AUGUST 19 PREVIEW

PAPER REVIEW

There’s a rather wide spread of news on selection this morning.

Starting off with the Business Daily over at www.bdafrica.com; -- the lead article focuses on rising utility costs.

First you had to contend with a rise in power bills; -- and now water utilities are seeking to raise prices by at least 50% for small scale consumers too.

Contrary to the pricing model used by the power sector players though; -- the regulators here are seeking higher prices for industrial players also. not just households. This move is going to cost the Water Minister Charity Ngilu some political capital; -- since she’ll be dealing with the oddity that is the Kenyan consumer.

We want better services; -- but more often than not we’re not willing to pay for it.

Since the water sector was fragmented and private players introduced; -- market forces have a far bigger role to play in it, and the Water Minister argues that prices [which have not been revised since 1999] must be brought up to let players work on creaky infrastructure and improve service delivery.

Higher utility prices; -- a necessary evil? That really is the question here. Make the judgment after reading this.

http://www.bdafrica.com/index.php?option=com_content&task=view&id=9449&Itemid=5822

The 24-hr port clearance system is set to go live today, with all the relevant players having sent their senior management figures over to the port to work out the finer details for the plan.

http://www.bdafrica.com/index.php?option=com_content&task=view&id=9445&Itemid=5810

Chamas, as investment clubs are more commonly known, have one main problem; -- depositor discipline.

In most cases, it would seem Kenyans avoid the trouble of making standing orders at their banks, for perceived cost reasons.

A range of groups; -- from university students to the Transcentury CE, all offer advice on how to tame this beast here.

http://www.bdafrica.com/index.php?option=com_content&task=view&id=9434&Itemid=5812

The RVR saga is getting some neutral, off-the-crosshairs coverage this morning too, with the Business Daily reporting that its shareholders have pledged to inject 10 million dollars [approx…680 million shillings] into the business. If that’s done; -- it should then get the 3.8 billion shillings it has been seeking from international lenders. The 680 million shillings will be raised via a rights issue which the firm’s board approved last week.

More details here.
http://www.bdafrica.com/index.php?option=com_content&task=view&id=9448&Itemid=5810

Today; -- the Financial Journal over at www.eastandard.net has a wide spread of equally interesting stories to look over. [http://www.eastandard.net/mag/index.php?id=1143992851&catid=457]

The emerging stand-off between employers and policy makers and unions over a new set of labor laws is the banner headline here.

Other articles of interest focus on energy [High Oil prices and the Road not taken]; -- but there are two you will most certainly have to read.

The bear run at the NSE, to be frank; -- put some many counters out on dirt cheap prices; -- and if you had some cash to spare, the last two months were a pretty good time to position yourself for a medium to short term kill.

Those at least, are my thoughts, after reading this article; -- and poring over mind-numbing volumes of charts from the bourse each day.

http://www.eastandard.net/mag/InsidePage.php?id=1143992863&cid=457&

The cost of borrowing is rising; -- but what’s the fuss about?

That seems to be the one attitude that the Treasury has at the moment, especially with banks raising their base lending rates in the face of rising inflation numbers, and the Central Bank twiddling its thumbs and ‘waiting for direction’ on the next inflationary targets. More details available ‘ere.

http://www.eastandard.net/mag/InsidePage.php?id=1143992880&cid=457&

www.eastandard.net has no political coverage of any importance; -- save for the Prime Minister’s dipping into the amnesty or not debate once again, here; --
http://www.eastandard.net/InsidePage.php?id=1143992909&cid=4&

and the Chairman of the Electoral Commission, Samuel Kivuitu, expressing his lack of approval for the manner in which the President was hurriedly sworn in. Now that tempers are less volatile; -- a more sober, rational approach to the events of December 27- January 3 is emerging.

Key among them is the manner in which he said he saw a bunch of camera equipment before him when he announced who the winner of last year’s elections was, and he therefore thought a wide spread of media houses was represented; -- not just the state broadcaster, KBC.

http://www.eastandard.net/InsidePage.php?id=1143992911&cid=4&

www.nationmedia.com on the other hand also has details on errors in the vote tally, courtesy of the ECK Chairman and his tale of a milliondead voters once again. Is it just a coincidence that in a race as tight as what we saw last December, a million votes could swing the vote either way?

That however is not the lead story there.

Instead; -- the front page is all about the 15 minutes of dramatic running on the track which saw Kenya take its first 2 Gold medals.

I was watching this in the office with the news team at about 1630hrs yesterday; -- and we had to run this story as our lead. We ended up operating so close to our time deadlines, I think we actually exceeded it by about 5 minutes or so. Getting this story out was tight; -- but worth every minute of work Fred Indimuli and I put into it. More details here.

http://www.nation.co.ke/sports/-/1090/460562/-/khqh41z/-/index.html

Not surprisingly, Eldoret was in an absolute uproar after the win.

Here’s a news freebie you can have to read over at the Economist, for those of you with leanings towards international politics.

Musharaff’s resignation slammed into the headlines early on Monday, at around 1100 hrs local time; -- and it has quite a few people rattled.

The debate on it on the BBC’s Have Your Say program was nothing less than heated; -- and here’s the Economist’s take on the matter; -- cynical, terse, and to the point.

http://www.economist.com/world/asia/displayStory.cfm?story_id=11950470&source=features_box1

BIZ LITE

Your morning calendar’s not as packed as you may imagine.

There are two main issues the Industrilization Ministry’s political functionaries will have today.
1. Minister for industrialization Hon. Henry Kosgey will at 1030hrs address a press conference on the application and marking of imported goods with the KEBS standardization mark, the ISM. This will be after a closed door meeting with Captains of Industry in the board room on 18th floor at Telposta Towers, GPO.

2. Assistant Minister for Industrialization Hon. Ndiritu Muriithi will open a stake holder’s consultative forum on the Ministry’s strategic plan at the Kenya School of Monetary Studies at 0900hrs. Participants at the workshop will be required to identify strategies that will lead to the rapid growth and expansion of the industrial sector in line with the Vision 2030 economic blueprint.

I had a chance to look over Access Kenya’s half-year numbers rather briefly last night. The profit growth figures [in excess of 30% for profits before tax] is not uncommon for a company that’s still growing, is fairly young, and is in what one could regards as a Blue Ocean market; -- though that’s one idea that’s wearing off rather thin.

However; -- just by looking at the numbers, the rapid growth seems to be straining the previous efficiency of the firm from a purely sales perspective.

The cost of sales as a percentage of total turnover rose to 49% from 33% at a similar period last year. At the close of the 2007 financial year for AK; -- that figure stood at 48.6%. Ergo; -- the acquisition and expansion drive still needs some tweaking for cost effectiveness.

However; -- the rest of the balance sheet looks fairly solid.

That said; -- I’m putting my money on its wi-max network as its main trump card. Since this has the potential to be scaled up o a 4G network once the relevant details are sorted out; -- they care well positioned to become a dominant network infrastructure player 5-10 years down the line.

You’re wondering what 4G is? Here’s a basic primer.

http://en.wikipedia.org/wiki/4G; -- but get a geek to interpret some of the finer details for you.


After spending time with the one I lean on most often [my elder brother]; -- tripping over wires and being called from masts 20 meters plus above the ground, let’s just say I had to learn a thing or two about that biashara of his. :-)

Finally; -- is the Bull Run at the NSE starting at last?

Well, some certainly think it is.

After last week’s plunge past 5 shillings on the Saf-Com counter; -- it seems some sense was slapped into market players; -- especially the sellers.

Saf-Com’s gained 19% from recent lows, and according to Aly-Khan Satchu, players are now holding their cards pretty close to their chest, holding onto the counter.

After the release of H1 numbers; -- the bank’s counters are also getting plenty of interest from buyers, or rather, the top level bank counters are. Both indices are rising again; -- the NASI closed at 100.162 on August 18, and the 20-share index closed at 4746.80. Look for the 5 000 mark on the latter; -- we’re headed north from ‘ere.


Right; -- another freebie ‘ere from the Economist about crisis management which caught my eye.

http://www.economist.com/displaystory.cfm?source=hptextfeature&story_id=11948676

Some Kenyan politicians and their handlers need to read this; -- especially the bits on how to handle what’s been aptly branded as ‘Acts of God’ [insert evil laughter + grin here].

For now, they’ve had a decent run. Wait until the crap really hits the fan; -- that’s when quality levels really come through.