however if you analyse it technicaly, you realise that given that safaricom and kenya re are coming to the market in a big way, most stocks may not rise in the near future. since most pple will be liquidating to prepare for those major IPOs.

    i have not yet quatified how much elections will affect the market but there is a rumour that the snap election thing is more of an investors initiative than politicians. investors want the election to come early and be done with so that the party can continue

  4. to say the truth i have not yet digested what Jimnah was driving at. however i remember that the proposal was made last year to increas MSC share capital 5 times. one easy way to do that is split. the other is through a bonus.

    the problem at the NSE is that the regulator, the foreseer and the broker are one and the same person. how do u prevent conflicts from arising in such cases?

  5. Odelge, you forgot investor-Mbaru is an investor via G-29, but also D&B being a investment bank means they can do proprietary trading.
    On share manipulation, going on big time.
    MSC-well, as Jimnah would know, there are many ways of giving investors access. The govt could offload more of its stake and make MSC a private entity. Or a rights issue which I think MSC will do anyway to finance some of their projects.

    IPOs, i am really hoping the CMA/NSE spaces them out kidogo so that we have a couple every other month unlike Dec when it all happened at a go.

  6. mainat ... cant agree with you more. in fact i had complained earlier about the pace at which IPOs are being done. its like there is no tomorrow. i have this feeling that safaricom IPO has the ability to crush the market if not managed properly. if kengen issued 2b shares what prevents safaricom from issuing like even 3billion or more? given its relative success, safaricom will attract more takers who will sell their other shares for a piece of the action

  7. I was told by the CFO of (listed firm) that they were being pushed to announce a bonus &/or split by brokers.

    The CFO was emphatic that they saw no benefit for them as a firm to split the shares except additional costs.

    Most shareholders had been shareholders for years & were happy with the high dividends over the years.

    mbaru is being GREEDY. It is better to buy 1 Mumias share at 42/- coz there is more VALUE... than buying after a 5:1 split where 10/- = 50/-...

  8. I think D&B 'underwrote' the Mumias Offer OR bought to speculate & is losing 7/- per share so is CRYING...

    Buy announcing a split, the price can rise & then D&B will dump!

    Odegle - Safaricom IPO will NOT crush the market. It does not matter coz the FUNDAMENTAL price will rule. The high priced stocks will fall in price!

    At the end of the day... VALUE will win! It amuses me when KQ is at a P/E of 10, while EACables has a P/E over 30!

  9. Coldi ... so it really is true that its the brokers who are driving this market at this pace! that causes worry since not many CFOs are as strong as the one you have mentioned.

  10. I agree, Safaricom and all those others should come after this year. CMA, NSE etc should first be cleaned up. Everything is now mixed up. We thought some politicians were being unfair when they warned that in the end tutaumia. We thought it was tribal. Now we know better. Am from Central Kenya but God forbid, never, ever again will I limit my judgements on politics and tribe. There is more to it all and the government has to start listening to the opposition. They have marginalised people but to ignore National leaders, seriously, it's a shame. Kalonzo, Raila, had a point in it all. Its all so crazy. Who will stop these greedy leaders from messing the economy, if even other leaders can't. What's the emergency? Why should all those coorporate IPOs take place now, during an election year? It's all so messy. CMA, NSE should be cleaned up and the government should listen to other leaders. I agree 100% Safaricom should not be out until we know who mobitela are and other factors are dealt with. Surely, it took two months to get eveready refunds back, as CBA used our funds because of inefficiency and we want to bring other goverment owned firms into the mess. Something must be done. Anyone who can has access to those leaders, please let them know that they must not give up in demanding that the government should stop treating public property like their private property. It's an election year and CMA and NSE are still so messed up, not to mention the brokers.

  11. anon i agree with you. when it comes to money you cannot afford to think tribaly! is it more painful when a stranger steals your money than when its your cousin? bottom line your money has been stolen and you need to get angry. if this holds then we can safely say that we all need to gaurd our investments very jalously no matter who holds the reigns of power.


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