Top News

Ideas & Debate

Life

Page 3

Page 9

Page 27

How to win the war against

graft in tax administration

Erroneous credit reporting

due to lax bank processes

MONDAY, JUNE 6, 2016

NO. 2366

Keosene tax
incease looms
as MPs ght
petol dilution
BY EDWIN MUTAI

Parliament has recommended a steep

increase in kerosene taxes to eliminate its use in the adulteration of
petroleum.
The move is bound to hurt poor
households that rely on kerosene to
cook food and light up their homes.
The punitive move was taken after
the National Assemblys Energy committee learnt that Kenya has lost 100
per cent of the Rwandan petroleum
export market and 30 per cent of the
Ugandan market because of rampant
adulteration.
The committee said Kenyas loss
of its share of the fuel market in the
neighbouring countries to Tanzania is
mainly the result of pricing dierences between petroleum and kerosene
or diesel. Tanzania has same prices
for the three commodities.
The pricing is because of the difference in fuel taxes for diesel and kerosene and we should therefore consider reviewing it, Jackson Kiptanui,
the vice chair of the Energy committee, told the Budget Committee, while
presenting the 2016/17 budget report
for the Ministry of Energy and
Petroleum. Mr Kiptanui said Kenya needed to make KEROSENE, Page 4

Ways to get employees

to take responsibility

WWW.BDAFRICA.COM KSH60 | TZ SH 1,700 | UGSH2,700 | RFr900

Rotich moves to ceate single

collateal egiste fo banks
Move aims to make
it easy for borrowers
to transfer loans
from one lender to
another and cut costs

BY GEORGE NGIGI

Treasury secretary Henry Rotich. FILE

The Treasury has published a Bill creating a single electronic registry for motor vehicle logbooks and other movable
assets used as security for bank loans
aiming to make it easier for borrowers
to maximise the use of such collateral.
A centralised registry is the governments answer to the diculties facing
borrowers seeking to realise full value of

assets that remain in the hands of one

bank they borrowed from in the past.
Borrowers, who currently use motor vehicles as security, for instance,
have to transfer ownership of the car
to the bank and deposit the logbook,
which is evidence of ownership, with
the lender.
The cost of transferring car ownership at the Kenya Revenue Authority
COLLATERAL, Page 4
(KRA) registry

CANONISATION
VATICAN CITY
Pope Francis
leads a mass for
the canonisation
of Blessed Maria
Elisabeth Hesselblad
and Stanislaus of Jesus
and Mary at St Peters
Square yesterday. The
leader of the Catholic
Church said the two
new saints showed
the power of Jesus
resurrection.
AFP

NEWS INDEPTH

Pages 12-13

Ericsson Kenya staff

seek retrenchment terms

Survey: Business owners

frustrating impatient heirs

NSE retreats as foreign

investors cut trading.

Kenya Power has signalled a row with

Kenya Electricity Generating Company
after insisting it will not back calls to
increase the price at which the electricity
distributor buys hydropower.

Kenyan employees of global electronics

giant Ericsson have demanded that
the company discloses to them names
of those who will be affected by an
impending retrenchment.

Page 5

Page 7

Less than half of family business

owners in Kenya have plans to
hand-over their companies to
the heirs-in-waiting, a study by
nancial consultancy PwC has
established. Page 8

The Nairobi Securities Exchange

(NSE) has retreated by 5.5 per cent
over the past one month as foreign
investors reduced their trading
leaving 15 of the top 20 largest
stocks in the red. Page 19

BRIEFING

Mental illness: The silent

battle for millions of
Kenyans

Kenya Power rejects bid

to raise power tariffs

BUSINESS DAILY | Monday June 6, 2016

TOP NEWS

Benchmak with pees, foum tells small entepises

TOP 100 Editor challenges entrepreneurs to

participate in annual survey to build networks

about the taxman, he added.
Mr Rapuro spoke on Friday at SerSmall and Micro-Enterprises (SMEs) ena Beach Resort during the Mombasa
should benchmark with their peers County launch of this years Top 100 Midfrom other parts of the country in order Sized Companies survey.
to improve their systems and upscale
Out of the about 1,000 entries that are
standards, Mombasa-based entrepre- submitted for the survey which is in its
ninth year, there are thousands more out
neurs have been told.
Participating in the annual Top 100 there who stay out because they cannot
Mid-Sized Companies survey would stand the test of scrutiny that goes with
enable them to reap the benets of net- the survey, Mr Rapuro noted.
working with people of similar goals and
He, however, said those who have had
make them part of a network
the courage to come out in
that oers members invaluthe open have gained from
able insights in the world of
the survey, including increased media exposure, high
enterprise, Business Daily
Companies
managing editor Ochieng
with thee-yea level recognition by partners
and consumer trust.
Rapuro said.
Mr Rapuro said a number audited accounts
An initiative of consultof promising businesses were
have put thei ing rm KPMG and the Nashying away from entering
tion Media Group, the surpocesses in
the competition fearing visits
vey tracks SMEs with annuode
from the taxman, a fear he deal turnover of between Sh70
scribed as unfounded because
million and Sh1 billion with
OCHIENG RAPURO, MANAGING
participants are compliant
those exceeding the Sh1 bilEDITOR, BUSINESS DAILY
with most of the tax agencys
lion mark joining Club 101.
demands and ready for scrutiny
Rose Lutta, the NMG marketing direcOne of the requirements for partici- tor, said the survey proles and celebrates
pating in this survey is submission of excellence in the SME sector, which acthree years audited accounts, meaning counts for more than half of the jobs in
compliance with one of the most impor- the country.
tant tax obligations, he said.
As organisers of the survey we felt
Companies with three-year audited it is important to showcase, to motivate
accounts have put their processes in or- and to grow the number of people comder after being audited by a member of ing into the SME market and we will conthe ICPAK (Institute of Certied Public tinue to give them an opportunity to grow
Accountants of Kenya). I think these are their businesses, she said.
the people who should be less concerned
The survey has also launched a marBY GITONGA MARETE

Local entrepreneurs and business leaders listen to a presentation at Serena Beach Resort during the launch of the Top 100 Mid-sized
companies survey 2016 in Mombasa. WACHIRA MWANGI
keting portal for participating, the Top
100 Market Place, which will be used by
companies to share information and experiences, she added.

Success stories
Last year, the survey ranked top a Mombasa-based pharmaceutical company,
Pharmaken, co-owned by two directors
Samier Muravvej and Leonard Njagi, as
the most innovative and fastest growing
company.
The 2016 Survey which was ocially
launched on May 17 is scheduled to close
on 31 August with data collection from interested companies having commenced

on May 23.
Those attending the launch got to hear
from their fellow entrepreneurs including Dr Muravvej.
Other entrepreneurs who shared their
success stories were Mohammed Jama
of Logistic Solutions Ltd, Julie Munyi,
(United (EA) Warehouses Limited) and
Ivan Patrick De Souza of Coast Industrial
& Safety Supplies Limited.
Participating in the survey last year
when we were ranked 29th was an exciting and wonderful experience for us and
what I would say is that as a company, we
will never be the same, said Ms Munyi,
the operations manager at United (EA)

Warehouses Limited.
Entrepreneurs who have been recognised through this survey have attested
to how this recognition catalysed transformation of their businesses as an avenue that positioned them to strategic
investment or acquisition.
Some of the benets that these Top100
companies enjoy are forums that are
hosted by the sponsors of the survey
in addition to those by the founders
KPMG and NMG.
The forums support networking and
building of relationships which are key
to every business.
gmarete@ke.nationmedia.com

Centum releases full- year results

TV providers as fans look to get a piece of

the football action.

What is making news this week

Monday, June 6, 2016

PKF Kenya pre-budget tax brieng

PKF Kenya will hold a pre-budget media
brieng to address various tax issues related
to the budget proposal. Among the issues
the 2016/17 budget is expected to address
is the directive by President Uhuru Kenyatta
exempting low income earners from paying
taxes on bonuses, overtime and retirement
benets.

Mkenya Daima initiative brieng

The platform that brings together different
stakeholders such as the private sector, civil
society, religious groups, university student
leaders, Vision 2030, NCIC among others will
issue an update of their views on the current
political climate in the country.
The political scene is currently dominated
by the calls by the Cord coalition for the
removal from ofce of IEBC commissioners,
with the coalition holding a series of
demonstrations on Mondays to press for the
commissioners exit.

Liquid Telecom hosts seminar

The event will bring together leading
technology experts to discuss the latest
network industry trends and standards and
their implications for enterprise and carrier
customers.
Tuesday, June 7

Parliament resumes sittings

The National Assembly resumes sitting after
a one month recess. The key agenda for the
House is the budget and the accompanying
Bills, and it is also expected to pass the last
batch of Bills needed to fully operationalise
the 2010 Constitution ahead of the August
27 deadline.

World Bank open day

The World Bank will hold its open day
at Nairobi Club. At the event, members
of public will interact with senior World
Bank staff including the country director,
programme leaders, economists and other
ofcers who implement the World Bank
funded projects.

IFC and Media Council host

corporate governance summit
The International Finance Corporation (IFC)
and the Media Council of Kenya (MCK)
open the rst corporate governance media
reporting conference in Kenya which
aims to aims to strengthen the medias
understanding of corporate governance.
Thursday, June 9

Budget reading day

Treasury secretary Henry Rotich presents
the 2016/17 budget before Parliament.
The country is expected to push resources
towards the social sectors of education and
health, as well as capital investments in
energy, infrastructure and ICT.
Kenyans will also be keen to see the tax
measures to be taken by the National
Treasury for the new scal year, given that
tax revenues are likely to fall below target for
the current scal year.

Listed investment rm Centum will on

Wednesday release its full year to March
2016 nancial results.
The companys after-tax earnings for the
six months to September 2015 increased to
Sh1.9 billion from the Sh1.23 billion it posted
during a similar period the previous year.

African food summit opens

The summit which will run between
June 8 and 10 will bring together food
and beverage manufacturers and
packers, suppliers, technology providers,
researchers, regulatory and policy makers
from sub-Sahara Africa.
Friday, June 10

Euro championship kicks off

The 15th edition of the UEFA European
Championship, commonly referred to as
Euro 2016 kicks off in France.
The popular 24-team championship which
runs for a month will provide a boost to the
coffers of local entertainment joints and pay

CFC Stanbic, Total hold AGMs

CfC Stanbic, Total Kenya and Flame Tree
Group will all hold their annual general
meetings on Friday.
Totals AGM comes when it is in the process
of taking over the business of Kenyas largest
petroleum importer, Gulf Africa Corporation
(that trades locally as Gapco) in a move that
will see the French oil giant boost its storage
capacity to 177 million litres from the current
52 million, leaving it at 100 million litres
more than second-ranked Vivo Kenya.

KenGen rights issue closes

The KenGen Sh28.8 billion rights issue that
has been on sale since May 23 closes on
Friday. A total of 4.4 billion shares were
on offer at a price of Sh6.55, representing
an entitlement ratio of two for every one
share held. The announcement of the
results is set for July 1, while the listing and
commencement of trading of new shares at
the NSE will be on July 6.

Monday June 6, 2016 | BUSINESS DAILY

TOP NEWS
RADAR SCREEN

I Q B A L P. K A R I M

ETHICS Effective anti-corruption strategy should include casting the tax net wider, lifestlyle audits and invesment in training

How to win the wa

against gaft in tax
administation
C

orruption has always been in excountry is lled with the bright light
istence in one form or another.
of prosperity.
As far back as the 4th century,
A voice from the backbench asked:
Thats all very good...but where is the
a famous scholar, wrote, Just as sh
moving inside water cannot be known
remaining Sh99?
when drinking water, even so ocers
Corruption can be broadly categorised into: political corruption, adminappointed for carrying out works
istrative corruption, grand corruption
cannot be known when appropriatand petty corruption.
ing money.
We will examine the main causes
I will start this article by telling a
of and issues related to corruption in
story about a certain country which
will remain unnamed but the message
tax administration, the impact of corof which we as a country
ruption on the economy
can also very much reand the suggested policy
late to.
measures for combating
Couption
An MP of a governing
corruption in tax adminparty during his speech in dastically educes istration.
parliament: There was a
A variety of factors contax evenues,
father who gave Sh100 each
tribute to corruption in tax
focing the
to his three sons and asked
administration.
govenment to
them to buy things and
These include the complexity
of tax laws and proll up a room completely.
nd othe means
cedures, the monopoly
The rst son bought hay
for Sh100 but couldnt fo nancing thei power and discretion of
expenditue
tax ocials, the lack of efll the room entirely. The
second son bought cotton
fective monitoring and sufor Sh100 but couldnt
pervision, overall government environment and the
ll the room entirely.
commitment of political leadership.
The third son bought a candle for Sh1
Corruption drastically reduces tax
and lit it up and the room was lled
revenues, forcing the government to
with light completely.
nd other means for nancing their
The MP added, The governing
expenditure, including borrowing both
party is like the third son. Since the
day we have taken charge of oce, our
domestically and internationally. Fu-

Kenya Revenue Authority Commissioner-General John Njiraini speaks during a media brieng. FILE

ture scal exibility is reduced, because

servicing of debt has to be given priority over other critical expenditures.
This creates a vicious circle endangering scal sustainability.

Evade taxes
Corruption is like cancer as it breeds
further corruption that is, corruption may corrupt. Collusion between
corrupt taxpayers and corrupt tax ofcials puts honest taxpayers at a disadvantage, encouraging them to evade
taxes in order to compete.
Corruption adversely aects investment and growth. Widespread corruption leads to reduction in both foreign
and domestic investment.

Some policy measures that could

be adopted include rationalising the
tax system with further simplied tax
laws. The design of the tax structure
should be as broad as possible. The goal
should be to have as many tax payers
as possible in the tax net. The jua kali
(informal) sector needs to be brought
into the net.
The tax authority also needs to invest in continuous training of tax ocials as it is not uncommon to receive
tax demands which are both frivolous
and incorrect.
Make tax ocials accountable and
salaries competitive. The lifestyle audits currently being conducted by
the Kenya Revenue Authority are a

good start and should be pursued

with vigour.
Provide tax ocers with more ethics training.
At the national level, our President
has already declared that ghting corruption is his number one priority.
Independent commissions against
corruption, which carry out investigative, preventive and communicative
functions, have proved a resounding
success in ghting corruption in many
countries.
There is a challenge for our Ethics
and Anti- Corruption Commission.
The writer is Deloitte East Africa
Audit Partner.

Catholic bishops face sack fo mishandling abuse unde papal plans

Pope Francis has approved measures to
sack bishops who mishandle child sexual
abuse cases, a papal decree says.
Bishops who are negligent in dealing with priests committing abuse will
be removed under the new legal procedures.
The decree comes in response to longrunning demands by abuse victims and
their supporters to hold bishops accountable if they fail to protect their ocks from
paedophiles.
Existing laws relating to abuse cases
would be tightened, the Pope said.
He acknowledged that canon law already allows for a bishop to be removed
for negligence but says he wants a more
precise denition of the grave reasons
that could lead to dismissal.

Some bishops have covered up abuse

by transferring perpetrators from parish to parish rather than reporting them
to police. Pope Francis set up a Vatican
commission to establish best practice
in relation to abuse cases and expose
wrongdoing in parishes in 2014.
The ponti tweeted on Saturday: Let
us hear the cry of the victims and those
suering, no family without a home, no
child without a childhood.
The Roman Catholic Church has for
much of the last 15 years been forced
on the defensive by scandals involving
priests who are alleged to have abused
children and then been transferred rather
than handed over to the authorities.
Vatican treasurer Cardinal George Pell
admitted in March he did not act after a

Pope Francis leads a mass at St Peters Basilica at the Vatican. FILE

boy told him about a paedophile priest.

The cardinal told an Australian Royal
Commission into child abuse that a stu-

dent at St Patricks College in Ballarat

said Brother Edward Dowlan was misbehaving with boys in 1974.

He said it was casually mentioned

and the boy did not ask him to act.
Dowlan, who has since changed his
name to Ted Bales, was jailed last year for
abusing boys in the 1970s and 80s.
Cardinal Pell was giving evidence
from Rome to the Royal Commission
into Institutional Responses to Child
Sex Abuse.
He was excused from ying back to
Australia due to a heart condition.
A group of abuse survivors and supporters have own to Rome to face
Australias most senior Catholic as he
testies. Peter Blenkiron was abused
by Brother Dowlan and spoke shortly
after the cardinal admitted he should
have done more about the paedophile
priest. -BBC

BUSINESS DAILY | Monday June 6, 2016

TOP NEWS

Rotich moves to
ceate centalised
collateal egiste
is estimated at Sh5,000 Treasury secretary Henry Rotich said.
and is borne by the borA centralised register also makes it easy
for a borrower to transfer loans across the
rower further raising the cost of credit.
To borrow from another bank, a per- industry, which is currently impeded by
son who has used his car as collateral for the tedious and costly process of revalua previous loan has to nd a means of ing the asset.
Similar registries in othsettling the debt and getting
the security back in his name
er jurisdictions have had sigbefore he can approach annicant impact on access to
other lender for money using The objects of this credit for SMEs and have won
the same car as security in the Act is to pomote the support of international
event that the value of the asnancial institutions such as
consistency
set allows.
the Financial Sector Deepenand cetainty in ing (FSD).
A borrower who has, for instance, used a car valued Sh2 secued nancing
In Ghana, 86 per cent of
million to secure a loan with
registrations
are securing
elated to
bank A and remains with a
loans granted to microbusimovable assets nesses and SMEs.
Sh200,000 balance cannot
A single registry availuse the same logbook as colHENRY ROTICH, TREASURY
lateral for a new loan with anable
for use to everybody sigSECRETARY
other lender that is oering
nicantly simplies the legal
and registration framework,
cheaper rates till they clear
resulting in straightforward
with bank A.
priority rules, enhanced transThe new Bill hopes to
solve that problem by eectively ena- parency and reduced cost of credit, says
bling borrowers to use a single security FSD Kenya, a proponent of the registry.
to borrow from two banks if its value can
Currently, the use of assets as collateral
cover both.
is pegged on dierent laws such as The
The objects of this Act is to promote Chattels Act and The Hire Purchase Act.
consistency and certainty in secured A multiplicity of registries, which
nancing relating to movable assets and are manual and do not share informato enhance the ability of individuals and tion, prolongs the collateral process and
entities to access credit using such assets, increases the costs, a committee formed
From Page 1

The National Treasury building in Nairobi . FILE

by the government to investigate the high

price of loans said, adding that a properly
functioning automated registry should
be established.
The Bill provides that in case of default, the registry will also be used to show
the lender with the rst claim on the asset
being disposed. The initiative, however,
appears not to have the full backing of
the lenders where credit ocers remain
sceptical of its application.
Some of the lenders have raised queries on how an asset used to secure two
loans would be treated in cases where a
customer has defaulted on one loan, but
is diligently servicing the other.
Cars are the most common asset used
to secure short- term loans in Kenya, making the logbook an important asset.
Banks take full value of brand new cars
as security for a loan and up to 80 per cent
for used cars.
In some countries such as Mexico, the
registry is also used by car buyers to conrm the true identity of vehicle owners
before completing a transaction.

The Bill also incorporates use of receivables as security. SMEs have for long
complained that their debtors, most of
whom are reputable institutions, including government, are ignored when they
are being appraised for loans.
Under the proposed law, the receivables will be included as part of a borrowers movable assets and recorded in the
centralised register.
Kenyas top three retailers Nakumatt,
Tuskys and Naivas owed manufacturers
Sh8 billion in unpaid dues as at September
last year, making receivables a massive item
in their list of assets.
Besides, the national government owed
contractors and suppliers Sh111 billion at
the end of the last scal year in June 2015,
while county governments held Sh37.46
billion in unpaid contracts.
Mr Rotich has, however, left out trading securities such as shares and Treasury
bills and bonds, meaning they will not be
in the centralised register.
Land titles, which are the most widely
used form of security in Kenya, have also

been left out of the centralised register

pending automation of land registry.
An electronic land register is expected
to open up the mortgage market, whose
growth has over the years remained painstakingly low. There are 25,000 mortgage
loans against a population of 21 million
deposit accounts.
Mr Rotich has also made it easier for
banks to take over collateral in the event of
default by eliminating the need for a judicial
process. A secured creditor is entitled to
obtain possession of the collateral in case
the grantor has consented in the security
agreement to the secured creditor obtaining possession, in which case no court application is required, the Bill says.
Banks have previously complained that
courts tend to favour borrowers by issuing
injunctions stopping repossession of assets.
This means bad borrowers continue enjoying use of pledged assets while not servicing
loans. But the law also moves to prevent
banks from irrational possession and sale
of collateral by demanding that any such
disposal of assets will have to consider the
interests of other parties with a stake in the
same property.
Lenders have been cited for disposing of
assets at throw away prices just to cover for
small debts outstanding to them -- leaving
borrowers worse o. Some of the lenders
have been accused of using repossession
to grow personal wealth.
Commercial lenders are currently facing a spike in non-performing loans, which
now stand at 8.2 per cent of total credit
disbursed. The defaults are expected
to result in increased repossession of
pledged assets.
gngigi@ke.nationmedia.com

Keosene tax incease looms as MPs ght petol dilution

prices of kerosene and
diesel at par to ensure
that petroleum dealers dont make any
gains by mixing the two.
The Energy Regulatory Commission
(ERC) on May 14, 2016 set the prices of
petroleum products, pushing up the
price of a litre of kerosene by Sh3.02 to
Sh46.98 while diesel rose to Sh70.37 up
from Sh66.23 last month.
The pump price dierences arise from
the fact that kerosene is charged excise
duty of Sh5.75 a litre, diesel Sh8.24 while
petrol is levied Sh19.89 per litre.
Diesel and petrol also attract a road
levy charge of Sh9 a litre that does not
apply to kerosene.
Low priced kerosene, though good for
the millions of poor households that use
it for heating and lighting, has become
the means by which unscrupulous traders adulterate petroleum to increase their
prot margins.
The ERC late last year reintroduced
From Page 1

tax on kerosene after President Uhuru

Kenyatta assented to the Excise Duty
Bill which increased levies on items
like water, beer, cigarettes, juices and
used cars.
The move, however, fell short of demands by the Petroleum Institute of East
Africa (PIEA) the oil dealers lobby
to remove kerosene subsidy because
of its use to adulterate the more expensive petrol and diesel.
PIEA has been lobbying the Treasury
to increase kerosene taxes to the level of
petroleum, but the government has been
hesitant because of its possible impact
on poor households.
Parliaments bid to have kerosene and
diesel taxes reviewed appears to be in
line with the oil dealers lobby who feel
the Sh5.75 kerosene tax is not enough
to bridge the gap between it and diesel
or petrol.
If the price of diesel and kerosene are
the same, no petroleum dealer will be

Buying fuel. FILE

tempted to mix the two, said Mr Kiptanui. The total value of Kenyas export
of petroleum products rose 12 per cent
to 59.5 billion in 2015, while that of reexports rose by 12.3 per cent to Sh59.5
billion, according to the 2016 Economy
Survey.
Kenyas loss of the Rwandan market and a large portion of the Ugandan
market to fuel adulteration means East
Africas largest economy faces a bleak
future with no growth in petroleum
exports.

Petroleum adulteration is the act of

mixing diesel with kerosene or super
petrol with kerosene to take advantage
of the lower taxes on kerosene.
It has in the past forced ERC to provide petroleum retailers with special selftest kits, dubbed lateral ow devices, in
an eort to tame rogue traders.
The energy regulator in March
cracked down on a number of petroleum companies whose retail stations
were found selling adulterated fuel.
More than 27 petrol stations were
shut down after they were found selling
adulterated petroleum or diverting fuel
meant for export to the local market.
Seven station were shut down in
Meru, ve in Kakamega. Dealers in
Kericho, Kirinyaga, Tharaka Nithi,
Mombasa, Migori, Siaya, Muranga,
Bomet, Kisumu and Kisii counties also
suered a similar fate.
The stations aected were among the
1,493 petroleum outlets whose products

were tested for quality.

The regulator slapped nes on the
mostly small dealers, for diverting fuel
meant for neighbouring landlocked
countries for sale in the Kenyan market. Petroleum meant for export is not
taxed locally.
The taxman has been losing revenue
as a result of diversion of export products into the local market, but vehicle
owners have suered the most damage
to their car engines arising from use of
petrol mixed with other additives.
The Mutava Musyimi-led committee
meets this morning to prepare its nal
report on the 2016/17 budget estimates
ahead of tabling tomorrow when Parliament reconvenes from a month-long
recess. Treasury secretary Henry Rotich will present the Budget statement
on Thursday.
emutai@ke.nationmedia.com

Monday June 6, 2016 | BUSINESS DAILY

ECONOMY & POLITICS

NEWS I REVIEWS I ANALYSIS

Kenya dops fom top 10 hydopowe nations

BY NEVILLE OTUKI

Kenya has slipped one position to be

ranked as the 11th largest hydropower
producer in Africa as Ethiopia powered
to position two.
The installed hydropower capacity
in the country grew six megawatts to
818MW last year, allowing South Africa to dislodge it from the top 10 list,
a report by Britain-based International
Hydropower Association shows.
Kenya has in recent years turned its
focus to geothermal energy to cut reliance on weather-dependent hydropower and expensive diesel generators.
Dependence on hydropower has in
the past subjected Kenyan consumers to heavy electricity bills during

droughts when expensive diesel generators are ramped up. Egypt is the top
hydro-power producer in Africa with
an installed capacity of 2,800MW, followed by Ethiopia (2,552MW)which
moved from position ve last yearand
DRC Congo (2,495 MW).

Cheapest source
Zambia had 2,272MW of hydro while
South Africa (2,251 MW) was fth, having jumped from position 15 last year.
Hydropower accounts for the
second largest share (35.1 per cent)
of Kenyas total power capacity that
stands at 2,333 megawatts. Expensive
thermal power ranks rst at 35.7 per
cent, while geothermal energy is third
at 26.8 per cent.

Hydropower is Kenyas cheapest

source at Sh3 per kilowatt hour, geothermal comes at Sh7 per unit while a
unit of thermal power goes for Sh18.
Thermal electricity is only connected to the national grid after supply of
cheaper hydro-electric and geothermal
electricity has been exhausted, often
during peak demand.
In East Africa, Kenya emerged top,
followed by Uganda (706 MW) and Tanzania (562 MW) which took positions
15 and 17 respectively.
Rwanda was ranked at 28 with
99MW hydropower while Burundi had
a hydropower capacity of 66MW.
The report says for full benets,
countries need to create power pools
to trade electricity.

Kenya Powe ejects KenGen

bid to aise electicity tais
DISPUTE Utility rm

says power producer

does not deserve higher
fees from hydro plants
BY NEVILLE OTUKI

Kenya Power has signalled a row with

Kenya Electricity Generating Company
(KenGen) after insisting it will not back
calls to increase the price at which the
electricity distributor buys hydropower
that could trigger higher bills for homes
and businesses.
KenGen has sought approval from
the Energy Regulatory Commission
(ERC) to raise the taris for its major
hydropower plants with an installed capacity of 765 megawatts or 47 per cent of
the rms total power capacity.
But Kenya Power says that KenGen
does not deserve an increment and
dismissed the electricity generators
claim that it needs compensation for
the expansion of its hydro plants. The
tari cannot be reviewed because the
existing infrastructure has been paid
for and there has been enough water in
the dams for the last three years, said
chief executive Ben Chumo.
The government has also opposed
Kenya Powers quest to increase retail
taris, arguing that it goes against the
policy of delivering cheap electricity
needed to ease the burden on households and make Kenya a competitive
country.

Kenya Power CEO Ben Chumo. SALATON NJAU

KenGen managing director Albert

Mugo said the proposed tari increment
is informed by recent expansion of the
companys hydropower capacity and the
need to deliver returns to shareholders
of the Nairobi bourse listed rm.
When we signed the PPA (power
purchase agreement) in 2009 there was
a projection for capacity increase, giving
room to revise the rates, he said without
giving detail of the gures.
Mr Mugo cited Kindaruma hydropower station, whose power capacity
has increased from 48 megawatts to 72
megawatts over the period.
KenGen is seeking higher wholesale
tari for Seven Forks Hydro stations
on Tana River, which includes Masinga
power station (40 megawatts), Kamburu (94 megawatts), Gitaru (225 megawatts), Kindaruma (72 megawatts) and
Kiambere (168 megawatts).
Others are Turkwel power station
(106 megawatts) and Sondu Miriu which
has a capacity of 60 megawatts.

KenGen has a total power capacity

of 1,617 megawatts, out of which 820
megawatts is hydropower, 518 megawatts is geothermal, 25.5 megawatts is
wind energy while the rest is thermal
sources.
This amounts to about a third of
power bought by Kenya Power for
onward sale to home and businesses,
a signal that an increase in the bulk
taris would put pressure on the ERC
to review retail taris to cover the additional costs.
Kenya Power recently sought the ERC
approval to raise consumer charges in
order to cover rising operation costs and
upgrade its transmission network.
But Ministry of Energy ocials have
ruled out any tari increment, putting
a fresh hurdle to Kenya Powers plan
to open a new avenue for growing its
bottom-line.
In 2004, the government opted to
subsidise KenGens bulk electricity purchase agreement with Kenya Power to
cushion consumers.
KenGen was directed to sell power
to Kenya Power at Sh1.76 per kilowatt
instead of the wholesale rate of Sh2.36
per unit.
The government opted to pay the
dierence of Sh0.60 on behalf of Kenya
Power.
Presently, homes consuming 200
KhW pay Sh3,398 or Sh17 a unit, up
from Sh2,783 or Sh13.90 a unit in April
2014. It remains unclear if the State will
step in with a subsidy to make the two
utilities happy once again.
notuki@ke.nationmedia.com

City Hall plans to hand

pension scheme anothe
pime estate in debt swap
rangements that might be upset by the
new landlords. Among the estates the
City Hall plans to hand out another of
county owns are those in Bahati, Ziwani,
its prime estates to a pension scheme as
Landhies Road, Joseph Kangethe, Harapart of the county governments plan to
mbee, Mbotela, New Pumwani, Bondeni,
reduce its Sh45 billion debt.
Kaloleni, Uhuru, and Embakasi.
The countys debt management stratOthers are in Maringo, Jerusalem,
egy paper indicates that the city governJericho, Lumumba, Ofafa and Mbotela,
ment has entered into negotiations with
Pangani, Jevanjee, Bachelors Quarters,
Local Authorities Pension Trust (LapJamhuri, Kabete, Juja Road, Gorofani,
trust) for the transfer to cover the amount
Kariobangi South, Huruma and Outerit owes.
ing.
The paper did not specify how much
County nance executive Gregory
Laptrust is currently owed and county
Mwakanongo did not respond to our
ocials had not responded by the time of
queries on which estate was being considered for the transaction.
going to press. Last June, City Hall owed
Laptrust Sh5 billion.
Hosea Kili, chief execuThis is the second such
tive of CPF Financials which
administers Laptrust told the
transaction with the county government having trans- I havent eceived Business Daily that he is unaferred the Mariakani Estate
ware of the swap.
anything like
to Local Authorities Pension
I havent received anyFund in early 2013. However, that. Maybe they thing like that. Maybe they
the deal has since been chalae planning to are planning to serve us with
lenged in court.
seve us with the the proposal, he said.
To settle this amount
Overall, the county govpoposal
ernments debt jumped from
the county is entering into
negotiations to transfer to HOSEA KILI, CHIEF EXECUTIVE, Sh42.3 billion to Sh45.2 bilCPF FINANCIALS
the scheme one of our prime
lion mostly driven by fresh
asset/ estate, the debt paper
bank loans and unpaid statreleased last week says.
utory dues.
The county has occasionally obtained
The agreed estate will be valued by
three professional valuers including the
short-term loans from commercial banks
government in order to establish the corto address shorter cash ow liquidity isrect value.
sues, the paper says.
The county owns tens of estates with
The paper notes that the mounting
most featuring dilapidated houses that
debts have made suppliers adjust their
prices upwards in anticipation of delayed
are ripe for redevelopment.
payments. This is continually diminishThe estates are occupied by county
ing the city governments capacity to oer
employees or those they have let out to
at rents well below the market rates arservices to city residents.
BY KIARIE NJOROGE

Some of the dilapidated Nairobi County-owned houses in Shauri Moyo Estate. FILE

BUSINESS DAILY | Monday June 6, 2016

ECONOMY & POLITICS

Use technology to ght teoism, Motoola tells Kenya

INSECURITY Country has been battling

Al-Shabaab terrorists based in Somalia

BY LARRY MADOWO
IN AMSTERDAM

Kenya should use advanced security

software to deal with the Somalia border crisis and the terrorism it has bred
within its borders, US technology giant
Motorola Solutions has said.
The American multinational, which
now specialises in mission-critical communication services, said other governments and agencies have beneted from
new technologies to keep people safe.
We highly encourage Kenya to think
in a wider perspective and solve some of
the issues they currently have around terrorism, said the president and general

manager of the rms Israel oce, Shimon

Dick, who also covers Africa.
Mr Dick attended a dinner with President Uhuru Kenyatta in Jerusalem in late
February where the issue of a nationwide
security system came up.
You cannot rely on a private operator like Safaricom to support the police,
he said in reference to the telecom rms
Sh14.9 billion National Surveillance, Communication and Control System. That
is just a general example, but it does not
happen anywhere else in the world.
Mr Dick was speaking on the sidelines
of the Critical Communications World
(CCW) 2016 Amsterdam, an industry conference now in its 18th year. The forum is

Ex-Wananchi
CEO held ove
womans death

Security personnel patrol near Westgate

Shopping Mall after the September 2013
terrorist attack. FILE
organised by the non-prot TETRA and
Critical Communications Association.
The Motorola chief advised Kenya to
go for a standard, secure system that can
be used for cross-border communication
and in co-operation with Somalia.
I recommend Terrestrial Trunked
Radio (TETRA) because it has stable infrastructure, the system is resilient and

even if you lose the switch you can talk

between just two base stations.
Interior ministry spokesman Mwenda
Njoka said there already exists an independent and default radio communications system for police and other security
agencies. After the Westgate Shopping
Mall terror attack in September 2013, various experts pointed to the lack of an eective communication system between the
police and military as having complicated
the rescue operation.
At the Amsterdam conference, specialist companies such as Airbus Defence and
Space are showing ways to make cities safer
and how technology can be used to assist
law enforcement organisations.
The European company has previously
unsuccessfully tried to clinch a police communication system tender in Kenya.
Some of the innovations at CCW 2016

Ramadhan

include a back pack from Nokia called Ultra Compact Network, which can launch
a small-scale 4G network within minutes.
The network can provide voice, video and
data services in emergency situations,
remote locations and events, and act as
a hotspot for public safety organisations,
industries and operators. It has a range of
75km and can be used by up to 400 users.
Motorola is showcasing radios, software solutions, enhanced infrastructure
and a virtual reality-enabled command
centre concept in Amsterdam.
The world is getting more dangerous, from a cyber-security but also from
a physical security perspective and thats
why we are innovating technologies to
keep people safe, says Jack Molloy, the
rms executive vice president of worldwide sales.
lmadowo@ke.nationmedia.com

Naiobi, Tukey in
taxation deal to
spu investment

BY ANGIRA ZADOCK

BY NEVILLE OTUKI

A former CEO of Wananchi Group,

Richard Alden, was arrested on Saturday following the death of a woman in
Karen, Nairobi, on Saturday.
Nairobi County police commander
Japheth Koome said the suspect had
taken the deceased, Grace Kinyanjui,
to Karen Hospital alleging that she had
shot herself in an attempted suicide.
When police ocers rushed to the
hospitall, they found that the woman had a gunshot wound, fresh stab
wounds and her ngers were also
broken.
Mr Alden, 63, was then arrested and
taken back to his residence where police established that he was a licenced
rearm holder.
Our ocers also found a spent cartridge in the house, which has been
taken for ballistic examination, Mr
Koome said. He has been arrested
and will face murder charges once investigations are complete.
Mr Alden, a Briton, was the chief executive ocer of Wananchi Groupthe
operator of Zukubetween September
2013 and November last year, having
previously been the groups chief operating ocer for nine months.
From 1998 to 2009, he was the chief
executive ocer and a founding director of ONO, the largest cable television
and telecommunications operator in
Spain.
The incident comes just a week after a man shot dead another man in
Garden Estate, Nairobi, after he found
him at his girlfriends house.

Kenya and Turkey have agreed to enter

into an agreement that will see rms registered in the two countries pay taxes in
either Nairobi or Ankara, meant to spur
investment.
President Uhuru Kenyatta and his Turkish counterpart Tayyip Erdogan, who was
on a three-day state visit to Nairobi last
week, agreed to strike a double taxation
avoidance agreement (DTAA) by August.
They agreed to strengthen bilateral relations in energy, education, healthcare,
ICT, oil and mining, agriculture and security following the signing of a number
of pacts.
Turkey will play host to President Kenyatta in August. The Turkish president came
with a delegation of 125 business people,
scouting for deals. We need to ensure any
barriers to investments in the two countries
are removed, Mr Kenyatta said in a joint
press brieng at State House.
A DTAA allows rms registered in the
two countries to pay taxes in only one
country. This is the second time a Turkish president is paying a State visit to Kenya
after Abdullah Gl in 2009.
The two countries seek to their raise
trade volume past the $1 billion (Sh100
billion) mark from Sh14.4 billion ($144
million) in 2015.
Bilateral trade is, however, skewed in
favour of Turkey which sold to Kenya Sh13.1
billion worth of goods last year compared
to Sh1.3 billion that Nairobi exported to
Ankara, according to data from Turkish
Ministry of Foreign Aairs. Kenyas imports
from Turkey include coal bitumen, petroleum, machinery, textiles, steel, fertiliser,
rubber, furniture and plastics.

Mombasa

A trader prepares coconut drinks on Kenyatta Avenue yesterday. Muslims are preparing for the
one- month fasting period during the Islamic holy month of Ramadhan. KEVIN ODIT

Questions aised ove the viability of

new Naiobi to Mombasa ail line
BY PAUL REDFERN
CORRESPONDENT, LONDON

Kenya is about to get a third-rate railway for the cost of a very expensive one,
according to a report in the Economist
magazine on the new Nairobi to Mombasa rail line.
Questions also remain, according to
the London-based magazine, on how the
railway will be paid for and who exactly
is going to run it. The new track is costing Kenya about $4 billion (Sh404 billion),
mostly funded by a loan from the Chinese
ExIm bank, and construction is due to be
completed next year.
But the report says that although only

a year remains before completion, not only

are taris and rates undecided, but it is
not even clear who will run the railway.
Kenyan ocials have apparently taken to
skipping trade conferences of late to avoid
answering questions.
Could this be because the new railway
is a dud investment? Its fastest trains will
do a fairly mediocre 80kph. Much as with
the old railway, parts of the new line will be
single-track, forcing trains to stop, often for
hours, to let others pass. Most absurdly, it
is built to a lower standard of load-bearing
than most other new freight railways.
The Economist also quotes consultants, including Pierre Pozzo di Borgo of
the International Finance Corporation

wing of the World Bank, who says that

rehabilitating the older line might have
cost just ve per cent as much as building a new one.
Transport experts have also questioned
whether it will be possible to load four full
containers onto each wagon, as is done on
other new lines.
The magazine notes that repaying the
loans taken out to build the line will require
hefty fees or huge volumes of trac.
It notes however that truckerswho
now handle more than 95 per cent of the
freight moved from Mombasa portwill
compete ercely on price, and shipping
companies may look for other ports if
levies rise.

Monday June 6, 2016 | BUSINESS DAILY

CORPORATE NEWS
PRICES I RESULTS I DATA

Eicsson Kenya sta demand

to know etenchment tems
LAY-OFFSWorkers want

to know, among other things,

number and the criteria for
picking those to be laid off

A Kenya Wildlife Service ofcer arranges a stockpile of ivory for burning:

JKIA has recorded 51 seizures in 289 cases in seven years. FILE

BY ABIUD OCHIENG

Kenyan employees of global electronics giant

Ericsson have demanded that the company
discloses to them names of those who will be
aected by an impending retrenchment.
The Ericsson Group headquarter in Kista, north of Stockholm. The globa telecom equipment
They want to know who among the 500
maker plans to shed jobs. AFP
persons the company has targeted for retrenchment are in the Kenya oce, and the
Mr Mboya in the letter addressed to the rm.
no negotiations will be considered.
departments to be aected.
The workers are also seeking details on any
An employee who volunteers shall rebenets payable to those who will survive,
The employees claim that an internal
ceive the legislated country retrenchment
package or as dened in the collective agreethe voluntary and forced retrenchments,
newsash dated May 27 this year sent by
the rms Head of Human Resources for Subments, as well as an Ericsson dened gratuand for what period will they continue to
Saharan Africa Region Blair Mackenzie, anwork for the company. They further seek to
ity, the company said in a communication
nounced a right-sizing initiative within
know the statutory actions and steps taken
to employees.The rm stated that it has conthe Region (sub-Saharan Africa)
to eect the said voluntary and
stantly been reviewing its business model to
adding that the company would
forced retrenchments including
improve customer experience so as to remain
immediately commence a volnotices and correspondences to
one of the leaders in the market.
the
relevant
authorities
and
taruntary retrenchment.
Mr Mboya says the employees are also
An employee
geted employees.
The employees through
alarmed that on the same date the interwho voluntees
In the communication to emlawyer Apollo Mboya have renal newsash was issued, May 27, 2016, all
shall eceive the ployees, the company had stated Region Sub-Saharan African employees requested Ericsson Kenya Ltd to
provide them with details of the legislated county that it will be its sole discretion
ceived a letter, curiously dated June 30, 2015
severance pay for the rst phase
which purported to explain the potential
to accept or decline a request,
etenchment
of the voluntary retrenchment
retrenchments, and that as an alternative to
and further that the process
package
shall be opened on May 27 until
potential retrenchment, the company is willfor each of the countries in the
June 10, 2016. The voluntary reing to consider voluntary retrenchment for
sub-Saharan Region including
ERICSSON COMMUNICATION
but not limited to South Africa,
tirement package shall generally
employees. The employees have warned that
Nigeria, Ghana and Rwanda.
consist of country legislated severance and
should Ericsson Kenya Ltd fail to provide
gratuity. The gratuity portion is dened as
the information , they will le a case in court
In respect to the next phase, forced retrenchment, we seek information regarding
challenging the layos. The letter has been
per the years of service at Ericsson, reads
the targeted number and employees in Kencopied to the Cabinet Secretary Ministry of
the communication.
ya, criteria for determining the targeted emThe employees were also notied that the
Information and Communication, Chairman
ployees, details of how to enforce the forceful
decision of opening, closing, as well as the
Communication Authority of Kenya and the
retrenchment, and the mechanisms if any of
principles of voluntary retirement remains
Director of Immigration.
deterring victimisation of employees, said
the sole discretion of Ericsson and therefore
aawiti@ke.nationmedia.com

Royal Media Sevices applies fo pay-TV licence

BY OKUTTAH MARK

Royal Media Services, the owner of Citizen

TV, is seeking a pay-television licence from
the industry regulator.
The Communications Authority of Kenya
in a Friday notice said Royal Media Services
and Simba TV Kenya had applied for a licence
terrestrial subscription broadcasting service that would enable them to oer payTV services. If granted, the licence would
put Royal Media Services in a head-to-head
competition with other pay-TV rms GOtv
and StarTimes.
The two oer their content both on satel-

lite and terrestrial platforms.

This is a licence for providing pay-TV
services on terrestrial platform. Some of the
existing terrestrial subscription service providers include GOtv and StarTimes.
The licensing process under the new regime is ongoing at the moment, said director
general Francis Wangusi in a response to the
Business Daily queries.
Any public or county authority, company, person or body of persons desirous
of making any representation on or objection to the grant of that licence as aforesaid
must do so before expiry of 30 days from
the date of this notice and must forward to

the applicant a copy of such representation

or objection.
The Regional Radio Communication Conference held in Geneva in 2006 set a June 17,
2015 deadline for migration to digital TV.
Before then access to pay-TV in Kenya
had been restricted to either satellite or cable
networks, but this changed with the digital
migration allowing the regulator to license
rms to oer the service under the digital
terrestrial broadcasting.
According to the GeoPoll survey released
in January, 30 per cent of the households that
own set-top boxes opted for free-to-air broadcasts while 70 per cent chose pay-TV.

JKIA ecods the

highest seizues of
ivoy in seven yeas
meaning a lot more ivory could be
passing through other airports unJomo Kenyatta International Air- detected and unreported.
port (JKIA) has the highest ivory
Kenyan authorities have in
seizures record globally.
recent months made several seiThis is as per a report released zures at JKIA including one in late
by the International Air Transport March where a cargo of gemstones
Association (IATA) last week.
was found to include ivory worth
JKIA, a regional hub, has re- Sh6.4 million.
The consignment was on transit
corded 51 out of the 289 ivory seizures reported in the seven years from Mozambique to Thailand.
Dogs trained by the African
to April 2016, a statistic IATA says
results from heightened screening Wildlife Foundation (AWF) and
and intelligence measures.
the Kenya Wildlife Service (KWS)
This is a good thing. It means Canine Detection Unit have been
partly credited for the
that initiatives by govincreased successernment and airport
ful seizures in recent
authorities in collabmonths.
oration with Kenyan
It means that
airlines are paying
At the AGM, IATA
initiatives by
o, said Jon Godson,
members including
IATAs assistant direcgovenment in Kenya Airways, entor for environment
dorsed a resolution
collaboation with denouncing
best practices.
the ilKenyan ailines legal trade in wildHowever, more
life and wildlife
needs to be done. And
ae paying o
products and pledged
that is why we are callJON GODSON, IATA ASSISTANT
ing on government
to partner with govDIRECTOR
ernment authorities
agencies, airlines and
and conservation orother stakeholders to
partner proactively to ght this ganisations.
The airlines committed to inlocal and global problem.
Mr Godson was speaking dur- crease passenger and employee
ing IATAs AGM in Dublin, Ireland. awareness about the nature,
The IATA is an association of 264 scale and consequences of the
global airlines. He said the high illegal wildlife trade. They also
number of seizures recorded at pledged to partner with airports,
JKIA does not mean Kenya leads freight forwarders and other stakeholders. The illegal wildlife trade
in ivory tracking.
This is because the seizures are threatens the survival of many ena combination of ivory parts inter- dangered species, said Tony Tyler,
cepted while in transit through IATAs director general and chief
JKIA from other countries while executive.
others were sourced from Kenyan
President Uhuru Kenyatta in
elephants. The statistics are collat- April torched 105 tonnes of ivory
ed from what is publicly reported, worth Sh31 billion.
BY MUGAMBI MUTEGI

BUSINESS DAILY | Monday June 6, 2016

CORPORATE NEWS

Telkom Kenya takeove now down to Cabinet appoval Family Bank

BY OKUTTAH MARK

France Telecoms bid to sell its 70 per cent

shareholding of Telkom Kenya to private
equity rm Helios Investment Partners is
now only awaiting Cabinet approval.
The Competition Authority of Kenya
(CAK) on Friday gave its approval for the
deal, following an earlier authorisation
by the sector regulator, Communications
Authority of Kenya (CA).
The conclusion of the sale is on
course. With the regulatory approval
from the Competition Authority of
Kenya, the Attorney Generals oce is
expected to take the matter to the cabinet
for approval, its thereafter that the parties will make a public announcement,
said ICT secretary Joseph Mucheru in
an interview.
Helios has registered Jamhuri Holdings Limited as the local company to take

over the shares. The government through

the Treasury owns a 30 per cent stake in
Telkom Kenya while France Telecoms
that is exiting the local market owns
70 per cent.
PURSUANT to the provisions of section 46 (6) (a) (ii) of the Competition Act,
2010, it is notied for general information of the public that the Competition
Authority of Kenya has authorised the
proposed acquisition of 70 per cent of
the issued share capital of Telkom Kenya
Limited by Jamhuri Holdings Limited,
Francis Wangombe, the CAK director
general said in the Kenya Gazatte notice published on Friday.
The CA approved the France Telecom sale on condition that Telkom
Kenya osets the frequency fees it owes
the authority.
In April Telkom Kenya paid Sh300 million in part settlement of the Sh1.5 billion

Acquisition
The Competition Authority of Kenya
has authorised the proposed acquisition
of 70 per cent of the issued share capital of Telkom Kenya by Jamhuri Holdings
Limited. Pictured is CAK director general
rancis Wangombe.
it owed to the Communications Authority
of Kenya (CA) in frequency fees arrears.
Telkom Kenya is said to be in talks with
the Treasury to oset part of the balance
(Sh1.2 billion) that the government currently owes the rm.
The telco in April also reportedly
agreed to settle Sh693 million owed to
Safaricoms by May 1.
Until 2012, the government had a 49
per cent stake in Telkom Kenya while
France Telecom held the remaining 51
per cent. But the State ceded a nine per

cent stake in December 2012 following

a Sh30 billion debt write-o before losing another 10 per cent last June after
it failed to inject Sh2.4 billion in a Sh10
billion rights issue.
Helios has recently held meetings
with government ocials on the rebalancing of Telkoms books, agreeing on
how the telco would settle debts it owes
and signing a clause guaranteeing that
the Treasurys shares in Telkom will not
be diluted.
The entry of Helios into Kenyas telecommunications sector is expected to
step up competition for Airtel and market-leader Safaricom, which dominates
both the voice and data markets.
The deep-pocketed private equity fund
is expected to inject into Telkom Kenya
the required capital and bring in a strong
management team that can turn the lossmaking telco to protability.

PwC suvey: Kenyan family business

ownes fustating impatient heis
SUCCESSION 60pc of heirs-in-waiting restless

Key things NextGen would like to

implement

as enterprise heads delay in handing over reins

well as in managing expectations and as

another way of avoiding conict, said the
Less than half of family business owners
PwC associate director Moses Nyabada
in Kenya have plans to hand-over their
during a Family Business Conference
companies to the heirs-in-waiting, a
held in Nairobi.
study by nancial consultancy PwC has
The survey also found that about 31
established.
per cent of owners admit
The study by Pricewaterthat company succession
houseCoopers (PwC), howplanning will be a key chalever, found that 60 per cent
When a founde lenge in ve years time.
of the next-in-line are waiting
Kenya has recently seen
stays too long
impatiently to take over the
a steep rise in the number
mantle, pointing to possible
of family feuds over control
in a position
future succession conicts.
they become an of wealth left behind by the
super-rich.
A majority (32 per cent)
impediment to
Some of the high-prole
of the heirs want to take the
helm of the family businesses
succession battles that have
the long-tem
but are not sure of their posifound their way to court
success of the
tion in the family business.
include those of former
business
Only 28 per cent of the
cabinet minister Njenga
JOSEPH OKELO, FDOUNDER,
next generation are ready
Karume, ex-police chief
ASSOCIATION OF FAMILY
heirs while another 11 per
Philip Kanyotu and NakuBUSINESS ENTERPRISES
ru businessman Stephen
cent hope to take up a senior
role but not necessarily the
Kungu.
Handing over the family
helm, according to the 2016
business and relinquishing all responsiNext Generation Survey by Pricewaterbilities continues to prove unpopular for
houseCoopers.
Succession planning ensures continufounders with 61 per cent admitting that
ity of family businesses, but only 23 per
they were nding it hard to let go while
cent of the Kenyan enterprises surveyed
52 per cent are concerned that handing
have a plan in place.
over means they will spend more time
The death of the owners of such enmanaging family politics.
The founders and heirs diering perterprises often marks the beginning of
vicious wrangles and tedious court battle
spectives on leadership, succession planto pick their successors.
ning and governance also continues to be
an impediment while running a family.
Succession planning helps to grow
According to the survey, 69 per cent of the
the leaders and ideas of tomorrow and
BY ANNIE NJANJA

A Tuskys store in Nairobi. Family members

are locked in a battle over the ownership
of the supermarket chain. FILE

next generation prefer to bring in nonfamily managers, expand into new geographic market (60 per cent) and diversify products and services (59 per cent)
while about 47 per cent prefer to establish
a new entrepreneurial venture.
Most founders prefer to stick to the
original business plan and not to bring
in outsiders. Joseph Okelo, the founder
of Association of Family Business Enterprises said that obsession deters most
founders from drawing a succession plan
as some are worried that next of kin may
not have the ability to manage and grow
family wealth if and when left behind.
When a founder stays too long in a
position they become an impediment to
the long-term success of the business.
Ensuring a smooth transition sometimes
involves getting outside help.
Bringing in professionals and putting
up structures can help the next genera-

SOURCE: PWC

tion scale up the business, he said.

Property management rm Knight
Frank published a report in March which
stated that Kenyas Super rich are more
worried about ability of succession plans
they have put in place for their businesses
than taxes or stock market instability.
The report found that 76 per cent of
the 8,962 dollar millionaires in Kenya
expressed doubts over their childrens
readiness or willingness to oversee
continuity of the family businesses in
their absence
The PwC Survey states that 69 per
cent of the next generation prefer to bring
in non-family managers to grow the business, expand into new geographic market
(60 per cent) and diversify products and
services (59 per cent). About 47 per cent
of those interviewed prefer to establish
a new entrepreneurial venture.
Anjanja@ke,nationmedia,com

opens Sh4bn
ights issue to
boost gowth

BY BRIAN NGUGI

Family Banks quest to raise Sh4 billion

through a rights issue has kicked o with
the lender oering its shareholders an
opportunity to buy more stock at a discounted price of Sh22 per share.
The mid-sized lender will be oering
four new shares for every 25 held to its
existing shareholders in a bid to raise expansion capital. The rights issue started
last Tuesday and will close on June 27.
Family Bank Chairman Wilfred Kiboro on Friday urged the banks shareholders to take their full rights and participate in the oer , saying the bank continues to be a home grown success.
Family Bank is a strong institution
that continues to play a central role in this
countrys development. We are here to
stay. I urge shareholders to exercise their
full rights as the bank is going places,
said Mr Kiboro.
Family Bank Chief Executive Ocer
David Thuku said the capital raised is key
to the lenders plans as it eyes growth to
top tier status.

Expand
We will continue to expand our business to 100 branches by end of this year.
We will be rolling out innovative yet
relevant nancial solutions while enhancing our procedures and systems.
This capital is key to our growth plans
that include rolling out innovative products that address the very needs of our
customers, said Mr Thuku.
The transaction advisors for the rights
issue approved by shareholders during
its Annual General Meeting held on April
22, 2016 are NIC Capital as Lead Transaction Advisors supported by Alpha Africa
Asset Managers (Investment Advisors)
Walker Kontos Advocates (Legal Advisors), and Deloitte & Touche (Reporting
Accountants).
The Bank is pursuing a multi-pronged
capital raising strategy a mix of debt
and equity as part of its ve-year capital
raising plan. Last year the lender raised
Sh2 billion through a corporate bond
that is currently trading on the Nairobi
Securities Exchange.
In April, the bank received Sh3.42
billion (30 million Euros) from the European Investment Bank (EIB) to provide
lower-cost long term loans to small and
medium sized businesses in Kenya.
This was the second tranche by the
European lender with the rst tranche
of Sh2 billion having been secured two
years ago. The funds came several months
after the lender secured a similar facility of Sh1 billion from a Netherlands
Financier Oiko Credit International.
Oikocredit East Africa is a subsidiary of
Oikocredit International headquartered
in Netherlands.

Monday June 6, 2016 | BUSINESS DAILY

IDEAS & DEBATE

OPINIONS I REVIEWS I ANALYSIS

FINANCE Credit reference bureau rules in Kenya protect consumers, but they are not being enforced by lenders

Eoneous cedit
epoting due to
lax bank pocesses
NIT PICKER
CAROL MUSYOKA
Two weeks ago, I published an opinion
on this page highlighting my experience
with an erroneous report that was submitted by my bank to the credit reference
bureaus (CRBs). The article generated
some interesting feedback from some
kindred spirits.
Augustine M shared as follows: I
have also experienced a similar issue like
yours. A standing order that I had closed
ve years ago, but apparently the bank
continued to surcharge and penalise for
four dark years and it only came to my
attention when I needed that CRB Credit
Report. What made me mad was why my
bank, which I understand has rights of
set-o to enable them recover from your
other accounts with them and clear you,
goes ahead to issue a damning report. Yet
I had all along another well performing
loan with the same bank.
Well dear Augustine, a major assumption that you are making is that
your bank has a universal view of your
accounts. Whereas you have a universal
view of the bank in terms of all the products and services that you are consuming from them, your bank may have as
many separate records of you, as there
are services you are consuming. These
records are in dierent databases that
dont talk to each other because they are
in dierent departments.
Asking your bank to set o from one
account to another, wellthats just asking for too much eciency. I mean do
you know how many internal approvals
have to be sought to get that process approved? Youve got to be kidding man!
Now your bank might be a manyanga
bank, meaning it has a supercalifragilisticexpialidocious 21st century operating system and therefore your national
identity card number can generate a universal view of your accounts. But then it
requires someone to initiate that query.
And theres hundreds of thousands of
other retail clients like you.
Moreover that would require a rather
high level of eciency. So hang tough
bro, theyre just not that into you. One
more thing: can you imagine the number
of negative reports that the CRBs have

of ordinary wananchi who have minor

charges on accounts that have failed to
be closed? And are now dragging a millstone around their creditworthy necks
in the name of credit reporting?
Another writer Andrew F had this
to say: Hello Carol, as soon the CRBs
were authorised commercial banks submitted 800,000 negative credit reports!
Needless to say, the commercial banks
neglected to comply with the new law by
notifying the 800,000 account holders
who were having their credit histories
trashed! Too expensive? It really makes
no dierence; our commercial banks are
out of control and our friends and associates **** (edited out as this is a family
newspaper) us royally in plain sight. You
knew who to contact which only leaves
799,999 others being trashed without
legally required notice.
Dear Andrew: Are you aware of how
many Kenyans must have been temporarily employed during the process of
issuing 800,000 negative credit reports?
During that period, the unemployment
A customer counts money at a bank counter. Banks should facilitate an efcient credit
levels for the country took a signicant
reporting system. FILE
dip and the banks were awarded with
the highest Pay As You Earn award from
Should a credit bureau fail to provide
surprised a class action has taken this
our veritable tax collectors.
the consumer with proof of accuracy of
long in Kenya.
Dear JK, thanks very much for reachinformation that the consumer disputes,
In fact the bigger issue for me is that
ing out to this pained sister. I have tried
it is compelled to remove the disputed
by ignoring Section 50 (1) (b) of the
to research your point about what hapinformation from its records. The same
Credit Reference Bureau (CRB) Regulations 2013, which requires banks to
section also gives the consumer the right
pened in South Africa and actually
notify each customer, within 30 days of
to be advised by a credit provider before
found that in 2005 the South Africans
the rst listing, that his name has been
certain adverse information about that
published a National Credit Act which
stipulates the type of informaconsumer is passed onto a credit bureau
submitted to all licensed
tion that credit bureaus
and to receive a copy of that information
bureaus, the banking
can keep on consumers,
on request.
industry deliberately
As we often say
scuttled eorts by Postal
how the information is
As we often say in Kenya, its not a
Corporation of Kenya to
dearth of laws that we suer from; rather
obtained, used, and for
in Kenya, its not
grow its prots through
how long that informait is the enforcement of existing law that
a death of laws
sale of regular postage
tion may be kept on
is the problem.
that we sue
stamps on the 800,000+
The Credit Reference Bureau regulatheir records.
fom, athe it is
reports that should have
tions in Kenya do protect the consumMore importantly,
been mailed out.
ers, but the protection mechanisms are
the Act aims to ensure
the enfocement
not being enforced by the banks, either
Finally, JK weighed
that credit bureaus
of existing
keep accurate records
through sheer laziness and ineptitude
in with these words:
law that is the
on consumers. In a bid
or utter contempt for the impact of their
Just thought I would
to
cure
the
mischief
of
actions.
point out great article
poblem
today in Business Daily,
erroneous credit reportI like that the South African legislathe system is absolutely
ing, the Act in Section
tion puts the burden of proof for veracawed. In South Africa
72 gives consumers the
ity of information on the credit bureau,
they forced all bureaus to delete all their
right to access and challenge information
which means that a layer has been added
information and have all banks resubmit
held by a credit bureau. A key extract of
for ensuring that consumers are protectbecause almost the entire country was
ed from lazy bank processes.
that section provides that a consumer
listed for one reason or another. I was
can challenge and request proof of the
accuracy of information held by a credit
listed because I owed a bank Sh200 for
Carol.musyoka@gmail.com
bureau.
not closing my account with them. Im
Twitter: @carolmusyoka

Other Voices
Donald Trump
US Presidential hopeful

Rebecca Carroll (Guardian)

Presumptive Republican nominee Donald
Trump has been fairly straightforward
regarding how he feels in general about black
people in America he failed to swiftly and
effectively disavow former KKK grand wizard
David Duke in May, referred to the Black Lives
Matter movement as trouble last fall, and
during the course of his campaign other things
have surfaced, such as his idea to air a white v
black season of The Apprentice.

Jacob Zuma
SA President

Simon Reader (Business Day)

The announcement this week that all of the
ANCs branches have accepted Jacob Zumas
apology for accidentally deceiving the country
conrms that the presidents inuence
has returned to its pre-December 10 2015
condition.Fear of repercussions has cowed
most ofcials into not reporting inappropriate
conduct by the Gupta family, so there will be no
investigation into their attempts to criminalise
the state. Its unlikely Zumas ANC will fall by the
barrel of the gun.

Yoweri Museveni
Uganda President

Yasiin Mugerwa(Daily Monitor)

To President Musevenis critics, the State-ofthe-Nation address is supposed to be more than
political theatre. In other countries, it is serious
business to the extent that in preparation for
the speech, thousands of words are crossed
out and many sentences re-written. The Head
of States to the nation last week was poorly
received. Some of the architects of the 1995
Constitution share the view that the purpose
of the address is for the President not only to
report the condition of the nation, but it also
allows him or her to outline his or her legislative
agenda and national priorities.

10

BUSINESS DAILY | Monday June 6, 2016

EDITORIAL & OPINION

Published by the Nation Media Group, Kimathi Street, Nairobi

Joe Muganda Chief Executive Ofcer | Tom Mshindi: Editor-in- Chief

Ochieng Rapuro: Managing Editor
P.O.Box 49010 GPO Nairobi Telephone: 254 20 328 8104 Fax: 254 20 214849
Email : bdfeedback@nation.co.ke www.bdafrica.com

Find quick and lasting

solution to IEBC ow

he fact that majority of Kenyans are getting tired of the

rising political tensions in
the country cannot be overstated.
With both sides of the political divide digging in for another ght,
they should all know that Kenya
cannot aord another wasted
Monday.
The opposition Cord has
vowed to continue with its Monday street protests today while
the government has vowed not to
allow them to be held.
Cord wants the Independent
Electoral and Boundaries Commission (IEBC) disbanded and a
new team put in place before next
years General Election. Kenya is
bigger than both President Uhuru
Kenyatta and Cord leader Raila
Odinga hence both must nd a
quick and lasting solution to the
current stalemate.
Last
Tuesday,
Kenyans
breathed a collective sigh of relief
when reports trickled in that both
leaders had met at State House in
Nairobi.
But their relief didnt last for
long as soon after both sides were
at it again and come Wednesday
parallel rallies were held on Madaraka Day.
We would like to commend
the clergy, business leaders and
some of the legislators who have
come forward in a bid to resolve
the problem.

It is welcoming to note that

we still have voices of reason
among us.
The impasse can only be sorted out through dialogue and not
chest thumping and incitement.
As things stand now, it would not
be appropriate to go to an election
with a discredited polls body.
It is also quite clear that some
Kenyan leaders have very short
memories. In the run-up to the
2007/08 General Election, the
whole country was on tenterhooks as a result of acerbic and
divisive political fault lines caused
by similar positions.
Many Kenyans were shocked
by the aftermath of that rancorous
period that left 1,500 dead, hundreds of thousands displaced and
the economy on its knees.
Though we all know the severe
consequences that are bound to
befall us if we continue on the
same path of confrontational
politics, some of the hardline
protagonists on both sides act
are behaving as if this does not
bother them at all.
We would like to caution that
if we maintain the same uncompromising stance, it will only be a
recipe for worse violence.
We owe it to the current and
future generations to learn how
to resolve our dierences amicably with pragmatic and mature
leadership.

Pobe touism fund

week hardly passes without

fresh reports about corruption scandals at our State
institutions.
Revelations that several top
managers at the Tourism Finance Corporation have been
suspended following a battle over
multi-million shilling assets are
worrying.
The current ght at the hotels
lending agency was apparently
sparked by a dispute over the sale
of a plot worth Sh700 million at
the Coast.
We urge the Ethics and AntiCorruption Commission and
other relevant State agencies to
move in with speed and clean up

the mess. The tourism industry is

currently on a revival path and cannot aord to be bogged down by
such shenanigans.
The investigations should not
only be thorough, but any ocial found to have put taxpayers
money at risk must be severely
punished,
An alarming trend that has
emerged is the reckless manner
in which some individuals treat
public sector jobs. They are not willing to serve honourably, but only
view such positions as a means to
quick riches.
It is time ocials stopped treating public funds and assets as their
own personal property.

To comment...
The editor invites comments on our content and topical issues. Please include your full names, telephone number and address in your letter.
Email: bdfeedback2@ke.nationmedia.com

Please note that our prices are subject to change depending on the
customers attitude...

Dishonesty in ou public debates is woying

COLLINS ODOTE
DISCOURSE

few years ago, I watched a movie

whose message resonates with the
events in Kenya in recent weeks.
In one of the scenes, one character asks
to be told the truth and in response he is
asked whether he can handle the truth that
he seeks. As a society we seem to be like
this character, seeking the truth yet not
prepared to handle it. Neither are we prepared to speak it. We consequently glide
through our public discussions trying to
obfuscate the truth.
Discussing this issue with a group of
friends this week, there was surprise at
how discussions on critical national issues
do not take honesty as a critical justication
and point of focus. Sadly, this is not limited
to the political class.
It permeates many segments in our society, evident when public issues are being
debated, more so when those discussions extend to political and governance matters.
One issue that has occupied debate over
the past few weeks is the 2017 elections. At
the centre of the discourse is the fate of the
current Independent Electoral and Boundaries Commission (IEBC) chiefs, the levels of
polarisation and the credibility of those elections. Of contention is the process by which
to discuss and resolve these issues.
There are dierences amongst the political class on which is the correct and desir-

able approach. Those discussing this quote

the Constitution, saying that their position
is anchored in the supreme law.
The positive out of this is the public pronouncement of adherence to constitutionalism. Were these statements fully accurate,
we would not be where we are. When one
listens beyond the formal statements, it becomes clear that the real debate is not about
the process.
It is also not about the Constitution. It is
a debate about politics and political interests. And in this process, the Constitution is
being used as a shield, to cover up the real
issues -those who are not willing to honestly
debate in public.
The reality is that the country is at a cross
roads. Our future is threatened. Our formal
statements as a country seem to appreciate
this fact. The need for a solution is not in
dispute. It cannot be that we can disagree
on nding that solution in a manner that is
in accordance to the Constitution.
To argue that the Constitution is an inconvenience which we can do away with is to ignore its purpose and the reason we struggled
to get the supreme law. Equally, to argue that
the Constitution prevents us from discourse
is to be economical with the truth. But such
is the nature of our public discourse.
Similarly treated with dishonesty is the
long-standing issue of corruption. Kenyans
are unanimous on the dangers of corruption and the need eradicate it. Yet despite
this understanding, recent surveys demonstrate that young people not only adore those
who have acquired wealth through corrupt
means, they look forward to opportunities
to partake of the same vice.
When the survey results were presented
to the public a few months ago, they were

VIEWS FROM ABROAD

met with surprise. However, we did not stop

to reect on where the young people may
have learnt this practices from.
The current debate is about our value system as society and the evidence is not far to
nd. Last week the media covered the ongoing public vetting of police ocers. Without
attempting to debate whether the ocers
were corrupt or not, what is striking is the
type of explanations they gave for the large
cash deposits they had in their accounts.
From proceeds of farming to tips from
important guests, the tales were as comical
as they were unreal. Yet few saw anything
wrong with those explanations. The public
largely laughed them away. How then would
we expect to have honest debate about corruption when we can publicly have such
explanations?
Lastly is the issue of our tribal dierences.
This column has in the past raised concern
about public discourse on this issue. One
only needs to follows comments on social
media to know that our level of tribal division is disturbing.
Worse, the feelings do not respect social
or educational status. One can therefore not
use ignorance as an excuse. Yet in public discussions we often pretend all is well and then
explain the dierences as articial.
It should therefore not surprise us when
one feels choked just from listening to and
participating in public debates. One wonders whether he/she is listening to fellow
Kenyans or is out of touch with reality. We
cannot hope to prosper with this approach
to public discourse. The question is whether
we have the moral courage to chart a different path.
Dr Odote is a lecturer at the University
of Nairobi

Opinions fom aound the wold

These are predatory loans

A time to weep about gun violence

Social media tour promos OK, but..

The Consumer Financial Protection Bureau has been

promising for more than a year to rein in the payday lending
industry, whose business model relies on luring Americans
into ruinously priced loans. The proposal that the agency
unveiled Thursday represents
NEW YORK TIMES
NEW YORK
a down payment on that
promise.
The industry says it provides a convenient option for
consumers, who can get a quick loan and repay it on their
next payday, typically in two weeks.
The system is expressly designed to bleed borrowers, who
are typically struggling workers or people on fixed incomes
who are just getting by.

Fifty-five-hundred people, give or take, have died in gun

violence in the United States so far this year, and an
additional 11,000 or so have been injured. So Wednesdays
campus murder-suicide at the University of California at
Los Angeles will be neither
WASHINGTON POST
WASHINGTON DC much noted nor long
remembered amid this nations quotidian digest of gunplay.
That Americans are largely inured to the carnage does
nothing to negate its grinding, corrosive toll. Think of the
hours-long panic into which tens of thousands of UCLA
parents, and tens of thousands of spouses and children of
UCLA faculty and staff, were thrown by the uncertain news
on Wednesday. And weep.

Experts in tourism sector from Igad, a regional bloc, have

been charting ways to market regional tourism products.
Among the items ways mooted to help promote tourism
in the region includes the use of social media, where the
participants urged all regional
THE NEW TIMES
KIGALI
citizens to play their role in the
drive. Social media has changed the way we do things.
But how are citizens expected to be important players in
social media marketing of the regions tourism potentials?
Customer care and being warm and welcoming to visitors
is not enough to raise tourism.
Only when the issue of pride and patriotism has been dealt
will we see citizens actively promoting their heritage.

Monday June 6, 2016 | BUSINESS DAILY

11

EDITORIAL & OPINION

Models are a surprising face for cartel economics

BY GEORGE HAY
REGULATION

hat do Richard Branson,

Kate Moss and restaurant
waiters have in common?
Following the Competition and Markets Authoritys (CMA) move to investigate Londons model agencies,
they all are associated with sectors
that have been scrutinised by the UK
watchdog for alleged price-xing.
While the CMA has yet to prove any
of its initial allegations, the modelling business does have some cartelfriendly features.

At rst sight, the business of supplying companies and fashion houses

with attractive clothes horses over 5
foot 8 inches in height for women and
5 foot 11 inches-plus for men, according to requirements listed on agency
websites looks hard to rig.
Economic theory suggests that cartels need barriers to entry, otherwise
attempts to x prices can be undermined by new entrants. Unlike the
start-up costs involved in supplying
new aircraft or building materials, an
aspiring model agent can theoretically
just stand in the street and ag down
appealing-looking specimens as they

Letters

walk past.
In fact, taking on the likes of Storm,
Models 1, Premier, FM Models and
Viva the agencies listed by the CMA
probably does mean scaling sizable
barriers. The more big name models
on the roster, the more clients use the
agency a variant of what economists
call network eects.
Those that want to crash the party
either have to take models from their
existing employer, or do something
special as Storm founder Sarah
Doukas famously did in 1988 when
she discovered the 14-year-old Moss
at New Yorks JFK Airport.

One dierence between xing

the price of models and, say, trucks,
is that the value of the former would
seem much more variable than the
latter. But modelling contracts are in
fact quite standardised, according to
booking term guidelines issued by the
Association of Model Agents.
Of the invoice that clients pay,
models receive two-thirds and the
agent the rest. Storm, for example,
invoiced 15 million pounds in 2014
and paid 10.3 million pounds out to
models, according to accounts lodged
at Companies House.
The author is a Reuters columnist

The editor welcomes brief letters on topical issues. Opinions expressed here are not necessarily those of
the editor or publisher. They may be edited for clarity, space or legal considerations.
Send via e-mail to bdfeedback2@ke.nationmedia.com

Will banks plan to launch a rm to take on M-Pesa succeed?

t is sad that they had to wait this

long to come-up with such a plan,
after losing the battle to kill MPesa, joining it and now this? From a
user point of view they are doing it not
to solve a consumer problem but address their revenue problems.
Mobile money has already solved
the customer problem. Lower charges
arent going to hack it, bankers better
enhance that experience, before pulling the plug on bank to M-Pesa.
But again, bankers have no chills
when it comes to user experience over
revenue, they actually have a distinction for the two called revenue dip. I
really cant wait to see how long theyll
take to implement it.
Thomas Kaberi

his was long overdue.....and now

whoever wanted to implement
the cash-lite solutions has no
more excuse. A thorough look into how
merchants will benet from this will
determine how M-Pesa will suer; Safaricom are clever and still in the win-

s long as the process of opening

a bank account is still a convoluted one as it is in most
banks, M-Pesa will still have the bulk
of the cash deposits. But all in all, any
service that is a viable competitor to
M-Pesa is welcome. As things stand,
the deposits in the M-Pesa platform
are more than the deposits in all the
commercial banks put together
Reluctantgenius

G
L

reat idea... I am only afraid

competing interests from the
banks could curtail the idea
Wiilsharaban

An M-Pesa agent serves a customer.

FILE

ning position as M-Pesa is built on the

SIM technology. All said....good move
by local banks.
Ernie

ery late. But better late than

never. I like M-Pesa but it has
become too expensive. They
need some serious competition espe-

cially for the un-banked who simply

cannot aord M-Pesas exorbitant
transfer fees. Safaricom is taking too
much of Kenyans disposable income we cannot continue to aord spending
so much on communication and MPesa; are we working for Safaricom?
Kenyan

est you forget, M-Pesa oat is

held in banks as liability to the
bank and Safaricom in its balance sheet is leveraged by banks albeit
as asset, you assertion is therefore factually incorrect.
Jalaal Kafkaesque
reat move, M-Pesa was sitting
too comfortably!
Jose Muga

The future of miraa is bleak, farmers should seek other alternatives

ll odds are against the miraa

business and farmers should
cut dependence on it as a
source of livelihood despite recent
promises by the government to support them.
A United Nations (UN) report released in 2014 stated that the UN Oce
on Drugs and Crime classied miraa
(khat) as a new narcotic along with
348 other substances. The UN called
them New Psychoactive Substances
(NPS). The report went ahead and explained that NPS are substances that
break the blood-brain barrier acting on

the nervous system to aect brain action, resulting to alterations in mood,

perceptions, behaviour and cognitive
functions of the brain.
In 1980 the World Health Organisation classied it as a drug of abuse that
can produce mild to moderate psychological dependence. It is a controlled
substance in some countries and most
are eager to ban it.
The United Kingdom just joined a
group of countries who bowed to pressure to protect its citizenry from harmful eects of this drug. Surprisingly
some local legislators are promising to

explore new market in China despite

the fact that miraa is banned there.
The social consequences of miraa
outweigh economic benets by far.
Families have slept hungry as fathers
spend their earnings on the drug. Miraa chewing is detrimental to mental
and dental health. Persons with kidney and heart diseases are advised
not to use it.
In view of these developments, it
is evident that the future of miraa is
bleak. It is a matter of time before most
countries impose a total ban.
Miraa farmers should start embrac-

ing alternative crops. There is much

untapped potential in traditional
drought -resistant and nutritious
foods. Their leaders should not waste
time on litigation or claiming to source
new markets. Miraa is a drug, accept
and move on.
I would not wish to sound pessimistic but in the case of miraa, farmers should be prepared for the worst.
The government should also not waste
time spending Sh1 billion of our taxes
to rescue a faltering venture.
Kungu Wanjiru
Limuru

Livestock oes
clea pathway to
SDG accleation
FRANCK BERTHE
DEVELOPMENT

s nations attempt to usher in a new era

of global development, seeking to satisfy
both the Paris climate agreement and Sustainable Development Goals (SDGs), there is one
natural resource that has remained untapped.
The livestock sectors potential to meet many
of the most pressing global challenges from
food and nutrition security to economic growth
and climate change has been somewhat buried
beneath bad news. Concerns relating to greenhouse gas emissions and overconsumption of
meat in the developed world are both valid and
important, but do not tell the whole story about
livestock.
Meeting both climate and sustainable development goals are a global challenge, and those
in the developing world are starting the race
from much further behind. Livestock oers a
pathway for developing nations to accelerate
progress towards several goals. In terms of poverty reduction, for example, we know that over
1.3 billion people depend on livestock for their
livelihood, out of which approximately 0.6 billion are poor farmers.
For these people, income generated from
animals and animal-based products can mean
the dierence between sending your children to
school or not, or whether you can access healthcare. Also, having access to nutritious meat, milk
and eggs goes a long way to improving vitamin
deciencies, the major cause of hidden hunger
which is estimated to aect around two billion
people.
Livestock must also be recognised as a major
engine for economic growth. It accounts for up
to 60 per cent of agricultural GDP in some developing nations, and ve of the six agricultural
commodities that fetch the highest value come
from livestock.
We are currently missing a huge opportunity to drive the sustainable development agenda
forward because livestock is overlooked and
underfunded. Despite the many pathways it
can provide towards the Sustainable Development Goals, particularly in developing regions,
livestock receives just 1-3 per cent of ocial development assistance by Organisation for Economic Co-operation and Development country
members.
The Livestock Global Alliance has been set
up to reverse this trend, and highlight the global
public good dimension of the sector. This week, it
has set out its agenda for making the sector more
ecient and sustainable, while respecting the
broad diversity of production systems.
Improving the productivity of animals is a
key focus of the alliance, given that it will serve
the triple purpose of boosting food production,
generating more income for farmers, and reducing environmental impacts as systems become
more ecient. Facilitating farmers access to animal health services, and quality feed resources
for their animals are two interventions that can
make a big dierence to animal health and welfare in almost any production system.
Berthe is coordinator of the Livestock Global
Alliance

12

BUSINESS DAILY | Monday June 6, 2016

NEWS INDEPTH
The state of mental healthcare

Mental illness: The silent

battle fo millions of Kenyans

Mental disorders come in

varied forms often ignored
by many people

NEGLECT Budgetary

allocation towards
hiring of psychiatrists
and buying of drugs
has been poor over
the years as rising
People GLOBALLY who have a mental disorder
number of patients pile
pressure on existing
Workforce for mental health in Kenya
public hospitals
The number of specialised healthcare

450 million
workers handling mental patients is way
below the WHO recommendations

88

427

Psychiatrists in Kenya

Mental health
nurses in Kenya

Other mental
health workers

Ideal status
per 10,000

Ideal status
per 6,000

Ideal status
per 9,000

of a population
(4700)

BY STELLAR MURUMBA

o you feel stressed up? You may as

well be suering a silent mental
illness that requires medical attention before it worsens.
For three years, Salome Wanjiru was
stressed. It appeared typical since she had
lost her husband of 10 years.
She is now a widow with four children to
take care of all by herself at their Dagoretti
Corner home, south of Nairobi.
After the bereavement Ms Wanjiru avoided social activities only to lose her friends.
Her business of exporting cosmetics to Sudan
went to the dogs as she slept and conned
herself in her bedroom for weeks.
To make matters worse, her 12-yearold daughter was almost raped one chilly
morning on her way to school. She survived
with multiple stab wounds from her cruel
attackers. She was hurt in the process and
was admitted for about three months to the
Melchizedek Hospital after eorts to seek
treatment at the Kenyatta National Hospital proved slow.

of a population
(4700)

I used all my money to clear her medical

bills because I just wanted to see her back to
normalcy, says Ms Wanjiru.
From normal stress, her condition escalated to depression. I would sleep throughout from Monday to Sunday yet my children
were depending on me.
I could go for days without taking a simple bath. I forgot I had a business to run and
cared less about my children aged between
21 and four. My husband left them under my
wings but those too were broken after his
demise, she adds.
As Ms Wanjiru went about her business
trying to pick up the broken pieces in her life
for the sake of her dependants, World Vision
ocials approached her with help after they
got wind of her condition through the Health
ministry. However, it took her time to agree
to be enrolled in a treatment and counselling programme.
Ms Wanjiru has since found a new lease of
hope in life and she is getting better now.
I feel I can go on with life now. I have improvedThey took me through an exercise
of breathing in and out to calm my nerves

Monday June 6, 2016 | BUSINESS DAILY

13

NEWS INDEPTH
overwhelmed in established hospitals such
as Mathari.
Mathari Hospital, against all odds, is doing a good job. I was surprised to nd neat
beds better than in other facilities after an impromptu visit, said the Cabinet secretary.
Besides piling pressure on the few established public health facilities, there is a major
shortage of specialist personnel to handle
cases of mental health.
Data by the Health ministry shows that
Kenya currently has 88 psychiatrists, short
of the recommended 4,200.
Ideally, there should be one referral mental health unit per county with each having a
bed capacity of 450 but the current capacity
of 14 has around 15 to 25 beds per unit.
Dr Catherine Syengo, deputy head of the
mental health unit, says that currently only
14 counties have in-patient mental health
units.
Nairobi and Eldoret have two mental
health rehabilitative units, she says.
Dr Syengo added that two methadone
treatment clinics for heroin users are set to
be opened in Kisauni (Mombasa) and Kisumu due to the prevalence in addicts in the
two counties.

11million

KENYANS suffering from a form of mental ilness

25%

Health ofcials say neurological and substance use disorders have become
common affecting one in every four Kenyans at some point in their lifetime.

Heroin addicts

1200
Psychiatrists beds

14

Mental health units (15-25 bed capacity)

0
2

Other specialised mental health services

Substance use
disorder treatment and
care in-patient unit

Ideal status
per 10,000

50

of population
(21,000)

Ideal status
per county

50

Referral mental health unit (450 bed capacity)

Ideal status
per county

1 Special unit per county

Ideal status
per county

1 Special unit per county

SOURCE: MINISTRY OF HEALTH REPORT BD INFOGRAPHIC/ MILLIE WACHIRA

it really helps. Something one of the ladies (World Vision ocials) told me and it
got stuck was that I should keep moving I
should keep going no matter what. I am
not looking back, she says.
Ms Wanjiru has since helped enrol a neighbour who had undergone a similar experience
into the treatment programme.
Another victim, Samuel Mbuyo, a jewelry
seller in Nairobi had been suering in silence
for ages before he was diagnosed with bipolar disorder. He was properly diagnosed a
decade after ve years of ghting a mental
illness unknowingly.

Suicide attempts
Bipolar disorder is characterised by extreme
mood swings marked by alternating periods
of elation and depression. It causes high-risk
behaviours such as impulsive sex, drug or alcohol use, and eventually suicide attempts.
After diagnosis, Mr Mbuyo immediately
started treatment at the Mathari National
Teaching and Referral Hospital, which later
proved a challenge due to congestion. The
facility is the countrys only referral hospital

for psychiatric care. Getting medication is

costly. I would hassle for money and would
only aord a days dose meaning I have to skip
treatment when I dont have money but I have
managed to stay positive in life, he said.
Stigma from relatives and friends hit him
hard and he once contemplated suicide.
They would call me mwenda wazimu
(Swahili for an insane person). It was like I
was dead but medication has helped.
Ms Wanjiru and Mr Mbuyo are not alone
in ghting mental ailments, which in extreme
cases may turn suicidal. An estimated 90 per
cent of the one million suicides globally are
associated with some form of mental disorder
namely stress, depression, bipolar disorder
and schizophrenia. Statistics show that about
11 million Kenyans suer some form of mental illnesses that are not taken seriously and
are more often discriminated against.
Up to 40 per cent of in-patients in health
facilities and another 25 per cent of outpatients suer from mental conditions, Ministry
of Health data shows.
Health secretary Cleopa Mailu says that
many of mental cases go unnoticed by health

Methadone clinics
countrywide

600

Heroin addicts
attended to daily at
Mathari Hospital.
Others clinics are at
Malindi County
Hospital and Coast
General Hospital.

workers because most of the patients do not

know how well to express themselves.
Most of those who go to hospital do not
express themselves well making it dicult for
an attendant to make the right diagnosis.
This means we need to create more
awareness on mental health, which can
have serious repercussions on peoples lives
if not attended to early enough, he said at
the launch of the Kenya Mental Health Policy
2015-2030 in Nairobi.

Impromptu visit
Dr Mailu said mental health programmes
would be given more prominence in public
health programmes.
When I hear about the statistics I get
scared. We want to achieve the highest standards in mental health, which we can as a country. We are relooking into introducing second
generation drugs because we cannot continue
to use mainstream drugs when we know we
have a better option, he said.
Dr Mailu urged county governments to
establish mental health units to decongest
and ease burden on health workers who are

Currently there are three operational methadone clinics for rehabilitating heroin addicts.
They are based at Mathari, which serves 600
heroin addicts daily, Malindi County Hospital
and one at Coast General Hospital.
In fact the two new methadone clinics
are fully stocked its just a matter stang.
Most heroin users are at the Coast and Nairobi. Central has high level of alcohol dependency, says Dr Syengo. She adds that
the clinics are licensed by the Poisons and
Pharmacy Board.
Dr Syengo urges the government to increase allocations to the mental health budget
which at the moment gets 0.01 per cent of the
total health budget. The health budget currently stands at Sh60 billion.
She also pointed an accusing nger to
insurance companies for discriminating
against mental health victims.
Health ocials say neurological and substance use disorders have become common
aecting more than 25 per cent of people,
which is one in every four Kenyans at some
point in their lifetime.

Traumatic events
By 2020, it is projected that the burden of
mental, neurological and substance use disorders will be 15 per cent of the total disability-adjusted life years higher than the 12 per
cent in 2000. This is an enormous burden in
the healthcare system and socioeconomic
development.
Outgoing World Health Organisation
representative to Kenya, Custodia Mandlhate, says that mental health is determined
by a range of socio-economic, biological and
environmental factors.
An estimated 450 million people worldwide have a mental disorder and the number
is likely to be higher due to common underreporting, she says.
Traumatic events such as the 2007 postelection violence and similar conicts play a
signicant role in development of post-traumatic disorders and anxiety, among others.
smurumba@ke.nationmedia.com

14

BUSINESS DAILY | Monday June 6, 2016

REGIONAL NEWS
AGRICULTURE Donor programmes rolled out for smallholder farmers to access regional export markets

East Afica food scheme aims

to stop the ot and boost tade

Farmers dry maize outside Kipchoge Keino Stadium in Eldoret. Most smallholder farmers in East Africa do not have proper storage
facilities for their harvests. FILE

The huge stock of maize Jumanne

Masele put aside last year was enough
to spare his family from hunger and
earn him cash to repay his debts - or so
he thought.
A short while after Masele had nished stung the grain into a traditional
storage cocoon, he realised much of it
had been infested by fungus as ground
moisture from heavy rain seeped in
through the bottom of his store made
of dried soil, sticks and grass.
There was nothing I could do to salvage my grains it was a total loss, he
told the Thomson Reuters Foundation.
Despite a bumper harvest, the farmer,
44, from Mbumi village in the east Tanzania district of Kilosa lost most of his
crops, threatening his familys food

supply. I still dont know how to store

my harvests traditional techniques
are no longer eective as the grain easily rots when we get unexpected extra
rains, Masele said.
Agriculture is the backbone of Tanzanias economy, providing work for more
than four fths of the population. The
rural sector accounts for over half the
countrys gross domestic product and
export earnings, according to national
statistics.
Yet as Tanzanian farmers struggle to
market their crops, nearly 40 per cent
of grains are lost to poor storage and
extreme weather, costing the nation
$332 million every year, the government says.
Eorts are underway to curb these

losses. Since 2013, smallholder farmers

in nine African countries have been getting help to trade staple foods across
borders and store their crops better under a ve-year programme managed by
Development Alternatives, Inc (DAI), a
U.S.-based company that works with the
private sector to overcome barriers to
development.
As part of the FoodTrade East and
Southern Africa programme, funded by
the British government, a 3 million
($4.3 million) grant was announced
in April to enable 70,000 smallholder
farmers in Tanzania and Uganda to access regional export markets.
Those two countries produce a surplus of staple foods almost every year,
whereas Kenya only grows enough to

feed itself one year in ve, according to

lead agency Farm Africa.
Until recently, high taris on trade
within East Africa meant it was cheaper
for Kenya to import crops from outside
Africa, but recent policy developments
have removed barriers to regional trade,
Farm Africa said in a statement.
Steve Ball, country director for Farm
Africa Tanzania, said the new projects
push to promote food trade was a step
towards agricultural self-suciency in
the region, and would help lift tens of
thousands of small-scale farmers out
of poverty.
Such farmers grow 80 to 90 per cent
of staple crops in the region, Farm Africa noted.
Local experts hope the FoodTrade
scheme will curb post-harvest losses
while increasing the amount of grain
crops for sale outside the peak harvest
season.
Tanzanias ght against hunger
received a major boost from the governments Big Results Now initiative
which raised maize production from
100,000 hectares (247,105 acres) per year
to 350,000 hectares in 2016. But it is only
now that the eects of poor grain storage
are becoming clear, analysts say.
Tanzania, through its National
Food Reserve Agency, owns 33 storage facilities with a total capacity of
246,000 tonnes, but ocials say that
is insucient.
Farm Africa and its partners will
help Tanzanian and Ugandan smallholders store their surpluses of rice,
maize and beans.
The farmers will initially sell products to more than 100 moisture-controlled depots with the capacity to stock
up to 500 tonnes each and carry out
quality checks.
-REUTERS

Fance pledges funding fo key Kampala highway poject

BY BD CORRESPONDENT
IN KAMPALA

The French government, through its

public bank and overseas development
agency, Agence Franaise de Dveloppement (AFD), has said it will commit
180million to the development of the
proposed Kampala-Jinja Expressway
next year.
The loan was revealed by Ms Virgnie
Leroy, the AFDs country representative, during a meeting with journalists
in Kampala to highlight their projects
in Uganda.
The project is one of the exciting
undertakings by the government (of
Uganda), and we are ready to oer them
any help, Ms Leroy said.
From what we know so far, she
said,there will be a number of aspects

Uganda National Roads Authority

executive director Allen Kagina. FILE
that will require nancing from environmental studies, studies for the resettlement action plan and others, which
need to be updated.
However, we will have to work with
the Ministry of Finance to nd allocation for the money, she added.

The ambitious toll road project will

be nanced through a Public-Private
Partnership (PPP) model.
The AFD nancing (loan) will, however, t in on the side of government.
The 77km stretch will start at Nakawa
in Kampala and connect to Jinja Township. Ocials say sections of the road
will have four to eight lanes, respectively at various points.
For example, it will have six lanes
between Bweyogerere and Lugazi, and
then a dual carriage between Lugazi
and Jinja.
Its development will also go handin-hand with construction of the Kampala Southern Bypass, an 18km road
stretch that will start at Butabika, on
the eastern outskirts of Kampala, and
connect to the New Kampala-Jinja Expressway and Munyonyo at the new

Entebbe-Kampala Expressway whose

construction is already ongoing.
The Uganda National Roads Authority executive director, Ms Allen Kagina, told Daily Monitor recently, that
they had planned going to the market
in March but faced some delays.
The delays were caused by two
things: one, the restructuring we are
doing here, being the implementing
agency, some of the activities planned
had to be delayed, but main one has
been the approval of the Resettlement
Action Plan and the Environmental
Impact Assessment plan.
We had a consultant who designed
one and was due for approval, but because it had been overtaken by several
months, it had to be updated before
we handover the project to the concessionaire.

BRIEFING
DAR ES SALAAM
Tanzania denies elephants could
disappear from reserve in 6 years
Tanzania rejected ndings by conservationists
who said elephants could disappear from a reserve there within six years due to industrial
scale poaching, saying the WWF analysis was
outdated.
WWF said Selous Game Reserve, Tanzanias
largest protected area, was home to one of the
greatest concentrations of African elephants on
the continent, but rampant ivory poaching has
seen the population reduced by 90 per cent in
less than 40 years.

KAMPALA
Imaging company Canon to
expand operations to Uganda
Canon, an imaging and optical solutions provider, has announced plans to invest more in
the East African region and expand operations
to the Ugandan market.
The announcement was made in Nairobi, Kenya
last week during the launch of its newly formed
Canon Central and North Africa (CCNA) business division that will oversee its Africa market
segment. The division was created in December 2015 to pay more attention to the demands
and needs of its customers operating in the
rapidly evolving African market.

BRAZZAVILLE
Congo to cut budget for second
straight year due to oil prices
Congo Republics government is proposing to
cut spending in the current 2016 budget by
around inne percent, repeating a similar midyear revision made last year as low oil prices
cut into revenues, the communications minister said. Initially set at 2.333 trillion CFA francs
($4 billion), spending under the revised budget
will drop to 2.122 trillion CFA francs, Thierry
Moungalla said:. Despite the delicate situation, the government plans to maintain a high
level of investment in order to permit the state
to support economic activity and continue to
play a role to stimulate growth.

LUSAKA
Zambia shortlists bidders to
build large-scale solar plants
Zambia has shortlisted bidders to build two
large-scale 50 megawatt (MW) solar power
generation plants as the nation battles a power
decit which threatens industrial output.
Zambias power shortfall has risen to 1,000 MW
from 700 MW in November due to lower hydro
generation as water levels have dropped because of drought.
NEON S.A.S./First Solar Inc and Enel Green Power SpA are front-runners for the two projects,
Zambias Industrial Development Corporation
said in statement.
The two bidders put their tariffs at 6.02 cents
per kilowatt hour (kWh) and 7.84 cents per
kWh, respectively, and the proposed tariffs
would remain xed for 25 years, the statement
said.

p.16/17

Monday June 6, 2016 | BUSINESS DAILY

15

MARKETING

Retail giants tap suburbs

for high-end shoppers
BRANDS
p.17 TOP
Interactive advertising

that works

p.18 WHATS NEW

Crown Paints introduces
green Zero VOC products

CORPORATE EVENTS | NEW PRODUCTS & SERVICES | EXECUTIVE APPOINTMENTS | MARKET TRENDS

Winnes and loses in

acquisitions pipeline
M&A Clients and shareholders tend to benet

THE BIG STORY

while some suppliers get short end of the stick

BY SILVIA MWENDIA

Two weeks ago, global logistics company

FedEx Corporation acquired TNT Express
in a 4.4bn (Sh495bn) deal that could see
the companys compound annual growth
rate (CAGR) gain 14 percentage points
more in shareholder returns.
This acquisition is a signicant accomplishment and marks the beginning
of a new era, lled with promise for our
people, customers and shareowners, said
Frederick W. Smith, Chairman and CEO
of FedEx.
We are proud to celebrate the joining
of two iconic companies and the approximately 400,000 team members who are
committed to serving customers around
the world.
According to David Ross, regional
President of FedEx Express Middle East,
Indian Subcontinent and Africa, FedEx
and TNT will, for the moment, continue
to run independently.
This acquisition is a cost-eective way

to signicantly expand our global capabilities and improve our densities, he said.
According to a 2015 report by PwC, acquisition deals that leveraged the buyers
key capabilities or helped it acquire new
ones produced signicantly better results,
on average of 14 percentage points.
In the report, PwC divides merger and
acquisition deals into three main categories, being leverage, enhancement and
limited t. Leverage deals see companies
buy brands they know will be a good t
for their capabilities system.
Enhancement deals are designed to
bring the acquirer capabilities it does not
yet have and that will allow it to intensify
its own capabilities system. Lastly, with
limited-t deals, the acquirer does not
consider their own capabilities.
In terms of the underlying drivers of
acquisitions, the report found that consolidation was the greatest driver, at 31 per
cent, and brought in the greatest returns
where it combined 7.9 percentage points
under the leverage category and 12.1 per-

Logistics rm
FedEx acquired
TNT Express in a
Sh495bn deal: The
deal is expected to
grow returns for
shareholders
FILE

centage points under the enhancement

category. However, not all consolidation
is geared towards expansion and the enhancement of markets.
Some consolidation-driven acquisitions are defensive, frequently to guard
market share from rivals, with such defensive deals more common during downturns. Such deals are designed to guard
against takeovers and achieve synergies
that help in cost-cutting by increasing efciency and lowering overheads. However,
deals may combine defensive and aggressive strategies.
For instance, a company in the US may
buy a stake in Kenya to expand, the move

may be viewed from a US point of view

as defensive, but from a Kenyan point of
view as expansive. In another scenario, a
company in Kenya may buy another company in Uganda to prevent a nosy neighbour from taking that market in advance,
even though the Kenyan company has not
exploited all of the opportunities in the
home market, said Patrick.
Both types of strategies can impact
sta and lead to job cuts, but defensive
acquisitions tend to bring far greater cuts,
as synergies are sought to lower operating costs.
Depending on how and when an acquisition done, there could be signicant
job losses. When one company is acquiring another, there are certainly duplicated
roles that may not be required in the new
outt, said Patrick.
In Europe for instance, during the period of 2002 to 2007, 6.5 per cent of the 3.7m
jobs lost to restructuring were as a result
of mergers and acquisitions.
Another potential loser during acquisitions, whether expansive or defensive,
are suppliers. If a supplier is deemed to
be working with the companys rival then
they may be let o, said Patrick.
Customers and shareholders, most of
the time, tend to benet from acquisitions,
in that the change is usually pursued to increase value for the clients and owners.
Whether a company is expanding or
defending its market, it is all about maintaining competitive advantage at the end
of the day, said Patrick.
-AFRICAN LAUGHTER

BRIEFING
Nairobi

Nairobi

Kampala

Nairobi

Tonya Ahenda wins Airtel

TRACE Music Star Kenya

Kebs signs MoU with the

Korean standards agency

Uber launches in Kampala

as city network hits 462

GeoPoll, Kantar, Cuende

unveil adverts tracker

Tonya Ahenda has joined a stellar cast of Africas up-and-coming singing talent as the Kenyan winner of Airtel TRACE Music Star competition. Tonya, an accountant, won a cash prize of
Sh1.5 million and a chance to represent Kenya
at the grand nale to be held in Lagos, Nigeria
on June 11. She will go head-to-head with nine
other contestants from across Africa for the
coveted prize. Kenyas top nalists battled it out
for the country prize in front of an stellar audience at the Enashipai Spa and Resort.

The Kenya Bureau of Standards (Kebs) and

Korean Agency for Technology and Standards
(KATS) last week signed a Memorandum of
Understanding to boost standardisation activities between the two countries. The three-year
agreement will see both countries benet from
exchanging technical personnel and participation in conferences, symposia, workshops and
exhibitions . Both countries have also agreed to
provide guidance to harmonisation of specic
standards with international standards.

Uganda has joined Ubers African network with

the launch of the innovative ride-sharing platform in Kampala last week. Alon Lits, the general manager for Uber Sub-Saharan Africa, said
the rm was inspired by the citys rapidly developing infrastructure and spirit of entrepreneurship . We are mindful of the citys current trafc
congestion, and we aim to be part of the solution in improving it, while creating new, fruitful
opportunities for drivers. Ultimately, we hope to
reduce the strain on the citys roads, he said.

GeoPoll, Kantar Media, and Cuende have

announced the launch of Pan-African OOH,
the rst data product to regularly measure
consumption of out of home media across
Africa. Through satellite imagery and mobile
survey data, Pan-African OOH measures trafc patterns and reach of billboards, urban
furniture, and other OOH media, and allows
brands, agencies, and media owners to gauge
the reach and effectiveness of their advertisements.

Mr Shawn Bolouki, Aga Khan University

Hospital CEO, joins Ms Jemimah Kimeu
(left), chief nursing ofcer, and Maureen
Omwenga, a clinical nurse, in cutting a
cake to mark Nurses Day. COURTESY

16

BUSINESS DAILY | Monday June 6, 2016

Monday June 6, 2016 | BUSINESS DAILY

FAFA founder
and Kiko
Romeo CEO
Anne McCreath
with make-up
artist Muthoni
Njomba at a
past event in
Nairobi. FILE

Retail giants tap sububs in ace fo high-end shoppes

CORPORATE SCENE

STRATEGY Rapid rise in number of outlets in

upmarket Nairobi underscores key role of location
BY QUEEN MUNGUTI

Barclays Bank of Kenya head of SME banking Susan Situma with a customer at the launch of Wezesha Biashara na
Barclays initiative in Machakos. The SME Open Day targets more than 10,000 business owners in 11 towns and will
offer the entrepreneurs access credit at subsidised rates as well as training in nancial literacy.COURTESY

Total Kenya MD
Anne-Solange
Renouard (left)
presents a cheque
in support of
this years Rhino
Charge to Mr David
Lowe at Braeburn
School in Nairobi.
Looking on is Rhino
Ark executive
director Christian
Lambrechts. COURTESY

National Bank of
Kenya chairman
Mohamed
Abdirahman
Hassan (left)
with actIng
chief executive
Wilfred Musau
at the lenders
AGM in Nairobi
on Friday.

akumatt Holdings announced

the opening of its 61st branch
in Kitisuru shopping complex
in Nairobi last month. This comes just
weeks after French retail store, Carrefour, also began operations in upmarket
Nairobi, with its rst store at The Hub
mall in Karen.
The openings reect an acceleration
in the supermarket race in Kenya, where
location is key.
Kitisuru is one of the few upmarket areas of Nairobi without a large, big brand
supermarket in the immediate suburb to
serve its wealthy residents.
For supermarkets now racing to capture the best locations, according to an article in the Harvard Business School Website titled, Location, Location, Location:
The Strategy of Place, the strategic value
of a new location depends on three things:
the strength of available resources, such
as nearby supporting industries; the companys ability to seek and retrieve knowledge in this setting; and its capability to do
something better than competitors.
And although upmarket Nairobi is no
stranger to retail stores, it is the convenience of location for the consumers in residential areas that is vital for the success
of new stores.
One of the rst things that retailers
look for when setting up shop is the potential of foot trac, said Bruce Gumo,
marketing analyst at Biztrace, a marketing solutions agency.
Consumers look for location conven-

ience, meaning they will shop at the nearest retail store.

As Nakumatt now looks to solidify its
market dominance in the face of incoming
rivals, the rms expansion strategies remain solidly on course, said the Nakumatt
Holdings regional operations and strategy
director, Mr Thiagarajan Ramamurthy, on
announcing the new Kitisuru store.
We have an army of loyal shoppers, formidable force of diligent staers, dedicated
suppliers and committed partners willing
to walk the talk with us and we believe that
gives us an edge. That is why our footprint
is growing by the day, he said.
Acknowledging the growing competitiveness in the local formal retail scene,
he said Nakumatt has been polishing its
business and marketing strategies.

SALATON NJAU

JOE OTIN

Shoppers at Nakumatt Supermarket at Garden City Mall on Thika Superhighway in Nairobi.FILE

FILE

trants look for ways to attract customers,

which means there will be promotions,
giveaways, discounts and competitions
among others, said Gumo.
There is basically a supermarket
race in the country, retailers, both local and international, are ghting for
consumers.
If you look at the rate at which new
supermarkets are opening, especially in
residential areas, it shows that they are
all competing for the same consumers.
If a store opens up in an area, chances
are in a few months, give or take; most
likely a dierent retailer (competitor)

Koean industy lobby

donates 16,500 items to
Kenyan schoolchilden

DIANA NGILA

Commercial Bank of
Africa chief executive
Jeremy Ngunze (left)
and Safaricom acting
director Financial
Services Brian Wamatu
(right) present a
dummy cheque to
Stawisha na M-Shwari
Sh5 million grand
prize winner Leonard
Ngetich Kiplangat
at a Safaricom shop
in Nairobi on Friday.

Top fashion brands demonstrate

interactive advertising that works

Consumer spending
In this, a magnet for external players such
as Frances Carrefour is the countrys formal retail penetration rate, which ranges
from 30 per cent to 40 per cent and is the
second highest in sub-Saharan Africa, according to a 2016 report by Oxford Business Group.
The report states that the consumer
spending for the average Kenyan consumer has risen by as much as 67 per cent in
recent years, which has made Kenya Africas fastest-growing retail market.
But as the entry of new retail stores in
the country intensies the competition
for their local counterparts, this is good
news for the consumers.
Local retailers will be looking for ways
of retaining their customers, as the new en-

Miss World 2015 Mireia Lalaguna with baby Yvette

Wanja at Gertrudes Childrens Hospital before she
underwent reconstructive surgery of her cleft lip and
palate under the Smile Train drive last week. SALATON NJAU

17

he Federation of Korean Industries (FKI)

has donated 16,500 sets of school materials, footballs, and T-shirts to Kenyan children seeking to make social responsibility part
of the ourishing relationship between the two
countries.
The gifts were delivered to Kenya during the
Kenya-Korea Business Forum that took place in
Nairobi last Tuesday. FKI vice chairman Seungcheol Lee delivered the consignment to Kenyan
Ministry of Health ocials on behalf of Korean
private business circle.
The federation, which is made up of South
Koreas global corporate giants such as Samsung,
Hyundai Motor Company, SK, LG, and Lotte, said
Kenyas close ties with Seoul bore the potential of
bearing the most benets to the two nations and
should be encouraged. The consignment included
10 sets of quality school materials made in Korea
such as sketch books, crayons and pencil cases.

will open one in the same area.

But even as the supermarket race
heats up in Kenya, it has become disruptive for residential small shop owners (kiosks).
Consumers prefer the convenience
of shopping in bulk in a supermarket,
rather than buying single items from a
variety of kiosks.
According to research conducted
by GeoPoll, a mobile survey platform,
over one weekend in the country titled
Spending Habits and Perceptions of the
Economy in Kenya, Nigeria, and South
Africa, 56 per cent of Kenyans would

rather shop in a supermarket, with 35

per cent shopping at a local kiosk.
One such consumer is Faridah Musango, who lives in Pipeline Estate in
Embakasi.
In the building I live, there is a kiosk
on the ground oor, but I hardly ever
shop there.
I prefer shopping at the supermarket across the road from the building,
because I am able to compare prices of
the dierent brands and I can take my
time shopping without worrying that I
am keeping people waiting in line.
- AFRICAN LAUGHTER

Absolut Vodka make Penod Ricad helps

Ghetto Foundation upgade Mathae oce

he 42 employees of wines and spirits group

Pernod Ricard Kenya observed the companys corporate social responsibility day
by assisting in transforming Ghetto Foundations
oce facilities as well as launching their long
term partnership with the organisation.
Ghetto Foundation is a community-based
organisation in Mathare, Nairobi, dedicated to
empowering the youth in the city slum.
They oer the youth life skills training in
entrepreneurship and reproductive health,
among others.
Pernod Ricard Kenya said it is committed to
supporting Ghetto Foundation by providing them
with laptops for their resource centre, training
the youth in entrepreneurship and responsible
drinking, funding business initiatives by the
youth as well as oering them internship opportunities at Pernod Ricard Kenya.
Denis Ochanine, managing director at Pernod Ricard Kenya said: We are extremely proud

to have partnered with the Ghetto Foundation.

We have been impressed by what they do to
promote entrepreneurship among the Mathare
youth, which is in line with one of the Pernod
Ricards core values and we are eager to support
them in this direction.
He added: Our partnership, through renovation of their oce, the creation of the resource
centre and the various activities we will carry
out with them in the future, is not only a way to
give a bit more exposure to the talented youths
of Mathare, but also a unique opportunity for us
to learn and be inspired by them.
Pernod Ricard sells brands such as Absolut
Vodka, Ricard pastis, Ballantines, Chivas Regal,
Royal Salute and The Glenlivet Scotch whiskies,
Jameson Irish whiskey, Martell cognac, Havana
Club rum, Beefeater gin, Kahla and Malibu liqueurs, Mumm and Perrier- Jout champagnes,
as well Jacobs Creek, Brancott Estate, Campo
Viejo, Gragna and Kenwood wines.

Style is a way to say who you are without having to speak, said Rachel Zoe, an American
fashion designer. Even though we would like
to achieve the same with our brands, in reality we
use various communication techniques to bring
our brand stories to life.
Interactive advertising, for example, aims to
make people think, feel and act, thereby generating behaviour that supports our businesses. The
three principles that dene interactive advertising emphasise a user-rst approach, a connected
world and a result-oriented mind set.
From a commercial perspective the ultimate
goal is to engender brand love within the target
audiences, which takes time, creativity and consistent action to achieve, especially within in a
highly competitive environment.
The average person gets thousands of messages daily which they lter based on relevance,
appeal, understanding and distinction. Therefore
when running interactive advertising campaigns,
David Ogilvys words come to mind: When I
write an advertisement, I dont want you to tell
me that you nd it creative. I want you to nd it
so interesting that you buy the product. When
Aeschines spoke, they said, How well he speaks.
But when Demosthenes spoke, they said Let us
march against Philip.
Anne McCreath understands interactive
advertising and her knowledge of the international fashion scene has helped her to propel
Kiko Romeo from a startup in a skeptical market
into one of the most distinctive clothing brands
in Kenya. McCreath begins by having a great
product that is inspired by local art and popular
culture combined with contemporary cuts and
styles that are designed to suit a niche Kenyan
market. These features make the brand unique,
not only from a Kenyan stand point but also in
the global arena, as they align to the sense of
pride that both nationals and foreigners living
here have for the country.
She couples this great product with unique
customer experiences that position the brand
as the premier fashion industry promoter and
thought leader, focused on developing local talent
and cottage industries. Through this McCreath
supports a sustainable eco-system which pulls
the heart strings of the target audience and gains
their devotion. The Festival for African Fashion
& Arts (FAFA), is her brainchild that brings a

large part of the industry players together into

a number of events. One of those events is a
fashion and accessories market that runs over
a number of days and provides an opportunity
for customers to browse the latest items from
the local fashion industry and buy products. It
also generates a tremendous amount of content
shared on social media as customers take photos
and videos of tantalising creations, which they
post on their time lines and reach a high number
of interested shoppers.
FAFA comes to a grand nale with the gala
fashion show that is one of the most coveted
annual lifestyle events in Kenya. With a host of
sponsors, local and global media support and an
eective marketing eort, tickets to the event are
easily sold out. It parades both established and
upcoming designers with their latest lines, generating excitement among customers, who again
share photos and videos on social networks.
The highlight is surprise appearances by celebrity models consisting of media, music and
sports celebrities as well as admired business
leaders. Needless to say the seles and photos
that ll social media thereafter are highly engaging and trend for days to come.
McCreath takes the user-rst approach when
she seeks to develop products and events that
energise her target audiences. For example, the
initiative to dress the Kenya Rugby Team shows
a knack for implementing big ideas, standing out
and leveraging on positive brand association. By
staging state-of-the-art fashion shows with all
the glitz and glamour she is able to leverage on a
connected world that thrives on user-generated
content, product endorsement and trading of
social media inuence.
With a conscientious approach to developing people and promoting the industry she gives
customers meaning and a deeper reason to be
brand-loyal and she has earned many awards for
her work, including being listed in the Top 100
Women Inuencing Africa by Arise Magazine.
When you see interactive advertising at work
you understand why its not digital, viral or intrusive but rather a process that uses creativity,
time and consistency to make an impact. Magic
moments are few and far in between and you
cant rely on these to run long term marketing
communications strategies. Instead rely on media
recency to build up your campaigns over time to
t within your budgets, and let each campaign
build upon the last. As Rome wasnt build in a
day, neither can you expect to turn your brand
into a household name overnight.
Mr Otin is a digital marketing expert and CEO
of The Collective - an interactive ad agency. He is
also the President of PAMRO and the Chairman of
the Advertising Standards Board of Kenya.
Email: joe@tc.co.ke

16

BUSINESS DAILY | Monday June 6, 2016

Monday June 6, 2016 | BUSINESS DAILY

FAFA founder
and Kiko
Romeo CEO
Anne McCreath
with make-up
artist Muthoni
Njomba at a
past event in
Nairobi. FILE

Retail giants tap sububs in ace fo high-end shoppes

CORPORATE SCENE

STRATEGY Rapid rise in number of outlets in

upmarket Nairobi underscores key role of location
BY QUEEN MUNGUTI

Barclays Bank of Kenya head of SME banking Susan Situma with a customer at the launch of Wezesha Biashara na
Barclays initiative in Machakos. The SME Open Day targets more than 10,000 business owners in 11 towns and will
offer the entrepreneurs access credit at subsidised rates as well as training in nancial literacy.COURTESY

Total Kenya MD
Anne-Solange
Renouard (left)
presents a cheque
in support of
this years Rhino
Charge to Mr David
Lowe at Braeburn
School in Nairobi.
Looking on is Rhino
Ark executive
director Christian
Lambrechts. COURTESY

National Bank of
Kenya chairman
Mohamed
Abdirahman
Hassan (left)
with actIng
chief executive
Wilfred Musau
at the lenders
AGM in Nairobi
on Friday.

akumatt Holdings announced

the opening of its 61st branch
in Kitisuru shopping complex
in Nairobi last month. This comes just
weeks after French retail store, Carrefour, also began operations in upmarket
Nairobi, with its rst store at The Hub
mall in Karen.
The openings reect an acceleration
in the supermarket race in Kenya, where
location is key.
Kitisuru is one of the few upmarket areas of Nairobi without a large, big brand
supermarket in the immediate suburb to
serve its wealthy residents.
For supermarkets now racing to capture the best locations, according to an article in the Harvard Business School Website titled, Location, Location, Location:
The Strategy of Place, the strategic value
of a new location depends on three things:
the strength of available resources, such
as nearby supporting industries; the companys ability to seek and retrieve knowledge in this setting; and its capability to do
something better than competitors.
And although upmarket Nairobi is no
stranger to retail stores, it is the convenience of location for the consumers in residential areas that is vital for the success
of new stores.
One of the rst things that retailers
look for when setting up shop is the potential of foot trac, said Bruce Gumo,
marketing analyst at Biztrace, a marketing solutions agency.
Consumers look for location conven-

ience, meaning they will shop at the nearest retail store.

As Nakumatt now looks to solidify its
market dominance in the face of incoming
rivals, the rms expansion strategies remain solidly on course, said the Nakumatt
Holdings regional operations and strategy
director, Mr Thiagarajan Ramamurthy, on
announcing the new Kitisuru store.
We have an army of loyal shoppers, formidable force of diligent staers, dedicated
suppliers and committed partners willing
to walk the talk with us and we believe that
gives us an edge. That is why our footprint
is growing by the day, he said.
Acknowledging the growing competitiveness in the local formal retail scene,
he said Nakumatt has been polishing its
business and marketing strategies.

SALATON NJAU

JOE OTIN

Shoppers at Nakumatt Supermarket at Garden City Mall on Thika Superhighway in Nairobi.FILE

FILE

trants look for ways to attract customers,

which means there will be promotions,
giveaways, discounts and competitions
among others, said Gumo.
There is basically a supermarket
race in the country, retailers, both local and international, are ghting for
consumers.
If you look at the rate at which new
supermarkets are opening, especially in
residential areas, it shows that they are
all competing for the same consumers.
If a store opens up in an area, chances
are in a few months, give or take; most
likely a dierent retailer (competitor)

Koean industy lobby

donates 16,500 items to
Kenyan schoolchilden

DIANA NGILA

Commercial Bank of
Africa chief executive
Jeremy Ngunze (left)
and Safaricom acting
director Financial
Services Brian Wamatu
(right) present a
dummy cheque to
Stawisha na M-Shwari
Sh5 million grand
prize winner Leonard
Ngetich Kiplangat
at a Safaricom shop
in Nairobi on Friday.

Top fashion brands demonstrate

interactive advertising that works

Consumer spending
In this, a magnet for external players such
as Frances Carrefour is the countrys formal retail penetration rate, which ranges
from 30 per cent to 40 per cent and is the
second highest in sub-Saharan Africa, according to a 2016 report by Oxford Business Group.
The report states that the consumer
spending for the average Kenyan consumer has risen by as much as 67 per cent in
recent years, which has made Kenya Africas fastest-growing retail market.
But as the entry of new retail stores in
the country intensies the competition
for their local counterparts, this is good
news for the consumers.
Local retailers will be looking for ways
of retaining their customers, as the new en-

Miss World 2015 Mireia Lalaguna with baby Yvette

Wanja at Gertrudes Childrens Hospital before she
underwent reconstructive surgery of her cleft lip and
palate under the Smile Train drive last week. SALATON NJAU

17

he Federation of Korean Industries (FKI)

has donated 16,500 sets of school materials, footballs, and T-shirts to Kenyan children seeking to make social responsibility part
of the ourishing relationship between the two
countries.
The gifts were delivered to Kenya during the
Kenya-Korea Business Forum that took place in
Nairobi last Tuesday. FKI vice chairman Seungcheol Lee delivered the consignment to Kenyan
Ministry of Health ocials on behalf of Korean
private business circle.
The federation, which is made up of South
Koreas global corporate giants such as Samsung,
Hyundai Motor Company, SK, LG, and Lotte, said
Kenyas close ties with Seoul bore the potential of
bearing the most benets to the two nations and
should be encouraged. The consignment included
10 sets of quality school materials made in Korea
such as sketch books, crayons and pencil cases.

will open one in the same area.

But even as the supermarket race
heats up in Kenya, it has become disruptive for residential small shop owners (kiosks).
Consumers prefer the convenience
of shopping in bulk in a supermarket,
rather than buying single items from a
variety of kiosks.
According to research conducted
by GeoPoll, a mobile survey platform,
over one weekend in the country titled
Spending Habits and Perceptions of the
Economy in Kenya, Nigeria, and South
Africa, 56 per cent of Kenyans would

rather shop in a supermarket, with 35

per cent shopping at a local kiosk.
One such consumer is Faridah Musango, who lives in Pipeline Estate in
Embakasi.
In the building I live, there is a kiosk
on the ground oor, but I hardly ever
shop there.
I prefer shopping at the supermarket across the road from the building,
because I am able to compare prices of
the dierent brands and I can take my
time shopping without worrying that I
am keeping people waiting in line.
- AFRICAN LAUGHTER

Absolut Vodka make Penod Ricad helps

Ghetto Foundation upgade Mathae oce

he 42 employees of wines and spirits group

Pernod Ricard Kenya observed the companys corporate social responsibility day
by assisting in transforming Ghetto Foundations
oce facilities as well as launching their long
term partnership with the organisation.
Ghetto Foundation is a community-based
organisation in Mathare, Nairobi, dedicated to
empowering the youth in the city slum.
They oer the youth life skills training in
entrepreneurship and reproductive health,
among others.
Pernod Ricard Kenya said it is committed to
supporting Ghetto Foundation by providing them
with laptops for their resource centre, training
the youth in entrepreneurship and responsible
drinking, funding business initiatives by the
youth as well as oering them internship opportunities at Pernod Ricard Kenya.
Denis Ochanine, managing director at Pernod Ricard Kenya said: We are extremely proud

to have partnered with the Ghetto Foundation.

We have been impressed by what they do to
promote entrepreneurship among the Mathare
youth, which is in line with one of the Pernod
Ricards core values and we are eager to support
them in this direction.
He added: Our partnership, through renovation of their oce, the creation of the resource
centre and the various activities we will carry
out with them in the future, is not only a way to
give a bit more exposure to the talented youths
of Mathare, but also a unique opportunity for us
to learn and be inspired by them.
Pernod Ricard sells brands such as Absolut
Vodka, Ricard pastis, Ballantines, Chivas Regal,
Royal Salute and The Glenlivet Scotch whiskies,
Jameson Irish whiskey, Martell cognac, Havana
Club rum, Beefeater gin, Kahla and Malibu liqueurs, Mumm and Perrier- Jout champagnes,
as well Jacobs Creek, Brancott Estate, Campo
Viejo, Gragna and Kenwood wines.

Style is a way to say who you are without having to speak, said Rachel Zoe, an American
fashion designer. Even though we would like
to achieve the same with our brands, in reality we
use various communication techniques to bring
our brand stories to life.
Interactive advertising, for example, aims to
make people think, feel and act, thereby generating behaviour that supports our businesses. The
three principles that dene interactive advertising emphasise a user-rst approach, a connected
world and a result-oriented mind set.
From a commercial perspective the ultimate
goal is to engender brand love within the target
audiences, which takes time, creativity and consistent action to achieve, especially within in a
highly competitive environment.
The average person gets thousands of messages daily which they lter based on relevance,
appeal, understanding and distinction. Therefore
when running interactive advertising campaigns,
David Ogilvys words come to mind: When I
write an advertisement, I dont want you to tell
me that you nd it creative. I want you to nd it
so interesting that you buy the product. When
Aeschines spoke, they said, How well he speaks.
But when Demosthenes spoke, they said Let us
march against Philip.
Anne McCreath understands interactive
advertising and her knowledge of the international fashion scene has helped her to propel
Kiko Romeo from a startup in a skeptical market
into one of the most distinctive clothing brands
in Kenya. McCreath begins by having a great
product that is inspired by local art and popular
culture combined with contemporary cuts and
styles that are designed to suit a niche Kenyan
market. These features make the brand unique,
not only from a Kenyan stand point but also in
the global arena, as they align to the sense of
pride that both nationals and foreigners living
here have for the country.
She couples this great product with unique
customer experiences that position the brand
as the premier fashion industry promoter and
thought leader, focused on developing local talent
and cottage industries. Through this McCreath
supports a sustainable eco-system which pulls
the heart strings of the target audience and gains
their devotion. The Festival for African Fashion
& Arts (FAFA), is her brainchild that brings a

large part of the industry players together into

a number of events. One of those events is a
fashion and accessories market that runs over
a number of days and provides an opportunity
for customers to browse the latest items from
the local fashion industry and buy products. It
also generates a tremendous amount of content
shared on social media as customers take photos
and videos of tantalising creations, which they
post on their time lines and reach a high number
of interested shoppers.
FAFA comes to a grand nale with the gala
fashion show that is one of the most coveted
annual lifestyle events in Kenya. With a host of
sponsors, local and global media support and an
eective marketing eort, tickets to the event are
easily sold out. It parades both established and
upcoming designers with their latest lines, generating excitement among customers, who again
share photos and videos on social networks.
The highlight is surprise appearances by celebrity models consisting of media, music and
sports celebrities as well as admired business
leaders. Needless to say the seles and photos
that ll social media thereafter are highly engaging and trend for days to come.
McCreath takes the user-rst approach when
she seeks to develop products and events that
energise her target audiences. For example, the
initiative to dress the Kenya Rugby Team shows
a knack for implementing big ideas, standing out
and leveraging on positive brand association. By
staging state-of-the-art fashion shows with all
the glitz and glamour she is able to leverage on a
connected world that thrives on user-generated
content, product endorsement and trading of
social media inuence.
With a conscientious approach to developing people and promoting the industry she gives
customers meaning and a deeper reason to be
brand-loyal and she has earned many awards for
her work, including being listed in the Top 100
Women Inuencing Africa by Arise Magazine.
When you see interactive advertising at work
you understand why its not digital, viral or intrusive but rather a process that uses creativity,
time and consistency to make an impact. Magic
moments are few and far in between and you
cant rely on these to run long term marketing
communications strategies. Instead rely on media
recency to build up your campaigns over time to
t within your budgets, and let each campaign
build upon the last. As Rome wasnt build in a
day, neither can you expect to turn your brand
into a household name overnight.
Mr Otin is a digital marketing expert and CEO
of The Collective - an interactive ad agency. He is
also the President of PAMRO and the Chairman of
the Advertising Standards Board of Kenya.
Email: joe@tc.co.ke

18

BUSINESS DAILY | Monday June 6, 2016

Bambui tagets lowe end of the maket with Sh500,000 home plan
BY OTIATO GUGUYU

Cement manufacturer Bamburi plans

to lock in buyers with an oer of customised house models and technical
support during construction.
The rm has done cost estimates and
developed 30 architectural drawings for
dierent home sizes costing between
Sh500,000 to Sh5.2 million to build.

The package, solely for residential homesbungalows, maisonettes

and incremental houses and dubbed
Maskani will see Bamburi partner
with lenders and local distributors to
fund the construction without disbursing money directly to the clients to tie
them to their product.
The customer will make a pick from
the set of design and we will then link

them to a nancial institution which

will provide the money. We will give
them a bill quantities for their specic
choice and then connect them with our
local distributor who will provide all the
materials, Bamburi Cemnet Head of
Marketing Irene Onacha,said.
Bamburi is in consultation with two
banks and three micronance institutions to act as their ocial lenders for

the project. Currently the client will

have to negotiate with the bank for a
lending rate but Bamburi says it plans
to factor in subsidies through their development nance programme to oer
favourable rates.
Bamburi Cement Managing Director Bruno Pescheux said the Maskani
initiative is initially being carried out
in Nairobi and its environs but will pro-

gressively expand to other towns in the

second half of 2016.
The rm will assist home owners
apply for building approvals and occupancy certicate from the county
government although the clients will
bear the costs.
They will also oer technical support during construction to ensure the
buildings are up to standard.

PERSONAL CARE MARKET AMONG KENYAN WOMEN

MARKETPLACE INFORMATION

SANITARY TOWELS

Most Purchased Brands

Source: Dama Report, consumer Insight

Product Name 2015 (%)

BATHNG SOAPS
Product Name 2015 (%)

Crown Paints CEO Raakesh Rao (right) and the companys acting group marketing manager, Nileq Gosavi,
display the newly launched range of VOC Zero paints at the Serena Hotel in Nairobi on June 2. The new
paints are more environmentally friendly. SALATON NJAU

Cown Paints unveils

eco-fiendly poducts
BY LYNET IGADWAH

rown Paints has unveiled an eco-friendly

range of paints as it
seeks to meet growing demand for green construction
materials in the market.
The Zero VOC range pose
no danger to the environment
as they do not contain unsafe
chemicals.
The paints contain special
colourants sourced from Canada and are ordourless.
The introduction of Zero
VOC paints is proof of our commitment to oer the highest
quality, innovative products
and superior value to our customers in the region. It also
reects our mission to ensure
that our products meet and exceed health and safety norms,
Crown Paints chief executive
ocer Rakesh Rao said.
VOCs Volatile Organic
Compounds- are solids
and liquids found in ordinary
paints that convert easily to

gas or vapour at room temperature which, when exposed to

the environment and humans,
can have harmful eects.
Crown Paints has been
manufacturing low VOC
paint ranges but after years
of research, has become the
rst company in the region to
manufacture and oer Zero
VOC products/
Opting for Zero VOC
paints will help create more
environmentally friendly and
healthier interior and exterior
spaces after paint work, Mr
Rao said in a statement.
He noted that owing to
the paints nontoxic nature,
they are ideal for people who
are particularly sensitive to
paint fumes.
Mr Rao said the oduorless
VOC paints are also perfect
for schools, hospitals and
homes.
With the demand for
architectural paint growing
rapidly due to the robust construction industry worldwide,

many government agencies are

now enforcing Zero VOC paint
production in their countries
and we are delighted to be the
rst to do so in this region,
he said.
The nished product ranges are tested in an accredited
analytical laboratory TUV
Singapore for Zero VOCs
contents as per the British
Standard (BS) method .
In March, the company
raised its stakes in East Africa
by opening its second factory
in the country estimated to be
worth Sh400 million.
The factory in Kisumu can
produce 1.2 million litres of
paint per month and has automated 70 per cent of its processes, a factor that assures the
quality of products.
The listed paint manufacturer operates through an extensive network of dealers and
showrooms in all major cities
and towns in Kenya.
ligadwah@ke.nationmedia.com

Geisha
Dettol
Imperial
Protex
Lux
Flamingo
Ushindi
Sunlight
Sawa
Diva
Jamaa
Others

39
1
4
10
6
6
1
1
1
1
1
3

2014 (%)
36
18
16
10
4
6
1
1
1
1
1
3

DEODORANT
Product Name 2015 (%)
Nivea
Rexona
Axe
Rasasi
Fa
Dove
Condence
Limara
Others

34
32
8
8
7
3
2
1
5

2014 (%)
50
47
7
6
8
4
2
2
5

TAMPONS
Product Name 2015 (%)
O.B
Kotex
Others

50
45
5

2014 (%)
52
47
1

Always
All Time
Sunny Girl
Flora
Super Girl
Kotex
Condence
Others

66
13
10
8
7
3
1
1

2014 (%)
57
9
10
6
5
3
1
2

TOILET PAPER
Product Name 2015 (%)
Toilex
Sifa
Cosy
Velvex
Rosy
Hannan
Fay
Private
Others

25
20
5
12
9
8
2
1
5

2014 (%)
27
19
17
12
11
10
1
1
2

TOOTHPASTE
Product Name 2015 (%)
Colgate
Aquafresh
Closeup
Whitedent
Sensodyne
Others

46
21
18
10
5
0

2014 (%)

50
45
14
10
4
1

Monday June 6, 2016 | BUSINESS DAILY

19

MONEY & MARKETS

PRICES I RESULTS I DATA

NSE eteats 5.5pc as foeign investos cut tading

ANALYSIS Counters show increased supply as

On a year-to-date basis, the main 20

share index is down six per cent.
Although analysts at Exotix Partners
and Equity Investment Bank have raised
concerns over continued inow of capital
(in a rising US rate environment), pressure on banks protability and balance
sheet growth, they remain more optimistic on the Kenyan stocks in the long run
compared to other frontier markets.
We remain positive on Kenya equities because the market valuation multiple of trailing price-to-book has de-rated
approximately 20 per cent from its startof-2015 peak, oil prices remain relatively
low and the economic growth outlook is
brighter than that of most frontier peers,
said Exotix Partners in a Kenya market
research note.

buyers cut exposure to banking stock on bad loans

month include KenGen at 21 per cent, Pan
Africa Insurance at 13 per cent, KapchoThe Nairobi Securities Exchange (NSE)
rua Tea at 12.8 per cent and Cooperative
has retreated by 5.5 per cent over the past
Bank at 12.5 per cent.
one month as foreign investors reduced
We attribute the decline in the index
their trading leaving 15 of the top 20 largto increased supply on most counters. In
est stocks in the red.
the short term we expect investors to reduce their exposure to banking
Market data for May
counters as the sector continues
compiled by Standard
to grapple with declining loan
Investment Bank (SIB)
book quality. We therefore expect
shows key indicators for
We emain
the downward trend (marginalthe market such as the
indices, turnover, and positive on Kenya ly) in the overall market index
equities because to be maintained, said Faida
foreign turnover have all
Investment Bank in a market
declined.
the maket
summary.
The NSE 20 share index has now dropped be- valuation multiple
of tailing pice- Foreign outows
low the 3800 point level for
only the second time in ve
to-book has de- The market turnover fell by
years, closing at 3799 last
Sh300 million to Sh7.3 billion
ated
Thursday, before slightly
in May from Aprils Sh10 bilEXOTIX PARTNERS, MARKET
gaining ground to stand at
lion. Market capitalisation has
3801.31 last Friday.
declined by Sh40 billion to
RESEARCH NOTE
The market has slackSh2.02 trillion since the beginened o in the aftermath of bank stocks
ning of May.
reporting their quarter one results, which
On the foreign trading side, inveswere mixed.
tors recorded a second straight month
of inows, but the volume declined comThe top declining stocks in the past
BY CHARLES MWANIKI

A Nairobi Securities Exchange staff on the trading oor. FILE

Historical average

pared to April. They pumped in a net of

Sh301 million into the bourse compared
to Sh388 million in April. In March they
had pulled out a net of Sh490 million.
Among individual stocks, Equity
Holdings dominated the foreign inows
charts, with the investors pumping in a
net of Sh620 million to the counter. It was
followed by Kenol Kobil at Sh87.3 million,

According to Cytonn Investments, the

market is also looking favourable on two
other multiplesprice to earnings and
dividend yield.
The market is currently trading at a
price-to-earnings ratio of 13.2 times versus a historical average of 13.8indicating
that most stocks are not overpricedand
a dividend yield of 4.2 per cent versus a
historical average of 3.4 per cent.
cmwaniki@ke.nationmedia.com

South Afican ating agency upgades

Mayfais cedit scoe on stable outlook
BY GEORGE NGIGI

Mayfair Insurance credit rating has been

upgraded following improved protability and capital adequacy.
South African rating agency GCR
has accorded the insurer an A- rating
up from BBB+, with a stable outlook.
The rating upgrade reects Mayfairs
strengthened earnings capacity, which is
expected to be sustained at strong levels
over the rating horizon, said GCR in the
rating report.
Mayfair posted a 47-per cent growth
in after-tax prot last year to Sh378 million up from Sh257 million in 2014.
GCR attributed the insurers prot
growth to prudent risk selection and
cost management.
The insurer, which paid more than
Sh1 billion to retail chain Nakumatt following the terrorist attack at its Westgate Mall branch in 2013, controls 1.8
per cent of the countrys general insurance market.
Mayfair wrote premiums of Sh2 billion last year up from Sh1.7 billion and

Mayfair Insurance MD Tushar Shah (left)

with Nakumatt chief Atul Shah during the
Westgate losses payout in January 2014. FILE
paid out claims of Sh636 million.
The rating agency also cited Mayfairs
strong capital position and liquidity in
upgrading its ability to settle claims.
Mayfairs share capital grew by 50 per
cent last year to Sh525 million indicating corporate activity rights issue or
bonus share issue.
GCR said the insurers cash position
at the end of the year was equivalent to
average monthly claims of 38 months
up from 27 months in 2014.
Mayfairs outlook was diluted from

positive to stable.
Risks in strategic assets are viewed
to be elevated, and exposure levels are
unlikely to reduce substantially in the
medium term given high entrenchment,
said GCR in its report.
Data from Insurance Regulatory Authority shows motor vehicle was the best
performing business class with an underwriting prot of Sh167 million while
workmens compensation was its worst
and only loss making class with negative
Sh167 million.
Its investment income remained at
last year at Sh193 million with GCR advising them to retain the same strategy
stating a more aggressive investment
strategy, as well as a weakening in operating performance, may also reduce credit
strength, said the rating agency.
GCR is one of the rating agencies licensed by the Capital Markets Authority
to rate listed companies in Kenya.
Insurance companies, including unquoted ones, opt to be rated in an eort
to assure the market of their ability to
pay any claims that arise.

Kenya Commercial Bank at Sh77.5 million

and I&M Holdings at Sh69.4 million.
In foreign net outows, East Africa Breweries Ltd led the market with
Sh286.4 million, while Bamburi Cement
had net outows of Sh92 million. Jubilee
Holdings and Cooperative Bank recorded
net foreign outows of Sh79.5 million and
Sh68.7 million respectively.

Milles dash hopes fo lowe ou

pices on expensive Naok wheat
BY GERALD ANDAE

Wheat harvest from Narok County at the

end of the month will not lower the price
of related grain products due to its high
cost compared to import stock, millers
have said.
The Cereal Millers Association (CMA)
said that local farmers demand for higherthan-international prices would make it
impossible for the harvest to impact the
prices of our products.
Narok is a major wheat belt for the
country and accounts for half of the total
crop that is harvested in Kenya.
The expected harvest from Narok will
not have any impact on the price of bread
and other our products because the local wheat is normally expensive than the
one that has been imported, said Mrs
Paloma Fernandez, the chief executive
of the CMA.
A 90-kilogramme bag of imported wheat costs between Sh2,800 and
Sh3,000 while farmers in the country
normally demand more than Sh3,800
for the same quantity arguing that it is
their break-even point.

Import duty appeal

Kenyan wheat farmers have been

pushing for rise in import tax from 10pc
to 35pc to discourage the relatively
cheap imports
The State has however ruled out
tax rise and asked them to cut high
production costs
A report by the Ministry of Agriculture indicates the minimum cost in production of a bag of wheat in North Rift is
Sh3,200. This can rise to Sh3,400 in areas
such as Narok. Kenya is a net importer
of wheat, bringing in two-thirds of its requirements to meet the annual consumption of 900,000 tonnes. It produces about
350,000 tonnes annually.
Agriculture secretary Willy Bett said
farmers have to address the high cost of
production to become competitive instead
of demanding prices that are higher than
those on the global level. He said they
should also stop calling for an increase
of import duty on the commodity which
currently stands at 10 per cent.

20

BUSINESS DAILY | Monday June 6, 2016

MONEY & MARKETS

KenGen shae picks up steam on

inceasing local investo appetite

BY CHARLES MWANIKI

REBOUND Electricity

producer has traded 53.3m

shares in two weeks since
start of cash call on May 23
BY OTIATO GUGUYU

Kenya Electricity Generating Company (KenGen) share has picked up steam as investor
appetite for the stock increased in the second
week of trading the new stock.
The KenGen counter has traded a total
of 53.3 million shares in the two weeks since
the rights issue opened in May 23.
From a trading perspective I think we
saw a bit of weakness in the rst days but
it has picked up in the last few days and I
KenGen managing director Albert Mugo during the release of half-year results in February. DIANA NGILA
think the oer is likely to be taken up, Eric
Musau, an analyst at Standard Investment
bid to defend their positions.
the stock has an upside potential of over 100
Bank (SIB) said.
Mr Musau said the governments decision
The interest is a combination of both loper cent, AIB Capital said.
to take up its principal shares by converting
cal as well as foreign investors. Locals were
KenGen is oering a total of 4,396,722,912
Sh20.2 billion debt into shares
quiet initially but it looks like they
new ordinary shares at a price of Sh6.55 per
are also coming up but foreign
has bolstered KenGens rights
share to raise Sh29 billion for business exinvestors have been quite keen,
issue by ooading the prespansion.
Mr
Musau
said.
Mr Musau said there is a sense that the
sure to raise the Sh28.8 billion
The inteest is
The shareholders will have up
to help nance 720 megawatts
shares would receive a positive push from
a combination
of new production capacity over
to June 10, 2016 to exercise their
the dividend yield.
of both local as right of two new ordinary shares
the next four years.
He also said the energy rms management
For any transaction, the anwell as foeign for every one ordinary share has played a proactive role in ensuring the
chor shareholder taking up their
investos. Locals held in the companys register success of the oer.
shareholding is always important
as at May 16.
The management has also been quite
wee quiet
as is the case for KenGen as you
AIB Capital recommended
proactive; they have met investors in Naithat the shareholders could reap
can imagine a company selling
robi, the dierent fund managers as well as
initially but it
shares and the anchor shareholdbetter returns from the potential
across the country in roadshows in Mombasa,
looks like they ae
er not taking up their share, that
of doubling its share price accordNakuru, Eldoret.
coming up
is always a negative, he said.
ing to their estimates.
So I think that eort as well as internaWe recommend shareholders
Mr Musau said that initially,
tional trips have also played an important
ERIC MUSAU, ANALYST,
role in seeing the type of interest that we have
the oer attracted more foreign STANDARD INVESTMENT BANK to take up their rights and invest
investors but recent trading had
more in KenGen due to the earnbeen seeing, Mr Musau said.
seen heightened interests from local invesings growth and upside potential the comtors which may indicate current shareholder
pany has. Based on our target price of 15.10,
dotiato@ke.nationmedia.com

Gold pice steadies ahead of US jobs date elease

Gold edged up after two days of losses on
Friday, but remained hemmed in a narrow
range ahead of key US payrolls data later in
the session and its implications for US monetary policy.
A strong reading could boost expectations
that the Federal Reserve will lift interest rates
sooner rather than later, a move that would
be bearish for non-yielding gold.
Gold prices are highly sensitive to US rate
expectations, and have fallen more than ve
per cent since minutes from a Fed meeting
indicated in mid-May that a summer rate increase may be on the table. They hit a 3-1/2
month low of $1,199.60 on Monday.
Spot gold was up 0.1 per cent at $1,211.70 an
ounce, while US gold futures for June delivery

Gaden City develope

Actis aises Sh50bn
fo Afican pojects

A gold shop in Beijing, China. AFP

were $1.20 an ounce higher at $1,213.80.
Trading volume is low ahead of the US
non-farm payrolls data, Naeem Aslam, chief
market analyst at Think Forex, said.
Traders will gauge this very closely and

Actis new cash injection

comes after a period of heightBritish private equity (PE) rm
ened activity in its East African
Actis has raised Sh50.5 billion
($500 million) for real estate ininvestments, where it has exited
vestment in eight African countwo power sector investments
tries including Kenya, its directors
in Kenya and Uganda in the last
said last Friday.
two years.
However, the rm did not
Last September, the PE rm
disclose the amount intended
sold its 30 per cent stake in Globeleq Africa, the energy company
for Kenya.
that owns the 75 megawatt (MW)
Actis said it had targeted to
raise Sh40 billion ($400 million)
Mombasa-based thermal power
in its third African real estate fund
Tsavo Power (commonly referred
dubbed ARE3, but managed to
to as Kipevu II), to CDC and Norget an extra Sh10 billion from the
wegian development nancier
institutional investors
Norfund for $227
taking up the oer.
million (Sh23 bilThe fund has a
lion).
diverse investor base,
The investment
Investments
including
pension
will go
funds, sovereign wealth
Globeleq also has
pedominantly power plants in
funds, development nance institutions and
Cameroon, Tanzainto pime
endowments
from
nia, Cote dIvoire
etail, oce
Africa, Asia, Europe
and South Africa.
and industial
and North America.
Actis in June
The new fund is sig- developments in 2014 sold shareholding in Ugannicantly larger than
capital cities..
Actis Africa real estate
dan power utility
Umeme to institufund 2, which closed
tional and retail inin October 2012 with
ACTIS STATEMENT
vestors, reducing its
commitments of $278
million, said Actis in a
stake to 14.3 per cent
statement last Friday.
from 60.08 per cent.
PE rms have been increasing
The investment will go pretheir investment in Kenya in redominantly into prime retail,
cent years, attracted by high reoce and industrial developturns especially in the real estate
ments in the capital cities of sevand nancial sectors.
en to eight sub-Saharan African
In April, third-tier Jamii Bora
markets.
Bank raised Sh1.2 billion through
The British rm is the princian equity investment from Equapal developer of the Garden City
mall along Thika Road, where it is
tor Capital Partners and Progrescurrently putting up oce blocks
sion Capital Africa, who joined
in the second development phase.
fellow PE rm Catalyst Principal
The International Finance CorpoPartners as signicant shareholdration and the CDC Group are also
ers of the bank.
investors in the project.

they will relate this to the Fed sentiment.

If you look at the odds for a June interest
rate hike, they have started to fade again, he
said. If the US NFP data is immensely strong
today, the odds could tilt once again in favour
of the Fed.
World shares rose towards their highest in
a month on Friday, although concerns about
rising prospects of a near-term US rate rise
kept activity subdued.
Gold demand in Asia, home to the worlds
biggest consumers of physical gold, was muted this week as a slight increase in India and
Japan was oset by reductions in other trading centres as buyers awaited further price
declines.
-REUTERS

Garden City Mall on Thika Road. FILE

Monday June 6, 2016 | BUSINESS DAILY

21

MONEY & MARKETS

Fed likely to avoid ate incease

befoe Bitain votes on EU exit

A Chinese
worker at an
offshore oil
engineering
platform in
Qingdao.
Ofcial data
shows factory
activity
expanded for
the third straight
month in May. AFP

REFERENDUM US delay to mitigate geopolitical risks linked to outcome of Brexit poll

The US Federal Reserve may be forced to delay a rate hike at its June meeting because of
mounting concern over the economic fallout
from Britains vote on whether to leave the
European Union.
The geopolitical risk likely will push any
rate increase until at least July, despite apparent consensus among Fed ocials that
a hike is warranted by stronger US growth
and tight labour markets.
The Feds June 14-15 rate-setting meeting
comes just a week before the British vote
on June 23. A leave vote is expected to roil
nancial markets, cause credit spreads to
widen, trigger a rush into safe assets and
bolster the dollar.
The dollars recent stability is one reason
the Fed has become more comfortable with
raising rates, and ocials may want to let
the threat of Brexit pass before moving to
tighten nancial conditions.
Fed board governor Daniel Tarullo last
Thursday joined the chorus of those warning
of his concerns over the British vote, telling
Bloomberg that Brexit would be a factor
he would consider at the Feds June policy
meeting and said that the British votes impact on markets would be key.
The most recent poll found that voters in
Britain Europes second biggest economy
and its most inuential nancial centre
were evenly split on whether to stay in the
EU or to leave.
By the time the Fed meets on June 14 and
15, at least four of the ve Washington-based
governors will have aired their views on the
outlook for rates, with Lael Brainard due to
speak Friday and Chair Janet Yellen appearing in Philadelphia next week.
Fed ocials will release their latest
economic projections at the June meeting
along with a policy statement, and Yellen
is scheduled to hold a post-meeting news

China May data to signal slow

ecovey as investo feas hold

A campaigner attends a pro-Brexit campaign event in Birmingham, England last week. AFP
conference. The two governors who have addressed the Brexit vote so far have sounded
notes of caution.
I do see the possibility of a real hit to economic growth both in the UK and the EU,
Fed Board Governor Jerome Powell said last
week. I can imagine the upcoming Brexit
vote as presenting a factor in favor of caution
about raising rates.
Secret meetings across Europe reveal uncertainty over what would follow a vote that
British Prime Minister David Cameron calls
a leap in the dark and also concern about
what happens if Britain stays in.
If Britain remains in the EU, it could lead
to continued inghting in the ruling Conservative party and destabilising battles with
the rest of the EU.
Waiting on the Brexit vote is a no-brainer, said Jon Faust, a former Fed staer and
now a professor of economics at Johns Hopkins University. Why move now as opposed
to a few weeks from now?
With few exceptions, the message from
regional Fed bank presidents has been con-

sistent: the upcoming Brexit vote may tip

the scales against a June increase.
This is only the latest obstacle to the Feds
two-year struggle to normalise US monetary
policy after dropping rates dramatically during a protracted downturn.
In 2014, the crash in oil prices and a rapid
spike in the value of the dollar crushed US
exports and drove ination into a ditch.
Last year, a surprise slowdown in Chinas
economy, alongside the malaise in Europe
and Japan, sparked global market turbulence
and broader concerns about a worldwide
recession. That vexing landscape kept the
Fed on hold until December.
Now, Brexit aside, the prospect of a rate
hike soon appears all but certain. Unemployment dropped to ve per cent in April;
ination appears to be gaining traction as
the drag from cheap oil and a strong dollar
fades; and the lull in growth over the past
few months has proved temporary, with
consumer spending and the housing market showing particular strength.
- REUTERS

A urry of data from China in coming weeks is expected to reinforce

views that the worlds second-largest economy is slowly steadying
but not gaining momentum as investors hoped just a few months
ago, a Reuters poll of economists
showed.
Increased government infrastructure spending and a housing recovery are supporting
growth even as Beijing appears to
be pulling in the reins on a record
credit binge amid worries about
the dangers of using too much debt
to stimulate the economy.
Though investors fears of a
hard landing have ebbed, concerns
remain that Beijing has not moved
fast enough on key reforms such as
cutting excess capacity, while debt
continues to rise and the yuan currency comes under pressure.
Factory surveys earlier last
week gave somewhat mixed signals on the health of manufacturing, with some signs of steadying
but companies continuing to shed
jobs in response to weak demand
at home and abroad.
With the economy showing no
signs of a quick recovery, analysts
expect Beijing to keep up its infrastructure spending spree, but
are dialing back expectations for

further broad policy easing by the

central bank.
Chinas policy easing momentum has already peaked. We think
that the recent mix of government
policy signals should be taken together, in light of policymakers
ongoing bid to achieve both its
targets of stabilising near-term
growth and progressing on structural reforms, UBS analysts said in
a note on Thursday last week.

Cautious stance
Loan and money data could add
to the debate over whether Beijing has shifted to a more cautious
stance as debt climbs.
New loans are expected to pick
up from April but remain well below the records in the rst quarter.
After lending hit a six-month low
of 556 billion yuan (58.57 billion
pounds) in April, new loans in
May are forecast to total 750 billion yuan.
Growth in M2 money supply,
however, may have fallen to an 11month low, in line with recent calls
from the government to reduce leverage. M2 was seen rising 12.5 per
cent in May from the same period
a year earlier, down from 12.8 per
cent in April.
- REUTERS

Bent oil emains above $50 afte OPEC meeting fails to stike deal
Brent oil prices held around $50 a barrel
last Friday following an OPEC meeting
that failed to agree on output targets, but
which was seen as supportive as Saudi
Arabia pledged not to ood the market
with more fuel.
The Organisation of the Petroleum
Exporting Countries (OPEC) failed to
agree to a clear oil-output strategy last
Thursday as Iran insisted on raising
production to regain market share lost
during years of sanctions, which were
lifted in January.
Analysts still took away positives from
the meeting in Vienna, as Saudi Arabia
showed restraint.
We will be very gentle in our approach
and make sure we dont shock the market

in any way, Saudi Energy minister Khalid

al-Falih told reporters.
As a result, Brent crude futures held
above $50 per barrel on Friday, trading
at $50.19 per barrel at 0647 GMT, up 15
cents from the last settlement and almost
double January lows.
US West Texas Intermediate (WTI)
crude futures were trading up nine cents
at $49.26.
Despite the failure to agree on a joint
policy, analysts said that rivals Iran and
Saudi Arabia both got what they wanted
from the meeting.
Both sides have achieved their underlying aims; Irans production remains unconstrained and Saudis policy of allowing
the market to rebalance through price is

Saudi Energy minister Khalid al-Falih. AFP

still in place. Non-OPEC supply has fallen

and OPEC has gained market share, BNP
Paribas said.
Given that Irans facilities cannot increase exports by much more and that
Saudi Arabia pledged restraint just as
supplies are disrupted elsewhere - especially in Nigeria, Venezuela, Libya and the
United States - traders said that the OPEC
meeting was supportive of oil prices.
The rate of global stock build has
fallen and the elevated stocks will begin
to erode from the start of 2017, providing scope for price improvement, the
bank said.
Bank of America Merrill Lynch said
that rising oil prices were also being
exacerbated by seasonal dynamics, as

well as robust trend gasoline consumption growth in the US, India, and even
China.
The US bank said that fueled by the
lower prices, oil consumption around the
world is booming on less ecient use, less
substitution eects, and more economic
demand.
Strong demand in Asia was also reected by a jump in rening margins especially for diesel and jet fuel.
For diesel, traders said a record heatwave in south and southeast Asia had
pushed up fuel demand to operate air
conditioners, while jet fuel demand
was soaring because of Asias booming
air travel.
- REUTERS

22

BUSINESS DAILY | Monday June 6, 2016

MARKET DATA
Agro Commodities Market
Early Morning wholesale commodity prices Date 03.06.2016.
COMMODITY
Unit
Kg
Nairobi
CEREAL
Bag
90
2500
Dry Maize
Green Maize
Ext Bag
115
2300
Bag
90
7100
Finger Millet
Sorghum
Bag
90
3500
Bag
90
Wheat
LEGUMES
Bag
90
5900
Beans Canadian
Beans Rosecoco
Bag
90
5800
Bag
90
5700
Beans Mwitemania
Mwezi Moja
Bag
90
5800
Dolichos (Njahi)
Bag
90
13000
Green Gram
Bag
90
9500
Bag
90
7500
Cowpeas
Fresh Peas
Bag
51
4500
Bag
110
13000
Groundnuts
ROOTS & TUBERS
Bag
50
2700
Red Irish Potatoes
White Irish Potatoes
Bag
50
2600
Cassava Fresh
Bag
99
2100
Bag
98
3200
Sweet Potatoes
VEGETABLES
Ext Bag
126
1500
Cabbages
Cooking Bananas
Med Bunch
22
500
Med Bunch
14
600
Ripe Bananas
Carrots
Ext Bag
138
2300
Lg Box
64
7000
Tomatoes
Onions Dry
net
13
950
Bag
142
2300
Spring Onions
Chillies
Bag
38
2000
50
2100
Cucumber
Bag
Capsicums
Bag
50
2500
44
1500
Brinjals
Bag
Cauliower
crate
39
2500
Bag
51
2500
Lettuce
FRUITS
Bag
57
4500
Passion Fruits
Oranges
Bag
93
3500
Bag
95
2500
Lemons
Mangoes Local
Bag
126
2800
Sm Basket
25
1000
Mangoes Ngowe
Limes
net
13
900
Pineapples
Dozen
13
880
Lg Box
54
2000
Pawpaw
Avocado
Bag
90
2500
Bag
50
1500
Kales
OTHERS
Tray
Tray
280
Eggs

Commodities
Mombasa

Kisumu

Nakuru

Eldoret

Kitale

2600
5600
6300
2700

3200
2400
7200
3200

2300
1800
4900
2700

2600
1080
7200
4950
3300

2450
2000
5000
3600

8000
7600

5500
5500
4800
4500
10800
7800
9000
4800
12100

6300
5000

8100
10800

4800
4800
4500

8100
13500
5400
1530
11700

10800
12600
7000
4000
13750

4200

1400
1200

3500

2000

3600
3000
2200
1800

Caracas
People argue with
members of the
National Guard as they
try to queue in front
of a supermarket.
Venezuelas opposition blames President
Nicolas Maduro for
the countrys fall from
booming oil giant to
basket case. The economy is meanwhile forecast to contract eight
per cent this year and
the International
Monetary Fund predicts ination will hit
700 percent. AFP

13950
9000
3250
5500
15400

10000
7800
2500
10400

1900
2400
2300
2550

3600
3600
2000
2000

4500
700
450
4450
6800
1400
4000
1900
2250
3500
900
3100
3000

1300
280
280
3000
7000
1300
2500
1500

1000
350
750
1700
6000
850
1000
2500

1800
950
560
1800
7400
1300
1400

2800
1500

2500
1300

1750

5000
2800
1800
1600
500

3000

3420
3300

1600
2800
1850

5000
3600
2700
3000
500

2400
700

960
1000
3000
2500

650
1200
1600
2500

480
2000
3000
700

1040
1890
1800
1400

970
2750
2200

SUGAR NO5

USD

500.30

5.50

330

290

300

330

310

COFFEE

USD

136.50

2500
500
750
7000
6000
1200
3000
6600
3000
3000

5500
4300
3800
3000

SOURCE: STATE DEPARTMENT OF AGRICULTURE. EMAIL MARKETINFO@KILIMO.GO.KE

PCT.CHNG
-8.04%
1.33%
0.06%
-1.91%
-3.09%
0.71%
-4.24%
3.14%
-10.05%
-3.47%
-0.88%
-4.12%
-2.98%
0.76%
0.64%
-0.98%
-5.58%
0.80%
1.17%
-1.98%
-0.12%
-3.41%
-1.06%
3.23%
-4.41%
-0.31%
-4.18%
-6.34%
-0.12%
-4.06%
-4.26%
0.15%
0.51%
-4.20%
-1.27%
-2.60%
-2.97%
-6.29%
1.30%
4.06%
2.30%
-8.14%
-6.94%
-4.11%
-3.85%
2.37%
-13.85%
2.89%
-2.51%
0.43%

OPEN
360.40
1,060.36
1,965.44
475.60
221.44
445.88
363.26
71.06
1,730.71
4,028.61
55.96
2,167.88
229.96
297.50
438.49
45,010.51
1,631.31
477.90
106.05
461.78
145.05
1,232.80
5,644.32
995.69
1,111.66
532.60
408.57
64,209.12
583.08
283.86
252.68
551.40
657.58
4,460.74
42,826.48
570.35
652.34
2,026.31
115.60
1,281.90
117.08
518.00
741.67
839.41
683.40
488.60
380.76
314.78
290.12
1,353.24

Global Commodity Prices

Unit Trusts

Effective date: 03 June 2016

Effective date: 02 June 2016

HIGH
360.40
1,060.36
1,965.44
475.60
221.44
445.88
363.26
71.06
1,730.71
4,028.61
55.96
2,167.88
229.96
297.50
438.49
45,010.51
1,631.31
477.90
106.05
461.78
145.05
1,232.80
5,644.32
995.69
1,111.66
532.60
408.57
64,209.12
583.08
283.86
252.68
551.40
657.58
4,460.74
42,826.48
570.35
652.34
2,026.31
115.60
1,281.90
117.08
518.00
741.67
839.41
683.40
488.60
380.76
314.78
290.12
1,353.24

COMMODITY

CURRENCY LAST

CLOSE
391.93
1,046.39
1,964.28
484.87
228.49
442.74
379.33
68.89
1,924.04
4,173.23
56.45
2,260.99
237.03
295.26
435.72
45,454.51
1,727.71
474.09
104.83
471.10
145.23
1,276.37
5,704.52
964.57
1,162.98
534.25
426.39
68,553.17
583.76
295.87
263.92
550.58
654.23
4,656.08
43,375.94
585.56
672.30
2,162.38
114.12
1,231.93
114.44
563.92
796.98
875.35
710.80
477.31
441.99
305.95
297.59
1,347.43

NET CHNG

USD

3,060.00

CURRENCY

DAILY YIELD

OLD MUTUAL

SH

7.92%

EFFECTIVE ANNUAL RATE

8.21%

BRITISH AMERICAN

SH

10.55%

11.07%

UAP

SH

4.62%

4.73%

PAN AFRICA PESA+

SH

11.45%

12.13%

CBA

SH

8.26%

8.56%

AMANA

SH

13.25%

14.08%

1.00

EQUITY MONEY MARKET FUND

SH

6.56%

6.76%

3.00

ICEA

SH

7.24%

7.51%

ZIMELE

SH

10.34%

10.75%

12.28%

13.43%

SOFTS

RUBBER

LOW
360.40
1,060.36
1,965.44
475.60
221.44
445.88
363.26
71.06
1,730.71
4,028.61
55.96
2,167.88
229.96
297.50
438.49
45,010.51
1,631.31
477.90
106.05
461.78
145.05
1,232.80
5,644.32
995.69
1,111.66
532.60
408.57
64,209.12
583.08
283.86
252.68
551.40
657.58
4,460.74
42,826.48
570.35
652.34
2,026.31
115.60
1,281.90
117.08
518.00
741.67
839.41
683.40
488.60
380.76
314.78
290.12
1,353.24

MONEY MARKET FUND

AGRO COMMODITIES

COCOA

MSCI Emerging Markets Sector Indices

NAME
LAST NET.CHNG
CI-UAE
360.40
-31.53
CI-AC AMER.
1,060.36
13.96
CI-ARGENTINA
1,965.44
1.16
CI-BRIC
475.60
-9.27
BRIC
221.44
-7.05
BRIC GROWTH
445.88
3.14
BRIC VALUE
363.26
-16.07
CI-BAHRAIN
71.06
2.16
CI-BRAZIL FREE
1,730.71
-193.33
CI-CHILE
4,028.61
-144.62
CI-CHINA FREE
55.96
-0.49
CI-COLOMBIA
2,167.88
-93.11
CI-CZECH REPUBLI 229.96
-7.06
CI-EAFE+EM
297.50
2.24
CI-EU
438.49
2.77
CI-EM
45,010.51 -444.00
CI-EGYPT
1,631.31
-96.40
CI-AC EUROPE
477.90
3.81
CI-C.FE
106.05
1.22
CI-C.FE X JP
461.78
-9.31
CI-GOLD DRAGON
145.05
-0.18
CI-HUNGARY
1,232.80
-43.57
CI-INDON. FREE
5,644.32
-60.20
CI-INDIA
995.69
31.12
CI-JOEG & MA
1,111.66
-51.33
CI-KOREA
532.60
-1.65
CI-KUWAIT
408.57
-17.82
CI-EM L.AMERICA 64,209.12 -4344.06
CI-SRI LANKA
583.08
-0.68
CI-MOROCCO
283.86
-12.01
CI-EM E.EUROPE
252.68
-11.25
CI-EM FAR EAST
551.40
0.82
CI-EM ASIA
657.58
3.35
CI-EM EUROPE
4,460.74
-195.34
CI-MEXICO FREE 42,826.48
-549.46
CI-MALAYSIA FREE 570.35
-15.21
CI-OMAN
652.34
-19.96
CI-PERU
2,026.31
-136.07
CI-AC PAC.
115.60
1.49
CI-PHILIPP.FREE
1,281.90
49.96
CI-PAKISTAN
117.08
2.64
CI-POLAND
518.00
-45.92
CI-QATAR
741.67
-55.31
CI-RUSSIA
839.41
-35.94
SOUTH EAST ASIA 683.40
-27.40
CI-THAILAND FREE 488.60
11.29
CI-TURKEY
380.76
-61.23
CI-TAIWAN
314.78
8.83
CI-ISRAEL
290.12
-7.47
CI-SOUTH AFRICA 1,353.24
5.81

Cisis gows

JPY

158.00

1.00

MADISON ASSET

SH

FROZEN OJ CON1 USC

157.30

3.05

CIC

SH

COTTON NO2

63.43

0.56

STANLIB

SH

8.72%

9.08%

APOLLO

SH

13.30%

14.14%

USD

100.32

100.32

CURRENCY

BUY

SELL

USD

95.99

95.99

OLD MUTUAL

SH

149.47

159.16

BRITISH AMERICAN

SH

176.18

181.33
11.79

USC

GRAINS

NABO

CORN

USC

417.75

2.5

FIXED INCOME FUND

MAIZE EUR

EUR

158.75

-4.25

CIC

WHEAT

USC

487.25

1.75

ROUGH RICE

USD

11.41

0.04

OILSEEDS

PAN AFRICA CHAMA+

SH

11.44

SH

6.40

0.31

AMANA

SH

126.04

126.04

2.70

EQUITY BALANCED FUND FUND

SH

103.84

101.80

MADISON ASSET

SH

56.84

59.97

ICEA

SH

124.28

130.83

STANLIB

SH

128.87

128.87

CIC

SH

USC

1,162.50

18.25

SOY BEAN OIL

USC

32.57

CANOLA

CAD

523.30

MYR

2,264.00

-8.00

METALS & MINING

SYMBOL

CURRENCY

100 OZ GOLD

USD

LAST
1,211.60

NET CHG
1.80

SILVER

JPY

56.00

0.00

HG COPPER

USC

2.11

0.04

PLATINUM

JPY

3,367.00

10.00

ALUMINIUM

CNY

12,370.00

-75.00

PALLADIUM

JPY

1,875.00

-65.00

OIL& GAS
SYMBOL

CURRENCY

BALANCED FUND

ZIMELE

SOY BEANS

PALM OIL

NABO

SH

LAST

NET CHG
0.01

APOLLO

6.21

SH

105.74

101.68

USD

98.28

98.28

OLD MUTUAL

SH

353.91

379.2

OLD MUTUAL EA FUND

SH

143.37

151.73
185.71

NABO
EQUITIES FUND

BRITISH AMERICAN

SH

179.99

MADISON ASSET

SH

41.89

44.47

CBA

SH

145.43

145.43

AMANA

SH

129.07

129.07

STANLIB

SH

158.96

158.96

ICEA

SH

130.42

137.29

APOLLO

SH

104.67

99.69

CIC

SH
92.78

92.78

NABO

USD

LIGHT CRUDE

USD

49.18

NO 2 HT OIL

USD

1.51

0.00

OLD MUTUAL

SH

99.43

101.79

BRENT CRUDE

USD

50.09

0.05

BRITISH AMERICAN

SH

132.83

135.54

GAS OIL

USD

448.75

-1.00

NATURAL GAS

USD

2.43

KEROSINE

JPY

41,850.00

SOURCE: THOMSON REUTERS

BOND FUND

UAP

SH

11.84

11.84

STANLIB B1

SH

101.63

101.63

0.03

STANLIB A

SH

100.17

100.17

300.00

PAN AFRICA PATA+

SH

9.76

10.06

ICEA

SH

95.93

96.89

Monday June 6, 2016 | BUSINESS DAILY

23

MARKET DATA
-

US job gowth
bakes shaply
as Veizons
stike takes toll
The US economy created the fewest
number of jobs in more than ve years
in May, hurt by a strike by Verizon
workers and a fall in goods producing employment, pointing to labour
market weakness that could make it
dicult for the Federal Reserve to
raise interest rates.
Nonfarm payrolls increased by
only 38,000 jobs last month, the
smallest gain since September 2010,
the Labor Department said on Friday.
Employers hired 59,000 fewer workers in March and April. The government said the month-long Verizon
strike had depressed employment
growth by 34,000 jobs.
The goods producing sector, which
includes mining and manufacturing,
shed 36,000 jobs, the most since February 2010.
Even without the Verizon strike,
payrolls would have increased by a
mere 72,000.
The Verizon workers, who were considered unemployed because they did
not receive a salary during the payrolls survey week, returned to their
jobs on Wednesday. They are expected
to boost June employment.

Unemployment
The jobless rate fell three-tenths of
a percentage point to 4.7 percent in
May, the lowest since November 2007.
The decrease in the unemployment
rate was in part due to a people dropping out of the labour force.
Economists polled by Reuters
had forecast payrolls rising 164,000
in May and the unemployment rate
falling to 4.9 per cent.
Fed Chair Janet Yellen has said
monthly gains of roughly 100,000
jobs are needed to keep up with
growth in the work-age population.
The US.central bank has signalled
its intention to raise rates soon if job
gains continued and economic data
remained consistent with a pickup in
growth in the second quarter.
Yellen said last week that a rate
increase would probably be appropriate in the coming months, if those
conditions were met. Data on consumer spending, industrial production, goods exports and housing have
suggested the economy is gathering
speed after growth slowed to a 0.8
per cent annualized rate in the rst
quarter. The Fed raised its benchmark
overnight interest rate in December
for the rst time in nearly a decade.
There is still no sign of meaningful
wage growth. Average hourly earnings rose ve cents, or 0.2 percent,
last month.
-REUTERS

MOVERS & LOSERS YTD

Kenya

Jan16

21.00
0.00%

May16
4.90
4.29
3.57%

CFC Stanbic
Kenya

85.00
-2.30%

May16
12.41
6.85
7.24%

EPS
DPS
Div Yield

Kenya

188.00
0.00%

Jan16

EPS
DPS
Div Yield

Jan16

Bamburi

DTB

Kenya RE

May16

TOTAL

18.35
-1.61%

Kenya

Jan16

May16

May16

EPS
DPS
Div Yield

14.49
13.04
6.88%

BAT

811.00
-3.22%

Kenya

Jan16
2.57
7.14
4.20%

EPS
DPS
Div Yield

189.00
0.53%

Jan16

19.80
9.49
1.33%

EPS
DPS
Div Yield

Kenya

EPS
DPS
Div Yield

Kenol Kobil
Kenya

Jan16

Unga
10.75
3.86%

May16

Kenya

May16

Jan16

49.76
16.30
6.10%

EPS
DPS
Div Yield

34.25
0.00%

Jan16
1.37
7.85
3.26%

EPS
DPS
Div Yield

StanChart

Kenya

EPS
DPS
Div Yield

Safaricom
212.00
0.00%

May16
19.97
10.62
8.02%

Kenya

Jan16
EPS
DPS
Div Yield

May16
5.27
6.50
2.92%

16.95
-0.29%

May16
0.95
17.84
4.48%

Tracking the markets: Benchmark Index (Latest Data) Africa

Africa
JSE All Share Index

Jan16

May 16

Jan16

May 16

Jan16

Rwanda
27,567.05
1.41%

2,424.86
-1.99%

1,764.00
0.17%

RSE All Share

Nigeria

Tanzania

Uganda

54,086.63
0.69%

NGSE All share

DSE All Share

USE All Share

South Africa

May 16

Jan16

May 16

130.15
-0.06%

Jan16

May 16

World
Dow Jones

Jan16

May 16

Jan16

May 16

Jan16

May 16

Mumbai
16,642.23
0.48%

20,947.24
0.42%

2,667.17
0.55%

Sensex

Tokyo

Hongkong

Europe
17,838.56
0.27%

Nikkei

HangSeng

FTSE 100

New York

Jan16

May 16

26,845.22
0.01%

Jan16

May 16

24

BUSINESS DAILY | Monday June 6, 2016

MARKET DATA
African Indices

Nairobi Stocks

NAME

NSE 20 Share Index

3,801.31
0.05%

Nairobi

LOCATION

LAST

OPEN

HIGH

LOW

NSE 20 - SHR IDX

KENYA

3,801.31

1.74

0.05%

3801.31

3801.31

3801.31

3799.57

NSE 25

KENYA

4,114.82

11.31

0.28%

4,114.82

4,114.82

4,114.82

4103.51

ALL SHARE INDEX

ALL SHARE INDE/D
ALSIUG

Nairobi

Oct15

May16

NSE 25 Share Index

4,114.82
0.28%

Nairobi

Oct15

May16

Active Counters
Counter

Priceri

Price fri

Last Fri

Prev Fri f

Change

Shares
Traded

Safaricom

16.95

17.10

-0.88%

22,669,000.00

KenolKobil

10.75

10.80

-0.46%

13,457,300.00

Equity

39.75

40.00

-0.62%

9,047,000.00

Co-Op Bank

16.55

18.15

-8.82%

7,620,800.00

KCB

37.25

39.50

-5.70%

7,436,900.00

Gainers
Price
Counter

Prev fri

Standard Grp

31.25

NBK
Williamson Tea

Price

net

Prev Fri

Change

27.25

4.00

%
Change

14.68%

11.15

10.50

0.65

6.19%

190.00

180.00

10.00

5.56%

KenGen

6.80

6.55

0.25

3.82%

STANLIB FAHARI I-REIT

19.55

19.05

0.50

2.62%

Losers
Counter

NSE

Price
Prev fri

Price
Prev Fri

net
Change

%
Change

20.25

27.50

-7.25

-26.36%

Longhorn Publishers 4.70

5.40

-0.70

-12.96%

Flame Tree GEMS

6.20

6.95

-0.75

-10.79%

Express (K) AIMS

3.45

3.80

-0.35

-9.21%

16.55

18.15

-1.60

-8.82%

Co-Op Bank

-21.12

-0.43%

4943.07

4943.07

4943.07

4964.19

369.72

0.69%

53857.24

54247.29

53810.05

53716.91

3.00

0.17%

1,764.00

1,764.00

1,764.00

1761

104.30

0.00

0.00%

104.30

104.30

104.30

104.3

CFG INDEX

20781.51

MOROCCO

20,731.11

-50.40

-0.24%

20771.49

20807.85

20731.11

MALAWI ALL SHR

MALAWI

12,823.24

-23.36

-0.18%

12,823.24

12,823.24

12,823.24

12846.6

NSE ALL SHARE/D

NIGERIA

27,567.05

383.41

1.41%

27183.64

27593.26

27181.82

27183.64

TANZANIA

2,424.86

-49.16

-1.99%

2,424.86

2,424.86

2,424.86

2474.02

EGYPT

7,617.88

45.49

0.60%

7577.92

7632.77

7577.92

7572.39

TUNISIA

5,551.23

20.77

0.38%

5552.2

5563.2

5527.91

5530.46

RWANDA

130.15

-0.08

-0.06%

130.15

130.15

130.15

130.23

Weekly Share Report

52 WK
HIGH

52 WK
LOW

AGRICULTURAL
18.10
EAAGADS AIMS
38.50
276.00
KAKUZI
383.00
77.00
KAPCHORUA TEA AIMS
242.00
681.00
LIMURU TEA AIMS
1,248.00
14.00
SASINI
23.25
16.00
WILLIAMSON TEA AIMS
435.00
AUTOMOBILES & ACCESSORIES
33.00
CAR & GEN
47.00
8.00
MARSHALLS
13.50
2.80
SAMEER
5.55
BANKING
9.80
BARCLAYS
16.50
71.00
CFC STANBIC
116.00
170.00
DTBK
235.00
36.50
EQUITY
48.50
18.80
HF
30.00
95.00
I&M HOLDINGS
125.00
36.00
KCB
60.00
8.00
NBK
23.00
35.00
NIC BANK
55.00
183.00
STAN. CHART.
334.00
15.50
CO-OP BANK
23.00
COMMERCIAL
1.30
ATLAS DEV. GEMS
11.10
3.45
EXPRESS (K) AIMS
6.00
20.25
HUTCHINGS BIEMER
20.25
3.70
KQ
7.90
3.70
LONGHORN PUBLISHERS AIMS 7.90
130.00
NATION MEDIA
219.00
24.50
STANDARD GRP
40.50
20.50
TPS EA
38.50
3.40
UCHUMI
11.00
21.00
WPP SCANGROUP
43.00
CONSTRUCTION & ALLIED
28.00
ARM CEMENT LTD
79.50
146.00
BAMBURI
200.00
45.00
CROWN BERGER
187.00
5.90
EA CABLES
17.00
65.00
35.00
EAPC
ENERGY & PETROLEUM
5.40
KENGEN
11.00
7.55
KENOLKOBIL
11.60
10.15
KENYA POWER
18.50
16.20
TOTAL
24.00
16.00
UMEME
24.00
INSURANCE
10.00
BRITISH AMERICAN
23.00
4.70
CIC INSURANCE
8.50
384.00
JUBILEE
580.00
16.00
KENYA RE
22.75
14.00
LIBERTY KENYA
28.00
36.00
PAN AFRICA
82.00
INVESTMENT
66.50
38.75
CENTUM INVEST.
1.20
HOME AFRICA GEMS
3.10
KURWITU VENTURES LTD GEMS1,500.00 1,500.00
3.40
OLYMPIA
5.50
4.35
TRANSCENTURY AIMS
16.65
INVESTMENT SERVICES
18.75
NAIROBI SECURITIES EXCHG 30.25
MANUFACTURING & ALLIED
11.10
A. BAUMANN AIMS
11.10
75.00
BOC GASES
140.00
675.00
BAT KENYA
869.00
12.80
CARBACID
19.80
245.00
EABL
320.00
2.10
EVEREADY EA
4.55
5.70
FLAME TREE GEMS
9.00
97.00
K. ORCHARDS AIMS
100.00
2.50
1.30
MUMIAS
30.50
UNGA
48.00
TELECOMMUNICATION & TECHNOLOGY
12.60
17.85
SAFARICOM
REAL ESTATE INVESTMENT TRUST
18.20
STANLIB FAHARI I-REIT
23.75
GEMS

MARKET UPDATES

4,943.07
54,086.63
1,764.00

RSE ALLSHARE IND

143.49
-0.01%

ZAMBIA
SOUTHAFRICA
UGANDA

TUN MAIN INDEX

All Share Index (NASI)

CLOSE

ZIMBABWE

EGX 30 IDX/D

May16

PCT.CHNG

ZSE INDUSTRIAL

DSE ALL SHR IDX

Oct15

NET.CHNG

YTD PRICE (KSH) PRICE (KSH)

% JUNE -03-2016 MAY -27-2016

WEEKLY
PRICE
CHANGE

SHARES
TRADED
LAST WEEK

SHARES
ISSUED

MKT CAP.
KSHS MN

EPS
LATEST
12MNTH

P/E
TRAILING

P/B
TRAILING

DPS
LATEST
12MNTH

TOTAL
DIVIDEND
YIELD

-14.02%
-4.10%
-57.50%
-26.36%
-3.58%
-50.52%

23.00
304.00
85.00
799.00
18.85
190.00

23.00
303.00
85.00
799.00
18.40
180.00

0.00%
0.33%
0.00%
0.00%
2.45%
5.56%

1,500.00
13,400.00
36,700.00
2,200.00

32,157,000.00
19,599,999.00
7,824,000.00
1,800,000.00
228,055,500.00
17,512,640.00

739.60
5,958.40
665.00
1,438.20
4,298.80
3,327.40

0.25
26.92
-5.82
1.22
2.21
23.77

92.00
11.29
-14.60
8.53
7.99

1.84
2.05
0.24
3.89
0.32
0.26

0.00
5.00
5.00
1.00
1.25
40.00

0.00%
1.64%
5.88%
0.13%
6.63%
21.05%

-8.86%
-30.30%
-20.00%

36.00
9.20
3.00

36.00
9.20
2.95

0.00%
0.00%
1.69%

500.00
14,200.00

40,103,308.00
14,393,106.00
278,342,393.00

1,443.70
132.40
835.00

0.76
-11.90
-0.06

47.37
-0.77
-50.00

0.69
0.34
0.36

0.00
0.00
0.00

0.00%
0.00%
0.00%

-27.57%
3.03%
0.53%
-0.63%
-13.93%
10.00%
-14.86%
-29.21%
-13.29%
8.72%
-8.06%

9.85
85.00
188.00
39.75
19.15
110.00
37.25
11.15
37.50
212.00
16.55

10.05
90.00
202.00
40.00
20.00
110.00
39.50
10.50
38.00
207.00
18.15

-1.99%
-5.56%
-6.93%
-0.62%
-4.25%
0.00%
-5.70%
6.19%
-1.32%
2.42%
-8.82%

1,290,400.00
10,200.00
11,700.00
9,047,000.00
466,200.00
213,200.00
7,436,900.00
91,300.00
754,400.00
84,000.00
7,620,800.00

5,431,536,000.00
395,321,638.00
220,100,096.00
3,773,674,802.00
352,416,667.00
392,362,039.00
3,025,219,832.00
308,000,000.00
639,945,603.00
309,159,514.00
4,889,316,295.00

53,500.60
33,602.30
41,378.80
150,003.60
6,748.80
43,159.80
112,689.40
3,434.20
23,998.00
65,541.80
80,918.20

1.55
12.41
19.80
4.59
3.43
13.56
6.49
-3.84
6.86
19.97
2.14

6.35
6.85
9.49
8.66
5.58
8.11
5.74
-2.90
5.47
10.62
7.73

1.65
1.46
1.56
2.17
0.74
1.97
1.46
0.25
1.06
1.56
1.85

1.00
6.15
2.50
2.00
1.30
2.90
2.00
0.00
1.25
17.00
0.80

10.15%
7.24%
1.33%
5.03%
6.79%
2.64%
5.37%
0.00%
3.33%
8.02%
4.83%

-38.10%
-23.33%
0.00%
-22.45%
4.44%
-14.66%
11.61%
-12.00%
-65.75%
-30.00%

1.30
3.45
20.25
3.80
4.70
163.00
31.25
22.00
3.75
21.00

1.40
3.80
20.25
3.90
5.40
163.00
27.25
22.25
3.90
21.00

-7.14%
-9.21%
0.00%
-2.56%
-12.96%
0.00%
14.68%
-1.12%
-3.85%
0.00%

43,000.00
3,200.00
849,700.00
282,200.00
98,100.00
13,700.00
53,600.00
57,500.00
74,100.00

1,497,370,885.00
35,403,790.00
360,000.00
1,496,469,035.00
369,940,476.00
188,542,286.00
81,731,808.00
182,174,108.00
364,959,616.00
378,865,102.00

1,946.60
122.10
7.30
5,686.60
1,738.70
30,732.40
2,554.10
4,007.80
1,368.60
7,956.20

-3.58
1.70
-18.34
-13.35
7.00
11.80
2.95
1.63
-10.85
1.12

-0.36
2.03
-1.10
-0.28
0.67
13.81
10.59
13.50
-0.35
18.75

0.61
1.06
0.63
3.48
1.23
0.37
0.34
0.88

0.00
0.00
0.00
0.00
0.15
10.00
0.00
1.35
0.00
0.00

0.00%
0.00%
0.00%
0.00%
3.19%
6.13%
0.00%
6.14%
0.00%
0.00%

-16.77%
8.00%
-14.75%
-38.21%
-25.13%

34.75
189.00
52.00
6.55
35.00

35.50
192.00
51.00
6.95
35.00

-2.11%
-1.56%
1.96%
-5.76%
0.00%

1,107,700.00
3,200.00
200.00
91,000.00
4,800.00

495,275,000.00
362,959,275.00
71,181,000.00
253,125,000.00
90,000,000.00

17,210.80
68,599.30
3,701.40
1,658.00
3,150.00

-5.84
14.49
0.65
-2.21
79.52

-5.95
13.04
80.00
-2.96
0.44

1.55
2.28
0.91
0.69
0.65

0.00
13.00
0.60
0.00
0.00

0.00%
6.88%
1.15%
0.00%
0.00%

-4.23%
11.98%
-18.94%
0.55%
-19.10%

6.80
10.75
10.70
18.35
18.00

6.55
10.80
10.80
18.70
18.00

3.82%
-0.46%
-0.93%
-1.87%
0.00%

1,593,800.00
13,457,300.00
129,000.00
24,700.00
1,388,600.00

2,198,361,456.00
1,471,761,200.00
1,951,467,045.00
175,028,706.00
1,623,878,005.00

14,948.90
15,821.40
20,880.70
3,211.80
29,229.80

5.24
1.37
3.81
2.57
1.34

1.30
7.85
2.81
7.14
13.43

0.17
2.24
0.41
0.21
2.10

0.65
0.35
0.30
0.77
0.90

9.56%
3.26%
2.80%
4.20%
5.00%

14.62%
-20.16%
-0.83%
0.00%
-21.79%
-35.00%

14.90
4.95
480.00
21.00
15.25
39.00

14.75
5.15
484.00
21.00
15.00
40.00

1.02%
-3.88%
-0.83%
0.00%
1.67%
-2.50%

1,210,900.00
1,586,300.00
78,600.00
431,000.00
33,000.00
10,500.00

1,938,415,838.00
2,615,538,528.00
59,895,000.00
699,949,068.00
535,707,499.00
144,000,000.00

28,882.40
12,946.90
28,749.60
14,698.90
8,169.50
5,616.00

1.31
0.43
42.70
4.90
1.37
-0.43

11.37
11.51
11.24
4.29
11.13
-90.70

1.40
1.77
1.79
0.69
1.40
1.12

0.30
0.10
8.50
0.75
0.00
0.00

2.01%
2.02%
1.77%
3.57%
0.00%
0.00%

-11.29%
-46.15%
0.00%
-29.17%
-38.79%

41.25
1.40
1,500.00
3.40
5.05

41.50
1.40
1,500.00
3.60
5.00

-0.60%
0.00%
0.00%
-5.56%
1.00%

2,382,200.00
271,600.00
2,100.00
33,900.00

665,441,775.00
405,255,320.00
102,272.00
40,000,000.00
280,284,476.00

27,449.50
567.40
153.40
136.00
1,415.40

10.44
-0.91
-114.00
-1.04
-7.09

3.95
-1.54
-13.16
-3.27
-0.71

0.84
0.17
0.39

0.00
0.00
0.00
0.00
0.00

0.00%
0.00%
0.00%
0.00%
0.00%

-18.18%

20.25

27.50

-26.36%

363,200.00

194,625,000.00

3,941.20

1.57

12.90

2.54

0.49

2.42%

0.00%
-12.75%
3.31%
-8.59%
12.09%
-22.22%
-11.43%
-1.02%
-15.63%
1.48%

11.10
89.00
811.00
14.90
306.00
2.10
6.20
97.00
1.35
34.25

11.10
89.50
826.00
14.90
302.00
2.30
6.95
97.00
1.35
35.00

0.00%
-0.56%
-1.82%
0.00%
1.32%
-8.70%
-10.79%
0.00%
0.00%
-2.14%

100.00
12,900.00
20,800.00
1,099,700.00
18,200.00
128,100.00
1,767,300.00
10,000.00

3,840,066.00
19,525,446.00
100,000,000.00
254,851,988.00
790,774,356.00
210,000,000.00
161,866,804.00
12,868,124.00
1,530,000,000.00
75,708,873.00

42.60
1,737.80
81,100.00
3,797.30
241,977.00
441.00
1,003.60
1,248.20
2,065.50
2,593.00

-2.02
7.61
49.76
1.55
11.31
2.80
1.36
0.33
-3.04
5.27

-5.50
11.70
16.30
9.61
27.06
0.75
4.56
293.94
-0.44
6.50

0.99
10.63
2.30
7.53
1.36
2.50
-54.80
0.16
0.55

0.00
5.20
49.50
0.70
6.00
0.00
0.00
0.00
0.00
1.00

0.00%
5.84%
6.10%
4.70%
1.96%
0.00%
0.00%
0.00%
0.00%
2.92%

3.99%

16.95

17.10

-0.88% 22,669,000.00

40,065,428,000.00

679,109.00

0.95

17.84

6.44

0.76

4.48%

19.55

19.05

180,972,300.00

3,538.00

0.00

0.00

0.00%

AIMS

2.62%

67,400.00

Monday June 6, 2016 | BUSINESS DAILY

25

MARKET DATA
Equities & Bonds
Weekly Kenya Treasury and Infrastructure Bonds

Share Price Performance Scorecard

SCORECARD AS AT 03 JUNE 2016
NAME
A BAUMANN
ATLAS DEVPNT & SPPRT SERV
ATHI RIVER MINING
BAMBURI
BARCLAYS KEN
BAT KENYA
BOC KENYA
BRITISH AMERICAN
CAR & GENERAL
CARBACID INV
CENTUM INV
CFC STANBIC BANK
CIC INSURANCE
CO-OP BANK
CROWN BERGER
DIAMOND KEN
EA CABLES
EA PORT CEM
EAAGADS
EA AFR BREW
EQUITY BANK
EVEREADY EA
EXPRESS KEN
FLAME TREE HLDNGS
G WILLIAMSON
HUTCHINGS BIEMER
HOME AFRICA LIMITED
HOUSING FIN
I&M HOLDING
JUBILEE HLDS
KAKUZI
KAPCHORUA
KEN ORCHARDS
KENGEN
KENYA AIRWAYS
KENYA COM BK
KENOLKOBIL
KENYA POWER
KENYA RE
KURWITU
LIBERTY HOLDINGS
LIMURU TEA
LONGHORN
MARSHALL
MUMIAS SUGAR
NAIROBI SECURITIES
NATION MEDIA
NATL BANK KEN
NIC BANK
OLYMPIA CAPITAL
PAN AFR INS
SAFARICOM
SAMEER AFRICA
SASINI
STANLIB FAHARI I-REIT
WPP SCANGROUP
STANDARD GRP
STD CHART KEN
TOTAL KENYA
TPS (EA)
TRANSCENTURY
UCHUMI SUPER
UNGA GROUP

PREVIOUS
11.10
1.35
34.00
188.00
9.95
838.00
89.50
14.45
36.00
14.90
41.00
87.00
4.85
16.60
52.00
188.00
6.55
36.00
23.00
296.00
39.75
2.15
3.45
6.60
185.00
20.25
1.40
19.50
110.00
476.00
304.00
85.00
97.00
6.75
3.75
38.25
10.35
10.60
21.00
1500.00
15.65
799.00
5.05
9.20
1.30
27.75
164.00
10.60
37.00
3.40
39.00
17.00
3.00
18.65
20.00
22.50
29.25
212.00
18.65
21.75
5.10
3.80
34.25

CLOSE
11.10
1.30
34.75
189.00
9.85
811.00
89.00
14.90
36.00
14.90
41.25
85.00
4.95
16.55
52.00
188.00
6.55
35.00
23.00
306.00
39.75
2.10
3.45
6.20
190.00
20.25
1.40
19.15
110.00
480.00
304.00
85.00
97.00
6.80
3.80
37.25
10.75
10.70
21.00
1500.00
15.25
799.00
4.70
9.20
1.35
20.25
163.00
11.15
37.50
3.40
39.00
16.95
3.00
18.85
19.55
21.00
31.25
212.00
18.35
22.00
5.05
3.75
34.25

% 1D
0.00
-3.70
2.21
0.53
-1.01
-3.22
-0.56
3.11
0.00
0.00
0.61
-2.30
2.06
-0.30
0.00
0.00
0.00
-2.78
0.00
3.38
0.00
-2.33
0.00
-6.06
2.70
0.00
0.00
-1.79
0.00
0.84
0.00
0.00
0.00
0.74
1.33
-2.61
3.86
0.94
0.00
0.00
-2.56
0.00
-6.93
0.00
3.85
-27.03
-0.61
5.19
1.35
0.00
0.00
-0.29
0.00
1.07
-2.25
-6.67
6.84
0.00
-1.61
1.15
-0.98
-1.32
0.00

% 5D
0.00
-7.14
-2.11
-1.56
-1.99
-1.82
-0.56
1.02
0.00
0.00
-0.60
-5.56
-3.88
-8.82
1.96
-6.93
-5.76
0.00
0.00
1.32
-0.62
-8.70
-9.21
-10.79
5.56
0.00
0.00
-4.25
0.00
-0.83
0.33
0.00
0.00
3.82
-2.56
-5.70
-0.46
-0.93
0.00
0.00
1.67-4.09
0.00
-12.96
0.00
0.00
-26.36
0.00
6.19
-1.32
-5.56
-2.50
-0.88
1.69
2.45
2.62
0.00
14.68
2.42
-1.87
-1.12
1.00
-3.85
-2.14

% 1M
0.00
-7.14
-5.44
0.00
-10.05
-5.15
-4.30
10.78
0.00
2.76
-6.25
-5.56
-5.71
-15.35
0.97
-6.00
-11.49
-10.26
-6.12
4.08
-0.62
-14.29
-13.75
-22.50
5.56
0.00
-9.68
-8.81
-0.90
2.13
0.33
0.00
0.00
-20.93
-13.64
-10.24
-0.46
-7.36
7.14
0.00
-0.65
0.00
10.59
12.20
-3.57
-26.36
-4.12
19.89
1.35
-10.53
-11.86
0.00
-7.69
1.62
-10.11
-17.65
5.04
6.00
-1.08
-4.35
7.45
-6.25
-7.43

% 3M
0.00
-23.53
5.30
-0.53
-16.88
-3.45
-6.32
24.17
-4.00
3.83
-7.30
0.00
-17.50
-13.35
-7.14
-9.18
-10.27
-19.54
-3.16
13.33
-2.45
-20.75
-23.33
-16.22
-3.06
0.00
-24.32
-9.88
10.55
4.35
1.33
-9.57
0.00
-8.11
-14.61
-9.15
1.42
-3.17
5.26
0.00
-23.56
-4.88
-18.26
-26.40
-12.90
-10.00
-11.89
-27.36
-9.64
-19.05
-29.09
0.30
-15.49
-4.56
-2.25
-20.75
9.65
7.07
8.26
-19.27
-16.53
-40.48
-9.87

% 6M
0.00
-18.75
-24.46
11.18
-24.81
3.97
-6.32
1.02
-8.86
-0.33
-10.33
0.00
-24.43
-9.56
-16.80
-6.47
-40.45
-30.00
4.55
11.68
-4.22
-25.00
-15.85
1.64
-46.02
0.00
0.00
-15.82
10.00
-4.95
-7.88
-45.86
-1.02
-11.11
-18.28
-8.02
33.54
-18.63
-4.55
0.00
-39.00
-26.36
17.50
-29.23
-12.90
-19.00
-0.61
-25.67
-12.79
-17.07
-36.07
7.96
-16.67
5.31
-4.63
-29.41
-2.34
1.92
-3.17
-20.72
-48.47
-52.83
-2.84

% 1Y
0.00
-88.24
-52.40
27.70
-35.83
3.31
-25.83
-33.78
-13.25
-15.82
-31.82
-18.27
-38.51
-23.02
-68.48
-17.90
-56.33
-40.68
-23.33
-2.55
-16.75
-52.81
-37.27
-30.34
-30.66
0.00
-53.33
-35.08
-5.17
-13.36
1.33
-34.62
-7.62
-24.44
-45.71
-36.32
27.22
-33.75
23.53
0.00

BONDS WEEKLY STATISTICS

BONDS LISTED AT THE NAIROBI SECURITIES EXCHANGE

ISSUE
MATURITY
ISSUED VALUE
DATE
DATE
IN MILLIONS

CENTUM BOND SENIOR UNSECURED FIXED RATE AND EQUITY LINKED NOTES
18-09-17
26-09-12
CTNB.BD.18.09.17/13.50
18-09-17
CTNB.BD.18.09.17/12.75
26-09-12
8-06-20
CTNB.BD.08.06.20/13
15-06-15
8-06-20
CTNB.BD.08.06.20/12.5
15-06-15
8-06-20
CTNB.BD.08.06.20/12.5V
15-06-15
CONSOLIDATED BANK OF KENYA LTD MEDIUM TERM NOTE PROGRAMME
24-07-19
30-06-12
CON.BD-FXD(SN)/2012/7YR
24-07-19
CON.BD-FXD(SBN)/2012/7YR
30-06-12
24-07-19
CON.BD-FR(SN)/2012/7YR
30-06-12
SHELTER AFRIQUE MEDIUM TERM UNSECURED NOTES
28-09-18
30-09-13
FXD (SHELTER AFRIQUE) /2013/5YR
28-09-18
FR (SHELTER AFRIQUE) /2013/5YR
30-09-13
MRM
3-01-17
27-10-08
FR (MRM) 2008/8YR
3-01-17
FXD (MRM) 2008/8YR
27-10-08
CFC STANBIC BANK SENIOR & SUBORDINATED BOND ISSUE
7-07-16
7-07-09
FR (CFC STANBIC) 2009/7YR
7-07-16
FXD (CFC STANBIC) 2009/7YR
7-07-09
KENGEN PUBLIC INFRASTRUCTURE BOND OFFER 2019
31-10-19
2-11-09
FXIB 1/2009/10YR
HOUSING FINANCE MEDIUM TERM NOTE
14-10-19
22-10-12
FXD (HFCK) 02/2012/7YR 2ND TRANCHE
2-10-17
FR (HFCK) 2010/7YR
26-10-10
2-10-17
FXD (HFCK) 2010/7YR
26-10-10
I&M MEDIUM TERM NOTE
8-03-19
13-12-13
FRN I&M-01/13/5.25
8-03-19
FXD I&M-01/13/5.25
13-12-13
BRITAM MEDIUM TERM NOTE
15-07-19
22-07-14
BRTB.BD.22/07/19-0037-13
UAP HOLDINGS MEDIUM TERM NOTE
22-07-19
28-07-14
UAP.BD.22.07.2019
NIC MEDIUM TERM NOTE
9-09-19
8-09-14
NIC.BD.09/09/19-0039-12.5
CIC INSURANCE GROUP LTD. MEDIUM TERM NOTE
2-10-19
8-10-14
CIC.BD.2.10.2019
CFC BANK MULTICURRENCY FIXED MEDIUM TERM NOTE
8-12-21
15-12-14
CFCB.BD.08/12/21-0042-12.95
CBA FIXED MEDIUM TERM NOTE
14-12-20
22-12-14
CBAB.BD.14/12/20-0041-12.75
EABL FIXED MEDIUM TERM NOTE
19-03-18
23-03-15
EABB.BD.19/03/18-0043-12.25
CHASE BANK FIXED MEDIUM TERM NOTE
2-06-22
10-06-15
CHBD.BD.02/06/22-0044-13.5
REAL PEOPLE MEDIUM TERM NOTE
6-08-18
10-08-15
RPBD.BD.06/08/18-0046-13.65
3-08-20
RPBD.BD.03/08/20-0047-13.65
10-08-15
FAMILY BANK MEDIUM TERM NOTE
43576
46310
FBKB.BD.19/04/21-0049-13.75
43576
FBKB.BD.19/04/21-0051-2.5
46310
43576
FBKB.BD.19/04/21-0050-14
46310

2,917.10
1,250.80
3,899.22
2,100.77
2,100.77

MATURITY

ISSUED VALUE COUPON

TRADED YIELD

TOTAL VALUE

NUMBER

DATE

IN MILLIONS

(%)

(%)

(KSHS)

OF TRADES

FXD 1/2015/1YR

29-09-15

26-09-16

24,260.65

19.062

13.2000

4,000,000

FXD 2/2015/1YR

26-10-15

24-10-16

20,482.75

22.954

11.6000

79,250,000

FXD 3/2014/2YR

25-05-15

19-12-16

29,375.70

10.890

FXD 1/2015/2YR

23-02-15

20-02-17

23,592.15

11.470

FXD 2/2015/2YR

29-06-15

26-06-17

18,746.80

12.629

FXD 1/2016/2YR

25-01-16

22-01-18

20,153.75

15.760

11.5000

400,000,000

FXD 2/2016/2YR

23-05-16

21-05-18

4,728.53

12.020

FXD 1/2012/5YR

28-05-12

22-05-17

31,079.55

11.855

11.8002

23,350,000

FXD 1/2013/5YR

29-04-13

23-04-18

20,240.75

12.892

14.5000

5,600,000

FXD 2/2013/5YR

1-07-13

25-06-18

26,340.05

11.305

FXD 3/2013/5YR

25-11-13

19-11-18

14,937.80

11.952

13.2500

4,000,000

FXD 1/2014/5YR

28-04-14

22-04-19

25,733.70

10.870

FXD 2/2014/5YR

23-06-14

17-06-19

16,418.25

10.934

FXD 1/2015/5YR

29-06-15

22-06-20

30,956.05

13.193

13.7500

1,000,000,000

FXD 2/2015/5YR

30-11-15

23-11-20

30,673.85

13.920

13.7500

1,300,000,000

FXD 1/2016/5YR

25-04-16

19-04-21

19,545.57

14.334

13.1894

1,705,800,000

10

FXD1/2007/10YR

29-10-07

16-10-17

9,308.80

10.750

FXD1/2008/10YR

29-10-07

12-02-18

2,992.75

10.750

FXD2/2008/10YR

28-07-08

16-07-18

13,504.70

10.750
10.750

TWO YEAR BONDS

FIVE YEAR BONDS

TEN YEAR BONDS

-15.89
-33.33
-22.69
-32.50
-3.57
-16.84
-46.90
-26.47
-32.00
-51.25
3.35
-38.14
18.18
-44.00
-14.38
-22.91
-20.22
-34.33
-61.30
-65.60
-23.46

FXD3/2008/10YR

29-09-08

17-09-18

4,151.60

FXD1/2009/10YR

27-09-09

15-04-19

4,966.85

10.750

FXD1/2010/10YR

26-04-10

13-04-20

19,394.15

8.790

FXD2/2010/10YR

1-11-10

19-10-20

18,849.90

9.307

FXD1/2012/10YR

30-06-12

13-06-22

35,273.50

12.300

13.8700

1,100,000,000

FXD1/2013/10YR

1-07-13

19-06-23

35,273.70

12.371

13.4750

813,200,000

FXD1/2014/10YR

25-05-15

15-01-24

35,852.15

12.180

13.9000

10,000,000

25-09-06

11-09-17

4,031.40

13.750

FXD1/2006/12YR

28-08-06

13-08-18

3,900.95

14.000

FXD1/2007/12YR

28-05-07

13-05-19

4,864.60

13.000

14.0125

605,500,000

14.8000

1,800,000

ELEVEN YEAR BONDS

FXD1/2006/11YR
TWELVE YEAR BONDS

FIFTEEN YEAR BONDS

COUPON
(%)
13.500
12.750
13.000
12.500

1480.60
1965.00
1.00

13.250
13.600

4,239.70
760.30

12.750
11.000

13,785
6,215

13.000

9,790
24,020

12.500

15,625.00

ISSUE
DATE
ONE YEAR BONDS

Weekly Corporate Bonds

JUNE 03, 2016

JUNE 03, 2016

AVERAGE

12.500

2,969.10
1,167
5,864

13.000

3,429
226 12.800

(182+2%)

6,000

13.000

8.500

2000.00

13.000

5514.00

12.500

5000.00

13.000

5080.00

12.950

7000.00

AVG TRADED
YIELD (%)

NUMBER OF
TRADES

FXD1/2007/15YR

26-03-07

7-03-22

3,654.60

14.500

FXD2/2007/15YR

25-06-07

6-06-22

7,236.95

13.500

FXD3/2007/15YR

26-11-07

7-11-22

18,030.20

12.500

FXD1/2008/15YR

31-03-08

13-03-23

7,830.90

12.500

FXD1/2009/15YR

26-10-09

7-10-24

9,420.45

12.500

FXD1/2010/15YR

29-03-10

10-03-25

22,336.25

10.250

FXD2/2010/15YR

27-12-10

8-12-25

13,513.10

9.000

FXD1/2012/15YR

24-09-12

6-09-27

21,089.45

11.000

FXD1/2013/15YR

25-02-13

7-02-28

42,138.45

11.250

FXD2/2013/15YR

29-04-13

10-04-28

17,385.85

12.000

FXD1/2008/20YR

30-06-08

5-06-28

20,360.95

13.750

FXD1/2011/20YR

30-05-11

5-05-31

9,365.80

10.000

FXD1/2012/20YR

26-11-12

1-11-32

44,581.65

12.000

28-06-10

28-05-35

20,192.40

11.250

28-02-11

21-01-41

28,144.70

12.000

13.5411

33,000,000

13.2500

2,400,000

TWENTY YEAR BONDS

TWENTY FIVE YEAR BOND

FXD1/2010/25YR
THIRTY YEAR BOND
SDB 1/2011/30YR

INFRASTRUCTURE BONDS
IFB 1/2011/12YR

3-10-11

18-09-23

43,447.35

12.000

IFB 1/2009/12YR

23-02-09

8-02-21

19,726.85

12.500
12.000

IFB 2/2009/12YR

7-12-09

22-11-21

18,897.65

IFB 1/2010/8YR

1-03-10

19-02-18

15,908.05

9.750

12.750

IFB 2/2010/9YR

30-08-10

19-08-19

32,871.55

6.000

5000.00

12.250

IFB 1/2013/12YR

30-09-13

15-09-25

38,841.68

11.000

4822.40

13.250

IFB 1/2014/12YR

27-10-14

12-10-26

35,480.90

11.000

12.2500

121,000,000

270.30
1363.90

13.650
13.650

IFB 1/2015/12YR

30-03-15

15-03-27

51,192.20

11.351

13.2039

201,900,000

IFB 1/2015/9YR

14-12-15

2-12-24

25,119.55

11.000

11.8073

226,000,000

1297.1
600.7
121 14

13.75
(182+2.5)

IFB 1/2016/9YR

23-05-16

12-05-25

34,902.25

12.500

12.7058

5,370,500,000

43

26

BUSINESS DAILY | Monday June 6, 2016

MARKET DATA
Global Markets & Currencies
Global Indexes

Currencies
Kenya Shilling
CURRENCY
US DOLLAR
STG POUND
EURO
SA RAND
KES / USHS
KES / TSHS
KES / RWF
KES / BIF
AE DIRHAM
CAN $
S FRANC
JPY (100)
SW KRONER
NOR KRONER
DAN KRONER
IND RUPEE
HONGKONG DOLLAR
SINGAPORE DOLLAR
SAUDI RIYAL
CHINESE YUAN
AUSTRALIAN $
SOURCE: CBK

BUY
100.80
145.46
112.47
6.47
33.28
21.64
7.70
15.44
27.44
77.03
101.82
92.72
12.10
12.09
15.12
1.50
12.97
73.29
26.88
15.30
72.82

DAILY
SELL
101.00
145.79
112.73
6.49
33.48
21.79
7.80
15.66
27.50
77.21
102.05
92.93
12.13
12.12
15.15
1.50
13.00
73.46
26.93
15.35
73.00

MEAN
100.90
145.62
112.60
6.48
33.38
21.71
7.75
15.55
27.47
77.12
101.94
92.82
12.12
12.10
15.13
1.50
12.99
73.37
26.91
15.32
72.91

US Dollar
BACKGROUND
EURO
JAPANESE YEN
BRITISH POUND
SWISS FRANC
AUSTRALIAN DOLLAR
SWEDISH KRONA
CANADIAN DOLLAR
CHINESE YUAN
NORWEGIAN KRONE
BOSNIAN MARK
DANISH KRONE
RUSSIA ROUBLE
TURKISH LIRA
ICELAND KRONA
INDIAN RUPEE
POLISH ZLOTY
CZECH KORUNA
HUNGARIAN FORINT
UKRAINE HRYVNIA
ISRAEL SHEKEL
ALBANIAN LEK
BULGARIAN LEV
SERBIAN DINAR
CYPRUS POUND
ESTONIAN KROON
GEORGIAN LARI
THAI BAHT
GIBRALTAR POUND
CROATIAN KUNA
KAZAKHSTAN TENGE
LITHUANIA LITAS
LATVIAN LATS
MOLDOVAN LEU
MACEDONIA DENAR
MALTESE LIRA
ROMANIAN LEU
SLOVAK KORUNA
SERBIAN DINAR
ARMENIAN DRAM
UAE DIRHAM
ANGOLAN KWANZA
BURUNDI FRANC
BOTSWANA PULA
CONGO FRANC
CAPE VERDE ESCUDO
DIJIBOUTI FRANC
ALGERIAN DINAR
EGYPT POUND
ETHIOPIAN BIRR
GHANAIAN CEDI
GAMBIAN DALASI
ERITREA NAFKA
GUINEA FRANC
KENYA SHILLING
COMORO FRANC
LIBERIAN DOLLAR
LESOTHO LOTI
LIBYAN DINAR
MOROCCAN DIRHAM
MALAGASY ARIARY
MAURITANIAOUGUIYA
MALAWI KWACHA
MOZAMBIQUEMETICAL
NIGERIAN NAIRA
RWANDA FRANC
SC RUPEE
ST HELENA POUND
SIERRALEONLEON
SAO TOME DOBRA
SOMALI SHILLING
SWAZILAND LILAGENI
TUNISIAN DINAR
TANZANIA SHILLING
UGANDA SHILLING
CFA FRANC
CFA FRANC
MAURITIUS RUPEE
SOUTH AFRICA RAND

FTSE 100

BID
1.11
108.95
1.44
0.99
0.72
8.31
1.31
6.59
8.34
1.73
6.68
67.03
2.95
125.15
67.32
3.94
24.25
280.15
24.90
3.87
124.00
1.76
59.99
0.40
11.70
2.14
35.61
1.44
6.73
337.71
2.85
0.51
19.76
55.19
3.41
4.05
21.55
110.44
476.50
3.67
165.06
1,532.20
0.09
913.00
97.97
176.00
110.14
8.88
21.56
3.91
42.10
16.10
7,150.00
100.90
426.25
90.00
15.59
1.37
9.75
3,245.00
352.23
700.79
56.50
199.00
769.00
13.24
1.44
3,898.00
21,329.00
585.00
15.59
2.14
2,186.00
3,360.00
588.72
588.72
35.54
15.60

ASK
1.11
109.00
1.44
0.99
0.72
8.32
1.31
6.59
8.35
1.77
6.68
67.04
2.95
125.46
67.33
3.94
24.26
280.40
25.00
3.88
124.50
1.76
60.19
0.40
11.71
2.16
35.63
1.44
6.73
337.78
2.85
0.51
19.96
55.41
3.42
4.06
21.60
110.86
480.50
3.67
166.41
1,582.20
0.09
943.00
99.07
177.88
110.69
8.88
21.86
3.92
43.60
16.60
7,350.00
101.10
427.25
95.00
15.62
1.38
9.77
3,285.00
360.23
718.10
57.63
199.50
779.00
13.44
1.45
3,998.00
22,657.00
592.00
15.63
2.15
2,196.00
3,370.00
603.72
593.89
35.56
15.61

INDEX (REGION/COUNTRY)

CLOSE

CHG

YTD

52 WEEK

% CHG

% CHG

HIGH

3-YR
LOW

% CHG

% CHG
2.3

GLOBAL
THE GLOBAL DOW (WORLD)

2,336.46

0.6

0.03

0.002

2,604.27

2,047.44

-9.6

THE GLOBAL DOW EURO (WORLD)

1,971.33

2.71

0.14

-2.7

2,223.60

1,699.54

-8.6

7.5

DJ GLOBAL INDEX (WORLD)

311.06

0.26

0.08

337.78

272.15

-7

3.3

DJ GLOBAL EX U.S. (WORLD)

207.85

-0.41

-0.2

-1.1

240.41

184.52

-13

-1.6
-0.6

ASIA PACIFIC
DJ ASIA-PACIFIC TSM (ASIA-PACIFIC)

1,356.56

-7.21

-0.53

-2.4

1,557.73

1,190.45

-12.5

ALL ORDINARIES (AUSTRALIA)

5,354.20

-41

-0.76

0.2

5,688.50

4,816.60

-2.9

2.9

S & P/ASX 200 (AUSTRALIA)

5,278.90

-44.3

-0.83

-0.3

5,706.70

4,765.30

-4.1

2.3

DOW JONES CHINA 88 (CHINA)

251.73

0.05

0.02

-12.2

408.69

SHANGHAI COMPOSITE (CHINA)

2,925.23

11.72

0.4

-17.3

5,166.35

HANG SENG (HONG KONG)

20,859.22

98.24

0.47

-4.8

S & P BSE SENSEX (INDIA)

26,843.14

129.21

0.48

2.8

JAKARTA COMPOSITE (INDONESIA)

4,833.23

-6.44

-0.13

5.2

5,100.57

NIKKEI 300 (JAPAN)

267.34

-6.11

-2.23

-14.1

343.20

NIKKEI STOCK AVG (JAPAN)

16,562.55

-393.18 -2.32

-13

20,868.03

TOPIX INDEX (JAPAN)

1,331.81

224.92

-35.7

5.2

2,655.66

-40.9

8.3

27,551.89

18,319.58

-24.3

-2.3

28,504.93

22,951.83

0.1

10.8

4,120.50

-5.2

-1.6

242.81

-21.2

5.1

14,952.61

-19.2

6.3

-30.26

-2.22

-13.9

1,691.29

1,196.28

-20.4

5.5

KUALA LUMPUR COMPOSITE (MALAYSIA) 1,630.53

4.03

0.25

-3.7

1,745.33

1,532.14

-6.4

-2.7

S & P/NZX 50 (NEW ZEALAND)

7,003.12

-19.28

-0.27

10.7

7,039.41

5,546.88

19.4

15.8

KSE 100 (PAKISTAN)

36,839.14

342.98 0.94

12.3

36,839.14

30,564.50

8.1

19.1

PSEI (PHILIPPINES)

7,464.59

-36.2

-0.48

7.4

7,665.52

6,084.28

-1.2

2.1

STRAITS TIMES (SINGAPORE)

2,795.09

4.55

0.16

-3

3,373.48

2,532.70

-16.4

-5.5

KOSPI (SOUTH KOREA)

1,985.11

2.39

0.12

1.2

2,107.33

1,829.81

-4.2

-0.3

COLOMBO STOCK EXCHANGE (SRI LANKA) 6,523.84

-18.91

-0.29

-5.4

7,498.78

5,862.35

-8.4

0.3

WEIGHTED (TAIWAN)

8,556.02

-41.14

-0.48

2.6

9,476.34

7,410.34

-8.5

1.2

SET (THAILAND)

1,424.06

8.3

0.59

10.6

1,519.47

1,224.83

-4.5

-3

EUROPE
STOXX EUROPE 600 (EUROPE)

344.35

0.23

0.07

-5.9

406.80

303.58

-12.3

4.6

STOXX EUROPE 50 (EUROPE)

2,877.49

-2.08

-0.07

-7.2

3,520.48

2,566.26

-14.7

1.6

EURO STOXX 50 (EURO ZONE)

3,033.86

-4.91

-0.16

-7.2

3,686.58

2,680.35

-14.7

3.1

EURO STOXX (EURO ZONE)

325.09

0.06

0.02

-5.8

380.54

284.92

-11.6

5.2
-2.6

ATX (AUSTRIA)

2,231.54

9.42

0.42

-6.9

2,612.35

1,957.05

-14.6

BEL-20 (BELGIUM)

3,512.48

8.21

0.23

-5.1

3,849.12

3,130.76

-4.9

9.9

PX 50 (CZECH REPUBLIC)

888.40

0.2

0.02

-7.1

1,041.00

845.90

-12.8

-2.5

OMX COPENHAGEN (DENMARK)

890.75

-5.93

-0.66

-1.8

923.55

745.49

22

OMX HELSINKI (FINLAND)

8,001.14

9.71

0.12

-6.9

8,875.70

7,257.23

-6.9

8.8

CAC 40 (FRANCE)

4,466.00

-9.39

-0.21

-3.7

5,196.73

3,896.71

-10.4

4.2

DAX (GERMANY)

10,208.00

3.56

0.03

-5

11,735.72

8,752.87

-10

6.9

BUX (HUNGARY)

27,208.42

218.83

0.81

13.7

27,271.78

20,610.76

22

12.2

FTSE MIB (ITALY)

17,767.30

-43.55

-0.24

-17

24,031.19

15,773.00

-23.9

1.1

AEX (NETHERLANDS)

447.59

0.81

0.18

1.3

503.48

382.61

-7.8

7.2

ALL-SHARES (NORWAY)

665.18

-0.05

-0.01

2.5

698.66

552.32

-4.5

7.4

WIG (POLAND)

44,772.72

72.05

0.16

-3.6

54,749.74

42,152.70

-18.2

-2.2

PSI 20 (PORTUGAL)

4,850.00

-0.38

-0.01

-8.7

5,921.04

4,460.63

-17.4

-6.5

RTS INDEX (RUSSIA)

885.93

-4.59

-0.52

17

981.82

628.41

-4

-12.7

7,746.30

-19.6

2.5

435.21

-8.8

8.4

IBEX 35 (SPAIN)

8,957.90

41

0.46

-6.1

11,556.10

SX ALL SHARE (SWEDEN)

485.01

0.85

0.18

-4

541.60

SWISS MARKET (SWITZERLAND)

8,205.82

20.29

0.25

-6.9

9,526.79

7,496.62

-11.1

1.1

BIST 100 (TURKEY)

76,272.10

-762.83 -0.99

6.3

86,343.65

68,567.89

-7.5

-3.9

FTSE 100 (U.K.)

6,185.61

-6.32

-0.1

-0.9

6,859.20

5,537.00

-9.8

-2.1

FTSE 250 (U.K.)

17,076.26

14.79

0.09

-2

18,090.42

15,178.80

-5.6

AMERICAS
DJ AMERICAS (AMERICAS)

506.12

1.85

0.37

3.9

522.13

433.35

-1.7

6.8

MERVAL (ARGENTINA)

12,717.90

91.87

0.73

8.9

14,173.87

9,288.41

13.1

53.9

SAO PAULO BOVESPA (BRAZIL)

49,887.24

874.59

1.78

15.1

54,477.78

37,497.48

-6.8

-2.3

S & P/TSX COMP (CANADA)

14,136.99

73.45

0.52

8.7

15,019.39

11,843.11

-5.9

3.8

SANTIAGO IPSA (CHILE)

3,054.30

-8.67

-0.28

3.8

3,198.07

2,759.77

-4.1

-5

IPC ALL-SHARE (MEXICO)

45,508.31

-49.3

-0.11

5.9

46,191.51

40,265.37

2.1

CARACAS GENERAL (VENEZUELA)

15,521.19

-33.93

-0.22

6.4

16,820.52

11,064.37

25.5

166.8

SOURCE: WSJ MARKETS

Global Indices
NAME

LOCATION

LAST

NET.CHNG

DJ INDU AVERAGE

NEWYORK

17,838.56

48.89

FTSE EUROTOP 100

LONDON

2,667.17

14.62

0.55%

2,651.86

2,673.42

XETRA DAX PF/D

FRANKFURT

10,246.33

38.33

0.38%

10,237.58

10,282.72

10,221.52 10,208.00

CAC 40 INDEX/D

PARIS

4,483.07

17.07

0.38%

4,477.83

4,490.36

4,468.41

FTSE MIB/D

MILAN

17,812.16

44.86

0.25%

17,863.98

17,867.08

17,652.38

17,767.30

SMI PR/D

SWITZERLAND

8,215.42

9.60

0.12%

8,230.48

8,231.54

8,200.58

8,205.82

HANG SENG INDE/D

HONGKONG

20,947.24

88.02

0.42%

20,956.08

21,049.20

20,887.79

20,859.22

NIKKEI 225 INDEX

TOKYO

16,642.23

79.68

0.48%

16,599.51

16,716.14

16,554.60

16,562.55

ALL ORDINARIES

AUSTRALIA

5,392.55

38.32

0.72%

5,354.20

5,397.50

5,354.20

5,354.23

SSE COMPOSITE/D

SINGAPORE

2,938.18

12.95

0.44%

2,929.79

2,945.52

2,915.19

2,925.23

STRAITS TIMES /D

SHANGHAI

3,724.24

18.73

0.51%

3,723.29

3,733.57

3,716.70

3,705.51

S&P SENSEX/D

MUMBAI

26,845.22

2.08

0.01%

26,919.23

27,008.14

26,816.72

26,843.14

SOURCE: THOMPSON REUTERS

PCT.CHNG

OPEN

HIGH

LOW

CLOSE

0.27%

17,789.05

17,838.56

17,703.55

17,789.67

2,651.86

2,652.55

4,466.00

NAME
ANGLO AMERICAN/D
ASSOC.BR.FOODS/D
ADMIRAL GROUP/D
ABDN.ASSET.MAN/D
AGGREKO/D
ANTOFAGASTA/D
ARM HOLDINGS/D
ASHMORE/D
AVIVA PLC/D
ASTRAZENECA/D
BAE SYSTEMS/D
BARCLAYS/D
BRIT AM TOBACC/D
BR LAND CO/D
BHP BILLITON/D
BUNZL/D
BP/D
BURBERRY GRP/D
BT GROUP/D
CARNIVAL/D
CENTRICA/D
COMPASS GROUP/D
CAPITA PLC/D
CRODA INTL/D
CRH/D
DIAGEO/D
MAN GROUP/D
EXPERIAN/D
FRESNILLO/D
G4S/D
GKN/D
GLENCORE/D
GLAXOSMITHKLIN/D
HAMMERSON/D
HARGREAVES LS/D
HSBC HOLDINGS/D
ICAP PLC/D
IAG/D
INTERCONT HOTE/D
IMI PLC/D
INTERTEK GROUP/D
ITV/D
JOHNSON MATTHE/D
KAZ MINERALS/D
KINGFISHER/D
LAND SECS GROU/D
LEGAL & GENERA/D
LLOYDS BNK GRP/D
MARKS & SP./D
MORRISON SUPMK/D
NATIONAL GRID/D
NEXT/D
OLD MUTUAL/D
PETROFAC/D
POLYMETAL INT/D
PRUDENTIAL/D
PEARSON/D
RECKIT BNCSR G/D
ROYAL BANK SCO/D
RDS A/D
RELX/D
ROYAL DTCH SHL/D
REXAM/D
RIO TINTO/D
ROLLS ROYCE PL/D
RANDGOLD RES./D
RSA INSRANCE G/D
SABMILLER/D
SAINSBURY(J)/D
SCHRODERS/D
SCHRODERS NV/D
SAGE GROUP/D
SHIRE/D
STANDARD LIFE/D
SMITHS GROUP/D
SMITH&NEPHEW/D
SERCO GROUP/D
SSE PLC/D
STANDRD CHART /D
SEVERN TRENT/D
TATE & LYLE/D
TULLOW OIL/D
TESCO/D
UNILEVER/D
UNITED UTIL GR/D
VEDANTA RES/D
VODAFONE GROUP/D
WEIR GROUP/D
WOLSELEY/D
WPP PLC/D
WHITBREAD/D

LAST
590.80
2935.00
1971.00
270.40
1144.00
421.90
998.25
290.50
444.50
4072.50
493.48
181.37
4187.50
734.50
819.80
2042.00
361.10
1079.00
433.45
3397.00
201.60
1296.00
1058.00
2935.00
2080.00
1862.50
136.80
1302.00
1065.00
184.50
283.00
131.25
1469.67
572.00
1321.00
454.05
426.80
531.50
2678.00
998.50
3159.00
212.10
2966.00
144.25
364.50
1157.00
236.10
71.04
356.50
196.10
969.10
5361.25
177.90
771.50
839.50
1348.25
848.00
6899.00
241.36
1682.50
1260.10
1687.50
633.50
1882.50
621.00
5889.76
484.70
4316.00
255.50
2668.00
2021.00
622.00
4504.70
334.20
1118.00
1190.00
109.79
1528.22
538.90
2254.00
635.00
238.29
169.50
3186.50
951.86
373.00
230.36
1182.00
3771.00
1590.00
4200.00

CLOSE
587.50
2900.00
1962.00
267.60
1141.00
417.40
984.00
285.00
443.60
4042.00
492.80
180.40
4142.50
730.00
805.60
2039.00
353.10
1075.00
433.50
3394.00
200.90
1294.00
1059.00
2935.00
2073.00
1851.50
132.40
1296.00
1044.00
185.30
282.50
128.55
1444.50
567.00
1311.00
446.15
415.60
532.00
2638.00
998.00
3156.00
212.50
2995.00
143.80
365.10
1148.00
235.70
70.53
356.60
196.40
959.60
5385.00
177.10
770.50
832.00
1350.00
849.50
6842.00
239.80
1661.00
1255.00
1665.50
627.50
1865.50
607.00
5850.00
484.70
4320.00
256.90
2653.00
2008.00
620.50
4449.00
333.60
1116.00
1178.00
106.90
1521.00
533.70
2245.00
637.50
230.70
169.50
3164.00
946.00
372.80
228.80
1174.00
3786.00
1597.00
4164.00

NET.CHNG
3.30
35.00
9.00
2.80
4.00
4.50
14.00
5.50
0.90
30.50
0.60
0.90
45.00
4.50
14.20
3.00
8.00
4.00
-0.05
3.00
0.70
2.00
-1.00
0.00
7.00
11.00
4.40
6.00
21.00
-0.80
0.50
2.70
25.50
5.00
10.00
7.90
11.20
-0.50
40.00
0.50
3.00
-0.40
-29.00
0.30
-0.60
9.00
0.40
0.52
-0.10
-0.30
9.40
-25.00
0.80
1.00
7.50
-2.00
-1.50
57.00
1.50
21.50
6.00
22.00
6.00
17.00
14.00
35.00
0.00
-4.00
-1.40
15.00
13.00
1.50
54.00
0.60
2.00
12.00
2.90
7.00
5.20
9.00
-2.50
7.30
0.05
22.50
6.00
0.20
1.55
8.00
-15.00
-7.00
36.00

PCT.CHNG
0.56%
1.21%
0.46%
1.05%
0.35%
1.08%
1.42%
1.93%
0.20%
0.75%
0.12%
0.50%
1.09%
0.62%
1.76%
0.15%
2.27%
0.37%
-0.01%
0.09%
0.35%
0.15%
-0.09%
0.00%
0.34%
0.59%
3.32%
0.46%
2.01%
-0.43%
0.18%
2.10%
1.77%
0.88%
0.76%
1.77%
2.69%
-0.09%
1.52%
0.05%
0.10%
-0.19%
-0.97%
0.21%
-0.16%
0.78%
0.17%
0.74%
-0.03%
-0.15%
0.98%
-0.46%
0.45%
0.13%
0.90%
-0.15%
-0.18%
0.83%
0.63%
1.29%
0.48%
1.32%
0.96%
0.91%
2.31%
0.60%
0.00%
-0.09%
-0.54%
0.57%
0.65%
0.24%
1.21%
0.18%
0.18%
1.02%
2.71%
0.46%
0.97%
0.40%
-0.39%
3.16%
0.03%
0.71%
0.63%
0.05%
0.68%
0.68%
-0.40%
-0.44%
0.86%

LI E

FINANCE

Monday June 6, 2016 | BUSINESS DAILY

MANAGEMENT

BUSINESS LAW
How you can use
intellectual popety
as a maketing tool

Page 28

Page 30

Six pieces of
conventional
business wisdom
that ae wong

WORKPLACE In todays world, the only ones who will survive are those who actively promote excellence at work

Ways to get employees to take esponsibility

J

ust about everything has changed

in the work world in the last 25
years. In the old system, people
took orders. Employees were expected
to park their brains, shut their mouths
and work their forty hours a week.
But somewhere along the way, some
entrepreneurs and organisations got
smart. They began to realise they could
do more than buy their employees time.
They could engage their employees
heads and hearts as well.
In the new world of work, its all
about taking responsibility. Employees are expected to take responsibility
to use all their talents and to perform
with excellence.
So what can you do to encourage
your people to take responsibility and
perform with excellence? Ive found
seven things that work.

1. Help people get a vision of excellence

Lots of people dont even know what
excellence means. After all, theyre
doing their job and think thats good
enough. Theyre competent but not
excellent. Jim Collins, the author of
Good to Great, says thats dangerous
explaining, Competence is the enemy
of the great.
So show them your vision of excellence that goes beyond competence, or
create such a vision together.

2. Expect excellence
Sounds simple enough. But all too many
leaders and managers do just the opposite. When they oversee every detail of
every function, theyre saying, in eect,
they dont expect excellence from their
people. They expect failure.
Just be careful. As Sterling says in
the book, Pygmalion in Management,
its very dicult to disguise your expectations. If you expect others to shrug
responsibility and do just enough to
get by, they will sense that and act accordingly.
Expect and project. Expect excellence from others and learn to project
your expectation. And then

3. Lead by example
A German proverb says, When you
walk your talk, people listen. In other
words, if you take responsibility for
excellence, chances are the people
around you will also take responsibility and practice excellence.

Workers in
a meeting.
Praise excellent performance.
You might
be amazed
at the difference it
can make in
someones
life or career.
FILE

Simply put, your coworkers

wont take responsibility for excellence until they see you demanding excellence from yourself and
everybody else. Only then will they
see that excellence is more than a
hyped-up, avour-of-the-month
buzz word or training class. Rather, excellence is something that
mature people, eective entrepreneurs, leaders, managers and
parents take seriously.
Walk your talk. Dont ever say
something like quality is king
around here and later ship out
a few defective items when youre
crunched for time.

a decision. Brenda Ellsworth tells

her team at Tastefully Simple, It
all begins with making a decision
and saying, This is what Im going
to do: Im going to make it happen,
no matter what!
To get that kind of commitment, ask the percentage question: To what degree are you
committed to excellence on this
project? And what will it take to
get you 100 per cent on board? After
all, there comes a time when you
need to move from deliberation to
decision and from consideration to
commitment.

4. Get a commitment to excellence

5. Reward responsibility

Its unbelievably powerful. As F.

W. Woolworth, the founder of the
F.W. Woolworth retail chain noted,
We would rather have one person
working WITH us than three merely working FOR us.
When you want people to take
responsibility for excellence, get
a commitment from the other
person that he/she CAN do it and
WILL do it.
Get the other person to make

When people take responsibility for

excellence, they typically do it for
a reason. Maybe the work makes
them feel good, helps them master
a skill, or move ahead in their career. But theres always a reason.
One of the main reasons people
take responsibility is because they
want to receive praise. So give it to
them. Praise excellent performance. You might be amazed at the
dierence it can make in someones
life or career.

Others are encouraged to take

responsibility when they get something tangible. Make sure youre
doing something that rewards others for taking responsibility. And if
they make some mistakes along the
way, all you have to do is...

6. Use responsibility-encouraging words

When people take on more and
more responsibility, theyre bound
to make some mistakes and some
correction is needed. Thats normal.
In those cases, you would be well
advised to follow Goethes advice,
Correction does much, but encouragement does more.
To be specic, dont talk to
someone about his weaknesses.
That sounds too much like a set of
permanent character aws. A focus
on weaknesses will turn a person
into a pessimist because hell think,
Thats just the way I am. Theres
nothing I can do about it.
Instead, when youre correcting
less-than-excellent performance,
talk about the persons improvement opportunities. Use words
that tell the other person he/she

can do some things to improve. Its

within his/her power.

7. Analyse the process and payoff of taking responsibility

Excellence does not randomly
strike like lightning. Its the result
of certain acts of responsibility taking. And the process can be replicated, if its understood.
So its not enough to acknowledge the other persons excellence.
The best way to keep it going is help
him understand the reason it came
about in the rst place. WHY did
things turn out right and HOW can
he replicate that?
For example, if an individual
had an unusually good month in
sales, recognise it and ask her why.
Did she use a dierent approach
to prospecting or in closing the
sale? Did she make more sales
calls or approach a dierent type
of clientele? Did she create a new
presentation?
By asking such questions, you
help the other person understand
how the process of responsibility
taking led to signicant payos.
-ENTREPRENEUR

27

28

BUSINESS DAILY | Monday June 6, 2016

Life: Personal Development

Custome pefeences
key to shaping futue
insuance poducts
BY SIMBA CHINYEMBA

he Kenyan insurance industry in is well

established with it roots tracing back
to the colonial era. Members of a community pooled together resources to create a
fund to deal with social-economic problems
which in itself was a form of insurance.
The contributions ranged from material
to moral support or payments in kind. With
British settlers invested substantially in farming, foreign insurance companies saw an opportunity to grow the industry in the colonies,
protecting investments against various risk
exposures.
However, the real development of commercial insurance in Kenya took place with
economic growth being realised post-independence.
Fast forward to 2016, Kenya has been
marked as one of the markets to watch in Africas insurance sector.
With a vibrant middle-class and growing
economy, the sector is ready to take its global position in the global playing eld with
the expectation that the demand for both life
and non-life insurance products will continue
to rise.
In a competitive environment, certain
trends are expected to take shape. Some
trends to watch out for are;

Urbanisation
With a sizeable population of approximately
44 million people and the growth in the middle class, concentrated economic activities are
expected to be on the increase.
An increase in literacy and expansion of the
working population has an impact on the adoption of insurance as the need for insurance is
encouraged.
Rapid urbanisation does however bring
about some negative elements such as unemployment and poverty. These can result
in social unrest that may bring with it damage to property and increased burglary and
theft claims.

Companies that
build their objectives around the
customer will have
better retention
rates. FILE

Foreign investor appetite

Kenyas economy has seen an increase in acquisitions and foreign investments in the insurance industry. Its protability has created
a high level interest from established players
in the market over the past few years with
groups such as Liberty, Old Mutual and MMI
signicantly increasing their investment. The
sector grows hand in hand with the economy.
This can lead to increased product innovation
and transfer of skills locally.

Improved data analysis

Real-time collection of data is set to provide
insights into customer behaviour and in

turn guide product development. Analytics is

also expected to provide data that helps spot
trends, predict outcomes for underwriting
and make pricing decisions that are a better
t of the risk prole for each customer.
Players will be in a better position to understand their business opportunities and risks
presented through data, especially in an environment where trends continue to shift the balance
of power towards customers. You can expect to
see more innovative solutions informed by customer demands for solutions that reect them
and adapt to their changing circumstances.

Technology
Technology has not only transformed the way
we communicate but also how we do business.
With the increase in smartphones, we have seen
customers lean more towards products that oer
them convenience at a reasonable cost. This trend
is expected to inuence the insurance business.
Firms will need to create mobile oerings as a
response to this trend. Leveraging on payment

platforms that oer the customer exibility and

convenience in the submission of policy premiums and claim payments is also expected to be
on the rise.

Improved customer relationship

Organisations are increasingly emphasising
on a customer-centric culture with the aim of
improving the bottom line. Companies that
build their objectives around the customer
have markedly better customer retention and
the resultant positive word of mouth can see an
increase in business.
To improve communication with customers
it is expected that there will be an increased role
for retailers and mobile technology, shifting distribution channels with the ultimate goal of giving
customers a more personalised experience.
Chinyemba is the country head for Metropolitan Cannon in Kenya and the MMI Group Limited chairperson for the East Africa Regional
Growth Hub.

These pieces of conventional business wisdom are totally wrong

ts a reality of entrepreneurship that

much of the time were ying blind.
As entrepreneurs, we strive to live
and think at the outer rims of our industries, always working to innovate better
products and processes to improve our
businesses and bring value to our customers. We thrive on the creativity and
uncertainty of it all.
At the same time, we reach for tried
and true precepts to live by, anything
to help guide us in the unknown. Conventional wisdom isnt called conventional wisdom for nothing and often it
imparts good and useful advice. Dont
act impulsively when youre angry, for
example -- theres a truism that has stood
the test of time.
Yet what was once convention can
become stale and lead us astray. And
conventional wisdom isnt everything
-- isnt bucking convention part of the
reason we became entrepreneurs in the
rst place?
Youve heard them all before. Here
are six pieces of conventional business

options. Through online reviews they

have information about your product
(and, importantly, your competitors
product) galore. And with social media
customers have a megaphone to broadcast their displeasure or their delight -today your product is your brand.

3. Value performance over loyalty

Conventional wisdom can become stale and lead us astray. FILE

wisdom that, from experience, are totally wrong.

necessarily a bad thing either.

Sometimes you need to make the tough

call to axe even a passionate and loyal
co-worker who is underperforming.
But blindly valuing performance over
loyalty is not courageous or decisive - its unwise.
You need people who are passionate
about the company and the mission.

2. Marketing trumps product

1. Write a business plan
I didnt. Instead of agonising over developing a fully-formed, well-honed strategy for my company, focus on highlighting
and developing your skills and aggressively pursuing a range of opportunities.
A business plan isnt necessarily a bad
thing, of course. But not having one isnt

This may be one of the most pernicious

myths there is about business. At one
time, it might have been true that your
brand was more important than your
product. Thats simply not the case in
todays age of the empowered customer.
People arent stupid and the Internet has
given them, literally, a world of shopping

4. Protability doesnt matter

In tech, people often say success is all
about high growth rates and that focusing on protability is wrong. But no one
has ever run a successful business in the
red for years and years with no end in
sight. Investing in innovation, rapid iteration and high-velocity growth are all

powerful precepts to live by, but protability needs to be within reach.

5. Follow a proven playbook

You cant follow anyone elses playbook, because your company, like all
companies, is unique in its own ways
as well. Think and plan independently
and dont expect things to work out just
because you followed all the steps someone else did.

6. Get an MBA
BS, and that doesnt stand for Bachelor of Science. More important than
an MBA is to understand what you do
well, highlight your best traits and leverage your skills. You dont have an MBA
to be successful.
You can still become successful by focusing aggressively on seeking out new
opportunities, saying yes when opportunity knock and building successes by
excelling at the things you do best.
-ENTREPRENEUR

Monday June 6, 2016 | BUSINESS DAILY

29

Life: Personal Development

Can comics teach kids money smats?

Millennials
want to work
for a business
they can also
call their own.
Treat them
like an important part
of your business. FILE

PLAN Visa and Marvel

will produce books that use

favourite character to advice
BY CHRIS TAYLOR

ts a bird, its a plane, its a ... nancial

planner?
The next time your kid brings
home a comic book, it might not be just
about battles, explosions and good versus
evil. Instead, it might be about evaluating
wants versus needs, living within your
means and creating emergency funds.
That is because nancial services company Visa Inc has partnered with Marvel
Comics to create Rockets Powerful Plan,
a new comic book starring the superhero
team Guardians of the Galaxy. The comic
is slated to be sent to every public library
in the United States, and there are more
than 150,000 copies printed in eight languages.
The theme: why it makes sense to cultivate money smarts.
The challenge was to create a fun, action-packed story while also including a
lesson on personal nance, said Darren
Sanchez, an editor at Marvel. Trying to
squeeze educational information into a
story can be tough, especially with a topic
like money management. To make it work
you have to be careful not to overwhelm
the story.

Popular with educators

After all, as any parent knows, children
listen to very little of what you have to say,
especially when it comes to money. When
it is the Guardians of the Galaxy who are
talking (Rocket, Groot, Star-Lord, Gamora, and Drax the Destroyer), they are more
likely to actually pay attention.
So who is the Suze Orman of the superhero world, dispensing personal nance
advice while defeating powerful foes at the
same time? Turns out it is Rocket, an intelligent raccoon, who is voiced by Bradley
Cooper in the recent big-screen lm.
When the squad receives a fee for exterminating robopests, Rocket suggests
putting some of that money aside for an
emergency fund. That cash later comes
in handy when the group has to repair
their spaceship, and purchase high-tech
weapons to vanquish their enemies. (Sorry
about the spoilers.)
The comic is the second such venture
by Visa. The original, produced in 2012,
featured the Avengers and Spider-Man
tossing o money advice. It proved to
be so popular with educators that more
than half a million copies were eventually printed.
This time, in addition to the Guardians of the Galaxy, look for cameos by
Ant-Man, Iron Man, Thor, Black Widow
and Hulk. It was produced in languages

Your company culture

matters most when
recruiting millennials

A
Avengers
movie poster.
FILE

including English, Spanish, Man- with their children. The only subjects they were more reluctant to
darin, Japanese and Malay.
We wanted simple messages talk about? Death and sex.
that kids could latch on to and take
And 44 percent have not talked
out of it, like saving for a rainy day, to their kids at all about nancial
said Hugh Norton, Visas head of subjects including long-term investnancial education. Issues like ing, market volatility, or nancial
emergency savings are extremely statements.
That is where a money-oriented
important, and something we can
comic book like Rockets Powerful
drill into kids from an early age.
On the back of the comic book, Plan could come in handy. In the
kids will nd interactive games like past Visa has tried out other innovaword searches, where they can try tive avenues to reach out to kids, as
to locate terms like budget, cur- well, such as sponsoring nancial
literacy-themed National Football
rency and goal, for example.
League games.
There is also a
Marvel has put
wants-versus-needs
its deep bench of suchallenge. Should you
spend money on necesperheroes to work
The comic is
sities like water and
on other custom
the second
a place to live, or luxuprojects, as well,
such venture
ries like video games
including for Netfby Visa. The
lix Inc, Walt Disney
and candy? (On secoriginal,
ond thought, kids, do
Cos Disney Interacproduced in
not answer that.)
tive, ESPN and the
2012, featured
Make-A-Wish FounJudging from a rethe Avengers ...
dation.
cent survey, it seems
Even superheroes
like parents could inare not immune from
deed use all the help
they can get in explaining money the nancial challenges of parenthood, by the way. In Visa and Martopics to kids.
vels new comic, when Ant-Man gets
Almost as bad as death and sex
a cut of the fee from the Guardians
In the annual Parents, Kids & of the Galaxy for helping eliminate
Money survey by Baltimore- their enemies, what does that cash
based money managers T. Rowe go toward?
Purchasing a drum set for his
Price Group Inc, more than half of
parents admitted they were some- daughter.
what, very or extremely reluctant to talk about nancial issues Taylor is a Reuters columnist

s an entrepreneur you are responsible for making

a number of decisions within your company. You
will establish its foundation, business model and
much more. As your business grows, it will likely fall on
you to make the tough decisions that guide the company.
These decisions will play a big role in determining your
company culture.
Regardless of how large or small your business, it will
have its own culture. When trying to bring in and retain
millennial talent, your company culture is going to play a
large role in their decision making. An entrepreneurs business may depend on creating a culture that breeds success,
and that is going to be contingent upon an understanding
of catering to millennial desires.

Understand millennials
The current generation of college graduates doesnt plan
on staying at the same company for more than a few years,
let alone for their entire career. Millennials have a sense of
self worth, and they will constantly search for a business
that better suits their expectations and needs.
You, as the entrepreneur, will have to come up with a
way not only to attract rising talent but retain it. Create a
company culture that resonates with millennials on some
level. Even less sexy businesses can have a culture that young
people are appealed to.

Offer the right benets

Many entrepreneurs nd that oering a sizeable salary wont
retain millennial employees. While this worked for previous
generations, millennials seem to be rocking the boat. Instead
of letting this frustrate you and disrupt your business, focus
on benets that millennials want to see.
One of the top priorities for many millennials is their
work-life balance. Oering a generous salary or wage wont
go far if your employee isnt able to enjoy their hard-earned
money, and this is even truer with the newest generation
of skilled workers.
Consider increasing the number of days an employee can
take o or add more work holidays. Oer exibility for them
to work remotely. Your employees will stay fresh and will be
more eager to commit time and energy to your business.

Develop your rising talent

Bring them in on meetings, keep them updated on all facets
of your business and ask for their opinion. Also, millennials
are fairly open to criticism - they just prefer it face-to-face
and in a timely manner. Millennials want to work for a business that they can also call their own, so treat them like an
important part of your business. -ENTREPRENEUR

30

BUSINESS DAILY | Monday June 6, 2016

Life: Law
TIMES CROSSWORD 25 143

How you can use intellectual

popety as a maketing tool

12

13

14

15

16

CATHY MPUTHIA

17

arketing is the process of establishing and maintaining a relationship

between you and your target customer. There is a great correlation between
law and marketing and perhaps marketers
should know some of the laws applicable to
their industry.
Intellectual property (IP) rights are some of
the key consideration that marketers should
ensure that their qualifying products and services have. To eciently market your products
or services the same should have a distinct
identity and this identity should be attributable to you. One ecient strategy used in
marketing is to establish a competitive advantage over your rivals goods and services.
You should be able to convince the target that
they stand to gain by choosing your products
and services over your competitors.
There are many marketing tools used to
do this including pricing strategy and quality controls. However one tool that is often
overlooked is the use of IP. In essence IP is
the set of rights granted to persons who have
outstanding or novel creations and the type of
IP right (IPR) granted depends on the products or service.
Having an IPR can assist you market
your products or services better. Customers
should be able to distinguish between your
products/services from competitors. IP is
used eectively in the marketing principle
of dierentiation.
A trademark is a sign, logo, shape or word
used to distinguish your products/services
from your competitors. Any business that constantly creates new brands should trademark
them for dierentiation and distinction. A
trademark is very important in branding strategy. A trademark will also help you build repute in the market and deal eectively with

10

11

BUSINESS LAW

18
19

20

23

21

24

22

25

26

Intellectual property is used effectively in the marketing principle of differentiation. FILE

contra-brand and counterfeits. I once read of
a pharmaceutical company that was facing a
market upheaval over counterfeit drugs. The
market felt that the standard of the drugs
were not good quality yet what had really happened was production of a lot of counterfeits
by fraudulent pharmaceuticals.
A trademark will enable such a company
le orders for destruction of the counterfeits
and will eectively stop anyone from riding
on the goodwill of its brand. A trademark
cushions a brand from competition and
counterfeiting.
Trademarks are also very useful in personal branding and this is especially important
for people in the public limelight like celebrities and entertainers. Recently from media
reports it turns out that Chelsea FC owned
the trademark over Jose Moruinhos name.
It is therefore possible for an entertainer to
protect their stage name using trademarks.
It is important to protect ones public image
using trademarks.

This only applies to persons with unique

names for example stage names. It so happens that some impostors seek to ride on
the goodwill of celebrities by staging false
performances and at times trading using a
celebritys name.
A trademark can cushion celebrities
against this eventuality. The singer Mariah
Carey was able to stop a porn actress from
acting with the name Mary Carey as that was
damaging to her own reputation.
In terms of domain name protection, a lot
of celebrities have been able to take over websites purporting to operate using their names.
For example Wayne Rooney was able to take
over a website in his name and the actor Wesley Snipes was also able to stop a website from
operating with his name. The website was a
pornographic website that could have been
damaging to the actor.
Ms Mputhia is the founder of C. Mputhia Advocates. cmputhia@cmputhiadvocates.com
www.cmputhiaadvocates.com

27

Across
1 Managed quite a cut in delivery charge
(6)
5 Unprinted version of story regularly
keeping newspaper busy (4,4)
9 In great delight, Jack returned toy
packages American left (8)
10 Answer urge at rst to get up
suddenly some days (6)
11 Letter from Greek business graduate
one found in the City (6)
12 Reaching out as a responsible person
(2,6)
14 Famous wife turning dye out on a
Thursday (4,8)
17 Holding back present: sugary stuff
with a very soft lling (12)
20 Out of breath, out of energy, have to
relax (4,4)
22 Put out skirts one day and robe
(6)
23 After a fashion party, female meeting
family (4,2)
25 Cape to go round corner bunk (8)
26 Liberal bravely taken apart by
Speaker (8)
27 Childrens and grownups clothes
found around at mostly (6)

Down
2 Being responsible for howlers such as
every vowels having extra pen-stroke?
(6)
3 Did winter sports team at bridge get
on with outstanding round? (11)
4 In comes Sian I compose lies with
great fervour (9)
5 Case of young Sikh thats lost
husband, very dear (3-4)
6 Priest joining party in Johannesburg,
once ready (5)
7 One has teeth to chew on things (it
ate leaves) (3)
8 Job Cockney had getting hold of the
last Kings College student (8)
13 Made ones delta a gamma with a few
adjustments (11)
15 Expert groups article not nishing
well for writer? (5-4)
16 Censor volume about girl from the
south (8)
18 Amphibians extremities in particular
difcult to keep cool? (7)
19 Century for Englands opener makes
draw obtainable if need be (2,4)
21 Sir Johns rejecting personnel cuts as
waste (5)
24 Call a friend from over the Atlantic
up (3)

SUDOKU PUZZLE

221

How to play
TIMES 25,142

Solution:3044

Solution:0370
YOUNGEST
Solution: 3804

Solution:385

TRIO: 455
TAK (STAKE, STAKEN, INSTAKE, MISTAKE)

Across:

Down:

1 Knight
4 Burred (Nightbird)
7 Journeyed
9 Neat
10 Fist
11 Quack
13 Plague
14 Hawser
15 Deceit
17 Sundry
19 Level
20 Zone
22 Anti
23 Spearmint
24 Expert
25 Nantes.

1 Kidnap
2 Grot
3 Torque
4 Breach
5 Reef
6 Doctor
7 Jamaicans
8 Dissident
11 Quail
12 Kabul
15 Dazzle
16 Tenant
17 Sermon
18 Yoicks
21 Epee
22 Anon

B O WW I N D
U
I
N
E
C O L O U R B
K
L
N
T
S P I R I T
A
S
O
B AMB O O Z
A O
N
O
L E F T
U N
S
O
B
E
A I R R I F L
M A G
A
F AN T A S Y
I
G
M E
R E E D Y
R

OW
H
L I N
T
D E C
M
L E D
T
T A L
L
E
U
C
F O O
R
AN S

SUDOKU 220

WHO O
A
V
D N E S
D
R
L A S S
E
T
L E N
V
P
E N T E
N
H
D D E R
E
M
T B A L
T
R
AC K E

P
O
S
S
E
S
S
E
D
S
O
L
I
D

Fill the grid so that every row, every column and every 3x3 box
contains 1-9.
You solve the puzzle with reasoning and logic and not
mathematical ability

Monday June 6, 2016 | BUSINESS DAILY

Boxing legend
Muhammad Ali throws
a punch towards photographers during a
press conference in
Jakarta, Indonesia.
AFP

Septic shock caused

Ali death, says family
BOXING Public funeral to held in Louisville on Friday

oxing legend Muhammad Ali died of septic

shock due to unspecied natural causes,
his family has said.
Septic shock is a life-threatening condition when
blood pressure drops to dangerously low level after
infection People with weakened immune system
are more prone to developing septic shock
Symptoms include slurred speech, confusion,
diarrhoea, vomiting, shivering, muscle painQuick
response is key to successful treatment.
The three-time world heavyweight champion
- one of the worlds greatest sporting gures - died
on Friday night at a hospital in Phoenix, Arizona.
The 74-year-old had been suering from a respiratory illness, a condition that was complicated by
Parkinsons disease.
A public funeral will be held for the boxer on Friday in his hometown of Louisville in Kentucky. He
was a citizen of the world and would want people
from all walks of life to be able to attend his funeral,
said the family spokesman, Bob Gunnell. Former
US President Bill Clinton is among those who will

give a eulogy at the service, and was one of many

prominent global gures who paid tribute to Ali
on Saturday, saying he lived a life full of religious
and political convictions that led him to make tough
choices and live with the consequences. The legendary Brazilian footballer, Pele, said the sporting
universe had suered a huge loss.
Muhammad Ali shook up the world. And the
world is better for it, said US President Barack
Obama. Ali was as much a campaigner for black
equality as he was a champion in the ring, where
he won 56 of his 61 ghts.
Asked how he would like to be remembered, he
once said: As a man who never sold out his people.
But if thats too much, then just a good boxer. I
wont even mind if you dont mention how pretty
I was. But he was once a polarising gure in the
US. At a time of racial segregation in the 1960s he
joined the separatist black sect, the Nation of Islam,
which rejected the inclusive approach of civil rights
leaders such as Martin Luther King. George Foreman, who lost his world title to Ali in the famous

Rumble in the Jungle ght in Kinshasa in 1974,

called him one of the greatest human beings he had
ever met. To put him as a boxer is an injustice,
said Foreman.
American civil rights campaigner Jesse Jackson
said Ali had been willing to sacrice the crown and
money for his principles when in 1967 he refused
to serve in the Vietnam war.
That decision was widely criticised by the
boxers fellow Americans. He was stripped of his
title and had to put his ghting career on hold for
three years.
Born Cassius Marcellus Clay, Ali shot to fame
by winning light-heavyweight gold at the 1960
Rome Olympics.
Known as The Greatest - a nickname characteristically coined by the boxer himself - he beat
Sonny Liston in 1964 to win his rst world title and
became the rst boxer to capture a world heavyweight title on three separate occasions.
At the time of his rst ght with Liston, Clay was
already involved with the Nation of Islam, a religious
movement whose stated goals were to improve the
spiritual, mental, social, and economic condition
of African Americans in the US.
But in contrast to the inclusive approach favoured by civil rights leaders like Dr Martin Luther
King, the Nation of Islam called for separate black
development and was treated by suspicion by the
American public.
Ali eventually converted to Islam, ditching what
he called his slave name and becoming Cassius
X and then Muhammad Ali. -BBC

31

Spains Gabine
upsets Seena to
win Fench Open
Spains Garbine Muguruza beat world number one Serena
Williams in straight sets to win her rst Grand Slam title
at the French Open.
Fourth seed Muguruza won 7-5 6-4 to make amends for
losing last years Wimbledon nal against Williams.
The 22-year-old is Spains rst female champion at Roland Garros since Arantxa Sanchez-Vicario in 1998.
Williams, 34, had hoped to win a 22nd Grand Slam singles title and tie Ste Grafs Open-era record.
Im so, so excited - to play in a Grand Slam against one
of the best players, its the perfect nal, Muguruza said.
Im so happy. I had to be very ready and concentrated
on all the points and just to ght as much as I can.
All the matches Ive played against her helped me. Its
our favourite tournament in Spain and I want to thank all
my Spanish supporters. Williams had reached the nal
despite reportedly struggling with a thigh problem, but the
defending champion began in terric form, moving freely
as she made the early running.
It was all Muguruza could do to hang on, a forehand
and an ace seeing o early break points, and it was Williams who faltered rst by dropping serve with a double
fault at 2-2.
With both players hitting huge groundstrokes and
vying for control of the rallies, Williams looked to have
gained the upper hand with three games in a row taking
her 5-4 in front.
However, Muguruza played a nerveless service game to
stay in the set and then clinched it with some wonderful
hitting down both tram lines.
The second set began with three breaks of serve but it
was still Muguruza who was dictating, another stunning
forehand into the corner moving her into a 3-1 lead.
-BBC

Garbine Muguruza returns the ball to Serena Williams during their

nal match at the Roland Garros 2016 French Tennis Open . AFP

SPORTS BRIEFING
Bolt could lose Olympic relay
medal over teammates doping
Jamaicas Usain Bolt could lose one of the
three gold medals he won at the 2008 Beijing Olympics.
Reuters report that the A sample of one
of his team-mates in the 4x100m, Nesta
Carter, was found to contain the banned
substance Methylhexanamine.
The news comes after the retesting of 454
samples from the 2008 Games.
Carter, who along with his agent has not
replied to requests for comment, will face

From left: The Jamaican relay team Nickel

Ashmeade, Usain Bolt, Nesta Carter and
Asafa Powell . AFP

sanctions if his B sample also tests positive for the substance. The 30-year-old ran
the rst leg for Jamaicas 4x100m relay team in
Beijing, which also included Michael Frater, Asafa Powell and Bolt. The team took gold in what
was then a new world record of 37.10 seconds,
ahead of Trinidad and Tobago and Japan.
Carter was also a member of Jamaicas gold
medal-winning relay teams at the 2011, 2013
and 2015 World Championships as well as the
2012 Olympic Games. He has not run this season, because of a foot injury, but is expected to
return to the track ahead of Jamaicas Olympic

trials from 30 June to 3 July. Methylhexanamine

has been on the World Anti-Doping Agency
(Wada) Code prohibited list since 2004, although it was reclassied on the 2011 list as
a specied substance, meaning one that is
more susceptible to a credible, non-doping
explanation.

Egypt and Senegal qualify

for Africa Cup of Nations
Egypt and Senegal qualied for the 2017
Africa Cup of Nations nals in Gabon on
Saturday as the penultimate round of x-

tures continued. Roma winger Mohamed

Salah scored both of Egypts goals in a 2-0
victory away to Tanzania as they returned
to the nals of a Nations Cup for the rst
time since 2010.
Senegal sealed their place at Gabon 2017
thanks to goals from their English Premier
League players, Sadio Mane and Mame
Biram Diouf, who both scored in a 2-0 win
away to Burundi. Saturdays game in Dar
es Salaam was Egypts nal match in the
qualiers, following Chads withdrawal
from Group G.

32

BUSINESS DAILY | Monday June 6, 2016

The OUTL OO K

ECONOMIC ANALYSIS & COMMENTARY with Anzetse Were

Rand at against
geenback ahead
of S&P eview

RESEARCH Knowledge about this activity crucial to unlocking potential of rural business

Infomal economy
key segment, make
it moe poductive
T

he informal economy as a key

a reality where numerous insights into
the informal economy are embedded in
theme for me this year as a development economist. The inforgeneral research and data generated for
mal economy can be broadly dened as
dierent sectors.
economic activity that is not subject to
This lack of clarity has therefore limgovernment regulation, taxation or obited the extent to which policy intervenservation.
tions can be designed to meet the needs
of players in the informal economy who
The reality is that although there is
are invariably the poorer. In my view it
a general acknowledgement of the inis time for a greater attempt be gather
formal economy, there has yet to be a
targeted and co-ordinated
data and information on
analysis of the informal
the informal economy to
The infomal
economy in Kenya and I
better understand it.
economy is
suspect much of Africa.
This delineation is paractivity not
ticularly crucial to unlock
This is not due to the fact
that dierent organisations
the potential of rural Kenya
subject to
and businesses in society do
and Africa in general. In a
egulation,
not intersect with the inforpaper published last year,
taxation o
mal economy in the both
the International Institute
obsevation
for Environment and Deprofessional and private
velopment (IIED) makes
lives; what seems to lack
the point that in Africa,
is a specic eort to delinthe informal economy generates up to
eate between the formal and informal
economy in analytical work.
90 per cent of employment opportunities in some countries and contributes
Therefore, for example, a company
may assess an aspect of agriculture perup to 38 per cent of the gross domestic
tinent to their work but will not, while
product (GDP) in others.
doing the analysis, delineate between
Most farmers across Africa rely on
formal and informal agricultural acinformal networks to access their markets and communities diversify their intivity. And this is no surprise as the
come beyond farming (non-farm work)
informal economy is messy and comthrough informal sector activities which
plex. But lack of focused attention on
accounts for 4045 per cent of the averthe informal economy translates into

South Africas rand was at against the

dollar in early Friday trade, with dealers
and analysts expecting caution to prevail
ahead of a rating review by Standard &
Poors which could result in a sub-investment rating if unfavourable.
The JSE securities exchanges Top-40
futures index was up 0.42 per cent.
The rand traded at 15.5750 versus the
dollar by 0646 GMT, unchanged from last
Thursdays New York close.
Government bonds, however, edged
slightly higher, and the yield on debt
maturing in 2026 fell 3 basis points to
9.29 per cent.

Global arena
A woman sells grains at an open air market: In the rural economy, prices of goods and
services are affordable. FILE
age rural household income.
But the informal economy is still
viewed as a pariah because it is labelled
as inecient, unregulated, and as IIED
aptly states, the informal economy is
equated with illegality and thus faces
strong pressure to formalise. My view is
that addressing the informal economy
should not be based on the assumption
that formalisation is the best way forward. Entry into the formal economy is
expensive and goods and services tend
to be pricier.

Government repsonse
There is warranted concern with the
lack of regulation of goods and services
in the informal economy and the extent
to which customers in this economy are
exposed to danger, but the response of
government and other stakeholders
should not necessarily be a push for

formalisation.
Since there is a pronounced lack of
presence of formal organisations and
businesses in rural Kenya and Africa in
general, the informal economy is an even
more important player in terms of determining the welfare of rural residents. It
would, therefore, be prudent for actors
active in rural Kenya and Africa to map
out the features and characteristics of
this economy.
The rst step should be the use of
such data and information to design interventions that increase the productivity, eciency and safety of activities in
the rural informal economy. This may
increase the income-generating capacity in the rural areas and translate into
more access to goods and services.
Were is a development economist.
anzetsew@gmail.com

GLOBAL MARKET WATCH

DJ INDU
17,838.56
48.89

FTSE 100
2,667.17
14.62

MARKET CAP IN SH BN
TOTAL SHARES TRADED
EQUITY TURNOVER IN SH
BONDS TURNOVER
TOTAL DEALS (BONDS)
TOTAL DEALS (EQUITY)
NSE 20 SHARE INDEX

XETRA DAX
10,246.33
38.33

I would advise caution today. There

may be opportunities, but be aware of
the large risk.
Investors also awaited U.S. jobs data
later last Friday which could add pressure on high yielding but riskier emerging market assets if it backs the case for
interest rates to rise in the worlds biggest economy.
-REUTERS

CAC 40
4,483.07
17.07

FTSE MIB
17,812.16
44.86

SMI PR
8,215.42
9.60

HANG SENG
20,947.24
88.02

NIKKEI 225
16,642.23
79.68

ALL ORD.
5,392.55
38.32

SSE COMP.
2,938.18
12.95

S&P SENSEX
26,845.22
2.08

$: 100.90
: 112.60
: 145.62

TSh
USh
SAR

21.71
33.38
6.48

HE SAID

2,023.20

2,051.38

78,566,800

87,128,800

2,029,564,083

2,751,581,040

13,007,300,000

25,441,399,750

103

211

4,687

6,019

3,801.31

3,867.50

143.49

145.54

NSE 25 SHARE INDEX

4,114.82

4,188.81

FTSE NSE KENYA 15 INDEX

183.25

184.49

FTSE NSE KENYA 25 INDEX

183.68

184.96

88.73

88.60

1,034.01

1,041.06

FTSE ASEA PAN AFRICAN INDEX

Emerging market

PREVIOUS WEEK

NSE ALL SHARE INDEX

FTSE NSE KENYA BOND INDEX

Investors were bracing for a verdict from

S&P, which has expressed concern about
its dismal growth outlook and heavy reliance on capital ows.
The review is expected after South Africas bond and stock markets are closed
for the day, although the rand will still be
trading on the global arena.
Risk is for an adverse reaction in the
currency market in a very illiquid time of
day/week, Standard Bank trader Oliver
Alwar said in a note to clients.

CURRENCY RATES

Weekly Market Activity

LAST WEEK

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