Wednesday, February 28, 2007

5 bad news

the market is today quite depressed, taking a peak at the numbers via eight you notice that the prices in almost all the counters are heading south. there could be many reasons attributable to that. but apart from that there have been some really depressing news this past week

standard reported yesterday on the ills of the automated system. the misuse of the same. riba capital also commented on it extensively. today Jaindi Kisero has also talked about it. funny thing is that kenyans are only raising eye brows when things are getting thick. in my very fast blog i suggested that the rise and rise of EAC was not 'normal' but i guess at that time the grass was too green and too grown for anyone to notice

the second news is the report by UNDP about the poverty index in the country. standard said Kenyans dying young and poor, UN report while nation talked about the big divide. why do i find these statistics disturbing, because 1. they showed that like the NSE every region has become poorer apart from nyanza which has become richer. Nyanza is still the second poorest but that was the only region that showed growth. nyanza ,western and NEP lead in poverty. the greater nyanza has always voted with the oposition and have always been 'punished' for it. Western and NEP have always been in govt and western have had 3 vice presidents in 6 years. the thinking in kenya is that its ok if the leaders 'eat' for you. but what i find more depressing is the fact that the overall poverty is higher than 50% where did the 5.8 economic growth go to? i suppose it doesnt add the number of plates of ugali as moi adviced.

3rd bad news is starehe toping the KCSE once again. it just points us to the above. i find it unacceptable that one school continues to dominate proceedings year in year out. its also embarassing that 40+ years on, very few new centers of execellence have been set up in the country. for us to have equitable distribution. one of the funtions of CDF should be to set up one centre of academic excellence per constituency or better per district and at least 2 national schools per province.

other news indicate that Forest Whitaker won the oscar for his potrayal of Amin in the last king of scotland. ok give it to him, he did it extremely well. looks like for you to win if you are black , you have to perform beyond any reasonable and unreasonable doubt. i found the movie hard to watch. the african was potrayed as brutal,stupid, and beastly. (maybe am even being unfair to beasts)

last bad news, i met a director from holywood, in nairobi. incidentaly after watching the last king. he is in town to work with a local NGO on something they are calling development through media. and to develop the local movie industry. i asked him if he knew about nollywood, he didnt, what of riverwood; never heard about it and his local experts didnt know either. so how will they develop the industry they know nothing about?

Tuesday, February 27, 2007

Ponzi warming ponzi warning

Last saturday i went to the home and living expo at the sarit centre. unlike other home expos this one was free entry but the exhibitors were quite few. the most striking was the dubai real estate investment schemes. investors were required to pay a deposit of 3.5 million Kshs to book the investment. and own a piece of dubai. believe it or not, many kenyans were lining up to take up the investment. the dubai houses were looking heavenly, its looks like these guys have really put their imagination and creative to concrete or is it glass? moving on there were other 'common' exhibitions but another place i found interesting was hfck , they could not answer me why they charge processing fees. like i have argued before i find it akin to paying for customer service. they also could not tell me why the processing fee is a percentage of the value of the loan. does it mean the bigger the loan the harder it is to process. doesnt the computer just follow set logic? but while i was 'complaining, KCB had sold all its simba villas in emabakasi. ok they were sold way back even before the expo. so i suppose they only came there to show off. and the pple around me found that very shocking. one person asked how is that posible. coz the lady at the stand said most guys had paid cash. 4 million cash! yet they hadnt moved in. another person volunteered that it was because of the NSE, a third said it was because of the wise leadership of kibaki hence the economic growth. but someone insisted that it was due to DECI, he promised us all that he would join DECI the following monday to enable him buy houses on the fly like that and even invest in the real estate in Dubai!

i think it was at the same time that DECI was evolving into CLIP, SASANET,PESANET and even INVESTOCK and also it may be the same time that CBK was drafting the warning letter to the 'owners' of these schemes. unfortunately this comes after the schemes have really run deep.
but ponzi schemes really and truly 'work' for the initial investors, but someone is going to burn fair and square. problem is how do you know you are among the first?

easy way out is to remind yourself that nothing comes from nothing. nothing ever could like in the sound of music.

On a lighter note the nuns at Lwak girls catering college has given the girls a unique punishment. after one of the girls was tempted to steal one piece of chicken during a practical,(those girls have a standard menu of githeri for lunch and ugali-mboga for dinner) all the 40 girls were sent home to go and come back with two live chicken. some girls went and came back with young or female fowls. these were sent back because the headteacher said the punishment required the girls to bring 2 jogoo (thwon) and not the famale also called in these parts as gweno ma sii.

odegle tip of the day ... it helps to read wide on any subject before investing in its area. it helps to find out all the information about an investment before commiting your hard earned money.

Thursday, February 22, 2007

breaking news

just got the sms news breaking that safaricom has lost the interconnect charges case to celtel. CCK has ruled in favor of celtel and capped phone charges at 30 /= . now the battle begins. but am sure safaricom can use its might (they control 70% ) to wipe celtel from the face of the earth (kenyan part of earth actually) however whichver way celtel has bloodied safaricom's nose!

were the BBK results good? no they warent considering the hype. they have also retained quite a substantial profit for expansion. but why expansion, why not improve the quality of the services on offer first. and will this expansion biashara hold when equity's bubble eventualy goes burst? i thot BBK would have concentrated more on new products eg mortgage, insurance, sme credit and so on as well as money trasfer.

Bankelele used to give us some very useful insights into the banking industry. dont know what happened that he lost steam unless he has also started liquidating his assets in order to 'stand'. i have been wondering whether we can have legal recourse against him since he didnt wean us of this. however , its interesting that banks were the sector that was expected to announce very good results due to the high liquidity experienced last year. but wait. i thought liquidity in the bank is a bad sign. i would love to hear the thots of fellow bloggers as far as the industry is concerned.

Monday, February 19, 2007

of goodwills ...

it was when i was class six that the govt of nyayo introduced the business education as a subject in primary school. it was an elitist subject which you could only take once u reach class six. later the govt trashed the subject for unkown reasons. anyway, that was when i heard of the word 'good will' or are they two words. the likeable teacher explained good will as the value of a business entity not directly attributable to its tangible assets and liabilities but which derives from factors such as consumer loyalty to the brand. i always knew good will to be just that. it was until i went to nakuru that i discovered that good will was not only that and could also be paid for houses. in fact it was being paid for munispal council houses. the houses in kabatia II also called section 58 are on an almost 1/8 acre piece yet the rent is only 1300,(most tenants keep upto 4 dairy cows in the compound) the rent has been that way for as long as i can remember. needless to say those houses which are very near the road (or on tarmac as nairobians are wont to say) and also very near town are hot cakes in nakuru. everyone wants to live there. the last time i was there, to get the houses, you had to part with 50,000 /= 'good will' payable to the incumbent before you go to the council offices. however nakurians did not mind that figure and there was always a very long line of pple willing to pay that amount. but that was almost 7 years ago. right now the same 'good will' is going for between 250,000 for a one bedroom house to 300,000 for the 2 bedroom ones. and they are not available! you wonder why the council allows that kind of business.

but elsewhere in nairobi, instead of creating 'good will', businesses continue to confound me with their customer service or lack of it thereof. one service which the city council has failed to provide is public toilets and in the late '90s it was the most lucrative business venture. many pay per use cubicles poped up. i always found it ridiculous. but they not only did well but were fast copied all over the country. the most confounding to me was the one at the Holy Family basilica, talk of milking faithfuls, after tithe, and offering, the poor faithfuls have to cough 5/= each time they have haja ndogo and 10/= for the other one. however last week i got a shock of my life when i saw at nakumatt lifeftyle (..NAKUMATT of all the people!) had placed a young girl just outside the loos to collect 10/= per entry. so where does customer service start and where does it end. isnt it these small conviniences that help bring the human traffice that businesses crave for? at unga house in westlands, i heard the business owners are complaining that human traffic is not good and are therefore thinking of vacating the premises en mass. elsewhere, others are trying to stem the flow. unspeakable

ok away from matters loo to matters oooh! just as expected, sameer seems to have annouced an abominable result to which the market has responded by lowering the share price of the tyre manufacture to a low of 12 bob down from a high of 38 posted just 2 months ago. in fact at that time it was expected to 'head north' to the land of cables and city trust! i have not been able to download the results from nse website though. and the sameer website also dont have then. NSE has only posted the icon for the results and not the results themselves.

odegle tip of the day ...ever heard of a ponzi scheme? its probably the easiest way to make money from fools!

Thursday, February 15, 2007

bear run silence

There apears to be a loud silence on the part of the investment advisors of yesteryear. those forums which used to record hundreds of contributions and bullish sentiments are uncharacteristically mum. in fact some 'panelists' have since even changed their usernames to hide identity! looks like it was very easy to advice on what to buy and what will head north, or what will be split. but now with the bear market, advisors dont know what to do with all the shares being offloaded in the market. in fact more bad news are coming as far as company performance is concerned. after MSC announced less than expected results, portland has followed and i heard the sameer MD on radio already blaming cheap imports. that will prepare us for worse results. some time last year sameer was supposed to be the stock to watch given that some club was interested in it. in fact koboro was also linked to it.

but its all good as my friend likes to say, the activities of the NSE have provided quick learning to investors. pple now know that splits do not increase the share price. but rather increases the number of shares on offer hence diluting dividends. also the price gets supressed since supply is higher.

But other factors could also explain the subdued prices apart from what is generaly agreed to be correction. in 2002 jimnah mbaru vied for starehe constituency and lost. if he needs to vie again this year, wouldnt this be the best time for him to consolidate his gains in the NSE and liquidate his shares for campaign money or did he already do it last year. how about those other politicaly correct senior investors of the NSE? just wondering. politics is expensive, we saw Mr. Nguyai of mediplus closs shop after he was trounced by muite. the company jsut couldnt take it.

however if all else holds as we are proceeding right now, then about april wud be ideal time to buy more shares to bottom up the loses and average prices. eg if u bought ICDC for 100 /= and it goes down to 20/=, you will be better off buying some more at 20 /= so that the prices level off and you gain when it rises marginaly . you can also let go at 30/= and wait to catch it again at 19/=

but remember that even at 19, ICDC still is actually 190! so no panic.

in developed markets, you can hedge against this using options. other strategies is to be still and do nothing until the 'dhuruba' passes. or you can decide to go to other businesses like animal husbandry

and talking of animals, yesterday i saw a notice which i only associate with sugar. at nakumatt when they say two kilos per shoper please (why do we normally have shortages when we have that many industries ?)
so at nakumatt they have put a notice 'Two chickens only per shoper please'
which brings us to the first real oportunity of the year. chicken take very short time to mature enough to become dinner. you can therefore liquidate some of your assets, then go to chicken rearing for the short term. by the time the govt manages to control the cow disease (these men are old and wont be able to do it fast enough) you shall have made your millions. best business oportunities are when you have to respond to an urgent need.

odegle tip of the day ... bear runs are normally accompanied by general pessimism. in our case it could as well be just market correction as opposed to real bear run. as demostrated yesterday by kespa, the optimism of last year is very much alive.

Tuesday, February 13, 2007

priceless art ...

I went to my broker over lunch time to collect my stanbic certs and also place some orders for the NSE. good news is that i got full allocation, in fact i think all kenyans got full allocation given the size of the share cert book (actually books, they were 3) on the table. bad thing is that this stock thing has caught kenyans so much that even my investment bank , however hidden they are was packed as always have been since kengen. i had to stand in the queue for long something i never used to do at this bank. pleasantly they have employed more pple (young girls really hehe) but still i suppose the demand is just too high. bad news is that they stil do not have a link with the Uganda Stock exchange and so they cannot help in the trade in the secondary market. they however adviced me to go to dyer and blair when i need to sell. dyer and blair has an office in uganda but i hear that bank is crowded like gikomba. better news, the man ahead of me was a very old man. all white hair and stooping, he had several share certs which he wanted immobilized. he was also applying for a cdsc account for the first time. thats not the news though. the news was that he was asking rather animatedly when safaricom will come as he wants to time the issue so that he can benefit from that cash cow. he was asking how he can ensure that he gets as much slice as posible. ok if Kibaki has failed in other ways, at least his term has excited the market and kenyans in a way hitherto unknown or imagined. in fact behind me was another old woman. these two probably octagenerians were the land chasers of yesteryears but now they want their names in the share registers of some of the most modern technology companies in the country. for that kibaki needs another vote

after thinking about kibaki, i went to see an exhibition at the alliance francais. Patrick Mukabi , Jimnah Kimani and Maggie Otieno are exhibiting priceless pieces to say the least. first i went upstairs to see a photo exhibition being run by reuters. remarkable snapshots. the pictures tell you whole stories. very nice snaps of africa, from an enterprising kariuki in river road who makes faces in bars for a living to amputees playing football in sierra leone, to guns in somalia and so on. very catchy snaps about the negativity of africa. why are internatioinal media houses in love with the negative side of africa? even of kariuki they said in the caption that river road is the most dangerous place in kenya! however the snaps are deadly!

i then go downstairs where mukabi's art is displayed. if you dont know, mukabi art is a unique approach which concentrates on heavily endowed women. women with more than enough behind, large arms and large breasts. mukabi does not do abstract or imagined art, he gets those women to pose nude for him. i need to ask him how he manages to get those women lying naked in front of him for over ten hours and even they allowing him to exhibit their paintings. however the naked women do not appear vulgar and they are a welcome relief from the sad photos upstairs. Mukabi makes you appreciate the detail of the body of a large woman. intimate details. some are however clothed but bottomline, they are big, very big. it makes women jivunia kuwa mnono the cheapest piece retails for 46,500 kshs. along side mukabi, Maggie has displayed her sculpture or old men done on wood. very creative i must say. she has modeled them into CD racks , flower stands etc. they look lovely.

how can u benefit from art work? well you can buy and hold just like the stock market. then sell when the value in the international market goes up. art exchange is big business elsewhere in the world , in kenya am not sure, we only get to see art when there is an exhibition. for instance if you buy mukabi's piece for 46K, hold it for 5 years and it goes to 500K you shall have made some decent quid. picasso's art was not worth a dime when he started but now if you hold it, you can even get shot and robbed of it. such priceless art are better kept in vaults in the bank. and indeed if you look around you , mukabi has started making inroads, look at those paintings at Java coffee house, Club Sound and even Deep West club, you see a lil bit of mukabi there as well. am even told that one of his paintings is hung on one of the walls of the new safaricom headquarters. you get the picture now?

Odegle hats off of the day!!!: we were told politicians are paid to talk and not work. well one indefatigable politician has decided to work for his pay anyway. Raphael Tuju MP rarieda and former chairman of Narc-Kenya has got his italian friends to 'water' rarieda constituency at a cost of 350 million. hats off to the man. since he came into 'power' in 2002, he has built schools, brought elec, mobile 'hospital' with 3 doctors, tarmacked roads and now watered the area.

odegle tip of the day ... apart from stocks and art work, people trade in old coins, old foreign currencies, high quality silk, gold , and other precious metals and stones. the idea is still buy low sell high. however these ones do not have splits, bonuses or dividends!

Friday, February 09, 2007

...of weekends and leisure times

another weekend is here. but this is not going to be a good one. in fact most nairobians are increasingly finding it hard to while away the long weekends. kenyans way of whiling away time had been laid out easily until the bovine disease checked in. hitherto, all you needed was enough quid for 2 kilos of nyama choma, enough for beer and some friends then the weekend would pass unnoticed while you watch premier league on big screen! in fact in hope nairobians will now find a better pastime than eating nyama choma and premier league soccer while the RVF threatens meat lovers away. i always find it boring that departmental get togethers invairably have beer and nyama choma. there are other ways like going to the theatre, nature walks, picnics and even outdoor games. but those are unnairobian.

if you are a nairobian and you dont watch pirated copies of 24 and prison break then you cant be counted. however there are more refreshing DVDs from kenya institute of education. they normally video tape all those drama festivals pieces including dances and all. in fact yu can tell them to customize the DVD for you so that you get upto 8 hours of high quality kenyan music and drama entertainment or watch plays of your favorite schools. that will cost you only between 600 and 1000 bob. if you watch those national fetival winners, you will be shocked (pleasantly) that you are a kenya. it will make you have a reason to jivunia kuwa mkenya!

but on another note, butcheries are for the first time running a promotion. buy 1 kilo of meat and get 1/4 kilo free! RVF has scared all meat eaters and chicken is almost becoming extinct in these parts. i heard fish is going like water. where butcheries were selling 100kilos a day, they can now manage only 20 kilos and so on. however the bovine virus is not letting up and the other day even a vet who performed post mortem on one of the animals succumbed.

Elsewhere, security or lack of it is threatening to roll back all the gains of the kibaki administration. i read in horror that the UN had given its warning on the situation to its employees. this is happening at a time when the UNEP is being considered for relocation to europe. the UN said that the kenyan authorities did not have the capacity to deal with crime in the country. probably what we lack is the will. the other day, the police commissioner came on TV and he kept on going on and on that they are understaffed and under equiped thats why they cant stop crime. but the last time i checked, policemen with guns were arresting pple as young as 16 for not having ID cards! if they were truly understaffed, you would expect the commisioner to put them to better use than looking for pple manga mangaring. i know in the slums , young pple are sometimes arrested on the way to or from the duka sometimes carying cooking fat or unga. while thugs are killing pple on the roads. on another note, i wanted to ask Ali, who appears to be a gentleman, why he accepted the appointment even though he knew he did not have the training or the experience for the job. but i couldnt get through. in fact i wanted to put it to him that his being plucked from a diff force caused morale crisis in the police force. because by that, Kibaki was sending a signal that he did not have confidence on anyone else in the police. time has come for africans to take self responsibility. u dont just take up and job and sit on it for the sake. if you cant do it, leave it to those who can.

but while that was going on, the NSE was experiencing a beating and pple were fleeing like mice from a sinking ship. good news is the bottom seems to have been hit and the motion is back up.

odegle tip in a long long time! --- huge capital gains are more likely in less developed and unstable markets like USE and even zimbabwe. high returns do not necessarily mean better economy. the high risk high return principle is really true. the ugandan bourse is doing quite well as in the kenyan counterpart. short term falls should not worry you unless yu see a reall danger like war, or increased cost of business.

Tuesday, February 06, 2007

points, points and more points

this entry is rather late. i should have posted it when safaricom launched their bonga points sometime last week. or was the other week. there is just something about loyalty programs. i know KQ has one ans so does nakumatt. in fact for me i enjoy shoping at nakumatt only for the points. i always feel like am getting back something in return for my purchase. safaricom has however decided to be more generous and are awarding their subscribers 1 point for every 10 shillings. (nakumatt awards 1 for 100) safaricom promises to have in place a very robust and exciting reward program once customers acrue enough points. thats very nice to hear. with nakumatt points i have ever bought shoes, clothes and even done some shoping for myself. how is that for discounts and reward. right now i discovered that they have included mobil filling station as part of their prgramm so when u fuel at mobil you get awarded points though at a meaner rate of 1 for 250. other good things of such programs are that they help u quickly find out how much you are spending on certain things. eg if you find that you have 5,000 safaricom points at the end of the month, you may not want to rejoice since it means that your monthly expenditure on calling is 50,000!

well if that 50,000 translates into some good business and/or benefits then you dont have to worry.

Be that as it may, february which is world reknown as the red month of love is here. and since the NSE is sliding anyway, you can take a break as suggested by 'panelists' in stockskenya and take out your significant other. that doesnt mean breaking the piggy bank only. it may mean selling your kengen allocation or your priced eabl shares to treat her. (its always her isnt it?) trating a lady does not come cheap. but the panelist who brought that up got her fair share of criticism. but give it up to the lady, women actualy are the ones who make the world go round forget the sun. galileao lied!

elsewhere investors are trying hard to find what to make of the erratic behavior of the NSE index of late. it went up early january when everyone expected a downturn and even crossed the forbidden 6000 point mark, only for it to come tumbling down on a free fall akin to the fall of a dictator. but if you have watched migration of gnus in the maasai mara then you would not be suprised at the behavior of the NSE.

Monday, February 05, 2007

....Elections Elections Elections!

I hate elections and elections years! already as expected for each election year, the security aparatus has collapsed. basically normally during an election year everything collapses. the day that the two americans were gunned down , i was at nairobi hospital. in fact when i arrived, they had just been brought and there was heavy american presence . the presence was so heavy that normal operations were paralysed. it took 3 hrs for the doc to see me. i was told they were busy tending to the dead americans. a sombre mood engulfed the entire hospital. one thing i remember the doctors whispering to me is that she found it sad that someone should die without being sick. and that our security was really bad. i felt a lot of concern i her voice and thought that kenyans had woken up to the fact that security and other things are really need urgent attention.
eventualy i got to see the doc and got my medicine and left.

in the evening news, the minister for internal security was on adressing several provincial admin officers. i moved closer hopeful that he would utter those magic words but no. he was telling the chiefs to toe the govt line! that they must reciprocate by making sure that govt critics did not have their way. such a big oportunity to reign in on criminals had just passed. in fact since thugs some as young as 14 years started killing police officers and robbing pple by the day, the hon minister has said nothing. even the head of state has said nothing, not even the police commisioner. and now last evening, those thugs killed one of the leading researchers on HIV/AIDS. i still dont know if the kenyan govt knows what we have just lost due to insensitivity to administration by allowing young pple to play around with guns like that. bt its really worrying. when kibaki was campaigning, he promised security of kenyans to be top priority. well it doesnt matter anymore, the old man is such a liar that he denies every thing he ever said.

but wait what did kenyans think? if a man can lie to his own friends and collegues how much more can he lie to those he doesnt even know. the pumbavus? in fact i know that an unwritten law among men is never to betray a felow man and never to renege on a gentlmans agreement . this law carries the same weight as never touching a a friends wife!

in fact due to the elections, the NSE has really taken a beating and i suspect that if safaricom is floated this year in this situation then the float may not be good. a friend from one of the brokers hinted to me that they are lobbying the president to call early elections so that we can go on with our money making lives! apperently most brokers have it cast on stone that kibaki will get reelected so the sooner he gets his reelectionthe better for the bourse.

for me whichever way, i would like this election thing to pass before we all perish