KA-INVESTOR

• Mobile TV Is Here

  Posted: April 30, 2008, 9:31 pm by ka-investor

  Safaricom has partner with DSTV to provide Mobile TV to their subscribers. Mobile TV is a technology that allows people to view regular live television content on their mobile phones or other mobile devices that they get through traditional cable or pay TV subscriptions at home.

  
  

  Research indicate that mobile phones will remain the central multi-purpose device for the foreseeable future, outnumbering any other mobile devices like digital media players and pocket PCs. 84% of mobile phone users in countries where Mobile TV has been launched are interested in using Mobile TV Service provided it is commonly available and affordable. Close to 60% of these will prefer watching the same content that they get on TV at home. News, sports, music videos and Game shows are the four dominant types of content that the surveyed users will prefer watching on mobile TV.

  Personally I would go for it, if the subscription costs are affordable. The possibilities are tremendous. Getting up-to-date news on the go, watching a live soccer matches when you are in the rural or even following your favorite series anywhere you are. It’s just amazing,

  I bet the service will be quite popular. The big question however is the pricing, which in turns depends on how much it will cost the mobile services provider. Safaricom plans to price it at Ksh.1,000 as from 1^st July, but it will be free before June 30. This will be a boon for high end mobile handsets as most of the users will upgrade their handsets specifically to get mobile TV on their handsets.

  The recommended phone type by Safaricom cost at least Ksh.25,000 per set. The success however, will be dependent on content offered and price charged for the service

  Would you go for mobile TV if the prices are kept in the range of Ksh.1,000 per month?

• Waiting to Excel

  Posted: April 25, 2008, 5:37 pm by ka-investor

  Now that the window of application for the Safaricom IPO has finally closed, everybody is waiting to cash-in in one of the ‘biggest bets’ of the year. Most of the optimists that queued up for hours just to get a piece of this giant offer are now crossing their fingers that the share price will double or triple {to ksh.10, 15 ….or even 20} once the share hit the trading floor on May 9^th.
  
  

  On the other hand, pessimists or mere IPO-refund-adverse investors who by-passed the IPO hope that many retail investors will off-load in the 1^st week so that the share price won’t appreciate that much {hover around Ksh.6 or 7} and they can buy as many shares as possible for the long term. In my view the possibility of this is quite minimal, but I’m ready to get more shares in case it happens.

  With an oversubscription being more than likely to be the case {even with Tanzanians out}, I hope it will be over 200% so that we claw back more shares from the foreign lot. Anything less than this will mean having your monies tied up in refund cheques.

  With over 2 million shareholders in their register, Safaricom is in for more headaches during their AGM’s. And I don’t understand how foreign shareholders will be handled when it comes to this.

  
  

  The waiting has been long and I’m glad that at last this is behind us. For over two years, the debate on Safaricom the company and Safaricom the IPO, its Mobitelea connections and many other things have been making rounds in the blogs. Some heated discussions have taken place, but after all is said and done the Mobitelea culprits are still untouchables. So forgetting about them is the only feasible option.

• Safaricom IPO: 7 Days to Go

  Posted: April 17, 2008, 3:51 pm by ka-investor

  Confused investors: there seems to be too much information flowing around (Brokers advert and bank loans) and many investors are left confused on what is right and what isn’t. The fact is, where money is involved the truth is usually the first casualty. Many applicants have been misadvised into taking loans without proper analysis (IPO euphoria), opening multiple accounts to ‘maximize’ on allocations and some are even wondering who’s telling the truth after read caveat emptor on the IPO from ODM and Africog. As Concept will put it, there is too much information noise to understand who is saying it right.

  ‘Undugu’ keeps Tanzanians out: The Bank of Tanzania (BoT) barred Tanzanians against participating in the Safaricom IPO. The main reason being that Safaricom had not made any commitment to cross-listing at the DSE (I believe this could have been done later on). But it’s evident that brokers there are not taking it in good faith. They have questioned the legality of the directive by BoT. And even after the CMA chairman, Jimnah, tried to lure the BoT to rescind on its decision, Kenyan brokers are saying the Tanzanian snub will not dent the IPO hopes. But the rejection by BoT is a clear blow to the regions integration.

  1.65 million applications … and counting: data available at Nation media indicate that over 1.65 million applications have been made for the Safaricom IPO, with 50,000 being online application. Taking into account the enormous amount of applications to be made, I preferred the manual application for my shares over the online one. With the inefficiencies our brokers have I’m skeptical that the online applications will be handled well. But let’s wait and see. One of the leading banks has also issued over ksh15 billion in loans to applicants (could this be Equity bank…and is it the reason behind the recent rally in its share price to Ksh.185?)

• Another week has opened for the Safaricom ...

  Posted: April 7, 2008, 6:40 pm by ka-investor

  Another week has opened for the Safaricom IPO with more investors rushing to apply for the shares. I hope the number of applications will increase this week as most investors have read the prospectus and sourced for enough funds. Last week was a little bit slow, with most applications coming from non-Kenyans. There are several conflicting analysis on the expected peak for the shares once they hit the trading floor on May 9^th. But my prediction is the price will settle some where between Ksh.10 and Ksh.15.

  Applicants who have been going for loans being hawked by banks for the IPO have learned the tricks of the banks to reap them off. Apart from the interest being charged on the loans, loan applicants have to incur several hidden charges before the loan is awarded. Some of the banks claiming to finance 100% of the IPO application are forcing applicants to open new CDS accounts with them, hence cashing in on the transaction charges too.

  In Uganda, investors are wary of the Safaricom IPO citing the political uncertainness of Kenya. For a country like Uganda that is quite used to violence than Kenya, it’s really ironical. Most Ugandans are in favour of alternative investments on the Uganda Securities Exchange such as the Uganda Clays rights issue that ended just before Easter and the upcoming New Vision rights issue.

  In other developments:
  - Gold production at Lolgorien, Kenya, by Goldplat Plc. (a UK firm that specialize in producing precious metals like gold, silver and platinum group metals, on the African continent) may commence in the second half of 2008.
  -The Uganda Securities Exchange (USE) is planning to immobilize their listed companies share certificates so as to increase on the bourse liquidity. Similarly several firms are set to have rights issues and stock splits to increase on the share supply at the USE.
  - ZTE Corporation, China's largest listed telecommunications manufacturer and wireless solutions provider, has signed a deal with the Kenya government to construct an optical network covering the western part of Kenya.

• Zimbabwe Stock Exchange: Investing in Mugabe ?

  Posted: April 4, 2008, 5:16 pm by ka-investor

  
  {an article I wrote for the African Executive early last year...might be turning out to be true!}
  
  As some stock exchanges, Kenya and South Africa, around Africa are taking a bear turn an unlikely bourse is on a bull run and going even stronger. The Zimbabwe Stocks Exchange {ZSE} has ballooned to phenomenal levels as a result of the bullish patterns dominating the stock market this year. Most of the counters in ZSE have recorded enormous gains with the mainstream industrial index growing by over 600%

  Despite the big economic crisis that has been facing Zimbabwe; the ZSE has managed to post very impressive performance two years in a row, 2005 and 2006, beating the high inflation rate that plagues the country according to The Africa Stock Exchanges Association (ASEA). Thanks to the on going stocks rally, the ZSE market is now worth a staggering Z$405 trillion in market capitalization, after rising a steep 275 percent in just three days this week.

  While market capitalization (value of a company calculated by multiplying the number of shares in issue by the current stock price) does not reflect the actual performance of a company, it provides a useful guide to movements in the share price of a listed company. The huge increase in the market capitalization of the 75 listed companies in ZSE suggests, obviously, that the amount of trade is so high. This begs the question; why does the ZSE perform so well when everything is apparently in turmoil?

  Ideologically, a country’s stock market performance should reflect the performance of the economy. But in the case of Zimbabwe, this does not apply. Institutional investors and individuals from South Africa and Britain are simply eyeing the stock market in the belief that
  

  The remaining three constituencies (out of the 210 that exist) will be determined by by-elections following the deaths of three candidates prior to the March 29th elections: Pelandaba/Mpopoma, Gwanda South, and Redcliff

  prices will soar if and when Mr. Mugabe steps down and investors regain confidence in the country. This has therefore led to a mad rush for the listed stocks, making the market to have an exceptional bull run in a slump economy.

  Further more, negative interest rates and inflation have caused a stampede for assets, which have driven share prices to record highs, even in real terms. To these investors – both legitimate and crooks – the early bird catches the worm, and in this case there are too many birds that came in early. The ZSE boom simply reflects profits that have been made on paper while, on the ground, several businesses have gone bankrupt. This pseudo profits, for the foreign investors, could yet vanish into thin air because of currency controls that make it difficult to take money out of the country.

  The stocks rally may also be because there are very few investment options that can provide real returns in Zimbabwe. Most of the other investment options like mining and land ownership lost their value after most of the European investors moved out due to the turbulent political climate in the country. Hard-line policies by the Zimbabwe government created an inherent risk that most investors were left with the stocks market as the only viable investment. Investors know where good returns are, and the ZSE is one of them. This is why it’s performing above all markets in Africa.

  The ZSE’s future in the short run indicates a continued upside. Equities are the only other best form of investment in a hyperinflationary environment such as the one existing in Zimbabwe. At the moment, there is no reason for an immediate stop in the Bull Run. But as the demand for stocks continue to sore, the market capitalization will eventually reduce. Stocks which are absurdly overvalued will lose more than proportionately when normalcy returns and the market may even be faced with an eminent crash.

  The viability of the decision to invest in the future of Mugabe’s tenure in power is simply a wrong investment factor. It is not a good sign for the ZSE, especially for a country whose economy is indicating otherwise. It’s only a matter of time before the stocks market follows the downward trend that the Zimbabwe economy has taken, and when that happens there will be no redeeming of losses.

  
  

Blah blah blah

Fish cakes

Alas a fish cake.

Yet more fish cakes

Guess what ... yeah ... fish cakes.

The end of the fish cakes